Bricklayers of Western Pennsylvania Combined Funds, Inc. v. Scott's Dev. Co.

Decision Date06 January 2012
Citation41 A.3d 16,2012 PA Super 4,192 L.R.R.M. (BNA) 2681
PartiesBRICKLAYERS OF WESTERN PENNSYLVANIA COMBINED FUNDS, INC., Appellant v. SCOTT'S DEVELOPMENT COMPANY, Appellee.Laborers Combined Funds of Western Pennsylvania, as Agent for Phillip Ameris and Albert W. Betler, Trustees ad litem, Laborers District Council of Western Pennsylvania Welfare and Pension Funds, the Construction Industry Advancement Program of Western PA Fund, and the Laborer's District Council of Pennsylvania and its Affiliated Local Unions, Appellants v. Scott's Development Company, Appellee.
CourtPennsylvania Superior Court

OPINION TEXT STARTS HERE

Kenneth W. Lee, Lemoyne, for appellants.

Bryan G. Baumann, Erie, for appellee.

BEFORE: STEVENS, P.J., FORD ELLIOTT, P.J.E., MUSMANNO, BENDER, GANTMAN, DONOHUE, ALLEN, LAZARUS and OLSON, JJ.

OPINION BY ALLEN, J.:

Under Pennsylvania's Mechanics' Lien Law, only a “contractor” or “subcontractor” is permitted to file a lien claim against an owner of property, 49 P.S. § 1303(a), for the payment of debts due by the owner to the contractor or by the contractor to any of his subcontractors for labor or materials furnished during a project. 49 P.S. § 1301; see 49 P.S. § 1201(4), (5) (defining “contractor” and “subcontractor”).

In these consolidated appeals, the trustees of employee benefit funds filed mechanics' lien claims for unpaid contributions owed to union members as a result of collective bargaining agreements between a contractor and the unions. This Court, sitting en banc, is asked to determine whether the trustees have standing to assert these mechanics liens. The trustee itself is not a “subcontractor” under the Mechanics' Lien Law because it did not perform work on, or furnish materials to, a project. The trustee was contractually obligated under the labor agreements to receive and collect the distributions on behalf of the unions' members. Here, the trial court dismissed the trustees' complaints for lack of standing. The trial court concluded 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 a contractor.

We conclude that under the applicable rules of statutory construction, the definition of “subcontractor” in the Mechanics' Lien Law is entitled to a liberal interpretation. Contrary to the trial court, we conclude that a traditional subcontractor agreement is not a mandatory prerequisite to confer “subcontractor” status. Instead, given the averments in the trustees' complaints, the trustees have sufficiently pled the existence of a necessary contract between the unions and the contractor, particularly an implied in fact contract to furnish labor. We further conclude that under the specific facts presented in this case, the unions are subcontractors and given the unique legal relationship that exists between the trustee and the union, the trustee has standing to assert a mechanics' lien claim on behalf of the union. Finally, we conclude that the trustees' mechanics' lien claims are not preempted by section 301 of the Labor Management Relations Act, 29 U.S.C.S. § 185. Accordingly, we reverse the trial court's orders dismissing the trustees' complaints and remand for further proceedings.

1. Facts and Procedural History

These two consolidated appeals stem from construction work that members of two different unions performed on the same property. The facts and procedural history are summarized as follows.

A. 687 WDA 2010

Scott's Development Company (“the Defendant) owned real property located at 2225 Downs Drive in Erie County. In 2007, the Defendant retained J. William Pustelak, Inc. (“Pustelak”) as a general contractor to perform construction work on the property.

Previously, on March 10, 2005, Pustelak entered into a collective bargaining agreement with Bricklayers and Trowel Trades International, Local No. 9 (“the Union”). The agreement covers work to be performed within the Union's jurisdiction as specified in the collective bargaining agreement and sets forth the precise work the Union's members are authorized to perform. Pursuant to the collective bargaining agreement, Pustelak was to pay health, welfare, retirement and/or fringe benefits to Bricklayers of Western Pennsylvania Combined Funds, Inc. (“the Trustee) for each hour of labor performed by the Union's members. The collective bargaining agreement incorporated the trust agreement between the Union and the Trustee. Under the trust agreement, the Trustee was the authorized agent to collect the contributions on behalf of the Union's members.

