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Hillside Lumber, Inc. is an Illinois material supplier, who furnished $141,000 of lumber materials to a property owner in 2008, and didn’t get paid for more than $65,000 of the furnishing. So, in accordance with the state’s mechanics lien statutes, Hillside Lumber lodged a mechanics lien with DuPage County’s records.

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It appears the company prepared and file the Illinois mechanics lien on its own, as it is signed by Ewa Kulaga, and according to the document, was “prepared by Ewa Kulaga.” The Illinois Secretary of State indicates that this individual is the company’s president. You can view the original mechanics lien filing’s pdf here.

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While the form used appears to be sufficient, and the mechanics lien claim was filed on time, the lien was still invalidated by a trial court. Earlier this month, an Illinois appellate court affirmed that decision invalidating the mechanics lien in National City Mortgage v. Hillside Lumber, Inc., highlighting to mechanic lien claimants everywhere the importance of getting every lien claim done 100% correctly…and the perils in trying to do it yourself.

A few years back I had a survey of mechanic lien filings conducted where lien records were examined in select counties across the United States, and was surprised to find that over 72% of lien claims were filed pro se (i.e. without the assistance of an attorney, or even a lien service). Folks like Hillside Lumber, Inc. are scattered across the country. They think that filing a mechanics lien is a simple task requiring a form and a few spare minutes. We wrote an article a few months ago contesting this ideology, Why You Shouldn’t Use Do-It-Yourself Mechanics Lien and Preliminary Notice Forms.

The problem in the Hillside Lumber case wasn’t the form, or the method of filing. The lien was invalidated because Hillside Lumber didn’t retain proof that it had served a copy of the lien on the property owner. Under Illinois law, this proved fatal. I underlined and italicized “retain proof” on purpose, because Hillside Lumber claimed in this case that it had actually served the owner with notice of the claim. The court didn’t much care for the allegation, however. According to the decision, “once plaintiff asserted its lack of notice…Hillside had to prove that plaintiff actually received notice.”

Hillside Lumber signed an affidavit asserting that it served notice of the lien by certified mail, but the court considered such a self-serving affidavit alone as insufficient to prove actual sending or receipt of the notice.

Not only was Hillside Lumber unable to prove the property owner received notice of the claim, but it was even unable to prove that it had sent off the notice. The lien claim was invalidated because notice of the claim could not be demonstrated, and Hillside Lumber got stiffed more than $65,000.

What if Hillside Lumber had used a mechanics lien service like levelset? Every time levelset files a mechanics lien, it sends notice of the claim pursuant to the state’s requirements. In Illinois, notice of the claim would have been sent to the property owner certified mail, return receipt requested with restricted delivery to the owner. More importantly, perhaps,levelset keeps confirmation of the sending and delivery of the notice, including an affidavit of service that is prepared at levelset and signed by the person who mailed off the notice. In this case, Hillside Lumber would have been able to produce an affidavit of delivery, a proof of the sending, a certified mail tracking number, and a green card return receipt (all kept on levelset’s servers), and perhaps, would be $65,000 richer.

Here are some articles on the ‘net about this case:

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