Sep 13 2013, 5:20 am
FOR PUBLICATION
ATTORNEYS FOR APPELLANTS: ATTORNEY FOR APPELLEES:
BRIAN J. HURLEY JOHN F. LAKE
TIMOTHY C. KRSAK Lake & Lake
Douglas Koeppen & Hurley Michigan City, Indiana
Valparaiso, Indiana
IN THE
COURT OF APPEALS OF INDIANA
VON TOBEL CORPORATION, Individually, )
and d/b/a VON TOBEL LUMBER & )
HARDWARE; and VON TOBEL LUMBER & )
HOME CENTER, INC., )
)
Appellants-Plaintiffs, )
)
vs. ) No. 46A03-1301-MI-18
)
CHI-TEC CONSTRUCTION & REMODELING, )
INC.; JOHN F. ZIOLA, JR.; and MARGARET )
LYNN WEST, as Trustee for the MARGARET )
LYNN WEST TRUST, )
)
Appellees-Defendants. )
APPEAL FROM THE LAPORTE SUPERIOR COURT
The Honorable Jennifer L. Koethe, Judge
Cause No. 46D03-0906-MI-298
September 13, 2013
OPINION - FOR PUBLICATION
KIRSCH, Judge
Von Tobel Corporation, Individually, and d/b/a Von Tobel Lumber & Hardware ,
and Von Tobel Lumber & Home Center, Inc. appeal the trial court’s grant of summary
judgment in favor of the Margaret Lynn West Trust (“the Trust”). The appellants
contend that summary judgment in favor of the Trust was erroneous, and that the trial
court should have granted the Plaintiffs’ request for summary judgment.
We reverse and remand.
FACTS AND PROCEDURAL HISTORY
Margaret Lynn West is the Trustee of the Trust which owns a parcel of real estate
on Lake Michigan. On November 21, 2006, the Trust entered into an agreement with
Chi-Tec Construction & Remodeling, Inc. (“Chi-Tec”), owned by John F. Ziola, Jr.
(“Ziola”), for the construction of a house on the property. Chi-Tec began building the
house in December of 2006. Chi-Tec had previously entered into a credit agreement with
Von Tobel Corporation, allowing Chi-Tec to make purchases from any of its wholly
owned subsidiaries, including Von Tobel Home Center. During the construction process
on the Trust property, Chi-Tec purchased goods and materials on credit from Von Tobel
Home Center.
Pursuant to the credit agreement, Von Tobel Home Center made its first delivery
on January 8, 2007. Nine days later, on January 17, 2007, Von Tobel Home Center took
steps to secure rights to a mechanic’s lien by tendering pre-lien notice (“Pre-lien Notice”)
to the Trust and recording that notice in the Office of the Recorder of LaPorte County.
The instrument identified Von Tobel Home Center, Inc. as lienholder. Von Tobel
Corporation did not file a separate pre-lien notice. Thereafter, Von Tobel Home Center
2
continued to supply materials to Chi-Tec, and made its last delivery on June 16, 2008.
All invoices bore the heading, “Von Tobel Lumber & Hardware.” The Trust paid
invoices directly to Chi-Tec, but Chi-Tec failed to pay the Plaintiffs the sums that it owed
for materials. Von Tobel Corporation recorded notice of a mechanic’s lien (“Lien
Notice”) against the property on July 15, 2008.
Von Tobel Corporation initiated a lawsuit on June 23, 2009, seeking foreclosure of
its mechanic’s lien as well as damages against Chi-Tec, Ziola, and the Trust. The Trust
filed its Answer and Affirmative Defenses challenging the validity of Von Tobel
Corporation’s mechanic’s lien. Ziola and Chi-Tec both filed for Chapter 7 Bankruptcy in
June, 2012.
Von Tobel Corporation moved for summary judgment and the Trust filed its
response and a cross motion for summary judgment. Following a hearing on both
motions, the trial court entered summary judgment in favor of the Trust holding that Von
Tobel Corporation’s mechanic’s lien was invalid because of “the designation of the
wrong claimant on the pre-lien notice . . . .” Appellants’ App. at 658-61. The Plaintiffs
now appeal.
DISCUSSION AND DECISION
Summary judgment is appropriate only if the pleadings and designated evidence
show “there is no genuine issue as to any material fact and . . . the moving party is
entitled to judgment as a matter of law.” Ind. Trial Rule 56(C). Even if the facts are
undisputed, summary judgment is not proper if those undisputed facts give rise to
conflicting inferences that are material. Winkler v. V.G. Reed & Sons, Inc., 638 N.E.2d
3
1228, 1231 (Ind. 1994). The party seeking summary judgment must demonstrate the
absence of any genuine issue of fact as to a determinative issue, and only then is the non-
movant required to come forward with contrary evidence. Jarboe v. Landmark Cmty.
