Chicago Daily Law Bulletin - Predevelopment engineering services are lienabl
1. Chicago Daily Law Bulletin - Predevelopment engineering services are lienable improvements: Supreme Court
http://www.chicagolawbulletin.com/Articles/2015/11/30/Commercial-Litigation-11-30-15.aspx[11/30/2015 5:13:31 PM]
November 30, 2015 Print friendly page
Commercial
Litigation
By Paul B.
Porvaznik
Paul B.
Porvaznik is
an attorney
at Davis,
McGrath
LLC and practices
primarily in the areas of
commercial litigation,
landlord-tenant law,
mechanic’s liens and
post-judgment
enforcement.
Predevelopment
engineering services are
lienable improvements:
Supreme Court
The Illinois Supreme Court recently
reversed the 3rd District Appellate
Court and found that an engineering
firm’s predevelopment services
supplied to an unfinished real estate
project were still lienable even
though the services didn’t physically
alter the land or improve the
property value.
In Burke Engineering, Ltd. v. Heritage
Bank of Central Illinois, 2015 IL
118955 (Nov. 19, 2015), the plaintiff
was hired in April 2008 by a future
property owner (Owner 2) who was
in the process of buying the property
from its then owner (Owner 1).
The sale from Owner 1 to Owner 2
(whom plaintiff contracted with)
closed in August 2008 — about four
months after the plaintiff’s contract with Owner 2. Owner 2’s
lender recorded its mortgage lien after Owner 2 bought the
property and after Owner 2 hired plaintiff.
When Owner 2 decided to abort the project, the plaintiff liened
the property and sued to recover about $100,000 worth of
predevelopment services. The plaintiff named Owner 1, Owner 2
and the lender as defendants.
The trial court found that the plaintiff’s services weren’t lienable
and granted summary judgment for the lender (the owner
defendants were dismissed by now) on the basis that the
plaintiff didn’t improve the property or increase its value. The
3rd District affirmed.
Reversing the appellate and trial courts, the Illinois Supreme
Court considered the purpose of the Illinois Mechanics Lien Act
(770 ILCS 60/1) and what constitutes a lienable improvement.
Section 1(a) of the act confers lien rights on anyone contracting
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2. Chicago Daily Law Bulletin - Predevelopment engineering services are lienable improvements: Supreme Court
http://www.chicagolawbulletin.com/Articles/2015/11/30/Commercial-Litigation-11-30-15.aspx[11/30/2015 5:13:31 PM]
with an owner for improvements. The act defines “improve” to
encompass furnishing “labor, services, material, fixtures,
apparatus or machinery, forms or form work in the process of
construction or for services as an architect, structural engineer,
professional engineer, land surveyor or property manager, 770
ILCS 60/1(b).
While the 3rd District majority found the plaintiff’s services non-
lienable, a thorough and vigorous dissent found just the
opposite. The dissent viewed the plaintiff’s services as clearly
lienable noting that the act specifically allows engineering
companies to lien for their services.
Adopting the spirit of the dissent, the Illinois Supreme Court
posited that Section 1 of the act provides a lien if services are
completed “for the purpose of improving the property.”
Under this standard, the court found that the plaintiff’s services
of (1) creating a plat of subdivision, (2) surveying the property,
(3) planning out roads and sewers — all were done to allow (“for
the purpose of”) Owner 2 to eventually develop the property.
(Paragraph 12)
The court bolstered its finding with decades-old case authorities,
statutory evolution and construction and policy concerns.
The court pointed to case precedent that allowed architects to
claim a lien for drawn up plans that never came to fruition. The
court found that plaintiff’s services here were no different than
the architectural drawings for unfinished projects that were still
lienable in those cases.
As a policy reason for allowing plaintiff’s lien, the court held that
if a physical improvement was a prerequisite for an engineer like
plaintiff to have lien rights, it would unfairly subject him to the
whims of a property owner who could decide to abort a project
at any time. To put a contractor at the mercy of a capricious
property owner ran contrary to the “protective purpose of the
act. (Paragraphs 12-13)
The court looked to various act amendments across decades to
find an “overarching intent to expand the availability of
mechanic’s lien, pointing out that Section 1’s reach had gradually
broadened over the past century to include structural engineers,
professional engineers, land surveyors and property managers as
possible lien claimants.”
Concerning the specific services furnished by the plaintiff, the
court stressed that under the Plat Act (765 ILCS 205/1 et seq.),
an undeveloped tract of land must be surveyed and a plat
recorded before any building can be erected on the land.
(Paragraphs 18-20)
Taken together, these factors all weighed in favor of finding the
plaintiff’s engineering services were lienable improvements under
the act.
Takeaways
This is a significant pro-contractor decision as it provides
expansive protection for lien claimants who perform services on
uncompleted projects.
The case’s clear lesson is that predevelopment engineering,
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![Chicago Daily Law Bulletin - Predevelopment engineering services are lienable improvements: Supreme Court
http://www.chicagolawbulletin.com/Articles/2015/11/30/Commercial-Litigation-11-30-15.aspx[11/30/2015 5:13:31 PM]
November 30, 2015 Print friendly page
Commercial
Litigation
By Paul B.
Porvaznik
Paul B.
