Daily Development for Monday, August 20, 2007
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri

MECHANIC’S LIENS; EASEMENTS:   A mechanic’s lien for work performed on easement property may not attach to the principle property of the dominant estate unless the work was performed in connection with improvements to the principle property.  Matanky Realty Group v. Katris, 856 N.E.2d 579 (Ill.App. 1 Dist. 2006). 

In 1984, Defendants purchased an outlot from the owner of an adjacent shopping center and were granted an appurtenant easement for use of the shopping center parking lot for purposes of ingress, egress and parking.  The easement specified that Defendants were obligated to pay 5.8% of the cost of reasonable and necessary maintenance and repair of the parking lot. 

In May of 2005 , Plaintiff, the property manager hired by the owner of the shopping center, sent Defendants an invoice for ten years worth of maintenance and repairs to the parking lot, claiming Defendants had failed to respond to monthly invoices that had been sent by Plaintiff over the past ten years.  In June of 2005, after Defendants had failed to respond to the most recent invoice, Plaintiff recorded a mechanic’s lien attaching to both the easement property and the Defendants’ outlot. 

Defendants filed a motion to dismiss Plaintiff’s lien on the outlot property, arguing that, since the work concerned was not performed on Defendants’ property, the lien could not properly attach to the outlot.  The trial court granted Defendants’ motion and subsequently granted Defendants’ motion to release the lien in accordance with its judgment.  Plaintiff appealed. 

The Appellate Court reviewed the grant of Defendants’ motion de novo and, noting that this was an apparent matter of first impression in Illinois, affirmed.  In evaluating the proper scope of the lien in question, the Court first noted that the basis for mechanic’s liens is entirely statutory and thus, a contractor must strictly comply with the terms of the statute in order to obtain relief thereunder.  Citing the statute governing mechanic’s liens, the Court noted the definition of a contractor under the Act as “[a]ny person who shall by any contract…, express or implied, … with the owner of a lot or tract of land, or with whom the owner has authorized or knowingly permitted to contract, to improve the lot or tract of land.”  Id. at 583 (quoting 770 ILCS 60/1 (West 2004)).  Accordingly, the Court found that, as a threshold issue, Plaintiff must demonstrate that Defendants were “owners of the lot or tract of land” on which the work was performed in order for the lien to attach to

Defendants’ property.

The Court recognized that ownership in the context of the statute was broader than the simple fee interest and could include other interests in land such as beneficiary interests in land under a trust and leasehold interests. Defendants’ property interests in the easement property, however,  were limited to the right of use and did not include any cognizable ownership interest in that property.  As Defendants were not the owners of the easement property, the lien could not attach to their property under the terms of the statute. 

Plaintiff argued that attachment to Defendants’ outlot was nonetheless proper, as Plaintiff had been hired by the owner of the easement property, and the work performed benefited Defendants’ dominant estate.  Again noting Defendants’ lack of ownership interest in the easement property, the Court found that “a contractor may obtain a lien only ‘upon the whole of such lot or tract of land and upon adjoining or adjacent lots or tracts of land of [the owner of the tract or lot on which the work was performed].’”  Id. At 583 (quoting 770 ILCS 60/1 (West 2004)).  As the owners of the easement property did not own Defendants’ outlot, the attachment of the outlot was improper as a matter of law. 

The Court distinguished Fairfax v. Ramirez, 133 Idaho 72, 982 P.2d 375 (1999), in which the Idaho Supreme Court held that a mechanic’s lien for work performed on an easement road leading to the principle property could attach to the principle property even if said property was owned by someone other than the owner of the easement property.  In that case, the work at issue was found to be “essential preparatory work for…requested repairs to the principle property.”  Matanky at 584.  Here, the Court found that, while the improvements to the easement property benefited Defendants, they were not sufficiently related to the Defendants’ principle property to merit attachment of the lien to that property.  Again citing the principle of strict statutory construction, the Court declined to extend Fairfax to the case before it.

Comment 1: A nice question, and one that is likely to arise under the wording of most mechanic’s liens statutes.  In fact, it likely would be a question of first impression in most jurisdictions. 

What about the flipside - where the work is contracted for by the owner of the dominant tenement.  The easement is an appurtenance of the dominant tenement.  Shouldn't the lien attach?  The editor suspects the language of most lien statutes is broad enough to permit attachment here.

Comment 2:  The editor concludes that this is not the sort extension of the mechanic’s lien statute that courts ought to create if the legislature has not been specific.  Likely the drafters of the legislation originally creating the mechanic’s lien remedy in Illinois did not have this situation in mind.

In the editor’s experience, those backing mechanic’s lien remedies (big contractors and materials suppliers hiding behind “fronts” of overall clad carpenters and brickmason subcontracteors)have plenty of power in most state legislatures.  They don’t need the courts to bail them out, and, as this remedy does not exist at common law, it would be imprudent of courts to do so.

Note, however, that landlords frequently discover that the mechanic’s lien remedy does reach their fee interest when the lease requires tenant to undertake improvements and repairs and then the tenants stiff the contractor. 

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