Von Tobel Corp. v. Chi-Tec Constr. & Remodeling (IN)

Summary: Claimant’s name on mechanic’s pre-lien notice and the lien notice need not match identically; idem sonans is permitted. Notice will be sufficient if it substantially complies with the statute while considering three factors: (1) degree of non-compliance; (2) satisfaction of the underlying policy of the statutory provision; and (3) prejudice that may have resulted from non-compliance.


Von Tobel Corp. v. Chi-Tec Constr. & Remodeling, Inc., 994 N.E.2d 1215 (Ind. Ct. App. 2013).


Facts: The Margaret Lynn West Trust (Trust) owned a piece of real estate on Lake Michigan and contracted with Chi-Tec Construction & Remodeling (Chi-Tec) for the construction of a house on the property. Chi-Tec had a credit agreement with Von Tobel Corporation (Von Tobel), where Chi-Tec could make purchases from any of Von Tobel’s subsidiaries, including Von Tobel Home Center. During the construction of the Trust house, Chi-Tec purchased goods and materials on credit from the Von Tobel Home Center. On January 8, 2007, Von Tobel made its first delivery of materials to the construction site and submitted a pre-lien notice to the Trust and to the LaPorte County Recorder’s office in the name of Von Tobel Home Center, Inc. On June 16, 2008, Von Tobel made its final delivery of materials to the Trust site and recorded a notice of a mechanic’s lien with the name Von Tobel Corporation. In June of 2009, seeking to foreclose its mechanic’s lien, Von Tobel filed suit but the Trust challenged the validity of the lien. Von Tobel moved for summary judgment and the Trust filed a cross motion for summary judgment. After a hearing, the trial court held in favor of the Trust, finding that the mechanic’s lien was invalid because of the difference in name between the pre-lien notice and the lien notice. Von Tobel appealed.


Holding: Reversed and Remanded. The Appellate Court held that the pre-lien notice was sufficient under the public policy of informing the Trust that a claim for materials was furnished, and the Trust was in no way prejudiced by the difference in names on the two notices. The Court cited prior precedent showing that the mechanics lien notice statute requires only substantial compliance. Prior cases have held that if the statute were to be strictly construed, that would frustrate the purpose of the legislation. In evaluating if a lien claimant has substantially complied with the statute, the court considers three factors: 1) what is the degree of non-compliance with the statute, 2) what is the underlying policy of the particular statutory provision, and 3) what is the possible resulting prejudice to either the property owner or other interested third parties.

Here, the degree of non-conformance is minimal; there is no language in the statute that requires that identical names be on both notices, and past cases have allowed idem sonans to be sufficient if they have substantially the same meaning. The policy that underlies the notice requirement is to provide the property owner with notice that a lien has been placed. Here, the Trust inquired to Chi-Tec about the subject, but did not take any corrective measures. However, this inquiry alone is enough to satisfy the requirement that they were on notice of the pending lien. Another policy concern is to place interested third parties on notice of the lien. Here, there were no interested third parties of concern. Finally, the Trust did not introduce any evidence that they suffered any prejudice because of the difference in the name of claimant on the two notices.


Based upon this analysis, the Appellate Court found that summary judgment in favor of the Trust was erroneous and the case was remanded back with instructions to enter summary judgment in favor of Von Tobel.


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By: ATG Underwriting Department | Posted on: Tue, 12/10/2013 - 12:07pm