FOR PUBLICATION
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
KEITH FAFARMAN JOHN M. STUCKEY
Gambs Mucker & Bauman Stuart & Branigin, LLP
Lafayette, Indiana Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
JOHN CHO d/b/a ACE CONSTRUCTION )
& INTERIOR DESIGN, )
)
Appellant-Plaintiff, )
)
vs. ) No. 79A02-0305-CV-449
)
PURDUE RESEARCH FOUNDATION, )
)
Appellee-Defendant. )
APPEAL FROM THE TIPPECANOE SUPERIOR COURT NO. 1
The Honorable Donald C. Johnson, Judge
Cause No. 79D01-0108-CP-440
February 26, 2004
OPINION - FOR PUBLICATION
RILEY, Judge
STATEMENT OF THE CASE
Appellant-Plaintiff, John Cho (Cho) d/b/a Ace Construction & Interior
Design (Ace Construction), appeals the trial court’s summary judgment in
favor of Appellee-Defendant, Purdue Research Foundation (PRF).
We affirm.
ISSUES
Cho raises eight issues on appeal, which we consolidate and restate as
follows:
1) Whether the trial court erred in determining that Ace
Construction’s mechanic’s lien was invalid because PRF did
not actively consent to the construction project;
2) Whether the trial court erred in determining as a matter of
law that the work performed by ACE Construction does not
support a mechanic’s lien;
3) Whether the trial court erred in determining as a matter of
law that Ace Construction’s mechanic’s lien was not filed in
a timely manner and is invalid; and
4) Whether the trial court erred in determining as a matter of
law that Ace Construction was not entitled to file a
mechanic’s lien for the expenses incurred in constructing the
clean room.
FACTS AND PROCEDURAL HISTORY
On or about January 6, 2002, PRF[1] and Optolynx, Inc. (Optolynx) [2]
entered into a Lease Agreement in which Optolynx leased from PRF 933 square
feet in Unit D1-100 Rooms D1-103, D1-104, D1-105, D1-106, and D1-107 in the
Purdue Technology Center (Technology Center) located at 3000 Kent Avenue,
in West Lafayette, Indiana, in the Purdue Research Park (the “Leased
Property”). Article 11 of the Lease Agreement expressly provided that
Optolynx was not to make “alterations, changes, improvements or additions
to the Leased Property without the prior written consent” of PRF.
(Appellant’s App. p. 223).
After executing the Lease Agreement, Optolynx expressed an interest in
leasing separate, additional space amounting to eight thousand eight
hundred eighty three square feet in units E1-100 and E1-200 (“additional
space”) of the Technology Center for the purpose of constructing a clean
room for the manufacture of computer chips. It is undisputed that PRF was
aware that Optolynx was developing plans for the construction of a clean
room in the additional space. It is further undisputed that PRF did not
participate in the following: 1) Optolynx’s decision to pursue the
construction of a clean room; 2) Optolynx’s determination of the work that
would be required in order to construct a satisfactory clean room; 3)
Optolynx’s selection of a contractor to perform the work; or 4) Optolynx’s
negotiation of an agreement with any prospective contractors. Greg Deason
(Deason), the Director of Research Park Development at PRF,[3] advised
Optolynx that PRF would agree to the construction of a clean room in the
additional space provided that PRF and Optolynx were both able to reach an
agreement on the terms of a lease for the space.
On April 11, 2000, Cho d/b/a Ace Construction entered into a contract
with Optolynx to construct the clean room in a portion of the Technology
Center.[4] Ace Construction specializes in the construction of clean rooms
and generally constructs four to five clean rooms per year. A clean room
construction project involves four phases: 1) design; 2) purchasing; 3)
manufacturing; and 4) construction. Under the terms of the contract
between Ace Construction and Optolynx, Ace Construction was to provide the
design engineering, materials, and installation of the clean room for a
price of $810,000 subject to adjustments for changes in the scope of work
or in equipment specifications. Some of Ace Construction’s obligations
under the contract were to be provided by Ace Construction’s sub-
contractors. Particularly, the services provided by Ace Construction are
described on page 10 of the contract, as follows:
PROJECT MANAGEMENT
Trained Ace Construction personnel will professionally manage the
OPTOLYNX, INC. project. Ace Construction will procure required
subcontracting services, and an experienced technical crew will
perform the turnkey installation.
(Appellant’s App. p. 242).
