In recently filed court documents, an insurance company insists a general contractor should repay it the more than $150,000 in costs it was forced to pay subcontractors who were not paid for their work on a hotel.
Chicago Title Insurance Company filed a lawsuit June 13 in Cook County Circuit Court against Pramichi Hotel, HHK Construction and Lawrence Waldron.
In its complaint, Chicago Title Insurance Company claims it issued a loan policy to Pramichi and HHK Construction in which it covered a $6.5 million mortgage issued by First Mid-Illinois Mortgage. Subsequently, HHK Construction hired multiple subcontractors to begin work on a new hotel that was being built in St. Clair County, according to the complaint.
However, many of the subcontractors were not paid for their work, the suit states. In turn, mechanic’s liens were filed against the site of the new hotel. Mechanic’s liens can result in foreclosure or a lien on the property’s title, which can affect the owner’s ability to refinance or sell the property.
In accordance with its policy, Chicago Title agreed to settle the litigation that arose from the mechanic’s liens, the complaint says. It claims it paid the eight claimants $144,800 to release the liens on the property. In settling the litigation, Chicago Title incurred an additional $44,048.53 in attorney’s fees, according to the complaint.
Now, Chicago Title wants Pramichi and HHK, which were originally responsible for paying the subcontractors, to reimburse it for the costs it incurred.
In addition to Pramichi and HHK, Chicago Title names Waldron as a defendant. Waldron, who managed HHK, engaged in a scheme that resulted in the loss of payment to subcontractors, the suit states.
“Lawrence Waldron submitted fraudulent draw requests to skim funds from construction funds for use on unrelated projects,” the complaint says.
Donald J. Kindwald and Jeffrey Greenspan of Kindwald Law Offices in Chicago will be representing it.
Cook County Circuit Court case number: 13-L-987.