New PA Superior Court Opinion: Service of Notice of Intent to Lien
On March 11, 2019, the Pennsylvania Superior Court issued its opinion in American Interior Construction & Blinds, Inc. v. Benjamin’s Desk, LLC reversing a trial court’s dismissal of a subcontractor’s mechanics’ lien action based upon a finding of improper service of the subcontractor’s formal notice of intent to lien.
In the American Interior, Benjamin’s Desk, LLC (“Benjamin’s Desk”) hired Brass Castle Building Co., LLC (“Brass”) to serve as its general contractor for constructing office space improvements. Brass, in turn, subcontracted certain aspects of that work to American Interior Construction & Blinds, Inc. (“AICB”). A payment dispute arose between AICB and Brass, and as a result, AICB served Benjamin’s Desk with formal notice of its intent to file a mechanics’ lien via FedEx on March 21, 2017. Several weeks later, in early June 2017, AICB filed its Statement of Mechanics’ Lien and Complaint to Obtain Judgment on that lien. In response to those filings, Benjamin’s Desk filed preliminary objections in alleging that the mechanics’ lien was procedurally defective because AICB failed to serve its formal notice of intent to lien in accordance with the requirements of section 501(d) of the Mechanics’ Lien Law of 1963.
That statutory section provides formal notice of intent to lien “may be served by first class, registered or certified mail on the owner or his agent or by an adult in the same manner as a writ of summons in assumpsit, or if service cannot be so made then by posting . . . the improvement.” Thus, according to Benjamin’s Desk, service via FedEx is neither by “first class, registered or certified mail”, nor is it services “by an adult in the same manner as a writ of summins in assumpsit” (i.e. via sheriff). In response, AICB argued that the FedEx delivery person is a competent adult, and therefore, services were proper pursuant Rule 400.1 of the Pennsylvania Rules of Civil Procedure – a rule that creates an exception to the general rule requiring service by sheriff for cases in Philadelphia County.
The Superior Court sided with AICB and reversed the dismissal of its mechanics’ lien action. However, the Superior Court did not base its conclusion upon the service exception created by Rule 400.1. Instead, the Superior Court cited to the long line of Pennsylvania case law holding that technical noncompliance with the Rules governing service may be excused absent “intent to stall the judicial machinery or actual prejudice.” The Superior Court then concluded that because Benjamin’s Desk did not allege AICB intended to stall the judicial machinery by serving via FedEx or that service via FedEx caused it actual prejudice, any technical noncompliance with the requirements of section 501(d) of the Mechanics’ Lien Law are excused.
Importantly, the Superior Court’s decision appears to implicitly hold that service by FedEx is neither acceptable service by mail under section 502(d), nor is it acceptable service by an adult under the Philadelphia specific service Rule. Instead, this decision appears to stand for the premise that, while not technically proper, subcontractors may serve formal notice of intent to lien via FedEx provided that the service does not prejudice the owner or reflect an intent to stall the judicial machinery. Thus, from a practical perspective, service of a subcontractor’s formal notice of intent to lien is not technically proper under the Mechanics’ Lien Law, but an owner will have a difficult time invalidating a subcontractor’s lien if its only basis for doing so is the fact that the formal notice of intent was served by FedEx instead of by mail or sheriff.