Dollar Bank, FSB v. EM2 DEVELOPMENT CORP.

716 A.2d 671, 1998 Pa. Super. LEXIS 1929
CourtSuperior Court of Pennsylvania
DecidedAugust 18, 1998
StatusPublished
Cited by2 cases

This text of 716 A.2d 671 (Dollar Bank, FSB v. EM2 DEVELOPMENT CORP.) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dollar Bank, FSB v. EM2 DEVELOPMENT CORP., 716 A.2d 671, 1998 Pa. Super. LEXIS 1929 (Pa. Ct. App. 1998).

Opinion

MONTEMURO, Senior Judge:

Appellant, Allegheny Millwork, appeals from the July 3, 1997 Order entered in the Court of Common Pleas of Washington County dismissing Appellant’s challenges to a Sheriff’s sale. We affirm.

Toscano Development, a corporation which purchases undeveloped land, installs the infrastructure and then sells lots for residential use, owned thirty lots in a housing development named Sienna Woods. In 1993, Tosca-no prepared the entire project for construction by installing sewer lines, placing fill, and building an end wall to contain water flow and ensure the stability of the soil. Toscano completed this work in the latter part of 1993. On August 26, 1994, EM 2 Development Corporation, a housing contractor, purchased one lot, Lot 115, from Toscano in order to build a house on the site. On the same date, EM 2 entered into an agreement with Appellee, Dollar Bank, for financing the real estate purchase and the construction. Dollar Bank recorded this mortgage on September 8, 1994. Sometime after EM 2 purchased the property from Toscano, EM 2 began work on building the house now located on the property. At some point, EM 2 subcontracted unspecified work to Appellant, and, pursuant to this agreement, Appellant supplied finishing materials worth $18,459.01 to the construction site between August and December of 1995. 1 On January 18, 1996, Appellant filed a mechanics lien against EM 2 for failure to pay for the materials.

*672 Dollar Bank eventually foreclosed on the property and on September 6,1996, acquired the land at Sheriffs sale. On September 26, 1996, Appellant, desiring to recover the amount of its hen, filed both a Petition to Set Aside the Sheriffs Sale of Real Estate and Exceptions to the Sheriffs Proposed Distribution of Sale Proceeds. The trial court denied these requests on July 3,1997, stating that Dollar Bank’s “mortgage is superior to [Appellant’s] hen as the mortgage given to Dollar Bank by the second owner of the realty occurred before any work contracted with [Appellant] commenced. There is nothing in the record to establish a contractual relationship between [Appellant] and the original owner, Toscano Development.” (Order dated 7/3/97). From this Order, Appellant filed a timely appeal.

Appellant raises one issue:

Whether a finishing contractor’s mechanic’s hen will not attach as of the date when visible work commenced on a property because it did not do work for the owner commencing the work?

(Appellant’s Brief at 3).

In essence, we are asked to determine when Appellant’s hen attached. If we find that the hen attached when Toscano began excavating the property and instahing sewer lines for the building of the house, then Dollar Bank must pay Appellant the amount of the hen. Conversely, if we find that the hen attached after EM 2 purchased and began their work on the property, Dollar Bank owes nothing to Appellant, as Appellant has failed to adequately establish on the record whether or not EM 2 started construction prior to the recordation date of Dollar Bank’s mortgage.

We agree with Appellant that neither a contractual relationship between the original owner and AppeUant, nor the commencement of Appellant’s work before the issuance of Dollar Bank’s mortgage, is necessary to support a finding that the hen took effect on the date Toscano began work on the property.

Section 1508 of the Mechanics’ Lien Law of 1963 addresses hen priority, in pertinent part, as follows:

The hen of a claim filed under this act shall take effect and have priority:
(a) In the ease of the erection or construction of an improvement, as of the date of the visible commencement upon the ground of the work of erecting or constructing the improvement^]

49 P.S. § 1508(a). “The Mechanic’s Lien Law is a creature of statute in derogation of the common law and must be given strict construction. Therefore, any questions of interpretation should be resolved in favor of a strict, narrow construction.” Delmont Mechanical Serv. v. Kenver Corp., 450 Pa.Super. 666, 677 A.2d 1241, 1244 (1996).

We agree with Appellant that the trial court incorrectly rehed upon the absence of a contract between Appellant and Toscano and the recording of Dollar Bank’s mortgage prior to the commencement of work by Appellant. The statute requires only the “visible commencement upon the ground of the work of erecting or constructing the improvement.” 49 P.S. § 1508(a). In Pennock v. Hoover, 5 Rawle 291 (Pa.1835), a case decided under an earlier version of the Mechanics’ Lien statute possessing requirements similar to those of the present enactment, 2 our Supreme Court stated that mechanics’ liens are

[m]ade to commence expressly from the commencement of the building of the houses, without reference or regard to the person or persons under whose direction or ownership of the property they are begun, continuing to be the same, at whose instance the materials from time to time, shall be furnished and the labour performed throughout the subsequent stage of the work, until finished. It is not the commencement of the right of ownership or claim to the property, nor yet the time *673 at which such right may be first exercised, in contracting for the materials, and with mechanics, for the purpose of continuing the building, that is to fix and regulate the commencement of the liens, on behalf of those furnishing materials, and performing the work; nor is it the time of furnishing the materials, or the time of commencing or finishing the work, but the time of commencing the building of the house, that gives date to the lien.

Id. at 307. Clearly, the identity of the party owning the property when the work of building the improvement commenced and the date that Appellant began work are not dis-positive in determining priority.

Dollar Bank cites Fordham’s Appeal, 78 Pa. 120 (1875), in support of the trial court’s conclusion that a contract must exist between the party seeking the lien and the original owner. In Fordham’s Appeal, the initial owner dug a cellar and laid the foundation of a house, then stopped the work and paid all claims. Six months later, the original owner sold the property to a second owner who financed the transaction with a judgment lien. Using the cellar, the new owner constructed a building. A subcontractor filed a mechanics’ lien on the building, and, following a judicial sale, claimed that its lien had priority over the lien securing the second owner’s purchase price. Our Supreme Court stated that:

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Bluebook (online)
716 A.2d 671, 1998 Pa. Super. LEXIS 1929, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dollar-bank-fsb-v-em2-development-corp-pasuperct-1998.