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Start-up Service was

Warranty Service: Lien too Late

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90 day Deadline Missed;

Sub out $120K lien

 

            Cyclonaire provided conveyor equipment as part of a “flux delivery system” to be installed at a steel mill in Riverdale, Illinois.  The conveyors were to be part of the updated process of moving lime, dolo lime, and coal into a basic oxygen furnace.

            Cyclonaire delivered the equipment on December 16, 2003, but at first it failed to function properly.  Because certain components were too small, sufficient airflow with the flux delivery process was obstructed.   Cyclonaire sent the last of four invoices to the general contractor, Fairfield Engineering, on December 31, 2003.  But its engineers and other staff did not complete work on the equipment to get it up and running until February 6, 2004. 

             When the balance of $120,456.26 on these invoices was not forthcoming, Cyclonaire liened the property.  The lien was recorded on June 22, 2004, after notice was served on the owner and Fairfield on May 4, 2004.     

             At trial Judge Meacham, in the Chancery Division at the Daley Center, ruled that the lien notice was past the ninety days because the work performed by Cyclonaire after delivery was not contract work but warranty work.  On appeal Cyclonaire argued that this work was “start-up” contract work.  The appellate court determined that all witnesses who testified agreed that the contract called for the delivery of equipment, not start-up services.

             The court also found that since the final bill was issued on December 31, 2003, this final invoice established the completion date in December.  Although this rule is part of the established caselaw under the Mechanics Lien Act, and in this case plainly applied to work performed five weeks after the date of the final bill, there would be a closer call if the invoice date and last day of work were in the same calendar month. 

             Cyclonaire Corporation v. ISG Riverdale, Inc., __IllApp3d__, No. 1-07-0421 (1st Dist. App. Ct, December 31, 2007)


  

1/24/08