TERRA FIRMA BUILDERS, LLC, Appellee v. WILLIAM KING, a/k/a BILLY M. KING, AND MELANIE L. KING, a/k/a MELANIE L. FRANTZ, Appellants
No. 15 MAP 2020
IN THE SUPREME COURT OF PENNSYLVANIA MIDDLE DISTRICT
DECIDED: April 29, 2021
BAER, C.J., SAYLOR, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.
[J-88-2020]; Appeal from the Order of Superior Court dated 07/19/2019 at No. 2593 EDA 2018, reversing the 8/21/2018 Order of the Court of Common Pleas, Delaware County, at No. CV-2015-001536.; ARGUED: October 21, 2020
JUSTICE DOUGHERTY
We consider whether the failure of a mechanics’ lien claimant to comply with express statutory requirements results in an unperfected lien such that the property owner‘s late objection to the lien‘s defect does not constitute waiver. We conclude the Superior Court erred in determining that the owner‘s objection to the defect was waived in this case, and we therefore reverse.
Appellants, William King a/k/a Billy M. King, and Melanie L. King a/k/a Melanie L. Frantz (the Kings), hired appellee Terra Firma Builders, LLC (TF) to perform construction work in the backyard of their home. The construction began on June 25, 2012 pursuant to a written contract. In December 2012, TF was removed from the project before its completion due to a dispute about the work performed up to that point. On February 20, 2013, TF commenced two lawsuits in the court of common pleas of Delaware County: 1) a civil action seeking damages for breach of contract and unjust enrichment; and 2) a mechanics’ lien claim for alleged unpaid labor and materials in the amount of $131,123.24, pursuant to the Mechanics’ Lien Law of 1963,
Shortly thereafter, on April 29, 2013, TF filed another mechanics’ lien claim against the Kings for the same dollar amount as
Almost two years later, on February 19, 2015, TF filed a complaint to enforce and obtain judgment on its lien pursuant to Section 701 of the Law.2 The Kings apparently did not file preliminary objections or otherwise raise TF‘s failure to file an affidavit of service at this time. Almost three more years passed, and on December 8, 2017, the common pleas court consolidated TF‘s mechanics’ lien and breach of contract actions. The consolidated matters proceeded to a bench trial before the Honorable Spiros E. Angelos. At trial, the parties agreed that TF failed to complete the project but disputed the amount of work remaining unfinished and the quality of the work completed. Findings of Fact and Conclusions of Law at 11. Judge Angelos found in favor of the Kings on all claims, including the Kings’ counterclaim, and awarded the Kings monetary damages. TF filed a motion for a new trial, which was ultimately granted. At the conclusion of the second trial, the court again found in favor of the Kings on the merits, but did not award any damages. The parties filed post-trial motions.
In June 2018, while the post-trial motions were pending, the Kings filed a petition to strike the mechanics’ lien on the basis of TF‘s failure to file an affidavit of service to perfect the lien, as required by Section 502 of the Law. TF opposed the petition, arguing the Kings had waived their right to object to the five-year old lien when they accepted service of the complaint to enforce, never filed preliminary objections pursuant to Section 505 of
The trial court granted the petition to strike on the basis of TF‘s failure to file an affidavit of service and thus perfect its lien, pursuant to Section 502 of the Law. See Trial Ct. Op. at 6, citing Regency Invs., Inc. v. Inlander Ltd., 855 A.2d 75, 77 (Pa. Super. 2004) (“Service requirements under Pennsylvania‘s Mechanics’ Lien law are strictly construed such that a complaint will be stricken if the statutory service requirements are not met[.]“); id. at 5, quoting Samango v. Hobbs., 75 A.2d 17, 20 (Pa. Super. 1950) (“[C]ompliance with the [Law] is a prerequisite to the validity of the lien, and the failure to observe it invalidates the lien.“).
On appeal, a divided three-judge panel of the Superior Court reversed. Terra Firma Builders, LLC v. King, 215 A.3d 1002 (Pa. Super. 2019). The majority opined “an owner who desires to challenge the perfection of the lien . . . must do so by filing a preliminary objection to the claim under Section 505” of the Law. Id. at 1005. The majority recognized Section 505 preliminary objections are governed by that statute, rather than the Rules of Civil Procedure, so they need not be filed within twenty days “like those to a normal civil complaint.”4 Id. The majority further opined: “That does not mean, though, that Section 505 preliminary objections can be filed at any time to the claim; after all, they are denominated as ‘preliminary.‘” Id. The majority then held: “if one of the specified defenses has not been raised ‘preliminary’ [sic] by the time a §1701 enforcement action has been filed to obtain judgment on the claim, but the owner desires to assert a Section 505 defense, it has to be raised in the enforcement proceeding [pursuant to] . . . the applicable rules of civil procedure. If it does not do so, then the claim is waived.” Id. (footnote omitted). The panel majority concluded the Kings’ objection to TF‘s mechanics’ lien, “in the form of a motion to dismiss [sic] over five years after the claim was filed and over three years from [the] commencement of the enforcement proceedings[,]” was too late. Id. at 1006.5
Judge Murray dissented, noting both the Law and applicable precedent permit an owner to raise defenses to a mechanics’ lien enforcement action at any time. Id. at 1006. Judge Murray opined the Law must be strictly construed, and a lien claimant must strictly comply with the statute‘s requirements to secure a valid lien. See id. at 1006-07, citing Wyatt Inc. v. Citizens Bank of Pa., 976 A.2d 557, 564 (Pa. Super. 2009) (any question of interpretation of the Mechanics’ Lien Law “shall be resolved in favor of strict, narrow construction“) and Regency, 855 A.2d at 79 (strict statutory compliance required to secure valid lien). Judge Murray reasoned TF failed to file the requisite affidavit of service under Section 502 of the Law and thus did not perfect its lien. She further observed Section 505 “unambiguously places no limit on when a party may raise a defense to the enforcement of the lien,” and the majority‘s contrary reading lacked “explanation or citation to any authority.” Id. at 1008-09.
