J-A05024-17


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

KRESS BROTHERS BUILDERS, L.P.,                   IN THE SUPERIOR COURT OF
                                                       PENNSYLVANIA
                         Appellant

                    v.

PATRICIA L. WILLIAMS, DALE HILL AND
JACQUELINE WILLIAMS,

                         Appellees                    No. 930 WDA 2016


                Appeal from the Order Entered June 15, 2016
             In the Court of Common Pleas of Allegheny County
                    Civil Division at No(s): GD15-010117


BEFORE: GANTMAN, P.J., BENDER, P.J.E., and MOULTON, J.

MEMORANDUM BY BENDER, P.J.E.:                          FILED MAY 23, 2017

      Appellant, Kress Brothers Builders, L.P., appeals from the June 15,

2016 order sustaining the preliminary objections filed by Appellees, Patricia

L. Williams, Dale Hill and Jacqueline Williams (hereinafter “Owners”), and

dismissing Appellant’s Amended Complaint to Enforce Mechanics’ Lien. After

careful review, we reverse and remand.

      The relevant facts and procedural history were set forth by the trial

court in its Pa.R.A.P. 1925(a) opinion, as follows:

      This matter arises from [Appellant’s] filing of a Mechanics’ Lien
      Claim against the [Appellees]/Owners, Patricia L. Williams, Dale
      Hill and Jacqueline Williams, for work performed on their
      Property located at 1421 Columbus Avenue, Allegheny County,
      Pennsylvania 15212. The Owners are sisters who own the
      Property but live in other states. George Saddler [(hereinafter
      “Mr. Saddler”)], the Owners’ tenant, hired [Appellant] to
      renovate and remodel the Property after it sustained damage
      due to bursting water pipes. Mr. Saddler signed a contract with
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       [Appellant] to repair the damage for $15,722.63. He paid
       $3,483.49 leaving a balance of $12,239.14. When [Appellant]
       was not paid the balance, [it] filed a Mechanics’ Lien against the
       Property on June 11, 2015. The Owners were notified of the
       Mechanics’ Lien several months later when they received a copy
       in the mail. The Owners failed to pay and [Appellant] filed a
       Complaint to Enforce Mechanics’ Lien Claim on November 12,
       2015. The Owners filed Preliminary Objections to the Complaint
       and a Motion for Sanctions on January 25, 2016.

Trial Court Opinion (“TCO”), 10/12/16, at 1-2.

       On March 14, 2016, the trial court denied the Owners’ Motion for

Sanctions and granted Appellant twenty (20) days to file an amended

complaint.    Appellant filed an amended complaint on March 30, 2016.       In

response, the Owners again filed preliminary objections 1 and a motion for

sanctions. The trial court entered an order dated June 15, 2016, dismissing

Appellant’s amended complaint with prejudice. On June 28, 2016, Appellant

filed a notice of appeal, followed by a timely Pa.R.A.P. 1925(b) concise

statement of errors complained of on appeal.

       Appellant now presents the following issues for our review:

       1. Whether the [t]rial [c]ourt erred and committed an error of
          law in sustaining the preliminary objections filed by [Owners]
          and dismissing with prejudice [Appellant’s] Amended
          Complaint to Enforce Mechanics’ Lien Claim without
          considering as true all well[-]pleaded facts set forth therein

____________________________________________


1
  Owners’ filed their preliminary objections pursuant to Section 1505 of the
Mechanics’ Lien Law, which provides “[a]ny party may preliminarily object to
a claim upon a showing of exemption or immunity of the property from lien,
or for lack of conformity with this act.” 49 P.S. § 1505.




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         and all reasonable inferences that can be drawn therefore
         [sic]?

      2. Whether the [t]rial [c]ourt erred and committed an error of
         law in finding that Section 1303(d) of the Mechanics’ Lien Law
         (49 P.S. § 1303(d)) is applicable in the case sub judice,
         particularly when Appellant’s Amended Complaint to Enforce
         Mechanics’ Lien Claim never alleged that [Mr. Saddler] was
         [Owners’] tenant; that a landlord/tenant relationship existed;
         or that a leased premise even existed?

      3. Whether the [t]rial [c]ourt erred and committed an error of
         law in holding that Section 1303(d) of the Mechanics’ Lien
         Law (49 P.S. § 1303(d)) is an absolute bar to a mechanics’
         lien claim?