Newspapers of Ind., Inc., 644 N.E.2d 118, 123 (Ind. 1994). However, the party appealing
from the grant of summary judgment has the burden of persuading the court that the grant
of summary judgment was erroneous. Winkler, 638 N.E.2d at 1231.
The statute governing Pre-lien Notice, in pertinent part, provides that:
A person, firm, partnership, limited liability company, or corporation that
sells or furnishes on credit material . . . for the original construction of a
single or double family dwelling for the intended occupancy of the owner
upon whose real estate the construction takes place to a contractor,
subcontractor, mechanic, or anyone other than the owner or the owner’s
legal representatives must:
(1) furnish the owner of the real estate . . . with a written notice of the
delivery or labor and the existence of lien rights not later than sixty (60)
days after the date of the first delivery or labor performed; and
(2) file a copy of the written notice in the recorder’s office of the county not
later than sixty (60) days after the date of the first delivery or labor
performed.
The furnishing and filing of the notice is a condition precedent to the right
of acquiring a lien upon the real estate or upon the improvement
constructed on the real estate.
Ind. Code § 32-28-3-1(i). As this Pre-lien Notice statute indicates, filing of such notice
“is a condition precedent to the right of acquiring a lien . . . .” Id. To acquire a lien,
however, further steps must be taken, pursuant to the Lien Notice statute, which provides
in pertinent part:
The statement and notice of intention to hold a lien may be verified and
filed on behalf of a client by an attorney registered with the clerk of the
supreme court as an attorney in good standing under the requirements of the
supreme court.
(c) A statement and notice of intention to hold a lien filed under this section
4
must specifically set forth:
(1) the amount claimed;
(2) the name and address of the claimant;
(3) the owner’s:
(A) name; and
(B) latest address as shown on the property tax records of the
county; and
(4) the:
(A) legal description; and
(B) street and number, if any;
of the lot or land on which the house, mill, manufactory or other buildings,
bridge, reservoir, system of waterworks, or other structure may stand or be
connected with or to which it may be removed.
Ind. Code § 32-28-3-3.
The Plaintiffs argue that these statutes do not expressly require that a Lien Notice
be filed in the identical corporation name as set forth in the Pre-lien Notice, that the Pre-
lien Notice bearing the name “Von Tobel Lumber & Home Center, Inc.” was sufficient to
inform the Trust that a claim for materials furnished in the construction of the residence
was being asserted by “Von Tobel Corporation,” and that the Trust was not prejudiced.
We agree.
In interpreting a statute, our goal is to determine and give effect to the intent of the
legislature. State v. Int’l Bus. Machs. Corp., 964 N.E.2d 206, 209 (Ind. 2012). In
determining legislative intent, we consider the objects and purposes of the statute as well
as the effects and repercussions of our interpretation. Id. “The legislative intent as
ascertained from the provision as a whole prevails over the strict literal meaning of any
word or term.” Id. (quoting Bushong v. Williams, 790 N.E.2d 467, 471 (Ind. 2003)).
Indeed, “[t]hese precepts have guided us in statutory interpretation for over a century.”
Id. (noting Parvin v. Wimberg, 130 Ind. 561, 571, 30 N.E. 790, 793 (1892) and observing
5
that when legislative intent is ascertained, “it will prevail over the literal import and the
strict letter of the statute.”). Where meaning is uncertain, “the courts will look also to the
situation and circumstances under which [the statute] was enacted, to other statutes, if
there are any upon the same subject, whether passed before or after the statute under
consideration, whether in force or not, as well as to the history of the country, and will
carefully consider in this connection the purpose sought to be accomplished.” Id.; cf. D
& M Healthcare, Inc. v. Kernan, 800 N.E.2d 989, 911 (Ind. 2003) (rejecting literal
construction of Indiana Constitutional provision in light of history of the provision and
subsequent practice).
Long ago, our Supreme Court set forth the purpose of our mechanics’ lien
legislation:
The mechanics’ lien laws of America, in general, reveal the underlying motive of
justice and equity in dedicating, primarily, buildings and the land on which they
are erected to the payment of the labor and materials incorporated, and which have
given to them an increased value. The purpose is to promote justice and honesty,
and to prevent the inequity of an owner enjoying the fruits of the labor and
material furnished by others, without recompense.