We granted discretionary review of the following issue presented by the Kings: “Is a property owner who seeks to challenge the perfection of a mechanics’ lien required to file preliminary objections before or during the enforcement proceeding of the lien?” Terra Firma Builders, LLC v. King, 226 A.3d 971 (Pa. 2020) (per curiam).6 We consider the parties’ arguments mindful that the issue is a pure question of law over which our standard of review is de novo and our scope of review is plenary. A. Scott Enters., Inc. v. City of Allentown, 142 A.3d 779, 786 (Pa. 2016).
The Kings argue Pennsylvania courts have consistently stricken void, unperfected mechanics’ liens for failure to comply with statutory requirements. The Superior Court majority‘s contrary reading, according to the Kings, is the first appellate court decision to excuse a failure to comply since the Law was enacted in 1963. The Kings argue the panel‘s decision must be reversed because its interpretation of Section 505 of the Law contradicts the clear mandate of Section 502, which the majority did not even discuss. The Kings observe Section 502 plainly states that in order to perfect a mechanics’ lien, an affidavit of service “shall be filed,” and the failure to file the affidavit “shall be sufficient ground for striking off the claim.”
The Kings further argue the panel majority‘s interpretation of Section 505 is wholly without support and ignores the statute‘s purpose, which is to provide an expeditious method to strike unperfected mechanics’ liens. The Kings submit the central issue is the meaning of “preliminarily” as used in Section 505: “Any party may preliminarily object to a claim upon a showing of exemption or immunity of the property from lien, or for lack of conformity with this act. . . . Failure to file an objection preliminarily shall not constitute a waiver of the right to raise the same as a defense in subsequent proceedings.”
Moreover, according to the Kings, the panel majority “created a quandary by which void, unperfected mechanics’ lien claims cannot be stricken[,]” and will improperly “maintain priority over nearly all other security interests” such that “third-party creditors will be prejudiced.” Id. at 13-14. The Kings submit that lien enforcement proceedings are “entirely dependent upon the existence of the lien, and if there is no lien, or if it is divested or stricken off, the enforcement proceeding falls with it.” Id. at 37, quoting 20 STANDARD PENNSYLVANIA PRACTICE 2d §105:220; see also id. at 565. The Kings further note the Pennsylvania Rules of Civil Procedure are silent regarding defenses to mechanics’ lien claims, and otherwise recognize “[t]he procedure governing the filing of a claim is provided by the Mechanics’ Lien Law of 1963[.]” Id. at 37, quoting Note to
TF responds that the Superior Court correctly reversed the trial court‘s decision striking its mechanics’ lien because the Kings waived their objection to the lien. TF concedes it never filed an affidavit of service for the April 29, 2013 lien at issue here, but it considers that lien — filed after it voluntarily discontinued the original February 2013 claim — to be the “exact same” lien it previously perfected by filing an affidavit of service in March 2013. Appellee‘s Brief at 2. TF argues the Kings should be barred by laches from challenging
TF further argues the Superior Court‘s decision below is consistent with case law that upholds the protections provided by the Law to contractors, and properly held that challenges to defective service may be waived. Id. at 10. TF submits that reversal of the Superior Court‘s decision would undermine the purpose of the Law by allowing a property owner to deprive contractors of their lien rights. TF argues owners should not have this ability to challenge a lien by the “back door” long after the contractor‘s options, e.g., filing a new lien, or pursuing settlement, have been foreclosed by the passage of time. Id. at 14-15. Finally, TF notes Section 701 of the Law provides the procedure to obtain judgment on a mechanics’ lien “shall be governed by the Rules of Civil Procedure promulgated by the Supreme Court,” and Rule 1651 provides “the procedure to obtain judgment upon a claim shall be in accordance with the rules relating to a civil action.”
We now turn the specific question raised in the appeal, that is, whether the Kings, as property owners seeking to strike off a mechanics’ lien claim filed against them, were required to assert their objection to the lien much earlier than they did here. First, we recall the underlying mechanics’ lien claim was timely filed on April 29, 2013.7 We further note that, in order to perfect a mechanics’ lien, the claimant “must . . . serve written notice of such filing upon the owner within one (1) month after filing, giving the court, term and number and date of filing of the claim[,]” and an “affidavit of service of notice, or the acceptance of service, shall be filed within twenty (20) days after service setting forth the date and manner of service.”
