Supreme Court of Pennsylvania Finds Objection to Affidavit of Service Requirement for a Perfected Mechanics’ Lien Was Not Waived Even if First Raised 5 Years Later
Mechanic’s lien claims, unlike other actions, are created by statute and, as a result, Pennsylvania courts require strict compliance with the statutory requirements to perfect the lien or risk the dismissal of the claim. By way of recent example, on April 29, 2021, in Terra Firma Builders, LLC v. King, the Supreme Court of Pennsylvania issued an opinion holding that a property owners’ late objection to the claimant’s failure to comply with the affidavit of service requirement was not waived since it is a prerequisite to a valid lien under the Pennsylvania Mechanics’ Lien Law. 15 MAP 2020, 2021 WL 1681341 (Pa. 2021).
The property owners hired the contractor to perform construction work in the backyard of their residential home. A dispute arose during the project and the contractor was removed from the project before it was completed. As a result, the contractor commenced litigation sounding in breach of contract and unjust enrichment and, simultaneously, filed a mechanic’s lien claim for unpaid labor and materials furnished on the project and filed an affidavit of service. Although the contractor voluntarily dismissed the original mechanic’s lien, it later timely filed another lien claim for the same amount but never filed the affidavit of service for the latter claim. The property owners answered the lien and asserted a counterclaim, but never contested the failure to file an affidavit of service. Two years later, the contractor filed a complaint to enforce the lien and the property owners again failed to raise the affidavit of service issue. Following a bench trial on the consolidated matters, the trial court ruled in favor of the property owners on all claims and awarded monetary damages but later granted pre-trial motions and held a second trial, which again found in favor of the property owners again but did not award damages. While post-trial motions were pending, the property owners filed a motion to strike the mechanics’ lien claim due to the contractor’s failure to file an affidavit of service, which the trial court granted. On appeal, the Superior Court held that preliminary objections pursuant to the Mechanics’ Lien Law must be raised in the enforcement proceedings pursuant to the applicable rules of civil procedure, otherwise they are waived. Specifically, the Superior Court held that the property owner’s motion to strike over five years after the lien was filed was too late and the objection was waived.
The majority opinion, penned by Justice Dougherty, noted that the Mechanics’ Lien Law requires that an affidavit of service be filed within twenty days of service and that failure to serve notice or file an affidavit of service is sufficient grounds to strike the lien claim per 49 P.S. § 1502(a)(2). Engaging in statutory interpretation of the Mechanics’ Lien Law, which statutorily provides the bases for contractors to assert mechanics’ lien claims and as a result must be construed narrowly, the Court held that § 1502 mandates that failure to comply with the notice and affidavit of service requirements of the law leads to an unperfected lien and serves as sufficient grounds to strike the claim. In terms of the meaning of “preliminary” within the Mechanics’ Lien Law, the Court held that 49 P.S. § 1505 clearly provides that, “Failure to file an objection preliminarily shall not constitute a waiver of the right to raise the same as a defense in subsequent proceedings.” The Court emphasized § 1505’s failure to include a time limitation on challenges to the validity of a lien in subsequent proceedings. In further explaining its decision and strict construction of the Mechanics’ Lien Law, the Court noted that mechanics’ liens are “a powerful statutory tool for the protection of valid secured property interests” and, as a result, “it is vital that the lien claimant strictly comply with the mandatory statutory requirements expressly set forth in the Law to prevent potential abuse.” Lastly, the Court clarified that the issue was not one of defective service but instead one of an unperfected, invalid lien. The Court held that “an earlier objection to the unperfected lien was possible and even advisable, but the circumstances do not warrant a finding of a waiver.”
It is critical that all mechanic’s liens strictly comply with the Pennsylvania Mechanics’ Lien Law. We are able to help your business perfect or respond to a mechanic’s lien claim.
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