Von Tobel Corporation, Individually, and d/b/a Von Tobel Lumber & Hardware and Von Tobel Lumber & Home Center, Inc. v. Chi-Tec Construction & Remodeling, Inc. John F. Ziola, Jr.

• Court: Indiana Court of Appeals
• Decided: September 13, 2013
• Docket: 46A03-1301-MI-18
• Status: Published

Opinion

Sep 13 2013, 5:20 am

FOR PUBLICATION

ATTORNEYS FOR APPELLANTS: ATTORNEY FOR APPELLEES:

BRIAN J. HURLEY JOHN F. LAKE TIMOTHY C. KRSAK Lake & Lake Douglas Koeppen & Hurley Michigan City, Indiana Valparaiso, Indiana

IN THE COURT OF APPEALS OF INDIANA

VON TOBEL CORPORATION, Individually, ) and d/b/a VON TOBEL LUMBER & ) HARDWARE; and VON TOBEL LUMBER & ) HOME CENTER, INC., ) ) Appellants-Plaintiffs, ) ) vs. ) No. 46A03-1301-MI-18 ) CHI-TEC CONSTRUCTION & REMODELING, ) INC.; JOHN F. ZIOLA, JR.; and MARGARET ) LYNN WEST, as Trustee for the MARGARET ) LYNN WEST TRUST, ) ) Appellees-Defendants. )

APPEAL FROM THE LAPORTE SUPERIOR COURT The Honorable Jennifer L. Koethe, Judge Cause No. 46D03-0906-MI-298

September 13, 2013

OPINION - FOR PUBLICATION

KIRSCH, Judge Von Tobel Corporation, Individually, and d/b/a Von Tobel Lumber & Hardware ,

and Von Tobel Lumber & Home Center, Inc. appeal the trial court’s grant of summary

judgment in favor of the Margaret Lynn West Trust (“the Trust”). The appellants

contend that summary judgment in favor of the Trust was erroneous, and that the trial

court should have granted the Plaintiffs’ request for summary judgment.

We reverse and remand.

FACTS AND PROCEDURAL HISTORY

Margaret Lynn West is the Trustee of the Trust which owns a parcel of real estate

on Lake Michigan. On November 21, 2006, the Trust entered into an agreement with

Chi-Tec Construction & Remodeling, Inc. (“Chi-Tec”), owned by John F. Ziola, Jr.

(“Ziola”), for the construction of a house on the property. Chi-Tec began building the

house in December of 2006. Chi-Tec had previously entered into a credit agreement with

Von Tobel Corporation, allowing Chi-Tec to make purchases from any of its wholly

owned subsidiaries, including Von Tobel Home Center. During the construction process

on the Trust property, Chi-Tec purchased goods and materials on credit from Von Tobel

Home Center.

Pursuant to the credit agreement, Von Tobel Home Center made its first delivery

on January 8, 2007. Nine days later, on January 17, 2007, Von Tobel Home Center took

steps to secure rights to a mechanic’s lien by tendering pre-lien notice (“Pre-lien Notice”)

to the Trust and recording that notice in the Office of the Recorder of LaPorte County.

The instrument identified Von Tobel Home Center, Inc. as lienholder. Von Tobel

Corporation did not file a separate pre-lien notice. Thereafter, Von Tobel Home Center

2 continued to supply materials to Chi-Tec, and made its last delivery on June 16, 2008.

All invoices bore the heading, “Von Tobel Lumber & Hardware.” The Trust paid

invoices directly to Chi-Tec, but Chi-Tec failed to pay the Plaintiffs the sums that it owed

for materials. Von Tobel Corporation recorded notice of a mechanic’s lien (“Lien

Notice”) against the property on July 15, 2008.

Von Tobel Corporation initiated a lawsuit on June 23, 2009, seeking foreclosure of

its mechanic’s lien as well as damages against Chi-Tec, Ziola, and the Trust. The Trust

filed its Answer and Affirmative Defenses challenging the validity of Von Tobel

Corporation’s mechanic’s lien. Ziola and Chi-Tec both filed for Chapter 7 Bankruptcy in

June, 2012.

Von Tobel Corporation moved for summary judgment and the Trust filed its

response and a cross motion for summary judgment. Following a hearing on both

motions, the trial court entered summary judgment in favor of the Trust holding that Von

Tobel Corporation’s mechanic’s lien was invalid because of “the designation of the

wrong claimant on the pre-lien notice . . . .” Appellants’ App. at 658-61. The Plaintiffs

now appeal.