      4. Whether the [t]rial [c]ourt erred and committed an error of
         law in sustaining the preliminary objections filed by Appellees
         and dismissing with prejudice Appellant’s Amended Complaint
         to Enforce Mechanics’ Lien Claim when Appellant should have
         been allowed to conduct discovery to determine:

         a. Whether any landlord/tenant relationship existed between
            [Mr. Saddler] and [Owners] and, if any relationship, the
            terms of that relationship;

         b. Owners’ knowledge of [Mr. Saddler] holding himself out as
            owner of the subject property with respect to the case sub
            judice and in prior instances;

         c. [Owners’] knowledge of Appellant’s work being done to the
            subject property;

         d. [Owners’] knowledge of the terms of the contract at issue
            in the case sub judice;

         e. Whether [Owners] provided consent to [Mr. Saddler] with
            respect to the contract at issue in the case sub judice
            and/or past contracts related to the subject property; and

         f. [Owners’] knowledge of the second check issued by The
            Hartford Insurance Company that has never been provided
            to Appellant?

Appellant’s Brief at 3-5.




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      Before addressing the merits of Appellant’s claims, we set forth our

standard of review. It is well-established that,

      [i]n determining whether the trial court properly sustained
      preliminary objections, the appellate court must examine the
      averments in the complaint, together with the documents and
      exhibits attached thereto, in order to evaluate the sufficiency of
      the facts averred.

      Our inquiry goes only to determining the legal sufficiency of
      [the] appellant’s complaint and we may only decide whether
      sufficient facts have been pleaded which would permit recovery
      if ultimately proven. We must be able to state with certainty
      that upon the facts averred, the law will not permit recovery by
      the plaintiff.

      This Court will reverse the trial court’s decision only where there
      has been an error of law or abuse of discretion. Further, when
      the sustaining of preliminary objections results in the denial of a
      claim or the dismissal of a suit in a mechanics’ lien proceeding,
      preliminary objections should be sustained only where the case
      is clear and doubtless.

Wendt & Sons v. New Hedstrom Corp., 858 A.2d 631, 632 (Pa. Super.

2004) (internal quotation marks and citations omitted).

      To   begin,   we   note   “[t]he    Mechanics’   Lien   Law,   Title   49   of

Pennsylvania’s Statutes, is a creation in derogation of the common law and,

therefore, any question of interpretation shall be resolved in strict, narrow

construction. To effectuate a valid Mechanics’ Lien claim, the contractor …

must strictly comply with the requirements of Title 49.”         Wyatt PNC v.

Citizens Bank of Pennsylvania, 976 A.2d 557, 564 (Pa. Super. 2009)

(internal citations omitted).   See also 49 P.S. §§ 1101–1902.          Moreover,

“[t]he right to the lien arises not from the act of furnishing the labor and

materials, but rather from the debt arising therefrom.        The right to file a

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mechanics’ lien must have a contract as its basis.” Murray v. Zemon, 167

A.2d 253, 255 (Pa. 1960).

      Here, the underlying contract was entered into between Appellant and

Mr. Saddler, the tenant. The record reflects that no contractual relationship

exists between Appellant and Owners. However, Appellant asserts that

throughout its dealings with Mr. Saddler, Mr. Saddler misrepresented himself

as the owner of the property and that “[a]t no time did Mr. Saddler ever

advise Appellant that he was a tenant, rather than the owner of the

Property.”   Appellant’s Brief at 7. Appellant further avers that Owners “not

only knew that Mr. Saddler was advising third parties that he was the owner

of the Property, but that they gave their consent and authorization to Mr.

Saddler to advise third parties that he was the owner of the Property; to

make improvements and repairs to the Property; and to contract with third

parties to make improvements and repairs to the Property.” Id. at 8-9.

      It has been well-established that even if the owners had knowledge of

and consented to repairs or renovations to the Property, that is not sufficient

in itself to sustain a mechanics’ lien claim against Owners.    See Fluke v.

Lang, 128 A. 663, 663-64 (Pa. 1925) (observing “[l]iability is not predicated

merely upon the fact that the owner knows a contract is to be made for work

to be done on his property; he must also know that the person who intends

to make it is ‘acting as if he were the owner’”). In order for the claim to be

valid against Owners, where they are not a party to the contract, their

consent must appear in the form of a written statement, signed by Owners,

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and the statement must state that the improvements to the Property are

being made for their immediate use and benefit. See Murray, 167 A.2d at

256 (adding “[t]his [written statement] is a condition precedent. The claim

filed must on its face show the existence of such consent to satisfy this

requirement”); see also 49 P.S. § 1303(d).2            There is no such written

statement by Owners in the present case.