Moore-Mansfield Constr. Co. v. Indianapolis New Castle & Toledo Ry. Co., 179 Ind.
356, 372, 101 N.E. 296, 302 (1913).
In Beneficial Financial Co. v. Wegmiller Bender Lumber Co., Inc., we expressly
“reject[ed] the idea that our entire mechanics’ lien statute must be strictly construed with
such hypertechnicality so as to frustrate the remedial purpose of the legislation.” 402
N.E.2d 41, 45 (Ind. Ct. App. 1980). There, we further determined that:
The perfection and enforcement provisions of the statute should be fairly and
reasonably construed and applied so as to afford materialmen and laborers the
6
security intended upon substantial compliance with statutory requirements,
keeping in mind the need to afford reasonable protection to the rights of other
parties who may have acquired an interest in the party.
Id. Ultimately, we determined that we must assess whether there has been substantial
compliance by the lien claimant. Id. In determining whether a lien claimant has
substantially complied, we assess three factors: (1) “the degree of non-compliance with
the letter of the statute,” (2) “the policy which underlies the particular statutory provision
in question,” and (3) “the prejudice which may have resulted to either the owner of the
property or other third parties who have an interest in the real estate.” Id.Here, the degree of non-compliance with the letter of the statute is minimal.
Indeed, the statute does not require the filing of a Lien Notice in the identical name as the
corporation that filed a Pre-lien Notice. See Ind. Code §§ 32-28-3-1(i), 32-28-3-3. Under
comparable facts, in Waverly Co. v. Moran Electric Service Inc., we long ago declined a
similarly narrow reading of the mechanic’s lien statutes. There, we determined that a
Lien Notice claiming an amount was due and owing to “Moran Electric Service
Company” was sufficient when the corporation that furnished the labor and materials was
actually named “Moran Electric Service, Inc.” 108 Ind. App. 75, 81, 26 N.E.2d 55, 57
(1940). We reasoned that although the two names were “not strictly idem sonans . . .
they [were] of sufficient similarity as to have substantially the same meaning.” Id. See
also Kendall Lumber & Coal Co. v. Roman, 120 Ind. App 368, 374, 91 N.E.2d 187, 190
(1950) (rejecting the notion that “the statutory notice of the lien was fatally defective
because it was signed ‘Kendall Lumber and Coal Company’ instead of ‘Kendall Lumber
and Coal Company, Inc.’”); cf. Talbott v. Hale, 72 Ind. 1, 4 (1880) (determining that
7
“Cincinnati, Peru and Chicago Railway Co.” and “Chicago Railroad Company” were
“the equivalents, each of the other, and had reference to, and were intended to designate
the same corporation.”).
In Logansport Equip. Rental, Inc. v. Transco, Inc., 755 N.E.2d 1135, 1137 (Ind.
Ct. App. 2001), we reiterated the policy that underlies the statutory notice provision
discussed in Waverly and Beneficial Fin., stating: “The filing requirements for a
mechanic’s lien serve two policy objectives: (1) to provide the record titleholder of the
property with notice that a mechanic’s lien has been placed upon the real estate; and (2)
to put third party purchasers and money lenders on notice of the same fact.”
Here, there are no potentially prejudiced third parties, and the only question is
whether the notice to the Trust was sufficient. The Trust received the Pre-lien Notice
from “Von Tobel Lumber & Home Center, Inc.” and the Lien Notice from “Von Tobel
Corporation.” The Trust does not contend that it was misled or confused by the
discrepancy. Further, when the Trust received its Pre-lien Notice, the Trust made an
inquiry of Chi-Tec about it, demonstrating that the policy objectives of the statute were
fulfilled. Finally, the Trust did not designate any evidence to the trial court of prejudice.
The variance between the name set out in the Pre-lien notice and that contained in
the Lien Notice was minimal, did not undermine the statutory policy concerns regarding
notice, and did not cause prejudice to the property owner or any third party.
Indiana’s mechanic’s lien legislation has a “remedial purpose.” Beneficial Fin.,
402 N.E.2d at 45. It is structured to give the affected homeowner notice of a potential
lien early in the construction process, so the party may take measures and direct funds
8
accordingly. See Ind. Code § 32-28-3-1(i). Here, the property owner had notice of the
potential lien early in the construction process, but failed to take appropriate measures to
see that funds were properly directed.
We reverse the summary judgment entered in favor of the trust and remand with
instructions to enter summary judgment in favor of Von Tobel Corporation.
Reversed and remanded.
ROBB, C.J., and RILEY, J., concur.
9