Belfor Prop. Restoration v. Rayenwood Manor

305 A.3d 1085

BELFOR PROPERTY RESTORATION, a Division of Belfor USA Group, Inc., Appellant

v.RAYENWOOD MANOR, LLC

No. 291 EDA 2023

Superior Court of Pennsylvania.

Argued August 29, 2023

Filed November 21, 2023

Appeal from the Order Entered December 27, 2022, In the Court of Common Pleas of Lehigh County, Civil Division, at No(s): 2022-M-0025, Zachary J. Cohen, J.

Ira E. Dorfman, Marlton, for appellant.

Kevin T. Fogerty, Allentown, for appellee.

BEFORE: BOWES, J., STABILE, J., and PELLEGRINI, J.^*

OPINION BY BOWES, J.:

Belfor Property Restoration, a Division of Belfor USA Group, Inc. ("Belfor"), appeals from the December 27, 2022¹ order that granted Ravenwood Manor, LLC’s ("Ravenwood") motion to strike Belfor’s mechanics’ lien claim and denied as moot Ravenwood’s other preliminary objections. We reverse and remand for further proceedings.

Ravenwood came into existence upon the filing of a certificate of organization as a domestic limited liability company on October 28, 2021, listing its registered address as 410 Broad Street in Milford, Pennsylvania, the address of attorney Ashley Zimmerman, Esquire. The certificate was amended on November 15, 2021, naming Phyllis Jager as its organizer and sole member. Also on November 15, 2021, Ravenwood acquired by deed a 4.6-acre property located at 3015 Barrington Lane in Allentown, Pennsylvania, for $6.4 million. The following day, the uninsured mansion of more than 36,000 square feet located on the property was significantly damaged by a fire that began in a turret of the structure.

On November 25, 2021, Ms. Jager contracted with Belfor to do demolition and restoration work on the residence. The only address listed in the work authorization contract was 3015 Barrington Lane, and all Belfor’s subsequent communications with Ms. Jager occurred through regular mail sent to that address, by telephone, or electronically. Among those communications were periodic invoices. Ravenwood paid three such invoices of nearly $440,000 each. Belfor completed its work on the property on May, 24, 2022, and submitted final invoices claiming an outstanding balance of more than $1 million.

On July 21, 2022, Belfor filed a notice of filing of mechanics’ lien claim against Ravenwood in the amount of $1,028,499.62, "for the price and value of materials furnished and delivered in connection with the improvement, erection[,] and/or construction of property and buildings … located at 3015 Barrington Lane." Mechanics’ Lien Claim, 7/21/22, at unnumbered 1. The Lehigh County Sheriff’s Office filed a return of service on the lien claim notice. Therein, Deputy Sheriff Timothy O’Brian certified that he served the notice on Ravenwood at 3015 Barrington Lane on August 2, 2022, at 11:10 a.m. "by delivering to and leaving with Jason Sedgwick[,] the person in charge to the defendant[,] a true copy thereof, a person over the age of eighteen." Sheriff’s Return, 8/9/22. Deputy O’Brian further noted as follows: "No one resides at this property. It is currently vacant. There is a security detail watching the property. A security guard by the name of Jason Sedgwick stated he would accept papers and let the def[endant] know." Id.

Belfor filed its complaint to enforce the lien on September 22, 2022. The same day, counsel entered an appearance on behalf of Ravenwood and filed a motion to strike the mechanic’s lien claim based upon improper service. While Belfor’s response to the motion was outstanding, Ravenwood filed preliminary objections reasserting its motion to strike the lien claim for lack of valid service and objecting to the inclusion of allegedly non-lienable, non-recoverable costs, extra-contract costs, expenses, and claims. After considering legal memoranda and oral argument from both parties, the trial court granted Ravenwood’s motion to strike the mechanic’s lien and deemed Ravenwood’s preliminary objections moot by opinion and order of December 27, 2022.² Belfor sought reconsideration, which the trial court denied. This timely appeal followed, and both Belfor and the trial court complied with Pa.RA.P. 1925.

Belfor presents the following questions for our review:

1. Whether the trial court erred when it based its decision on the fact Belfor’s mechanics’ lien was not served at Ravenwood’s "regular place of business," but where Ravenwood did engage in "activity" at a location where service was made pursuant to Rule 424(2).

2. Whether the trial court erred when it based its decision on the fact there was "no evidence that security guard Sedgwick was an employee of Ravenwood," when the only thing required by Cintas Corp. v. Lee’s Cleaning Services, Inc., 700 A.2d 915 (1997), is "a sufficient connection between [Sedgwick] and [Ravenwood] to demonstrate that service was reasonably calculated to give [Ravenwood] notice of the action against it."

