On November 28, 2012, the Pennsylvania Supreme Court granted the petition for allowance of appeal of Scotts Development Co. in the matter of Bricklayers of Western Pennsylvania Combined Funds v. Scotts Development, 41 A.3d 16 (Pa. Super. 2012) (en banc). In Bricklayers, the Superior Court found that labor unions can file and enforce mechanics lien claims for fringe benefits not paid by a general contractor to the unions members. The Superior Court reached this incredible decision even though under the collective bargaining agreements, the unions members were direct employees of the general contractor and despite the fact that the general contractor paid the unions members in full for the work that they performed on the project. In taking this appeal, the Supreme Court has the opportunity to correct this latest in a growing number of cases in which the rights of owners under Pennsylvanias Mechanics Lien Law have suffered as a result of well-intentioned but flawed decisions of the Superior Court.
Purposes of the Mechanics’ Lien Law
One of the laudable purposes of Pennsylvanias Mechanics Lien Law, 49 P.S. § 1101 (the Lien Law), is to protect the prepayment of labor and materials that subcontractors (and suppliers) invest in an owners property. It does so by creating the extraordinary remedy of permitting subcontractors to pursue an owner with whom they lack privity of contract for nonpayment by a general contractor for labor and materials the subcontractors provided on the owners project. This remedy is more extraordinary still as it can force an owner to pay twice for the same work. That is, even where an owner has paid its general contractor in full for certain work, the Lien Law can also require the owner to pay subcontractors for the same work.
