Pennsylvania’s Supreme Court will determine the fate of a claimant who filed several mechanic’s lien claims and mechanics lien enforcement actions to secure an unpaid debt owed to them after rendering over $2 million dollar in demolition services. With this case, Terra Technical Services, LLC v. River Station, L.P., the court can pave the way for an easier filing and mechanics lien enforcement process in the state. However, decisions in the lower courts make it appear as if such a judgment would be inconsistent with statutory mandates governing procedural formalities.
Background of the Case
Terra [filed] its 17 complaints under the same term and number as the filed liens, in contravention to the P.R.C.P. In 2007, Terra Technical Services, LLC and River Station Land, L.P. entered into a written agreement to have Terra demolish and remove debris from a 76-acre parcel of land owned by River Station for the amount of $2,497,000. After Terra completed its required work, River Station withheld final payment, resulting in Terra filing 17 mechanic’s lien claims and 17 corresponding complaints to enforce said claims. River Station objected to the liens and complaints on various grounds rooted in Pennsylvania’s Rules of Civil Procedure (P.R.C.P.). Most notably, it faulted Terra for filing its 17 complaints under the same term and number as the filed liens, in contravention to the P.R.C.P.
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Both the trial court and the appellate court agreed with River Station’s argument that P.R.C.P.sections 1653 and 1656(2) require that for a mechanics lien enforcement claim to be valid, a new action must commence by the filing of a “complaint or an agreement for an amicable action” under a new term and number. Filing a complaint in the same proceeding as the lien claim does not commence a new action and thus the enforcement of said claim is invalid under the P.R.C.P. From this judgment Terra appealed to the state’s highest court.
On March 11, Justices heard oral argument from both parties. The court will determine whether or not Mechanic’s Lien Law 49 P.S. Section 1101 mandates the filing of a lien enforcement suit under a different term and number for the lien claim to be validly enforced. One of Terra’s arguments is that Pennsylvania’s lack of uniformity in its procedures for filing mechanic’s liens and enforcement actions is inequitable and unfair. It would seem that its counsel seeks to appeal to the Justices’ barometer of common sense and fair dealing. However unfair it may be for lien claimants to lose their rights due to procedural formalities, it is generally a monumental task to ask a panel of Justices to look past a clear statutory mandate and create a new procedure.
Terra relies upon Bricklayers of Western Pennsylvania Combined Funds v. Scott’s Development, to substantiate its claim that a liberal (as opposed to a strict) construction of the statute should be undertaken. In that case, Pennsylvania’s Supreme Court stated that a liberal construction of the mechanic’s lien statute should apply to the substantive issue of how to construe lien claimants. It further stated that other aspects of the statute should be constructed strictly, such as notice and service (both procedural requirements) of parties in an action. The appellate decision in the case at bar quotes the Bricklayers’ judgment at length, and points out that Terra’s argument is inconsistent with the findings of that court.
While it is unknown as to what Pennsylvania’s Supreme Court will ultimately decide, it is plausible to assume, based on the firm logic of the appellate and trial courts and its own prior judgment in Bricklayers, that it will affirm the appellate court’s judgment. Hopefully, it will use this opportunity to clarify any open-ended questions in how to construe the statute and provide clear guidance to all lien claimants going forward.
If anything, this case should be an eye opener for all potential lien claimants – filing lien claims and enforcement actions is a specialized field and you should only trust those professionals that do it on a regular basis or you may find your self on the short end of an expensive stick.