DISCUSSION AND DECISION

Summary judgment is appropriate only if the pleadings and designated evidence

show “there is no genuine issue as to any material fact and . . . the moving party is

entitled to judgment as a matter of law.” Ind. Trial Rule 56(C). Even if the facts are

undisputed, summary judgment is not proper if those undisputed facts give rise to

conflicting inferences that are material. Winkler v. V.G. Reed & Sons, Inc., 638 N.E.2d

3 1228, 1231 (Ind. 1994). The party seeking summary judgment must demonstrate the

absence of any genuine issue of fact as to a determinative issue, and only then is the non-

movant required to come forward with contrary evidence. Jarboe v. Landmark Cmty.

Newspapers of Ind., Inc., 644 N.E.2d 118, 123 (Ind. 1994). However, the party appealing

from the grant of summary judgment has the burden of persuading the court that the grant

of summary judgment was erroneous. Winkler, 638 N.E.2d at 1231.

The statute governing Pre-lien Notice, in pertinent part, provides that:

A person, firm, partnership, limited liability company, or corporation that sells or furnishes on credit material . . . for the original construction of a single or double family dwelling for the intended occupancy of the owner upon whose real estate the construction takes place to a contractor, subcontractor, mechanic, or anyone other than the owner or the owner’s legal representatives must: (1) furnish the owner of the real estate . . . with a written notice of the delivery or labor and the existence of lien rights not later than sixty (60) days after the date of the first delivery or labor performed; and (2) file a copy of the written notice in the recorder’s office of the county not later than sixty (60) days after the date of the first delivery or labor performed. The furnishing and filing of the notice is a condition precedent to the right of acquiring a lien upon the real estate or upon the improvement constructed on the real estate.

Ind. Code § 32-28-3-1(i). As this Pre-lien Notice statute indicates, filing of such notice

“is a condition precedent to the right of acquiring a lien . . . .” Id. To acquire a lien,

however, further steps must be taken, pursuant to the Lien Notice statute, which provides

in pertinent part:

The statement and notice of intention to hold a lien may be verified and filed on behalf of a client by an attorney registered with the clerk of the supreme court as an attorney in good standing under the requirements of the supreme court. (c) A statement and notice of intention to hold a lien filed under this section

4 must specifically set forth: (1) the amount claimed; (2) the name and address of the claimant; (3) the owner’s: (A) name; and (B) latest address as shown on the property tax records of the county; and (4) the: (A) legal description; and (B) street and number, if any; of the lot or land on which the house, mill, manufactory or other buildings, bridge, reservoir, system of waterworks, or other structure may stand or be connected with or to which it may be removed.

Ind. Code § 32-28-3-3.

The Plaintiffs argue that these statutes do not expressly require that a Lien Notice

be filed in the identical corporation name as set forth in the Pre-lien Notice, that the Pre-

lien Notice bearing the name “Von Tobel Lumber & Home Center, Inc.” was sufficient to

inform the Trust that a claim for materials furnished in the construction of the residence

was being asserted by “Von Tobel Corporation,” and that the Trust was not prejudiced.

We agree.

In interpreting a statute, our goal is to determine and give effect to the intent of the

legislature. State v. Int’l Bus. Machs. Corp., 964 N.E.2d 206, 209 (Ind. 2012). In

determining legislative intent, we consider the objects and purposes of the statute as well

as the effects and repercussions of our interpretation. Id. “The legislative intent as

ascertained from the provision as a whole prevails over the strict literal meaning of any

word or term.” Id. (quoting Bushong v. Williams, 790 N.E.2d 467, 471 (Ind. 2003)).

Indeed, “[t]hese precepts have guided us in statutory interpretation for over a century.”

Id. (noting Parvin v. Wimberg, 130 Ind. 561, 571, 30 N.E. 790, 793 (1892) and observing

5 that when legislative intent is ascertained, “it will prevail over the literal import and the

strict letter of the statute.”). Where meaning is uncertain, “the courts will look also to the

situation and circumstances under which [the statute] was enacted, to other statutes, if

there are any upon the same subject, whether passed before or after the statute under

consideration, whether in force or not, as well as to the history of the country, and will

carefully consider in this connection the purpose sought to be accomplished.” Id.; cf. D

& M Healthcare, Inc. v. Kernan, 800 N.E.2d 989, 911 (Ind. 2003) (rejecting literal

construction of Indiana Constitutional provision in light of history of the provision and

subsequent practice).

Long ago, our Supreme Court set forth the purpose of our mechanics’ lien

legislation:

The mechanics’ lien laws of America, in general, reveal the underlying motive of justice and equity in dedicating, primarily, buildings and the land on which they are erected to the payment of the labor and materials incorporated, and which have given to them an increased value. The purpose is to promote justice and honesty, and to prevent the inequity of an owner enjoying the fruits of the labor and material furnished by others, without recompense.