The present appeal requires that we interpret certain provisions of the Law, specifically Sections 502 and 505. Our objective while performing statutory construction “is to ascertain and effectuate the intention of the General Assembly.”
We further observe that a mechanics’ lien is an extraordinary remedy that provides the contractor with a priority lien on property, an expeditious and advantageous remedy. See Philadelphia Constr. Servs., LLC v. Domb, 903 A.2d 1262, 1267 (Pa. Super. 2006) (mechanics’ lien statute provides “an extraordinary remedy” and “an expeditious method to obtain lien at very little cost to claimant“; if claimant is not responsible in timely perfecting the lien, the claim fails, and claimant can seek adequate remedy via breach of contract). Accordingly, a contractor seeking the benefit of the lien must “judiciously adhere to the requirements of the Mechanics’ Lien Law” in order to secure a valid and enforceable lien. Id.
Mindful of these principles, we examine the operative statutes. First, Section 502 expressly requires that in order to “perfect a lien, every claimant must[,]” inter alia, “serve written notice” of the lien‘s filing, and an affidavit of that service “shall be filed within twenty (20) days.”
It is clear, then, that TF failed to perfect its mechanics’ lien against the Kings because it never filed the required affidavit of service. We have previously recognized that a failure to file the affidavit means “the lien was not properly perfected and that such defect was not curable.” Day & Zimmermann, Inc. v. Blocked Iron Corp., 147 A.2d 332, 335 (Pa. 1959). As compliance with the Law is “a prerequisite to the validity of the lien, [] the failure to observe it invalidate[s] the lien.” Id. (citations omitted); see also Reed Terrace, 218 A.2d at 230 (failure to comply strictly with requirements of the Law renders purported lien invalid). We now consider whether the Kings waived their objection to enforcement of this unperfected — and thus invalid — mechanics’ lien.
Section 505 of the Law is entitled “Procedure for contesting claim; preliminary objections.”
We reject the Superior Court‘s unsupported conclusion, reformulated here by the dissent, that the challenge must be raised “in the enforcement proceeding [pursuant to] the applicable rules of civil procedure” on pain of waiver. Terra Firma, 215 A.3d at 1005. We are also unpersuaded by TF‘s argument the civil rules control the matter, such that the Kings’ failure to raise the Section 502 defense in preliminary objections, or in their answer to the enforcement action, resulted in waiver. First, the specific provisions of the statutory scheme expressly intended by the General Assembly to govern mechanics’ liens must prevail over the more general provisions of our Rules of Civil Procedure to the extent the two regimes conflict. See
In the present appeal, we are concerned with the filing and perfection of a lien, which is governed by Section 502 of the Law; and in any event, a claimant may not obtain judgment on an invalid mechanics’ lien. See, e.g., Samango, 75 A.2d at 18 (lien invalid for failing to comply with the Law, thus judgment entered on the lien also invalid); Keely v. Jones, 35 Pa.Super. 642, 645 (1908) (“When the act fixes a date at which, or within which, something is to be done in order to establish a valid claim, substantial conformity will not answer. There must be compliance with the requirement[.]“); see also Rees, Weaver & Co., 406 A.2d at 565 (Section 502 “provides that the failure to file the affidavit within the prescribed period ‘shall be sufficient ground for striking off the claim;’ and the cases hold that this unequivocal provision is not to be diminished or qualified“). Cf. M & P Management, L.P. v. Williams, 937 A.2d 398, 398 (Pa. 2007) (invalid confessed judgment “cannot be made valid through the passage of time“; court must strike void judgment despite debtor‘s failure to file timely motion to open or strike).
In this case, by holding the Kings waived their challenge to an unperfected lien, despite the fact Section 505 places no time limit on challenges raised in subsequent proceedings, the Superior Court improperly attempted to give legal force to an invalid judgment.10 A careful reading of the applicable statutes, including the unambiguous language in Section 505 that specifically provides a challenge to an invalid lien may not be waived due to failure to object “preliminarily,” reveals this was an absurd result the General Assembly cannot have intended. See
We are unmoved by TF‘s argument that the Kings waived the protections of Section 505 by failing to object sooner than they did, or that laches should apply here. First, the Kings’ participation in litigation on the merits after answering the complaint surely constituted “consent” to the court‘s jurisdiction over the parties’ contract dispute, but this is irrelevant. TF‘s reference to the Kings’ challenge as an objection to “defective service” is a misnomer and a red herring; the issue here is not defective service to which the Kings’ acquiesced when they participated in merits litigation before the court of common pleas. Instead, the defect here is in TF‘s lien, which remains unperfected and invalid, and the applicable statutes quite logically do not specify a time limit for objection to such a thing. Obviously, an earlier objection to the unperfected lien was possible and even advisable, but the circumstances do not warrant a finding of waiver.11
Justices Todd, Wecht and Mundy join the opinion.
Justice Donohue files a dissenting opinion in which Chief Justice Baer joins.
Justice Saylor did not participate in the consideration or decision of this matter.
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