Porvaznik is
an attorney
at Davis,
McGrath
LLC and practices
primarily in the areas of
commercial litigation,
landlord-tenant law,
mechanic’s liens and
post-judgment
enforcement.
Predevelopment
engineering services are
lienable improvements:
Supreme Court
The Illinois Supreme Court recently
reversed the 3rd District Appellate
Court and found that an engineering
firm’s predevelopment services
supplied to an unfinished real estate
project were still lienable even
though the services didn’t physically
alter the land or improve the
property value.
In Burke Engineering, Ltd. v. Heritage
Bank of Central Illinois, 2015 IL
118955 (Nov. 19, 2015), the plaintiff
was hired in April 2008 by a future
property owner (Owner 2) who was
in the process of buying the property
from its then owner (Owner 1).
The sale from Owner 1 to Owner 2
(whom plaintiff contracted with)
closed in August 2008 — about four
months after the plaintiff’s contract with Owner 2. Owner 2’s
lender recorded its mortgage lien after Owner 2 bought the
property and after Owner 2 hired plaintiff.
When Owner 2 decided to abort the project, the plaintiff liened
the property and sued to recover about $100,000 worth of
predevelopment services. The plaintiff named Owner 1, Owner 2
and the lender as defendants.
The trial court found that the plaintiff’s services weren’t lienable
and granted summary judgment for the lender (the owner
defendants were dismissed by now) on the basis that the
plaintiff didn’t improve the property or increase its value. The
3rd District affirmed.
Reversing the appellate and trial courts, the Illinois Supreme
Court considered the purpose of the Illinois Mechanics Lien Act
(770 ILCS 60/1) and what constitutes a lienable improvement.
Section 1(a) of the act confers lien rights on anyone contracting
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in battle with sheriff
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CPD: Spying tech
ought to stay a secret
Blagojevich asks
Serving the city's law profession since 1854
Home Courts ▼ Calendar Public Notices 40 Under 40](https://image.slidesharecdn.com/14af0279-ab90-4d64-b8f9-9ddc988fe3c0-160113153520/85/Chicago-Daily-Law-Bulletin-Predevelopment-engineering-services-are-lienabl-1-320.jpg)
![Chicago Daily Law Bulletin - Predevelopment engineering services are lienable improvements: Supreme Court
http://www.chicagolawbulletin.com/Articles/2015/11/30/Commercial-Litigation-11-30-15.aspx[11/30/2015 5:13:31 PM]
with an owner for improvements. The act defines “improve” to
encompass furnishing “labor, services, material, fixtures,
apparatus or machinery, forms or form work in the process of
construction or for services as an architect, structural engineer,
professional engineer, land surveyor or property manager, 770
ILCS 60/1(b).
While the 3rd District majority found the plaintiff’s services non-
lienable, a thorough and vigorous dissent found just the
opposite. The dissent viewed the plaintiff’s services as clearly
lienable noting that the act specifically allows engineering
companies to lien for their services.
Adopting the spirit of the dissent, the Illinois Supreme Court
posited that Section 1 of the act provides a lien if services are
completed “for the purpose of improving the property.”
Under this standard, the court found that the plaintiff’s services
of (1) creating a plat of subdivision, (2) surveying the property,
(3) planning out roads and sewers — all were done to allow (“for
the purpose of”) Owner 2 to eventually develop the property.
(Paragraph 12)
The court bolstered its finding with decades-old case authorities,
statutory evolution and construction and policy concerns.
The court pointed to case precedent that allowed architects to
claim a lien for drawn up plans that never came to fruition. The
court found that plaintiff’s services here were no different than
the architectural drawings for unfinished projects that were still
lienable in those cases.
As a policy reason for allowing plaintiff’s lien, the court held that
if a physical improvement was a prerequisite for an engineer like
plaintiff to have lien rights, it would unfairly subject him to the
whims of a property owner who could decide to abort a project
at any time. To put a contractor at the mercy of a capricious
property owner ran contrary to the “protective purpose of the
act. (Paragraphs 12-13)
The court looked to various act amendments across decades to
find an “overarching intent to expand the availability of
mechanic’s lien, pointing out that Section 1’s reach had gradually
broadened over the past century to include structural engineers,
professional engineers, land surveyors and property managers as
possible lien claimants.”
Concerning the specific services furnished by the plaintiff, the
court stressed that under the Plat Act (765 ILCS 205/1 et seq.),
an undeveloped tract of land must be surveyed and a plat
recorded before any building can be erected on the land.
(Paragraphs 18-20)
Taken together, these factors all weighed in favor of finding the
plaintiff’s engineering services were lienable improvements under
the act.
Takeaways
This is a significant pro-contractor decision as it provides
expansive protection for lien claimants who perform services on
uncompleted projects.
The case’s clear lesson is that predevelopment engineering,
Latest listings from
Jobs.LawBulletin.com
Supreme Court to
hear his case
Judge rejects move to
halt ‘abduction’
Sugar, corn industries
settle sweetener
dispute
Court struggles over
frozen assets, lawyer
fees
Murder charge for cop
in Laquan McDonald
shooting
Attorneys - Full Time Bankruptcy A
(Aurora)
Legal Secretaries - CAREER LEGA
ASSISTANT
Attorneys - Experienced Family La
Legal Secretaries - Conflicts Coord
Attorneys - Attorney Tax Dispute
Legal Secretaries - LITIGATION S](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)