       In its 1925(a) opinion, the trial court reasoned, “where a contractor

enters into an agreement for property improvements with a tenant and fails

to obtain ‘written notice’ from the property owners consenting to the

improvements, as required by Section 1303(d), the mechanics’ lien

complaint should        be   dismissed pursuant   to   the   owner’s preliminary

objections.”     TCO at 2 (citing Key Auto. Equip. Specialists, Inc. v.

Abernathy, 636 A.2d 1126, 1128 (Pa. Super. 1994)).                However, it is

important to note that our holding in Key Auto. Equip. Specialists, Inc.

was premised on our determination that the owners acted in good faith in

____________________________________________


2
 In 1963, the Mechanics’ Lien Law was amended to include Section 1303(d),
which provides as follows:

       Leasehold premises. No lien shall be allowed against the estate
       of an owner in fee by reason of any consent given by such owner
       to a tenant to improve the leased premises unless it shall appear
       in writing signed by such owner that the erection, construction,
       alteration or repair was in fact for the immediate use and benefit
       of the owner.

49 P.S. § 1303(d) (emphasis added).




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their dealings with the contractor and that throughout contract negotiations,

the contractor was fully aware that it was entering into a contract with the

tenant, and not the owner of the property. Id. at 1130. In our analysis, we

noted that these facts were distinguishable from those in Chambers v.

Todd Steel Pickling, Inc., 470 A.2d 159 (Pa. Super. 1983), where “we

found that estoppel may lie against the true owner of property, despite the

absence of the written notice requirement of section 1303(d), where facts

have been withheld and where the property owner did not act in good faith

throughout the transaction.” Key Auto. Equip. Specialists, Inc., 636 A.2d

at 1130 (quoting Chambers, 470 A.2d at 164) (emphasis added).

     We find Chambers to be more analogous to the case presently before

us. Thus, we reiterate our summary of Chambers, as follows:

     In Chambers, Robert Berger, the president and sole stockholder
     of Todd Steel Pickling, Inc. (Todd Steel) entered into a
     construction contract with George Chambers to build a
     residential home on property leased to Berger by Todd Steel. In
     negotiating this agreement, Berger led Chambers to believe that
     he was the actual owner of the property and, therefore, did not
     disclose that the property was leased to him by the owner, Todd
     Steel. Chambers did not obtain a written waiver from Todd Steel
     as required under section 1303(d).

     After Mr. Berger failed to make certain payments, [Mr.]
     Chambers filed a mechanics’ lien against both [Mr.] Berger and
     Todd Steel. Todd Steel filed preliminary objections, seeking the
     protection of the Mechanics’ Lien Act. The trial court agreed,
     holding that as [Mr.] Chambers failed to obtain a section
     1303(d) written waiver from Todd Steel, [Mr.] Chambers could
     not seek to recover from Todd Steel. [Mr.] Chambers appealed
     to the Superior Court.

     On appeal, [Mr.] Chambers asserted that because [Mr.] Berger
     had misled him and induced his reliance as to the ownership of

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       the property, “there was no necessity for the writing called for in
       49 [P.S.] § 1303(d).” We agreed. In finding that Todd Steel
       was estopped from seeking the protection of the Act, we were
       ever mindful of a contractor’s duty to inquire into the nature of
       the consent given by the actual owner of the property. We held,
       however, that such duty cannot be imposed, “where the
       president and sole stockholder of the corporate owner of the
       property leads a contractor to believe that he is the actual
       property owner.”[3]

Key Automotive Equipment Specialists, Inc., 636 A.2d at 1129 (citing

Chambers, 470 A.2d at 162-64) (internal citations omitted).