At the time the contract was executed, Optolynx paid Ace Construction
$81,000.00 as payment towards the contract price. However, Ace
Construction has not received any other amounts paid by Optolynx or any
other individual or entity towards the contract price. PRF did not
participate in negotiating or drafting the contract agreement between
Optolynx and Ace Construction, and further did not sign or initial the
contract agreement. In fact, PRF was not provided with a copy of the
agreement or the details of the agreement between Ace Construction and
Optolynx until after Ace Construction recorded its Notice of Intention to
Hold Lien on September 18, 2000.
Nonetheless, Deason informed Optolynx on numerous occasions that it
was not authorized to begin construction of the clean room until PRF, as
the landlord, had sufficient opportunity to review the plans for the
proposed clean room and assess the potential impact the plans had on the
other tenants and the Technology Center as a whole. Further, Deason
informed Optolynx that PRF would not approve plans for the construction of
a clean room in the Technology Center unless and until Optolynx executed a
lease for the space in which the proposed clean room was to be constructed.
Deason also informed Ace Construction that before any construction
activities could go forward, PRF’s approval would be required.
On May 16, 2000, Ace Construction presented to Deason a written
request allowing them to remove some ceiling tile and grid and to erect
metal studs for partition walls inside the proposed clean room space.
Although Ace Construction requested that PRF approve both the demolition of
the existing ceiling and the installation of a metal frame, PRF approved
only the minor demolition requested by Ace Construction. Thus, PRF denied
authorization of the other construction activities in the additional space.
PRF authorized Ace Construction to conduct the ceiling demolition because
of its “optimism” and belief that the clean room would eventually be built.
(Appellant’s App. p. 626). The ceiling demolition work involved removal
of the existing air conditioning ductwork, light fixtures, and wiring. Ace
Construction did not hire a subcontractor to do the ceiling demolition;
instead, they performed the work themselves. On or about May 18, 2000, the
demolition work was completed.
After the demolition was completed, Ace construction requested that
PRF approve the plans for construction of the clean room, sign the required
local building permit applications, and execute additional documents so
that the plans for the clean room could be submitted to the State of
Indiana to secure a design release. On July 18, 2000, the design plans
were reviewed in a meeting attended by representatives of Ace Construction,
Optolynx, and PRF. During the meeting, Deason communicated the technical
concerns identified during the design review to Ace Construction. Again,
Deason informed Ace Construction that he had to be made aware of all
improvements that would be made in the facility.
PRF reviewed the plans submitted by Ace Construction with the intent
that Ace Construction would proceed with building the clean room.
Nevertheless, Deason declined to execute any construction related documents
at the meeting and did not approve the plans for the proposed clean room.
Deason declined to execute any construction related documents because
Optolynx had not executed a lease with PRF for the additional space where
the clean room would be built. Eventually, negotiations between PRF and
Optolynx proved unsuccessful and no lease agreement for the additional
space for the clean room was ever executed or agreed upon.
Consequently, on September 7, 2000, Optolynx notified Ace Construction
that Optolynx was terminating the contract agreement to build the clean
room. Following the execution of the contract agreement and prior to its
receipt of the termination notice, Ace Construction expended a total of
$371,543.75 for the work, labor performed and the materials supplied and
used on the real estate owned by PRF. Upon receipt of Optolynx’s
termination notice, Ace Construction did not perform any further design
engineering for the clean room, purchase and/or start manufacture or
acquisition of additional materials, parts, or equipment, or engage in any
further demolition or construction of the clean room. However, Ace
Construction was required to provide the following services pursuant the
contract agreement and its termination by Optolynx: 1) receive and
warehouse the materials purchased for use in the clean room; 2) return
materials purchased for use in the clean room, which were returnable; 3)
complete the manufacture of materials, parts, or equipment previously
started; and 4) attempt to sell or otherwise use special order materials
purchased for use in the clean room, which were not returnable. Ace
Construction incurred an additional expense of $11,942 in labor to complete
these tasks.
On September 18, 2000, Ace Construction filed a Notice of Mechanic’s
Lien with the Tippecanoe County Recorder’s Office against PRF as owner of
the real estate and against Optolynx in the amount of $371, 543.75. On
August 10, 2001, Ace Construction filed its Complaint to Foreclose the
Mechanic’s Lien. On October 19, 2001, PRF filed its Answer to Complaint to
Foreclose Mechanic’s Lien, Counterclaim of Purdue Research Foundation and
Motion for Leave to Assert Crossclaim. On October 25, 2001, the trial
court granted PRF’s Motion for Leave to Assert Crossclaim. On December 6,
2001, Cho d/b/a Ace Construction filed its Answer to Counterclaim of Purdue
Research Foundation.
