Court Opinion

ID: 4261662
Source: CourtListenerOpinion
Date Created: 2018-04-05 15:49:40.019224+00
Date Added: 2024-06-11T14:29:39.652036
License: Public Domain

J-A06045-18

NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37

  IRON CITY EXCAVATING, INC.,              : IN THE SUPERIOR COURT OF
                                           :        PENNSYLVANIA
                  Appellee                 :
                                           :
                     v.                    :
                                           :
  ANIMAL FRIENDS, INC.,                    :
                                           :
                  Appellant                : No. 1532 WDA 2017

               Appeal from the Order Entered October 10, 2017
              in the Court of Common Pleas of Allegheny County
                    Civil Division at No(s): No. GD17-8388

BEFORE:      BENDER, P.J.E., SHOGAN, and STRASSBURGER, JJ.*

MEMORANDUM BY STRASSBURGER, J.:                        FILED APRIL 5, 2018

      Iron City Excavating, Inc., appeals from the order entered on October

10, 2017, which sustained preliminary objections filed by Animal Friends, Inc.,

and dismissed Iron City’s mechanics’ lien claim, see 49 P.S. §§ 1101-1902.

We affirm.

      We offer the following summary of the facts based upon the mechanics’

lien claim filed by Iron City against Animal Friends on June 6, 2017. According

to Iron City, it was a subcontractor of Burchick Construction Company, Inc.,

for work to be performed on a new commercial building that was owned and

operated by Animal Friends. Iron City asserted that it was not paid for labor

and materials for work it performed, and therefore Animal Friends owed Iron

City $97,154. Thus, Iron City filed a mechanics’ lien claim pursuant to 49 P.S.

§ 1502.

*Retired Senior Judge assigned to the Superior Court.
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      On August 2, 2017, Animal Friends filed preliminary objections to the

mechanics’ lien claim pursuant to 49 P.S. § 1505 (governing the procedure

for contesting a claim), arguing that Iron City waived its right to file a

mechanics’ lien claim pursuant to 49 P.S. § 1402(a) (governing waiver of liens

by contractors).   Iron City responded by arguing that the waiver of lien

agreement signed by Burchick was improper pursuant to 49 P.S. § 1401(b)(2)

(governing the posting of a bond as consideration for a waiver of lien

agreement). The trial court initially overruled those preliminary objections,

but on October 10, 2017, the trial court entered an order granting Animal

Friends’ motion for reconsideration and sustaining the preliminary objections.

Iron City timely filed a notice of appeal, and both Iron City and the trial court

complied with Pa.R.A.P. 1925.

      On appeal, Iron City sets forth numerous issues arguing that the trial

court erred in sustaining preliminary objections in this mechanics’ lien claim.

We review these issues mindful of our standard of review.

            In determining whether the trial court properly sustained
      preliminary objections, the appellate court must examine the
      averments in the complaint, together with the documents and
      exhibits attached thereto, [] in order to evaluate the sufficiency of
      the facts averred.

             Our inquiry goes only to determining the legal sufficiency of
      [the claimant’s] complaint and we may only decide whether
      sufficient facts have been pleaded which would permit recovery if
      ultimately proven. We must be able to state with certainty that
      upon the facts averred, the law will not permit recovery by the
      [claimant].

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            This Court will reverse the trial court’s decision only where
     there has been an error of law or abuse of discretion. Further,
     when the sustaining of preliminary objections results in the denial
     of a claim or the dismissal of a suit in a mechanics’ lien proceeding,
     preliminary objections should be sustained only where the case is
     clear and doubtless.

Wendt & Sons ex rel. Wendt v. New Hedstrom Corp., 858 A.2d 631, 632

(Pa. Super. 2004) (quoting Denlinger v. Agresta, 714 A.2d 1048, 1050–51

(Pa. Super. 1998)) (internal citations and quotation marks omitted).

     We also set forth the relevant law surrounding mechanics’ lien claims.

     § 1401. Waiver of lien by claimant

                                     ***

     (b)   Nonresidential Buildings.

           (1)   Except as provided in subsection (a), a waiver by a
                 contractor of lien rights is against public policy,
                 unlawful and void unless given in consideration for
                 payment for the work, services, materials or
                 equipment provided and only to the extent that such
                 payment is actually received.

           (2)   Except as provided in subsection (a), a waiver by a
                 subcontractor of lien rights is against public policy,
                 unlawful and void, unless given in consideration for
                 payment for the work, services, materials or
                 equipment provided and only to the extent that such
                 payment is actually received, or unless the
                 contractor has posted a bond guaranteeing
                 payment for labor and materials provided by
                 subcontractors.

