Lobar Associates, Inc. v. O'Neill, E. ( 2017 )

J-A17001-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
LOBAR ASSOCIATES, INC. : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellee :
:
v. :
:
EDWARD J. O'NEILL AND CARLA C. :
O'NEILL, H/W :
:
Appellants : No. 3525 EDA 2016
Appeal from the Judgment Entered October 13, 2016
In the Court of Common Pleas of Delaware County
Civil Division at No(s): 2015-001654
BEFORE: GANTMAN, P.J., RANSOM, J., and PLATT, J.*
MEMORANDUM BY GANTMAN, P.J.: FILED NOVEMBER 17, 2017
Appellants, Edward J. O’Neill and Carla C. O’Neill, h/w, appeal from the
summary judgment entered in the Delaware County Court of Common Pleas,
in favor of Appellee, Lobar Associates, Inc., in this Mechanics’ Lien case. We
affirm.
The trial court correctly set forth the relevant facts and procedural
history of this case as follows:
[Appellee] commenced this matter to enforce a mechanics’
lien for work that it performed on [Appellants’] property
under contract with an individual or entity affiliated with
[Appellants’] tenant, Radnor Carmel Café and Wine Bar,
LLC (“Radnor Carmel Café”). The only defense asserted by
[Appellants] in the pleadings and at oral argument was
that their lease with Radnor Carmel Café did not constitute
a writing signed by [Appellants] providing that
improvements made to [Appellants’] property were for
[Appellants’] “immediate use and benefit” and, therefore,
_____________________________
*Retired Senior Judge assigned to the Superior Court.
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[Appellee’s] claim was precluded under the Pennsylvania
Mechanics’ Lien Law.
[Appellants] are the fee simple title holders of the real
property located at 372 West Lancaster Avenue, Wayne,
Radnor Township, Delaware County, Pennsylvania 19087
(the “Subject Property”). On February 11, 2013,
[Appellee] entered into an agreement with an entity
affiliated with Radnor Carmel Café and known as Carmel
Café & Wine Bar (“Carmel Café”) to provide labor and
materials in performing construction work at the Property
so that the Property could be used to operate a restaurant
and wine bar. Under the agreement, [Appellee] was to be
paid for the cost of its work plus an eight percent fee
without a guaranteed maximum price.
At that time, Radnor Carmel Café was occupying the
Property as a lessee pursuant to a written lease agreement
(the “Lease”) with [Appellants]. The Lease includes the
following pertinent provisions:
Recognition that the central purpose of the Lease
was for Radnor Carmel Café to renovate the Property
to make it suitable for the operation of a Carmel
Café and Wine Bar Restaurant.
Radnor Carmel Café was obligated to pay rent to
[Appellants] during the term of the lease. (Lease, §§
3.01-3.02).
Radnor Carmel Café was required to submit to
[Appellants] for approval the plans and specifications
for Radnor Carmel Café’s improvements to the
Property. (Lease, § 5.02).
[Appellants] agreed to fully cooperate with Radnor
Carmel Café in connection with Radnor Carmel Café
obtaining permits and approvals for Radnor Carmel
Café’s improvements to the Property. (Lease, §
5.03).
Following the completion of Radnor Carmel Café’s
improvements to the Property, Radnor Carmel Café’s
right to undertake changes, alterations and additions
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to the Property that would serve to negatively impact
the value of the Property was subject to [Appellants’]
prior written approval. (Lease, § 5.09).
[Appellants] were obligated to repair and maintain
the Property, including all structural portions of the
building such as the roof, exterior and interior
structural walls, slab floors and foundations. (Lease,
§ 6.03).
Upon the conclusion of the lease term or earlier
termination, all improvements were to become the
property of [Appellants]. (Lease, § 13.01).
Consistent with the terms of the Lease, [Appellants] had
the opportunity to review Radnor Carmel Café’s
preliminary plans for the Project and executed a writing
agreeing that the preliminary plans were acceptable.
[Appellants] cooperated and assisted Radnor Carmel Café’s
obtaining approvals for the improvements to the Property
by executing Radnor Carmel Café’s application to the
Township of Radnor Design Review Board. Appellants paid
$12,373.40 directly to [Appellee] for the structural repair
work necessary to complete the Project.
