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Mechanics Lien Forfeited by Failing to Sue all Necessary Parties

June 2021

By: Jeffrey F. Clement

The Illinois Appellate Court, First District, recently issued an opinion which should remind contractors that the Illinois Mechanics Lien Act (the “Act”) is strictly construed and the lien can be forfeited when the Act is not properly followed.

In CB Construction & Design, LLC v. Atlas Brookview, LLC, 2021 IL App (1st) 200924, contractor CB Construction & Design, LLC (CB), performed renovation work for premises owner, Atlas. CB claimed that it completed its work but was still owed more than $1 million under the contract. CB filed a mechanics lien. Upon receipt of the lien, Atlas served CB with a Section 34 demand to file suit within 30 days. CB filed suit for breach of contract and enforcement of mechanics lien naming Atlas and “other defendants yet to be determined.”

Atlas then filed a motion to dismiss, arguing that CB failed to name all necessary parties to the mechanics lien action. Specifically, Atlas noted that the property lender, TPG, and rent assignee, Wells Fargo, both had recorded security interests in the property. Yet, the complaint failed to include either entity as defendants.

The Court agreed and granted Atlas’ motion to dismiss. The Court held that Section 11 of the Act requires each claimant to make as parties the owner of the premises, the contractor, all persons in the chain of contract between the claimant and the owner, all persons who have asserted or may assert liens against the premises under the Act, and any “other person against whose interest in the premises the claimant can assert a claim.” These Section 11 entities are referred to as “necessary parties.” In this case, CB’s lawsuit requested sale of the property and a declaration that the lien was “senior and superior” to any interest of any other person or entity. Because both TPG and Wells Fargo held a security interest and rents from the property and would be impacted by such relief, the Court determined that CB was asserting a claim against them and both entities were plainly necessary parties.

Exclusive Remedy Applies – Defendant Had Preexisting Legal Obligation To Pay Workers’ Compensation Benefits

June 2021

By: Andrew R. Makauskas

In Munoz v. Bulley & Andrews, LLC, 2021 IL App (1st) 200254, Plaintiff was an employee of Bulley & Andrews Concrete Restoration, LLC (“Bulley Concrete”). He sustained a back injury arising out of and in the course of his employment. Workers’ compensation benefits, including medical bills exceeding $76,000.00, were paid by Bulley & Andrews, LLC (“Bulley LLC”), the general contractor for the project. Bulley Concrete was a wholly-owned subsidiary of Bulley LLC.

Plaintiff filed a lawsuit in circuit court against Bulley LLC and other defendants. Bulley LLC moved to dismiss, arguing that it was immune from the lawsuit under the exclusive remedy provisions of the Workers’ Compensation Act (“Act”) (820 ILCS 305/5(a), 11 (West 2018)).

Judge Gillespie agreed, and dismissed Plaintiff’s lawsuit as to Bulley LLC.

Plaintiff appealed, arguing that Bulley Concrete was his employer, not Bulley LLC. The workers’ compensation claim had been made against Bulley Concrete, not Bulley LLC. Plaintiff argued that a parent company is not shielded from a lawsuit filed by an employee of its subsidiary.

Governor Pritzker Vetoes Pre-Judgment Interest Legislation- Revised Bill to be Sent to the Governor

April 2021

By: Jeffrey F. Clement

As BCM reported previously in January, the Illinois Legislature passed HB3360, which would have imposed 9% per annum pre-judgment interest on all categories of damages in a personal injury action running from the date the alleged tortfeasor has notice of the injury. In our prior alert, we highlighted many issues with the Bill, including its broad reach and punitive nature. We can now report that Governor Pritzker has vetoed HB3360. However, the Governor did indicate he would consider compromised legislation.

Indeed, compromised Senate Bill 72 has now been submitted to the Governor. Under Senate Bill 72, pre-judgment interest would (1) be at lower rate of 6% per annum, (2) be cut off at five years in all events, (3) start running from the date of the filing of the Complaint, (4) be tolled in the event of a voluntary dismissal and (5) not apply to claims against public entities. Senate Bill 72 is also markedly different from HB 3360 because it provide a mechanism for settlement offers. Specifically, if the defendant does better at trial than an offer made within a certain time prior to trial, interest is not applied. It also provides that interest does not apply to punitive damages, sanctions, statutory attorney’s fees, statutory costs and the amount of the highest timely-written settlement offer. However, Senate Bill 72 retains the provision allowing pre-judgment interest on non-economic damages.