On December 11, 2002, Ace Construction filed its Motion for Summary
Judgment, Designation of Evidence, and Supporting Brief. On December 12,
2002, PRF filed its Motion for Summary Judgment and Memorandum in Support
of PRF’s Motion for Summary Judgment. On May 8, 2003, the trial court
entered its order granting PRF’s Motion for Summary Judgment.
Ace Construction now appeals. Additional facts will be provided as
necessary.
DISCUSSION AND DECISION
I. Standard of Review
Summary judgment is appropriate if there is no genuine issue of
material fact and the moving party is entitled to judgment as a matter of
law. Ind. Trial Rule 56(C). In reviewing a decision upon a summary
judgment motion, we apply the same standard as the trial court. Miller v.
NBD Bank, N.A., 701 N.E.2d 282, 285 (Ind. Ct. App. 1998). We do not
reweigh the evidence designated by the parties. Turley v. Hyten, 751
N.E.2d 249, 251 (Ind. Ct. App. 2001). Instead, we liberally construe the
evidence in the light most favorable to the non-moving party. Schoknecht
v. Hasemeier, 735 N.E.2d 299, 301 (Ind. Ct. App. 2000).
The moving party bears the burden of showing prima facie that there
are no genuine issues of material fact and that it is entitled to judgment
as a matter of law. Id. Once this burden has been met, the non-moving
party must respond by setting forth specific facts demonstrating a genuine
need for trial, and cannot rest upon the allegations or denials in the
pleadings. Id. We review only the designated evidentiary material in the
record, construing that evidence liberally in favor of the non-moving
party, so as not to deny that party its day in court. Id.
II. PRF’s Active Consent
First, Cho argues that the trial court erred in finding that PRF did
not actively consent to the construction project performed by Ace
Construction for the improvement of the real estate owned by PRF.
Specifically, Cho asserts that PRF was actively involved in the design and
construction of the clean room. As a result, Cho contends that the trial
court erred in concluding that Ace Construction does not have a valid
mechanic’s lien against PRF due to lack of active consent.
Conversely, PRF contends that they were not actively involved in Cho’s
design of the proposed clean room for Optolynx. Rather, PRF asserts that
Optolynx determined to build the clean room in the Technology Center. PRF
maintains that they did not have a role in selecting Ace Construction to
manage the design or construction of the clean room and that they were not
involved in negotiating the contract agreement between Ace Construction and
Optolynx. Consequently, PRF argues that the trial court correctly
determined that Ace’s mechanic’s lien was invalid because PRF did not
actively consent to the work performed by Ace Construction.
Mechanic’s liens were unknown at common law and are purely creatures
of statute. Stern & Son, Inc. v. Gary Joint Venture, 530 N.E.2d 306, 207
(Ind. Ct. App. 1988). As a consequence, mechanic’s liens can only exist
when the claimant has complied with the applicable statutory steps. Id.
The courts generally have followed a strict construction in terms of
adherence to the requirements for creating a lien, and a rule of liberal
application of the remedial aspects of the mechanic’s lien statutes. Id.;
Mid America Homes, Inc. v. Horn, 272 Ind. 171, 396 N.E.2d 879,881 (Ind.
1979).
Indiana’s mechanic’s lien statute is found at Indiana Code section 32-
28-3-1. Before a mechanic’s lien can attach to real estate, the statute’s
absolute first requirement is that the landowner consented to the
improvements on which the lien is based. Stern & Son, Inc., 530 N.E.2d at
207. This consent must be more than inactive or passive consent and the
lien claimant’s burden to prove active consent is especially important when
the improvements are requested by someone other than the landowner. Id.
This emphasis is due to the fact that without the landowner’s active
consent, a lien claimant can only maintain a lien to the extent of his
customer’s interest in the land. Id. Additionally, it has long been the
rule that a person about to improve real estate must take notice of the
extent of his customer’s rights in the land and of the rights of those in
possession. Id.
In the present case, Cho argues that PRF actively consented to Ace
Construction’s actions based on three facts: 1) the lease between PRF and
Optolynx called for improvements made; 2) PRF was actively involved in the
clean room design and construction project; and 3) PRF insisted on
approving and reviewing the design plans for the clean room.