During the construction phase of the Project, [Appellee]
performed all work as contracted. On October 13, 2013,
[Appellee] submitted its final applications for payment to
Carmel Café. [Appellee] billed $1,109,670.50 for its time
and materials pursuant to its agreement with Carmel Café.
Despite accepting all the work [Appellee] performed,
Carmel Café failed to make payment of the final
$199,011.64 due and owing under the agreement.
On or about April 7, 2014, pursuant to the Pennsylvania
Mechanics’ Lien Law, 49 P.S. § 1502, [Appellee] filed a
Mechanics’ Lien Claim, in the Court of Common Peas of
Delaware County, Pennsylvania, at Docket No. 2014-
03304, against the Property in the amount of
$199,011.64. On February 23, 2015, [Appellee] filed its
Complaint to Enforce Mechanics’ Lien Claim against
[Appellants], commencing this action. On April 15, 2015,
[Appellants] filed Preliminary Objections, arguing that the
improvements to the Property were not for [Appellants’]
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immediate use and benefit. By order dated June 5, 2015,
this [c]ourt overruled [Appellants] Preliminary Objections.
Thereafter, [Appellants] filed an Answer, which raised no
affirmative defenses in new matter. In their Answer,
[Appellants’] sole asserted defense is that the
improvements made by [Appellee] under its agreement
with Carmel Café to the Property were not for [Appellants’]
immediate use and benefit.
(Trial Court Opinion, filed February 6, 2017, at 1-4) (some internal citations
to record omitted). Appellee filed a motion for summary judgment on April
22, 2016, and on May 23, 2016, Appellants filed a cross-motion for
summary judgment. Following oral argument, on October 13, 2016, the
court granted Appellee’s motion for summary judgment, denied Appellants’
motion for summary judgment, and entered judgment in favor of Appellee
for $199,011.64. Appellants timely filed a notice of appeal on November 9,
2016. On November 15, 2016, the court ordered Appellants to file a concise
statement of errors complained of on appeal per Pa.R.A.P. 1925(b);
Appellants timely complied on December 2, 2016.
Appellants raise one issue for our review:
DID THE TRIAL COURT ERR IN GRANTING SUMMARY
JUDGMENT IN FAVOR OF [APPELLEE] AND AGAINST
[APPELLANTS] AND IN HOLDING ON SUMMARY JUDGMENT
THAT THE IMPROVEMENTS COMPLETED BY [APPELLEE] ON
THE PROPERTY WERE FOR THE IMMEDIATE USE AND
BENEFIT OF [APPELLANTS]?
(Appellants’ Brief at 2).
Review of an order granting summary judgment asks us to determine
whether the trial court abused its discretion or committed an error of law.
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Mee v. Safeco Ins. Co. of Am., 908 A.2d 344, 347 (Pa.Super. 2006).
Judicial discretion requires action in conformity with law on
facts and circumstances before the trial court after hearing
and consideration. Consequently, the court abuses its
discretion if, in resolving the issue for decision, it
misapplies the law or exercises its discretion in a manner
lacking reason. Similarly, the trial court abuses its
discretion if it does not follow legal procedure.
Miller v. Sacred Heart Hosp., 753 A.2d 829, 832 (Pa.Super. 2000)
(internal citations omitted). Our scope of review is plenary. Pappas v.
Asbel, 564 Pa. 407, 418, 768 A.2d 1089, 1095 (2001), cert. denied, 536
U.S. 938, 122 S.Ct. 2618, 153 L.Ed.2d 802 (2002).
[W]e apply the same standard as the trial court, reviewing
all the evidence of record to determine whether there
exists a genuine issue of material fact. We view the record
in the light most favorable to the non-moving party, and
all doubts as to the existence of a genuine issue of
material fact must be resolved against the moving party.
Only where there is no genuine issue as to any material
fact and it is clear that the moving party is entitled to a
judgment as a matter of law will summary judgment be
entered. All doubts as to the existence of a genuine issue
of a material fact must be resolved against the moving
party.
