Jeffrey J. Ludwikowski
In B.N. Excavating, Inc. v. PBC Hollow-, L.P., 2013 Pa. Super. 120 (May 17, 2013), the Pennsylvania Superior Court sitting en banc addressed the issue of whether a mechanics’ lien claim exists for excavation work performed pursuant to a planned improvement that is never erected. The court held that the right to such a lien exists, further developing the line of reasoning used in its holding in Bricklayers of Western Pennsylvania Combined Funds, Inc., v. Scott’s Development Co., 41 A.3d 16 (Pa. Super. 2012), where the court proclaimed that a “liberal construction” should be employed for non-procedural provisions of the Mechanics’ Lien Law.
B.N. filed a mechanics’ lien claim on June 8, 2009 in the amount of $118, 670.71 against property and improvements owned by PBC in the Court of Common Pleas of Montgomery County. B.N. subsequently filed the Complaint upon the lien as a subcontractor. B.N. claimed that it entered into a contract with general contractor Warihay to provide labor and materials for excavation work, completing such work on December 18, 2008. Owner PBC filed preliminary objections, arguing that the lien for excavation work was barred because it was incidental to planned construction, but that a structure was never erected. Based on this fact, the trial court dismissed the lien claim, finding that Sampson-Miller Associated Companies v. Landmark Realty Co., 303 A.2d 43 (Pa. Super. Ct. 1973) barred lien claims when no improvement is erected in relation to the work. B.N. appealed to the Superior Court.
The Superior Court addressed its prior decision in Sampson-Miller, and rejected those cases that interpreted it to provide a bright-line rule that mechanics’ lien rights never exist in the absence of a constructed improvement. Instead, the Court stated that nothing in the Mechanics’ Lien Law requires that a structure actually exist or that construction of the improvement must be completed; the Lien Law requires only that “excavation must be performed incidental to the erection or construction of an improvement in order to create lien rights.” As such, the Superior Court held that B.N.’s lien rights exist even if no structure was ultimately constructed as argued by owner PBC.
It is important to note that the court acknowledged that it remains true that when excavation work is performed independent of a plan to construct an improvement, the law will not provide lien claim rights. This remains consistent with the statutory language of 49 P.S. § 1201(12)(a), thus supporting the long-standing proposition in Pennsylvania that a mechanics’ lien must be connected to the construction of a building. The court also acknowledged that its holding is consistent with its analysis in Dollar Bank, FSB v. EM2 Development Corp., 716 A.2d 671, 673 (Pa. Super. Ct. 1998), where the court held that a lien attached when excavation and related site work is performed as part of a continuous scheme to erect a structure. This case is an example of the Superior Court’s recent shift to a more flexible application of the law for substantive; as opposed to procedural issues in mechanics’ lien claims.