Lohmann Golf Designs, Inc. v. Keisler

The Court in Lohmann Golf Designs, Inc. v. Keisler, 260 Ill. App. 3d 886, 632 N.E.2d 121, 198 Ill. Dec. 62 (1994) stated that "a lthough section 7 of the Mechanics Lien Act states that 'an intent to defraud' is necessary before a mechanics' lien claim will be defeated due to an error or overcharge, our courts have held that where a lien claimant knowingly files a lien containing a substantial overcharge, the claim should be defeated on the basis of constructive fraud." Lohmann, 260 Ill. App. 3d at 891, 632 N.E.2d at 125. The Lohmann court articulated the rationale for this rule by stating that "a claimant who mistakenly files an erroneous claim will not be precluded from recovering, while a claimant who knowingly makes a false statement regarding a material matter should not be allowed to recover because the effect of his actions is to give the appearance of a greater encumbrance on the property than that to which he is entitled." Lohmann, 260 Ill. App. 3d at 891, 632 N.E.2d at 125. In Lohmann, the Court found an intent to defraud based on the misstated lien amount in conjunction with an affidavit averring that the amount recorded on each lien represented a true and accurate amount owed. See Lohmann, 260 Ill. App. 3d at 892-93, 632 N.E.2d at 126-27. Based on the affidavit and the erroneous amount recorded on the lien, the Lohmann court inferred the intent to defraud because the affiant, as president of the company, had knowledge of what the total amount owed was and that the liens exceeded the accurate outstanding balance. See Lohmann, 260 Ill. App. 3d at 892, 632 N.E.2d at 126.