Equibank v. Adle, Inc.

595 A.2d 1284, 407 Pa. Super. 553, 1991 Pa. Super. LEXIS 2566
CourtSuperior Court of Pennsylvania
DecidedAugust 30, 1991
Docket01844
StatusPublished
Cited by8 cases

This text of 595 A.2d 1284 (Equibank v. Adle, Inc.) 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
Equibank v. Adle, Inc., 595 A.2d 1284, 407 Pa. Super. 553, 1991 Pa. Super. LEXIS 2566 (Pa. Ct. App. 1991).

Opinion

TAMILIA, Judge:

James Reader, t/d/b/a L & R Glass Company, and Zeigler Roofing and Heating, Inc., (hereinafter L & R and Zeigler) take this appeal from the September 26, 1990, Order denying their exceptions to the sheriff’s proposed schedule of distribution of proceeds obtained from the sale of property purchased by appellee/mortgagee, Equibank.

*555 This proceeding was initiated by an action in foreclosure by appellee against defendants/mortgagors, Adíe, Inc., and Noria, Inc. On July 29, 1988, the property was sold at sheriff sale to appellee/mortgagee for $100,000. The sheriffs proposed schedule of distribution was filed August 5, 1988, and L & R and Zeigler filed exceptions claiming their mechanics’ lien judgments, obtained November 10, 1987, in the amounts of $8,702.45 and $26,881.00, respectively, had priority dating from the visible commencement of construction of the building on the property, May 16, 1986. Accordingly, appellants contended their judgments had priority over the mortgage held by appellee recorded on July 29, 1986, and should be reflected in the distribution. The court denied appellants’ exceptions finding the mechanics’ liens defective for appellants’ failure to comply with the mechanics’ lien statute requiring claimants to file individual liens against each condominium owner rather than one lien against the project. For this reason the court did not address the issue of the priority of the liens. Appellants have appealed to this Court from the foregoing Order.

Appellants raise four issues on appeal: 1) the appellee does not have standing to collaterally attack the validity of mechanics’ lien judgments; 2) the liens were valid because visible construction pre-dated the Declaration of Condominium filed by appellee thereby eliminating the need to file separate claims of apportionment; 3) appellants’ mechanics’ lien judgments have priority over appellee’s mortgage; and 4) appellee violated the Doctrine of Clean Hands and should be denied relief.

It is the appellants’ position Equibank’s attempt to collaterally attack the mechanics’ lien judgments is precluded because Equibank was not party to the proceedings culminating in judgment in appellants’ favor. We disagree and find the facts in this matter distinguish it from those cases relied upon by appellants.

The case law in Pennsylvania makes it clear that although a judgment in a mechanics' lien is binding upon an *556 owner, it does not preclude a stranger to that judgment from contesting the validity of a mechanics’ lien in a distribution proceeding after a sheriff’s sale.

Where the lien of a mortgage is prior in date to a judgment entered upon a scire facias sur mechanic’s lien, but is subsequent to the date at which the work upon the building was commenced, the mortgagee may upon a distribution of the fund raised by the sale of the building, attack the validity of the mechanic’s claim upon which the judgment in the scire facias was obtained. If the court finds for sufficient reasons that the mechanic’s claim was invalid, the mortgage will be entitled to priority over the judgment in the distribution of the fund.

Prudential Trust Co. v. Hildebrand, 34 Pa.Super. 249 (1907). And, where the mechanics’ lien holder avers its judgment takes priority over an incumbrance earlier in date, he can be required to prove the matters he alleges give his judgment priority.

A judgment on a mechanic’s lien ranks, as a judgment, from the date of its entry. As against incumbrances of later date it is, on the face of the record, a prior lien on the property bound by it. Against incumbrances earlier in date, however, the matters that give it priority, under the mechanic’s lien law,. must be affirmatively shown since the judgment implies nothing beyond the indebtedness on which it is based. To give it such priority, proof must be made that the building to which it relates was commenced before such incumbrances were created____

Nolt v. Crow, 22 Pa.Super. 113, 114 (1903).

As mortgagee, appellee had a lien against the property in question as of July 29, 1986, when the mortgage was filed. While appellants’ mechanics’ lien judgments were not entered until November 10, 1987, in their exceptions they argue the visible commencement of the project on May 16, 1986, preceded the mortgage recordation thereby giving their liens priority. The appellee herein is not, as appellants argue, a third party attempting to intervene in the action between appellants and the debtor owners. Rather, appel *557 lants and appellee are competing lien creditors. We find appellee is entitled to challenge the validity of appellants’ mechanics’ liens in the distribution proceeding following the sheriff sale, and appellants must prove their claim in the same fashion as would be necessary at trial.

We address now the validity of the mechanics’ liens. Appellants argue their liens are valid and reason separate mechanics’ lien claims were not required when they filed the claims in April, 1987, because their liens relate back to the May 16, 1986 date of visible commencement at which time appellee had not yet filed a declaration of condominium. We find this argument devoid of merit.

In order to set forth valid lien claims, appellants were required to comply with the specific dictates of 49 Pa.S. § 1806(b):

§ 1306. Consolidation or apportionment of claims

(b) Apportionment of Claims. Where a debt is incurred for labor or materials furnished by the same claimant for work upon several different improvements which do not form all or part of a single business or residential plant, the claimant shall file separate claims with respect to each such improvement, with the amount of each claim determined by apportionment of the total debt to the several improvements,____

Id. Accordingly, a single lien claim cannot be filed against a group of residential dwellings such as the condominium project which is the subject of this litigation. As reflected in L & R and Zeigler’s intent to file a mechanics’ claim and the subsequently filed mechanics’ claims, appellants were aware the project on which they wished to impose liens was comprised of condominium units known as the Ogle Station Condominium. Also, this Court cannot believe L & R and Zeigler, both experienced construction subcontractors, were unaware the project for which they contracted was a condominium development, thereby requiring them to comply with section 1306(b), Apportionment of Claims. See Metco, *558 Inc. v. Moss Creek, Inc., 385 Pa.Super. 542, 561 A.2d 808 (1989), alloc. granted, 525 Pa. 601, 575 A.2d 567 (1990). Appellants’ failure to comply with the statute requiring apportionment of claims against a condominium project renders their liens defective.

Having found the liens defective, we need not address the issues of the validity of the no-lien contract between owner and general contractor or the priority of lien holders, Equibank, L & R and Zeigler. See Trustees of C.I.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

EQT Production v. Teska, R.
Superior Court of Pennsylvania, 2016
William Penn Bank v. East Investments, LLC
48 Pa. D. & C.5th 531 (Montgomery County Court of Common Pleas, 2015)
Swenk v. Asbury
62 Pa. D. & C.4th 391 (Berks County Court of Common Pleas, 2003)
Paramount Aviation v. Agusta
Third Circuit, 1999
Olson v. North American Industrial Supply, Inc.
658 A.2d 358 (Superior Court of Pennsylvania, 1995)
Osterlund v. Osterlund
26 Pa. D. & C.4th 275 (Cumberland County Court of Common Pleas, 1994)

Cite This Page — Counsel Stack

Bluebook (online)
595 A.2d 1284, 407 Pa. Super. 553, 1991 Pa. Super. LEXIS 2566, Counsel Stack Legal Research, https://law.counselstack.com/opinion/equibank-v-adle-inc-pasuperct-1991.