The Union's members thereafter performed work on the Defendant's property in accordance with the collective bargaining agreement, but Pustelak failed to pay the Trustee the required contributions. On June 4, 2009, the Trustee filed a Statement of Mechanics' Lien Claim against the Defendant, seeking recovery of $17,072.98 in unpaid contributions. The Trustee alleged that the Union's members “performed bricklayer services, including but not limited to the construction of inside partition block walls; construction of two stairwells; installation of first floor cultured stone work; and construction of block and cultured, three sided, stone enclosures for dumpster, all of which were incorporated into or utilized for the improvement on [the property.] Statement of Mechanics' Lien, 6/04/09, at ¶ 8. On July 7, 2009, the Trustee filed a Complaint to Enforce Mechanics' Lien Claim.

In response to the complaint, the Defendant filed a preliminary objection in the nature of a demurrer, claiming that the Trustee lacked standing. The Defendant argued that the Trustee could not assert a mechanics' lien claim on behalf of the Union's members because the Union's members themselves were not “subcontractors” as defined by the Mechanics' Lien Law. Specifically, the Defendant argued that the Union's members were employees and/or laborers of a contractor (Pustelak), as opposed to “subcontractors.”

B. 688 WDA 2010

On July 1, 1987, Pustelak and another union, the Laborers District Council of Western Pennsylvania (“the Union”), entered into a collective bargaining agreement, whereby Pustelak agreed to employ the members of the Union for certain construction work. The agreement covered work to be performed within the Union's jurisdiction as specified in the collective bargaining agreement, and sets forth the specific type of work to be performed by the Union's members. Under the collective bargaining agreement, Pustelak was obligated to pay contributions in the form of health, welfare, retirement and/or fringe benefits to Laborers Combined Funds of Western Pennsylvania (“the Trustee) based upon the Union members' hourly pay rate. The collective bargaining agreement incorporated a trust agreement between the Union and the Trustee. Pursuant to the trust agreement, the Trustee was the authorized agent to collect contributions on behalf of the Union's members.

In 2008, Pustelak retained the Union's members to work on the project on the Defendant's property. The Union's members performed labor on the construction project in accordance with the collective bargaining agreement, but Pustelak failed to pay the required contributions. On June 3, 2009, the Trustee filed a Statement of Mechanics' Lien Claim against the Defendant, seeking recovery of $24,935.73 in unpaid contributions. The Trustee alleged that the Union's members “performed laborer services, including but not limited to stone work, grouting and block work on the interior and exterior walls of the entry way; construction and relocation of scaffolding; conveyance of materials; mixing of mortar; and operation of forklifts, all of which were incorporated into or utilized for the improvement on [the property].” Statement of Mechanics' Lien, 6/03/09, at ¶ 8. On July 1, 2009, the Trustee filed a Complaint to Enforce Mechanics' Lien Claim.

In response to the complaint, the Defendant raised a preliminary objection in the nature of a demurrer, claiming that the Trustee lacked standing. The Defendant contended that the Trustee could not assert a mechanics' lien claim on behalf of the Union's members because the Union's members were not “subcontractors” under the Mechanics' Lien Law. The Defendant argued that the Union's members were not “subcontractors,” but rather, were employees and/or laborers of Pustelak.

On March 25, 2010, the trial court sustained the Defendant's preliminary objections and dismissed the complaints in both cases (the appeals at 687 WDA 2010 and 688 WDA 2010). The trial court reasoned as follows:

The Court holds that [the Trustees] do not meet the statutory definition of ‘subcontractor,’ and thus, lack standing to assert a mechanics' lien claim. The union members providing the [ ] services are not the employees of the Unions or the [Trustees], but rather, are the employees of Pustelak. The Unions and the [Trustees] are merely the representatives of the employees. The Court does not view the [collective bargaining agreements] as a subcontractor agreement. Rather, it is an agreement, made of behalf of the contractor's employees, which defines working conditions, compensation, and other terms.

Trial Court Order and Opinion (T.C.O.), 3/25/10, at 2.1

The trial court, therefore, concluded that the Unions' members were not “subcontractors” under the Mechanics' Line Law for two reasons: (1) the Unions' members were employees and/or laborers of Pustelak, and (2) the collective bargaining agreements were not subcontractor agreements. Because the Unions' members were not “subcontractors,” the trial court concluded that the Trustees also were not “subcontractors.”

At appeals 687 WDA 2010 and 688 WDA 2010, the Trustees raise identical issues for our review:

[1.] Whether [the Trustee], as an agent or fiduciary on behalf of union members pursuant to a collective bargaining...

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