Motions for summary judgment necessarily and directly
implicate the plaintiff’s proof of the elements of [a] cause
of action. Summary judgment is proper if, after the
completion of discovery relevant to the motion, including
the production of expert reports, an adverse party who will
bear the burden of proof at trial has failed to produce
evidence of facts essential to the cause of action or
defense which in a jury trial would require the issues to be
submitted to a jury. In other words, whenever there is no
genuine issue of any material fact as to a necessary
element of the cause of action or defense, which could be
established by additional discovery or expert report and
the moving party is entitled to judgment as a matter of
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law, summary judgment is appropriate. Thus, a record
that supports summary judgment either (1) shows the
material facts are undisputed or (2) contains insufficient
evidence of facts to make out a prima facie cause of action
or defense.
Upon appellate review, we are not bound by the trial
court’s conclusions of law, but may reach our own
conclusions.
Chenot v. A.P. Green Services, Inc., 895 A.2d 55, 61 (Pa.Super. 2006)
(internal citations and quotation marks omitted).
“A mechanics’ lien is a statutory proceeding, the action in rem being in
the nature of collateral security for the payment of the debt due for work
done or materials furnished in accordance with a contract, express or
implied. Kelly v. Hannan, 566 A.2d 310, 314 (Pa.Super. 1989). A
Mechanics’ Lien case is not an action at common law; it is a particular type
of lien against real estate pursuant to statute. Id. “The right to a
mechanic’s lien must have a contract as its basis.” Id.Section 1303 of the Mechanics’ Lien Law of 1963 provides, in pertinent
part:
§ 1303. Lien not allowed in certain cases
* * *
(d) 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.
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49 P.S. § 1303(d).
The fact that the [owner] had knowledge of and consented
to the repairs made is not in itself sufficient. If the law
were otherwise, the cost of almost every alteration made
by a tenant could be the subject of a lien against the
owner. In order for the claim to be valid against the
estate of the owner, where he is not a party to the
[construction] contract, his consent must appear in the
form of a written statement, signed by him, and which
shall also state that the improvement is made for his
immediate use and benefit. This is a condition precedent.
The claim filed must on its face show the existence of such
consent to satisfy this requirement. Every mechanics’ lien
must be self-sustaining.
Murray v. Zemon, 402 Pa. 354, 359, 167 A.2d 253, 255-56 (1960). A
signed lease agreement between an owner and a tenant, which allows for
construction and improvements on the leasehold, is sufficient to satisfy the
“writing” requirement of the statute, provided the lease shows the
improvements will redound to the owner’s benefit. See American Seating
Co. v. City of Philadelphia, 434 Pa. 370, 256 A.2d 599 (1969). Courts
should look to the central purpose of the writing when deciding if it benefits
the owner. Id.Instantly, responding to Appellants’ issues, the court reasoned as
follows:
In the present matter, certain provisions of the Lease
demonstrate the improvements to the Property were for
[Appellants’] immediate use and benefit. Accordingly, as a
matter of law, the [Appellants] are required to make
payment to [Appellee] in satisfaction of the improvements.
[Appellants] recognized the central purpose of the Lease
was for the construction of the improvements at issue.
The Lease required [Appellants] to pay for certain portions
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of the improvements, namely, those pertaining to the
structural portions of the building and, in fact, [Appellants]
did so during the Project. Under the Lease, [Appellants]
agreed to cooperate in the construction, permitting and
approval process to complete the Project. At the
conclusion of the Lease, which could be terminated in the
event of Radnor Carmel Café’s default, [Appellants]
became the owner of all improvements to the Property.
The provisions of the Lease specifically identified earlier in
this Opinion are far beyond that which is required to meet
the “immediate use and benefit standard” under Section
1303(d) of the Pennsylvania Mechanics' Lien Law of 1963.
CONCLUSION
For the foregoing reasons, the [court’s decision] should not
be disturbed.
(Trial Court Opinion at 8). Upon review of the record and the applicable law,
we agree. The provisions of the lease between Appellants and Radnor
Carmel Café make clear the purpose of the lease was to improve the
property for mutual benefit. We emphasize those provisions which (a) call
for collaboration of Appellants and Radnor Carmel Café in the renovation
project of the Property, (b) require Appellants’ prior written approval for
changes, alterations and additions to the Property which would negatively
impact the value of the Property, and (c) declare all improvements would be
property of Appellants upon expiration of the lease term or earlier
termination. Thus, we conclude, the provisions of the lease satisfy the
“immediate use and benefit standard” of the statute. Accordingly, we affirm.
Judgment affirmed.
Judge Platt joins this memorandum.
Judge Ransom files a dissenting memorandum.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/17/2017
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