By: Jason A. Copley and Lori Wisniewski Azzara
On January 6, 2012, the Pennsylvania Superior Court, in a 7-2 decision, significantly expanded the Pennsylvania Mechanics’ Lien Law’s definition of a “subcontractor” in Bricklayers of Western Pennsylvania Combined Funds, Inc. v. Scott’s Development Co., 2012 Pa. Super 4. In this case, the trustees of employee benefit funds filed mechanics’ lien claims as a result of unpaid contributions owed to union members under collective bargaining agreements with the general contractor. The lower court dismissed the claims for lack of standing, concluding that the union members were not “subcontractors” under the Mechanics’ Lien Law because the collective bargaining agreements were not traditional subcontractor agreements and the union members were employees and/or laborers of the general contractor.
The Superior Court disagreed, concluding that a traditional subcontractor agreement was not a mandatory prerequisite to confer “subcontractor” status under the Lien Law. The Court found the collective bargaining agreements to be “implied in fact” contracts to furnish labor for the construction of an improvement. In liberally construing the Lien Law’s definition of “subcontractor,” the Court found the unions to be “subcontractors” under the Lien Law. Moreover, the Court held that the trustees had standing to assert the lien claims on behalf of the union members. Therefore, the mechanics’ lien claims were permitted to proceed.
This decision and its liberal construction of the Lien Law is a first in Pennsylvania. We will continue to monitor its impacts on the construction industry.
A more in depth discussion and analysis of this case can be found in the upcoming edition of our quarterly newsletter: Construction In Brief.
Jason A. Copley is the Managing Partner at Cohen Seglias and a Partner in the Construction Group. His practice is focused on representing contractors, subcontractors and owners in the areas of construction and commercial litigation.
Lori Wisniewski Azzara is an associate at Cohen Seglias Pallas Greenhall & Furman PC. Mrs. Azzara practices in the areas of construction and commercial litigation and has experience in contract negotiation, claims for delay and inefficiency, mechanics’ liens, and all types of contractual disputes.