We successfully defended our general contractor client and its surety against substantial mechanics lien and related claims on a prominent, large-scale adaptive reuse project. An opportunistic investor – having taken an assignment of claims from a defunct subcontractor – asserted a mechanics lien for materials supplied to the project and pursued additional claims of unjust enrichment, quantum meruit, and breach of contract. To strategically address the mechanics lien, we initiated litigation and bonded it off under Section 38.1 of the Illinois Mechanics Lien Act. This allowed the substitution of a bond for the property as security for the mechanics lien, transferring the mechanics lien from the property to the bond and letting construction go forward unimpeded. This tactical maneuver shifted the legal battle to the validity and amount of the mechanics lien itself. The claimant also pursued a separate breach of contract judgment against an individual person, adding complexity. Faced with these substantial claims, we negotiated a settlement for just 4% of the asserted value – a 96% claim reduction. This outcome protected our client from significant financial exposure and preserved their important relationship with the prominent real estate developer project owner, leading to further substantial projects. This successful resolution also protected the surety from potential liability under the bond and shows our ability to leverage litigation strategically for early, cost-efficient dispute resolution.