Commissioner Appointments and Realignment of Commission Panels; Arbitrator Reassignment

March 2021

On March 19, 2021, Governor Pritzker announced the following appointments to the Commission. The following biographies come from the Governor's press release.

Deborah Baker will serve on the Workers' Compensation Commission as a Labor Commissioner. Baker was previously Assistant Deputy Chief Legal Counsel and Ethics Officer at the Illinois Department of Corrections. Prior, she was Litigation Counsel and Compliance Counsel at UpRight Law and served as Assistant Attorney General at the Office of the Illinois Attorney General. Baker earned her bachelor's from the University of New Mexico and Master of Arts and Juris Doctor from Loyola University Chicago.

Barbara Flores will continue to serve on the Workers' Compensation Commission as a Public CommissionerFlores was previously an Arbitrator at the Illinois Workers' Compensation Commission. Prior, she was Corporate Counsel at Alden Management Services, Inc., and served as Final Agency Decision Writer at U.S. Postal Service, National Equal Employment Opportunity Investigative Services Office. She has extensive legal experience as a Law Clerk and is actively involved in scholarship and professional organizations. Flores earned her Bachelor of Science from the University of Illinois at Urbana-Champaign and Juris Doctor from the Chicago-Kent College of Law.

Christopher Harris will serve on the Workers' Compensation Commission as an Employer Commissioner. Harris was previously an Arbitrator at the Illinois Workers' Compensation Commission. Prior, he was Owner and Managing Attorney at Shield Law Firm LLC. Harris has additional legal experience as general counsel. Harris earned his Bachelor of Arts from the University of Illinois at Urbana-Champaign and Juris Doctor from the University of Illinois at Urbana-Champaign College of Law.

"Good Faith" Requirement in Settlement Contracts as Applied in Two Recent Cases, Koziol and Hartley

March 2021

By: Dylan R. Besser

Introduction

Imagine a familiar, somewhat common civil lawsuit scenario: Plaintiff, a construction worker, was injured on the job site when he fell through an opening on a catwalk. Plaintiff files suit alleging negligence against the project’s general contractor, the owner of the premises, and the subcontractor who erected the catwalk. A third-party complaint for contribution is then filed by these defendants against plaintiff’s employer, with standard allegations of failure to train, failure to supervise, and the like. Plaintiff then settles directly with the third-party defendant, his employer, and the third-party defendant files a “motion for good faith finding.” What could go wrong?

Legal Standard

The “‘good faith’ of a settlement is the only limitation which the Joint Tortfeasor Contribution Act (the “Act”) places on the right to settle and it is the good-faith nature of a settlement that extinguishes the contribution liability of the settling tortfeasor.” Johnson v. United Airlines, 203 Ill. 2d 121, 128 (2003) (emphasis added); 740 ILCS 100/2(d).

Torts — Recent Tort Litigation Pertaining to Transportation Network Providers Act

March 2021

By: Christapher L. Clanin

In the last 10 years, it is hard to imagine a sector of the economy that has undergone a more transformative reformation than that of the transportation industry. Early on, many states struggled to adapt to the fast paced changes caused by the now well-known industry disruptors, Uber and Lyft. In many ways, the linchpin that kept the system moving was the adoption of laws accommodating these companies, now known as “transportation network providers.” In Illinois, the Transportation Network Provider Act (“TNPA”) provided the basic framework for working as a transportation network provider in Illinois.

In Doe v. Lyft, Inc., the appellate court waded through the TNPA to answer two important questions: (1) whether the TNPA exempts ridesharing companies from the heightened duty of care and standard of vicarious liability that apply to common carriers and (2) if so, whether the TNPA violated the Illinois Constitution's ban on special legislation. 2020 IL App (1st) 191328, ¶ 1.

  • Chicago Bar Association
  • Workers' Compensation Lawyers Association
  • IRTB
  • DRI - The Voice of the Defense Bar
  • The Illinois Association of Defense Trial Counsel
  • Illinois Self-Insurers' Association
  • Chicago Bar Association
  • Workers' Compensation Lawyers Association
  • IRTB
  • DRI - The Voice of the Defense Bar
  • The Illinois Association of Defense Trial Counsel
  • Illinois Self-Insurers' Association
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