Opinion ID: 2068152
Heading Depth: 1
Heading Rank: 4

Heading: Superior Court Judgment Motion to Dismiss Granted

Text: On September 29, 2008, the Superior Court issued a written opinion adopting PFR's position and dismissing the statement of claim without prejudice. [4] King sought an interlocutory appeal to this Court, which was denied. [5] On February 5, 2009, in accord with its written opinion, the Superior Court entered a final judgment dismissing the statement of claim pursuant to Superior Court Civil Rule 54(b). This is King's direct appeal. In the beginning of its opinion granting the motion to dismiss, the Superior Court explained that it had considered converting the motion to dismiss into a motion for summary judgment but declined to do so. Superior Court Civil Rule 12(b)(6) requires a motion to dismiss to be treated as a motion for summary judgment under Superior Court Civil Rule 56 if matters outside the pleadings are presented to and not excluded by the Court. PFR's motion to dismiss did not rely on materials outside the pleadings. King's response, however, referred to the December 2006 letter to the Department of Land Use, which was attached to the response as an exhibit. The Superior Court decided that it would not convert the motion to dismiss to a motion for summary judgment because it did not need to consider King's exhibit (the December 2006 letter) to reach a decision on the alleged pleading defects. The Superior Court concluded that it would consider PFR's motion to dismiss as styled. [6] The Superior Court then reached the merits of the parties' arguments. The Superior Court noted at the outset that the Mechanics' Lien Statute must be strictly construed because mechanics' liens are in derogation of the common law; and explained that the statement of claim must comply with all applicable statutory requirements. The court stated that to obtain a mechanics' lien, a plaintiff must affirmatively show that `every essential statutory step in creation of the lien has been followed.' [7] The Superior Court concluded that King's statement of claim failed to comply with both the pleading and timing requirements for obtaining a mechanics' lien. Specifically, the Superior Court determined that the statement of claim failed to plead prior written consent of the property owner, as required by the statute. The court explained that, [a]lthough not explicitly referenced in the pleading requirements of § 2712, the statutory requirement of prior written consent has long been construed by Delaware courts to impose a pleading requirement upon that `special class of mechanics' liens[] for labors or supplies contracted for by the tenant. [8] The Superior Court held that the plaintiff must both plead and prove the owner's prior written consent to obtain a mechanics' lien. Although King's statement of claim alleges that the construction contract was between King and AWC, it does not allege that PFR gave prior written consent. The Superior Court concluded that King's statement of claim therefore must fail for neglecting to plead the existence of prior written consent. [9] King argued that prior written consent is not one of the pleading requirements listed in section 2712 and need not be pleaded. The Superior Court disagreed, stating that King's argument ignores the relevant case law and assumes without basis that § 2712 constitutes an exhaustive and exclusive catalog of all pleading requirements for mechanics' liens. [10] The court noted that even if the December 2006 letter from the manager of PFR to the Department of Land Use could constitute prior written consent, King failed to allege consent in the pleadings and only mentioned the letter in its response to PFR's motion to dismiss. Therefore, the court could not consider the letter as evidence of prior written consent. The Superior Court also concluded that King's statement of claim failed to plead a completion date and, therefore, was filed prematurely before King finished supplying labor or materials. The court explained that a plaintiff who has furnished labor or materials under a contract with a tenant is considered a subcontractor and subject to section 2711(b), [11] which requires a plaintiff to file a statement of [its] respective claims within 120 days from the date [of] completion of the labor performed or from the last delivery of materials furnished. [12] The pleading requirements of section 2712(b)(6) provide that the statement of claim must set forth [t]he time when the doing of the labor or the furnishing of the materials was finished. [13] The statement of claim must allege a finishing date, the Superior Court concluded, because that date is needed to determine when the statute of limitations began to run. [14] The Superior Court noted that the Delaware legislature had removed the requirement in section 2711(a) that contractors who have contracted directly with the owner of property wait 90 days after completing the construction work before filing a mechanics' lien. [15] Left in place, however, is the current section 2711(b), which requires that claims filed by subcontractors or contractors who contract with a tenant be filed within 120 days from the date of completion of the labor performed or from the last delivery of materials furnished. [16] As the Superior Court explained, by removing the 90-day waiting period for contractors under § 2711(a), the legislature did not also implicitly intend to eliminate the stated requirement under § 2711(b) that completion of labor or material deliveries precede filing. Rather, [a] straightforward reading of the statute makes clear that the provision of labor or materials must be finished before a § 2711(b) plaintiff can file a mechanics' lien action. [17] Moreover, the 120-day time period required for section 2711(b) must be calculated from the date of completion of the labor performed or from the last delivery of materials furnished. [18] Applying the plain language of section 2711(b), the Superior Court held that King's statement of claim was filed prematurely. [19] King conceded in its statement of claim that it was continuing to supply labor and materials to the project. Because neither the completion of the labor performed nor the last delivery of materials had occurred, the Superior Court held that the 120-day filing period under section 2711(b) had not begun to run. The Superior Court concluded that its holding was consistent with the language of section 2711(b) and with the Superior Court's decision in E.J. Deseta HVAC Services v. Conaty. [20] In Deseta, the Superior Court applied parallel language in revised § 2711(a) stating that a contractor `shall file his statement of claim within 180 days after the completion of such structure' to bar a claim that was filed before the structure was complete. [21] The Superior Court explained that in Deseta, the court noted that the principle that the Mechanics' Lien Statute must be strictly construed extends to requiring filing  within prescribed times. [22] Therefore, the Superior Court concluded, a claimant must observe not just the ending date of the statutory period, but its starting point as well. [23] Consequently, a plaintiff seeking a mechanics' lien under section 2711(b) must await the completion of labor or the final delivery of materials before filing an action for a mechanics' lien. Because King's statement of claim failed to plead a completion date, the Superior Court concluded that King's statement of claim was defective and was filed prematurely. Accordingly, the Superior Court granted PFR's motion to dismiss and dismissed King's statement of claim without prejudice. [24]