     § 1402. Waiver by contractor; effect on subcontractor

     (a)   General rule.-- To the extent that lien rights may be validly
           waived by a contractor or subcontractor under section
           401(a) or where the contractor has posted a bond under
           section 401(b)(2), a written contract between the owner

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              and a contractor, or a separate written instrument signed
              by the contractor, which provides that no claim shall be filed
              by anyone, shall be binding: but the only admissible
              evidence thereof, as against a subcontractor, shall be proof
              of actual notice thereof to him before any labor or materials
              were furnished by him; or proof that such contract or
              separate written instrument was filed in the office of the
              prothonotary prior to the commencement of the work upon
              the ground or within ten (10) days after the execution of the
              principal contract or not less than ten (10) days prior to the
              contract with the claimant subcontractor, indexed in the
              name of the contractor as defendant and the owner as
              plaintiff and also in the name of the contractor as plaintiff
              and the owner as defendant. The only admissible evidence
              that such a provision has, notwithstanding its filing, been
              waived in favor of any subcontractor, shall be a written
              agreement to that effect signed by all those who, under the
              contract, have an adverse interest to the subcontractor’s
              allegation.

49 P.S. §§ 1401-1402 (emphasis added).

       Iron City argues that the waiver of lien agreement contemplated by

subsection 1402(a) can only be satisfied where the bond posted by Burchick

satisfies the requirements of subsection 1401(b)(2).        Iron City goes on to

argue that in this case the $6,000,000 bond posted by Burchick does not

satisfy these requirements because it does not guarantee “payment for labor

and materials provided by subcontractors.”1 49 P.S. § 1401(b)(2); Iron City’s

Brief at 23. Iron City contends that the subsection should be interpreted as

requiring that the posted bond “be the equivalent of payment for the work in

____________________________________________

1The contract between Burchick and Iron City provided that Burchick would
pay Iron City $540,000 for its work. Preliminary Objections, 8/2/2017, at
Exhibit 3, Article II(a).

                                           -4-
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order for the bond to be capable of forming a basis for waiver of the

subcontractor’s lien rights.” Id. Iron City also suggests that the language

contained in the bond in this case is inadequate because the bond surety is

not obligated to pay subcontractors where Burchick is in default. 2 Id. at 25.

Thus, according to Iron City, there is no “valid and legally enforceable no lien

agreement between [Burchick] and Iron City” and therefore the trial court

erred in sustaining the preliminary objections. Id. at 32.

____________________________________________

2 Iron City points specifically to sections 3 and 17 of the bond in support of
this contention. See Iron City’s Brief at 24. Those sections provide as follows.

       § 3 If there is no Owner Default under the Construction Contract,
       the Surety’s obligation to the Owner under this Bond shall arise
       after the Owner has promptly notified the Contractor and the
       Surety (at the address described in Section 13) of claims,
       demands, liens, or suits against the Owner or the Owner’s
       property by any person or entity seeking payment for labor,
       materials or equipment furnished for use in the performance of
       the Construction Contract and tendered defense of such claims,
       demands, liens or suits to the Contractor and the Surety.

                                           ***

       § 17 If this Bond is issued for an agreement between a Contractor
       and subcontractor, the term Contractor in this Bond shall be
       deemed to be Subcontractor and the term Owner shall be deemed
       to be Contractor.

Preliminary Objections, 8/2/2017, at Exhibit 1. Specifically, Iron City suggests
that the language of § 3 is conditional. Iron City’s Brief at 24. It clearly is
conditional, but it is conditional upon the provision of notice to the surety. In
addition, Iron City argues that the language of § 17 is unclear. We disagree.
If the terms are substituted according to this provision, the language is
perfectly clear that the agreement applies to contractors (ie. Burchick) and
subcontractors (ie. Iron City).

                                           -5-
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       Here, the trial court reviewed the sections of the bond that Iron City

claimed are inadequate, and concluded that “there is nothing improperly

conditional, ineffective, or legally inadequate about the bond. To the contrary,

the bond satisfies the relevant sections of the Pennsylvania lien laws.” Trial

Court Opinion, 11/3/2017, at 2-3.

       Our review of the claim and the preliminary objections yields the same

result as that of the trial court. Despite Iron City’s attempts to convince this

Court otherwise, as well as claim that this case is one of “first impression,”

see Iron City’s Brief at 17, we conclude that Burchick and Animal Friends

entered into a valid waiver of lien agreement; that Iron City and Burchick

made this waiver of lien agreement part of their contract;3 and therefore, Iron

City is bound by the waiver of lien agreement. Accordingly, Iron City is not

entitled to file a mechanics’ lien claim against Animal Friends, and the trial

court did not err in sustaining preliminary objections and striking the claim.

       Order affirmed.

____________________________________________

3 See Preliminary Objections, 8/2/2017, at Exhibit 3, Article XI(a) (stating
“Subcontractor hereby expressly waives all rights to assert any mechanic’s
[sic] lien or materialman’s lien or other lien or claim against the Owner’s
property”).

                                           -6-
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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 4/5/2018

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