Mechanics Lien Attorneys’ Fees Only Binds Owner, Not Lender – IL Court

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Action Plumbing v. Bendowski, 402 Ill.App.3d 681 (2nd Dist. 2010), discusses Section 17(b) of the Mechanics Lien Act (the “Act”), 770 ILCS 60/17(b) – the section that allows a lien claimant to recover its attorneys’ fees from an owner in some circumstances.

The plaintiff plumbing contractor recorded mechanics liens against 16 residential properties and sued to foreclose the liens.

The contractor named the original owner of the parcels as well as the subsequent purchasers as defendants.

After a bench trial, the court entered a foreclosure judgment and awarded plaintiff contractor its full lien amount, interest plus attorneys’ fees against all defendants, including the subsequent purchasers (now, the current owners).

Reversing the fee award, the Second District held that the contractor can only recover allows attorneys’ fees against the “owner who contracted to have the improvements made”…”but not any other party“.  770 ILCS 60/17(b).

Since the subsequent purchaser defendants were not owners at the time plaintiff entered into his contracts, they couldn’t be responsible for plaintiff’s attorneys’ fees.

The Court also looked to Section 17’s legislative history which contains clear congressional statements that mechanics’ lien attorneys’ fees can only be awarded against owners – not subsequent purchasers. 

In ThyssenKrupp Elevator Corp. v. Community Investment Corp., 2012 IL App (2d) 101172-U, the Second District also disallowed lien claimant attorneys’ fees against a non-owner.

There, the issue was whether the plaintiff elevator could assert lien priority (including its attorneys’ fees) over a prior mortgage lender where that lender was defaulted for failing to appear during trial. 

The trial court vacated the default on lender’s motion and held that the contractor only took priority over the lender for the base lien amount plus interest and costs but NOT for its fees – which were substantial after several years of litigation.

Affirming, the Second District cited Section 17’s clear language that a contractor’s lien fees can only be taxed against an owner.  Since the lender wasn’t an owner by definition, the contractor’s attorneys’ fees didn’t bind the lender.  ¶¶ 26-30.

The Court also rejected the contractor’s argument that fee-shifting language in the underlying contract (between plaintiff and the owner) gave plaintiff’s fees primacy over the lender’s mortgage.

The reason: the lender was not a party to the underlying contract and so the plaintiff’s fees couldn’t prime the prior mortgage.  ¶¶ 31-32.    

EpilogueActon Plumbing and ThyssenKrupp make it clear that – at least in the Second District – a contractor’s mechanics’ lien attorneys’ fees can only be assessed against an owner – not a subsequent purchaser, mortgage lender, or other lien claimant. 

Even if a prior mortgage lender defaults and the owner-general contractor agreement has fee-shifting language (in addition to Section 17’s attorneys’ fee provision), the contractor’s attorneys’ fees are still only be taxable to owner – no one else.