3. Whether the trial court erred when it decided this case without ordering depositions and/or an evidentiary hearing pursuant to 49 P.S. § 1505 to resolve issues of fact, where Ravenwood’s preliminary objection alleged defective service of Belfor’s mechanics’ lien, but the sheriff’s return of service indicated service was proper.

Belfor’s brief at 2 (cleaned up).

[1] We begin with a review of the applicable law. We will reverse a trial court’s decision to strike a mechanic’s lien claim based upon improper service where there has been an error of law or an abuse of discretion. Accord Regency Investments, Inc. v. Inlander Ltd., 855 A.2d 75, 77 (Pa.Super. 2004) (stating standard of review of orders sustaining preliminary objections for improper service of process).

[2, 3] As our Supreme Court has observed, "a mechanics’ lien is an extraordinary remedy that provides the contractor with a priority lien on property, an expeditious and advantageous remedy." Terra Firma Builders, LLC v. King, 665 Pa. 592, 249 A.3d 976, 983 (2021) (cleaned up). "Accordingly, a contractor seeking the benefit of the lien must judiciously adhere to the requirements of the Mechanics’ Lien Law in order to secure a valid and enforceable lien." Id. Those requirements are as follows:

(a) Perfection of Lien. To perfect a lien, every claimant must:

(1) file a claim with the prothonotary as provided by this act within six months after the completion of his work; and

(2) serve written notice of such filing upon the owner within one month after filing, giving the court, term and number and date of filing of the claim. An affidavit of service of notice, or the acceptance of service, shall be filed within twenty days after service setting forth the date and manner of service. Failure to serve such notice or to file the affidavit or acceptance of service within the times specified shall be sufficient ground for striking off the claim.

(b) Venue; property in more than one county. Where the improvement is located in more than one county, the claim may be filed in any one or more of said counties, but shall be effective only as to the part of the property in the county in which it has been filed.

(c) Manner of service. Service of the notice of filing of claim shall be made by an adult in the same manner as a writ of summons in assumpsit, or if service cannot be so made then by posting upon a conspicuous public part of the improvement.

49 P.S. § 1502 (cleaned up, emphasis added).

Here, Ravenwood did not base its motion to strike upon the timing of Belfor’s filing or upon the venue. Rather, the motion to strike solely concerned the validity of the service of the written notice. In that vein, we observe that because Ravenwood is a limited liability company, service upon it is governed by Pa.R.C.P. 424. That Rule provides as follows:

Service of original process upon a corporation or similar entity shall be made by handing a copy to any of the following persons provided the person served is not a plaintiff in the action:

(1) an executive officer, partner or trustee of the corporation or similar entity, or

(2) the manager, clerk or other person for the time being in charge of any regular place of business or activity of the corporation or similar entity, or

(3) an agent authorized by the corporation or similar entity in writing to receive service of process for it.

Pa.R.C.P. 424. See also Pa.R.C.P. 2176 (providing that "corporation or similar entity" includes a "limited liability company").

It is undisputed that Mr. Sedgwick was not an officer, partner, or trustee of Ravenwood, and that he lacked written authorization to act as Ravenwood’s agent. Hence, the question is whether he was a "person for the time being in charge of any regular place of business or activity of [Ravenwood.]." Pa.R.C.P. 424(2).

The trial court, relying upon an opinion from the United States Court of Appeals for the Third Circuit and a ruling from a Philadelphia trial court, concluded that the person in charge must be "the person in charge of the business, not simply the place of business." Trial Court Opinion, 12/27/22, at 6 (emphasis in original) (citing Grand Entm’t Grp., Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 480 (3d Cir. 1993); Nahrgang v. Nahrgang, 86 Pa. D.&C. 135 (Pa.Com.Pl. 1954)). Accordingly, since no evidence established that Mr. Sedgwick was a person for the time being in charge of Ravenwood’s business, the court deemed that Rule 424(2) was not satisfied.³

The trial court contrasted these nonbinding cases with a more recent decision from our Supreme Court in Cintas Corporation v. Lee’s Cleaning Services, Inc., 549 Pa. 84, 700 A.2d 915 (1997). There, Cintas sued Lee’s Cleaning for breach of contract. A process server hand-delivered the complaint initiating the action to Virginia Watson, the receptionist at the offices of Lee’s Cleaning. Ultimately, the question that brought the case to the appellate courts was whether Watson was the person for the time being in charge of the place of Lee’s Cleaning’s business such that service was proper under Rule 424(2). Our High Court expounded on the issue as follows:

While there are few

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