Moore-Mansfield Constr. Co. v. Indianapolis New Castle & Toledo Ry. Co., 179 Ind.

356, 372, 101 N.E. 296, 302 (1913).

In Beneficial Financial Co. v. Wegmiller Bender Lumber Co., Inc., we expressly

“reject[ed] the idea that our entire mechanics’ lien statute must be strictly construed with

such hypertechnicality so as to frustrate the remedial purpose of the legislation.” 402

N.E.2d 41, 45 (Ind. Ct. App. 1980). There, we further determined that:

The perfection and enforcement provisions of the statute should be fairly and reasonably construed and applied so as to afford materialmen and laborers the

6 security intended upon substantial compliance with statutory requirements, keeping in mind the need to afford reasonable protection to the rights of other parties who may have acquired an interest in the party.

Id. Ultimately, we determined that we must assess whether there has been substantial

compliance by the lien claimant. Id. In determining whether a lien claimant has

substantially complied, we assess three factors: (1) “the degree of non-compliance with

the letter of the statute,” (2) “the policy which underlies the particular statutory provision

in question,” and (3) “the prejudice which may have resulted to either the owner of the

property or other third parties who have an interest in the real estate.” Id.

Here, the degree of non-compliance with the letter of the statute is minimal.

Indeed, the statute does not require the filing of a Lien Notice in the identical name as the

corporation that filed a Pre-lien Notice. See Ind. Code §§ 32-28-3-1(i), 32-28-3-3. Under

comparable facts, in Waverly Co. v. Moran Electric Service Inc., we long ago declined a

similarly narrow reading of the mechanic’s lien statutes. There, we determined that a

Lien Notice claiming an amount was due and owing to “Moran Electric Service

Company” was sufficient when the corporation that furnished the labor and materials was

actually named “Moran Electric Service, Inc.” 108 Ind. App. 75, 81, 26 N.E.2d 55, 57

(1940). We reasoned that although the two names were “not strictly idem sonans . . .

they [were] of sufficient similarity as to have substantially the same meaning.” Id. See

also Kendall Lumber & Coal Co. v. Roman, 120 Ind. App 368, 374, 91 N.E.2d 187, 190

(1950) (rejecting the notion that “the statutory notice of the lien was fatally defective

because it was signed ‘Kendall Lumber and Coal Company’ instead of ‘Kendall Lumber

and Coal Company, Inc.’”); cf. Talbott v. Hale, 72 Ind. 1, 4 (1880) (determining that

7 “Cincinnati, Peru and Chicago Railway Co.” and “Chicago Railroad Company” were

“the equivalents, each of the other, and had reference to, and were intended to designate

the same corporation.”).

In Logansport Equip. Rental, Inc. v. Transco, Inc., 755 N.E.2d 1135, 1137 (Ind.

Ct. App. 2001), we reiterated the policy that underlies the statutory notice provision

discussed in Waverly and Beneficial Fin., stating: “The filing requirements for a

mechanic’s lien serve two policy objectives: (1) to provide the record titleholder of the

property with notice that a mechanic’s lien has been placed upon the real estate; and (2)

to put third party purchasers and money lenders on notice of the same fact.”

Here, there are no potentially prejudiced third parties, and the only question is

whether the notice to the Trust was sufficient. The Trust received the Pre-lien Notice

from “Von Tobel Lumber & Home Center, Inc.” and the Lien Notice from “Von Tobel

Corporation.” The Trust does not contend that it was misled or confused by the

discrepancy. Further, when the Trust received its Pre-lien Notice, the Trust made an

inquiry of Chi-Tec about it, demonstrating that the policy objectives of the statute were

fulfilled. Finally, the Trust did not designate any evidence to the trial court of prejudice.

The variance between the name set out in the Pre-lien notice and that contained in

the Lien Notice was minimal, did not undermine the statutory policy concerns regarding

notice, and did not cause prejudice to the property owner or any third party.

Indiana’s mechanic’s lien legislation has a “remedial purpose.” Beneficial Fin.,

402 N.E.2d at 45. It is structured to give the affected homeowner notice of a potential

lien early in the construction process, so the party may take measures and direct funds

8 accordingly. See Ind. Code § 32-28-3-1(i). Here, the property owner had notice of the

potential lien early in the construction process, but failed to take appropriate measures to

see that funds were properly directed.

We reverse the summary judgment entered in favor of the trust and remand with

instructions to enter summary judgment in favor of Von Tobel Corporation.

Reversed and remanded.

ROBB, C.J., and RILEY, J., concur.