Lobar Associates, Inc. v. O'Neill, E.
3525 EDA 2016
| Pa. Super. Ct. | Nov 17, 2017Background
- Owners (Edward and Carla O’Neill) leased property to Carmel for a restaurant; lease contemplated construction and certain structural payments by owners.
- Carmel contracted for tenant improvements; contractor filed a mechanics’ lien after Carmel defaulted.
- Trial court granted summary judgment allowing the mechanics’ lien against the owners’ fee interest, finding the improvements were for the owners’ "immediate use and benefit."
- Appellants argued they would not derive immediate use or benefit because they are building owners, not operators, and any benefit depends on finding a future tenant who would use the improvements.
- The dissent (Ransom, J.) contends strict statutory requirements require a written owner statement that improvements are for the owner’s immediate use and benefit; mere knowledge or consent is insufficient.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a mechanics’ lien can attach to an owner's fee interest when the owner consented by lease but did not expressly state the improvements were for the owner’s "immediate use and benefit" | Mechanics’ lien valid because lease signed by owner permits construction and indicates improvements will inure to owner; signed lease satisfies the statute’s writing requirement | Owner lacks a written, signed statement that improvements are for the owner’s immediate use and benefit; mere consent/knowledge or reversion of ownership at lease end does not show immediate benefit | Dissent would reverse: strict statutory condition precedent unmet — owners did not have an express written statement that improvements were for their immediate use and benefit; mere consent insufficient |
Key Cases Cited
- Denlinger, Inc. v. Agresta, 714 A.2d 1048 (Pa. Super. 1998) (statutory mechanics’ lien provisions construed narrowly and strictly)
- Murray v. Zemon, 167 A.2d 253 (Pa. 1960) (owner’s written, signed statement that improvements are for owner’s immediate use and benefit is a condition precedent)
- American Seating Co. v. City of Philadelphia, 256 A.2d 599 (Pa. 1969) (signed lease may satisfy writing requirement where lease shows improvements will redound to owner’s benefit)
- Boteler v. Espen, 99 Pa. 313 (Pa. 1882) (historic precedent on when lessee-borne improvements affect owner’s rights)