Since you're running this script from your webserver, it has the permissions of that webserver (typically, that would be user 'apache' or 'nobody' - users with essentially no privileges.) The first question that comes to my mind is, can that user create a file in your current directory? Because that is what the 'open' call with the '>' (write) mode is going to do.

Unless your current directory has the appropriate permissions, that low-priv user is not going to be able to create that file. If it already exists, and was created by another user (e.g., you running the script from the command line), that low-priv user won't be able to 'chmod' it either.

As ikegami said, you need to check all your return values. I'd include those of the 'chmod' operation as well.

-- 
Human history becomes more and more a race between education and catastrophe. -- HG Wells