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On July 19, the Pennsylvania Superior Court handed down a 2-1 opinion, addressing the rule governing the filing of preliminary objections to a mechanics' lien, specifically when objecting to the failure to file an affidavit of service. In Terra Firma Builders v. King, 2019 PA Super 219 No, 2593 EDA 2018 (hereinafter Terra Firma Builders), the majority ruled that even though the statute in question must be strictly and narrowly construed, the owners of real estate waived their right to file preliminary objections, in spite of the contractor's failure to comply with the statute's service provisions.

Factually, the contractor filed a $131,123.24 lien against a residence on Feb. 20, 2013, timely filing an affidavit of service as required by 49 P.S. Section 1502 (perfection of lien). Shortly thereafter, the contractor filed a praecipe to withdraw the lien, choosing to re-file the identical lien roughly one month later, to which a new docket number was assigned in Delaware County. However, the contractor failed to file the affidavit of service on this second filing, in contravention of the Mechanics' Lien Law. Section 502 of the law provides, in pertinent part: "Failure to serve such notice or to file the affidavit or acceptance of service within the times specified shall be sufficient ground for striking off the claim." Critically, owners never filed preliminary objections to the claim on the basis of contractor's failure to file an affidavit of service. Furthermore, owners did not file preliminary objections to the complaint to enforce the lien and never raised the failure to file an affidavit of service as a defense in the litigation.

The trial court eventually consolidated the lien with the complaint to enforce to the lien, along with the contractor's breach of contract action against the owners. These matters proceeded to trial, with the owners prevailing and an appeal ensuing. With post-trial motions pending and despite the passage of five years, the owners filed their petition to strike the lien for failure to comply with Section 502 concerning service; the petition was treated as preliminary objections by the court. That trial court granted the petition, citing to the Lien Law, specifically Section 505 (preliminary objections) which in its estimation affords a litigant the right to file preliminary objections at any time; on appeal, the contractor conceded that it failed to file the affidavit of service. Notably, Section 505 provides, in relevant part, that: "Any party may preliminary object to a claim upon a showing of exemption or immunity of the property from lien, or for lack of conformity with this act … Failure to file an objection preliminarily shall not constitute a waiver of the right to raise the same as a defense in subject proceedings."

On appeal, our Superior Court confronted the question of whether an owners' approximately five-year delay in objecting to a failure to file an affidavit of service constituted a waiver of that issue. Initially, the Terra Firma Builders court acknowledged that preliminary objections in this context are not governed by the Pennsylvania Rules of Civil Procedure, but instead by the Mechanics' Lien Law. Unlike Rule 1028 of our Rules of Civil Procedure, which requires that preliminary objections be filed within 20 days, Section 505 does not provide an express time limitation. And despite this absence of a time limitation, the court noted that objections " … are denominated as 'preliminary'" and proceeded to hold that a Section 505 defense " … has to be raised in the enforcement proceeding in accordance with the manner provided for in the applicable rules of civil procedure. If it does not do so, then the claim is waived." The court justified its holding by citing, in a footnote, to the decision in Crane v. Rogers, 60 Pa. Super 305 (1915). The Crane case was decided under the repealed 1901 Mechanics Lien statute whereby a claim was filed by writ of scire facias, rather than complaint. Crane held that when an owner did not raise a defect in the lien after service of the writ, the right to object was subsequently waived.

In a dissent as lengthy as the majority opinion itself, Judge Mary Murray cited to multiple cases to support contention that applicable precedent does not prohibit a party from filing preliminary objections as late as the conclusion of enforcement proceedings. Like the majority, the dissenting opinion emphasized that strict compliance with Mechanics' Lien Law is necessary to secure a valid lien, and, as the pertinent statutes are in derogation of common law, any interpretation is resolved in favor of a strict, narrow construction. See Tesauro v Baird, 335 A.2d 792, 793 (Pa. Super. 1975) was cited for the rule that the doctrine of substantial compliance applies only to a defect in the form of the notice, not to situations where notice of claim must be served within one month of filing.

Clearly, the form of the notice is not the issue in Terra Firma Builders; the issue in this matter is the filing of the affidavit, rather than notice to the owners. Undeniably, there was still a violation of Section 502, in that the affidavit was never filed, which may be fatal to a claim. The dissent emphasized that Section 505 permits a litigant to raise as a defense what might have been raised earlier by preliminary objection. There appears to be no ambiguity in this language: Section 505 places no limit on when a party may raise a defense to the enforcement of the lien. For example, the dissent cited Rees, Weaver and Co. V. M.B.C. Paper Mill, 406 A.2d 562, 563 (Pa. Super 1979), where the Superior Court invalidated a mechanics' lien where a contractor failed to file an affidavit of service in the twenty-day period mandated by Section 502. The contractor there had secured a default judgment and the owner's petition to strike the judgment was granted.

The dissent focuses on the paucity of precedent cited by the majority in support of its holding that a Section 505 defense "must be raised in the enforcement proceeding in accordance with the manner provided for in the applicable rules of civil procedure." Like the majority, the dissent cited two early 20th century cases in support of its narrow, strict interpretation. When the statute fixes a date for which something must be done, substantial conformity will not suffice, citing Keely v Jones 35 Pa. Super 642, 645 (1908) and Thompson v. Radell, 42 Pa. Super. 105 (1910).

Perhaps the Terra Firma Builders court's decision will spur landowners to object to technical lien deficiencies, to avoid litigation over the timeliness of their objections, even where a plain reading of the Lien Law seems to give the owner more leeway. Where the stakes are high and attorney fees are an issue, a swift attack is probably the most prudent course; the realities of modern litigation practice require promptly asserting all defenses.

James M. Lammendola is an associate professor and deputy chair of the Legal Studies Department at Temple University's Fox School of Business. He was in private practice for 20 years. He may be reached at [email protected] or 215-204-4124.

Harper J. Dimmerman is a published novelist and adjunct professor at Temple University's Fox School of Business. He represents clients in various Philadelphia litigation and real estate law matters and may be reached at [email protected] or 215-545-0600.