{"id":903170,"date":"2024-08-20T15:04:39","date_gmt":"2024-08-20T21:04:39","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=903170"},"modified":"2024-08-20T15:04:42","modified_gmt":"2024-08-20T21:04:42","slug":"mechanics-lien-validity-decided-in-alternative-dispute-relsolution","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/mechanics-lien-validity-decided-in-alternative-dispute-relsolution\/","title":{"rendered":"Mechanic\u2019s Lien Validity Can Be Decided in Alternative Dispute Resolution in\u00a0Illinois"},"content":{"rendered":"\n<p>Robert J. Golterman, Jeremy P. Brummond and Taylor J. Essner | <a href=\"https:\/\/www.lewisrice.com\/publications\/mechanics-lien-validity-can-be-decided-in-alternative-dispute-resolution-in-illinois\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">LewisRice<\/a><\/p>\n\n\n\n<p>On June 14, 2024, in a case captioned\u00a0<em>Portage Park Capital, LLC v. A.L.L. Masonry Construction Co.<\/em>,<em>\u00a0<\/em>the Illinois First District Court of Appeals clarified and expanded the scope of arbitration in resolving disputes related to mechanic\u2019s liens. Prior to the\u00a0<em>Portage Park\u00a0<\/em>decision, arbitrators determined the amount the contractor was owed, while the courts determined the validity and enforced payment of the lien. Now, depending on the intention of the parties, arbitrators are empowered\u2014and encouraged\u2014to determine the\u00a0<em>validity<\/em>\u00a0of <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/mechanics-lien-5-things-to-know\/\">mechanic\u2019s liens<\/a>.<\/p>\n\n\n\n<p>In&nbsp;<em>Portage Park<\/em>, the property owner and contractor entered into an agreement whereby the contractor would construct a self-storage building in Chicago. The parties further agreed to utilize arbitration for dispute resolution. Claims subject to arbitration under their agreement included demands or assertions by one of the parties seeking adjustment or interpretation of contract terms, payment of money, extension of completion time, or other relief with respect to the terms of the contract.<\/p>\n\n\n\n<p>The parties disputed the amount of money owed to the contractor by the owner. In turn, the contractor filed a mechanic\u2019s lien for the disputed amount. The owner then sought a declaratory judgment in the Circuit Court of Cook County claiming that the contractor\u2019s mechanic\u2019s lien was fraudulent and false, and thus invalid. In response, the contractor successfully moved to compel arbitration and the Circuit Court dismissed the case.<\/p>\n\n\n\n<p>On appeal, the owner argued that, pursuant to the Illinois Mechanics Lien Act, the Circuit Court had exclusive jurisdiction to determine the validity of the lien at issue. The contractor responded asserting that while only the circuit court can&nbsp;<em>enforce<\/em>&nbsp;the lien, an arbitrator may determine the&nbsp;<em>validity<\/em>&nbsp;of the lien.<\/p>\n\n\n\n<p>The appellate court, relying on precedent from Minnesota, Ohio, and Texas, agreed with the contractor. It found that if the intention of the parties was to arbitrate certain claims, courts should defer to that intent. Because the owner and contractor in this case entered into a \u201cgeneric\u201d arbitration agreement, the parties were obligated to arbitrate any dispute arising under or relating to that agreement. And because \u201cevery dispute regarding a mechanic\u2019s lien involves some reference to or construction of the contract,\u201d the Court found that the mechanic\u2019s lien arose under or related to the contract, and thus the validity was subject to arbitration.<\/p>\n\n\n\n<p>The Court\u2019s decision in&nbsp;<em>Portage Park<\/em>&nbsp;clarifies and expands the scope of arbitration in resolving disputes related to mechanic\u2019s liens. With this precedent, contractors can now enter arbitration agreements with the understanding that arbitrators have the authority to determine the validity of mechanic\u2019s liens. The decision underscores the importance of clearly defining dispute resolution mechanisms in construction contracts.<\/p>\n\n\n\n<p>The full text of the Court\u2019s publicly-available decision can be found under \u201cResources\u201d below.<\/p>\n\n\n\n<p><a href=\"http:\/\/chrome-extension:\/\/efaidnbmnnnibpcajpcglclefindmkaj\/https:\/\/ilcourtsaudio.blob.core.windows.net\/antilles-resources\/resources\/9ccb2d59-2670-437e-b080-32adaa78ef19\/Portage%20Park%20Capital,%20LLC%20v.%20A.L.L.%20Masonry%20Construction%20Co.,%202024%20IL%20App%20(1st)%20240344.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Portage Park Capital, LLC v. A.L.L. Masonry Construction<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Robert J. Golterman, Jeremy P. Brummond and Taylor J. Essner | LewisRice On June 14, 2024, in a case captioned\u00a0Portage Park Capital, LLC v. A.L.L. Masonry Construction Co.,\u00a0the Illinois First District Court of Appeals clarified and expanded the scope of arbitration in resolving disputes related to mechanic\u2019s liens. Prior to the\u00a0Portage Park\u00a0decision, arbitrators determined the&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/mechanics-lien-validity-decided-in-alternative-dispute-relsolution\/\">Continue reading <span class=\"screen-reader-text\">Mechanic\u2019s Lien Validity Can Be Decided in Alternative Dispute Resolution in\u00a0Illinois<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[436,10772],"tags":[9895,141,42,6647,441],"class_list":["post-903170","post","type-post","status-publish","format-standard","hentry","category-dispute-resolution-2","category-mechanics-lien-law","tag-advise-consult","tag-alternative-dispute-resolution","tag-arbitration-2","tag-illinois","tag-mechanics-liens","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Mechanic\u2019s Lien Validity Can Be Decided in Alternative Dispute Resolution in\u00a0Illinois - Advise &amp; 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