       The Chambers Court recognized a prior holding of the Pennsylvania

Supreme Court, which stated that “while an owner may consent to his

tenant’s improvement of the property, without assuming any liability for the

work done, provided he acts in good faith throughout, he cannot escape

such liability if he knows of the tenant’s intention to make a contract ‘acting

as if he were the owner.’” Chambers, 470 A.2d at 163 (quoting Fluke, 128

A. at 664) (emphasis added).4
____________________________________________


3
  This holding belies Owners’ assertion in the instant case that Appellant had
the duty to investigate into the ownership of the Property, regardless of
whether Mr. Saddler held himself out to be the owner of the Property. See
Appellees’ Brief at 8.
4
    The Chambers Court explained:

       In Fluke v. Lang, supra, the Court was interpreting Section 2 of
       the Mechanics’ Lien Act of 1901, replaced by 49 P.S. § 1303(d),
       in conjunction with Section 4 of the 1901 Act, which was omitted
       from the Mechanics’ Lien Law of 1963.          Section 4 of the
       Mechanics’ Lien Act of 1901 provided:

          Any owner, not being a committee, guardian or trustee, as
          aforesaid, who shall knowingly suffer or permit any person,
(Footnote Continued Next Page)


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       This Court also finds persuasive the opinion in Kelly v. Hannan, 566

A.2d 310 (Pa. Super. 1989).                As alleged in the present case, it was

established in Kelly that the contractor believed he was contracting with the

owners of the property and that the owners knew of the tenants’ intentions

to    contract   with     the   contractor    as   though   they   were   the   owners.

Accordingly, we held:

       [T]he leasing agreement entered into in this case does not
       engage the language of 49 P.S. § 1303(d) wherein the owner of
       the estate in fee is protected from liability. We believe the
       appellee failed to act with good faith throughout the transaction
       and produced a lease at the time of the hearing in order to
                        _______________________
(Footnote Continued)

          acting as if he were the owner, to make a contract for
          which a claim could be filed, without objecting thereto at
          the time, shall be treated as ratifying the act of such
          person acting as if he were the owner, and the claim may
          be filed against the real owner, with the same effect if he
          himself had made the contract. Ratification shall also be
          presumed, and like subjection to lien shall follow, if the
          owner, not being a committee, guardian or trustee, as
          aforesaid, subsequently learning of such contract or of
          work being done upon his property, shall not, within ten
          days thereafter, repudiate the same, either by notice to
          the contractor and subcontractor or by posting such
          repudiation on the most public part of the structure or
          other improvement.

       According to the explanatory comments of the Joint State
       Government Commission, the above section does not appear in
       the Mechanics’ Lien Law of 1963 because it was omitted as
       unnecessary. Despite the fact that Section 4 of the Act of 1901
       is not found in the present statute, we find the interpretation
       given Section 2 of that Act persuasive in interpreting the nearly
       identical language of 49 P.S. § 1303(d).

Id.



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       engage the language of § 1303(d)…. For the reasons stated
       above we reverse the lower court’s order granting the appellees’
       preliminary objections.

Id. at 318.5

       Here, the trial court dismissed Appellant’s Amended Complaint with

prejudice, “finding that Section 1303(d) controls, and that [Mr.] Saddler, a

tenant, could not bind the owners when there was no written authorization

to do so.” TCO at 3. However, based on our foregoing analysis, it is clear

that Section 1303(d) of the Mechanics’ Lien Law does not act as an absolute

bar to a mechanics’ lien claim. In fact, if it is established that Owners had

knowledge that Mr. Saddler intended to enter into a contract with Appellant

while portraying himself as the owner of the Property, Appellant may have a

valid mechanics’ lien claim against Owners, because Owners would be

estopped from asserting protection from liability under section 1303(d). We

deem the trial court’s misapplication of the law to constitute reversible error.
____________________________________________


5
  In reaching the decision in Kelly, this Court was guided by the following
principles:

       The owner of leased property may be found liable for the
       improvements a tenant has made if the owner has “not acted in
       good faith throughout the transaction knowing that the tenant
       intends to make a contract acting as if he were the owner.”
       Chambers, … 470 A.2d at 161. Where facts are withheld and
       any attempt is made to mislead the contractor and the owner
       has promised to pay for the cost of the improvements, the
       theory of estoppel will lie. Murray, … 167 A.2d at 256.

Id. at 316.




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      Additionally, Appellant avers that the trial court abused its discretion

and committed an error of law in sustaining Owners’ preliminary objections

in the nature of a demurrer and in dismissing its Amended Complaint with

prejudice, without considering as true all well-pleaded facts set forth therein.

Appellant’s Brief at 13. In order to properly review Owners’ demurrer, “the

trial court was required to determine whether the law precluded recovery

notwithstanding    Appellant’s   well-pleaded   factual   averments    and    all

reasonable inferences that could be drawn therefrom.”       B.N. Excavating,

Inc. v. PBC Hollow-A, L.P., 71 A.3d 274, 278 (Pa. Super. 2013).              The

record reflects that Appellant expressly averred the following, in relevant

part, in its Amended Complaint:

      8. [Appellant] came to inspect the Property and[,] at that time[,]
      Mr. Saddler provided [Appellant] with homeowner’s insurance
      information through The Hartford Insurance Company[,] which
      reflected that Mr. Saddler was the owner of the [P]roperty.

      9. On or about February 19, 2014, [Appellant] and Mr. Saddler
      entered into a contract (“Contract”) for [Appellant] to perform
      renovation and restoration services at the Property for the total
      amount of $15,722.63. A copy of the Contract is attached
      hereto as Exhibit “2”.

      10. Per Mr. Saddler’s representations to [Appellant,] the
      Contract acknowledged that Mr. Saddler was the owner of the
      Property.

      11. Mr. Saddler signed the Contract acknowledging that he was
      the owner of the Property.

      12. At no time did Mr. Saddler ever advise [Appellant] that he
      was a tenant, rather than the owner of the Property, or that he
      was leasing the Property from another party.
                                     …



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     14. At no time did Mr. Saddler ever provide [Appellant] … with a
     copy of any lease with respect to his occupancy of the Property.

     15. [Appellant] performed all of the work on the Property as
     specified in the Contract.

     16. [Appellant] completed its work on the Property on February
     23, 2015.

     17. During the entire time that [Appellant] was performing its
     work on the Property, Mr. Saddler represented himself as the
     owner of the Property.

     18. The Hartford Insurance Company issued a check on Mr.
     Saddler’s homeowner’s insurance, in the amount of $3,483.49 to
     Mr. Saddler and [Appellant], which was signed by both parties
     and paid to [Appellant] for its work.
                                      …

     21. To date, the amount of $12,239.14 still remains due [to
     Appellant] for its work performed on the Property.
                                     …

     24. [Owners] were aware that Mr. Saddler was residing at the
     Property.

     25. [Owners] had knowledge of the damage to the Property and
     the work being performed by [Appellant].

     26. [Owners] had knowledge of the Contract.

     27. [Owners] knew that Mr. Saddler was advising third parties
     that he was the owner of the Property.

     28. [Owners] gave their consent and authorization for Mr.
     Saddler to advise third parties that he was the owner of the
     Property.

     29. [Owners] gave their consent and authorization for Mr.
     Saddler to make improvements and repairs to the Property and
     to contract with third parties to make improvements and repairs
     to the Property.

     30. [Owners] were aware that Mr. Saddler was maintaining the
     homeowner’s insurance on the Property.

     31. Subsequent to the work performed by [Appellant] on the
     Property, [Owners] listed the Property for sale at a listing price

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J-A05024-17


     of approximately $75,000, more than double the Property’s
     recently appraised value by Allegheny County for assessment
     purposes.

Appellant’s Amended Complaint, 3/30/16, at 3-5 (emphasis added).

     Mindful of our standard of review, and the trial court’s obligation to

view Appellant’s factual averments and reasonable inferences as true, we

cannot “state with certainty that upon the facts averred, the law will not

permit recovery.”   Wendt & Sons, 858 A.2d at 632.          As this case is not

clear and free from doubt, we discern that dismissal was not warranted.

See B.N. Excavating, Inc., 71 A.3d at 280 (concluding that dismissal was

not warranted where the Court could not find that a sufficient record existed

to sustain the appellees’ demurrer and to dismiss the appellant’s claim).

Moreover, considering our previous holdings in Chambers and Kelly,

Appellant’s evidence in this case may provide a sufficient basis to attach a

lien claim. Accordingly, an issue of fact exists which must be explored at an

evidentiary proceeding. See id.

     In light of the foregoing case law interpreting the applicability of 49

P.S. § 1303(d) and the averments contained in Appellant’s Amended

Complaint, it does not appear with certainty that the law precludes

Appellant’s recovery.    Accordingly, we reverse the June 15, 2016 order

sustaining   Owners’    preliminary   objections   and   dismissing   Appellant’s

Amended Complaint with prejudice, and we remand for further proceedings

consistent with this memorandum.




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      Order reversed. Case remanded for further proceedings. Jurisdiction

relinquished.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 5/23/2017




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