Indiana case law makes clear that a lease calling for improvements,
even very detailed improvements, will not prove the sort of active consent
needed to maintain a mechanic’s lien. Id.; Gardner v. Sullivan Mfg. Co.,
133 N.E. 31, 33-4 (Ind. 1921). In this case, PRF’s employee, Deason,
acknowledges that he reviewed the plans for the clean room. He focused
solely on the technical matters, and how the construction would impact the
other tenants in the Technology Center. However, the record clearly shows
that Deason continuously informed Ace Construction that PRF’s approval was
mandatory and necessary. In fact, PRF’s approval was required before any
construction could begin. Further, the record discloses that PRF never
gave its approval for construction of the clean room to Ace Construction.
Most importantly, PRF and Optolynx never executed any type of lease
agreement covering the real estate where the clean room would be built.
In any event, while these facts certainly establish that PRF was aware
of the construction, this awareness nevertheless does not establish the
sort of active consent needed to maintain a mechanic’s lien. Id.; see also
Woods v. Deckelbaum et al., 244 Ind. 260, 266-67, 191 N.E.2d 101,103-04
(Ind. 1963). Here, PRF was not involved in the negotiating of the contract
agreement between Ace Construction and Optolynx relating to the management
of the design and construction of the clean room. The record also
indicates that it was Optolynx, not PRF, who contracted to build a clean
room in the Technology Center.
The exact nature and content of the owner’s active consent in this
context will vary from case to case. See Stern & Son, Inc., 530 N.E.2d at
309.However, case law makes clear that the focus is not solely on the
degree of the owner’s active participation in the decisions and the actual
construction. Id. Instead, the focus is also on how closely the
improvements in question resemble a directly bargained-for benefit. Id.
Here, PRF did not receive a direct benefit from the improvements
constructed by Ace Construction, namely, the minor demolition work of which
it approved. Rather, the record reveals that PRF incurred an additional
expense of nearly $10,000 to replace the ceiling in the additional space,
which Ace Construction had removed. As a result, we find that there was no
bargaining between PRF and Ace Construction, not to mention a bargained for
benefit. Id.
Accordingly, we conclude that there is no genuine issue of material
fact on this issue. See T.R. 56(C). Consequently, we find that the trial
court did not err in finding that PRF did not actively consent to the
construction work performed by Ace Construction. See Stern & Son. Inc.,
530 N.E.2d at 307. As a result, we find that the trial court did not err
in granting PRF’s Motion for Summary Judgment on this issue.
III. Mechanic’s Lien
Next, Cho alleges that the trial court erred in determining as a
matter of law that the work performed by ACE Construction does not support
a mechanic’s lien. In particular, Cho argues that the trial court erred in
finding that the work Ace Construction performed was management or
supervisory services and therefore did not support the filing of a
mechanic’s lien. Cho also alleges that the trial court erred in
determining that the equipment and materials procured by Ace Construction
do not support a mechanic’s lien. Additionally, Cho asserts that the trial
court erred in determining that because the employees of Ace Construction
are not registered engineers in the State of Indiana, they were not
entitled to the protections provided under the statue.
A. Ace Construction’s Construction Management Services
First, Cho alleges that the trial court erred in determining that the
work performed by Ace Construction consisted of project management services
and, therefore, was non-lienable. As mentioned above, a mechanic’s lien
was a remedy unknown at common law and is purely a statutory creation.
Stern & Son, Inc., 530 N.E.2d at 207; Murdock Const. Management, Inc. v.
Eastern Star Missionary Baptist Church, Inc., 766 N.E.2d 759, 762 (Ind. Ct.
App. 2002). Because the mechanic’s lien is purely a creature of statute,
the burden is on the party asserting the lien to bring itself clearly
within the strictures of the statute. Murdock Const. Management, Inc., 766
N.E.2d at 762. The legislature expressly sets forth those persons entitled
to a mechanic’s lien. Id.
Specifically, Indiana Code section 32-28-3-1, states, in pertinent
part:
Sec.1. (a) A contactor, a subcontractor, a mechanic, a lessor leasing
construction and other equipment and tools, whether or not an operator
is also provided by the lessor, a journeyman, a laborer, or any other
person performing labor or furnishing materials or machinery,
including the leasing of equipment or tools, for:
1) the erection, alteration, repair, or removal of:
A) a house, mill, manufactory or other building;
* * *
may have a lien as set forth in this section.
Furthermore, Ind. Code § 32-28-11-1 was enacted following Beeson v.
Overpeck, 112 Ind.App. 195, 44 N.E.2d 195 (Ind. 1942), to codify the
expansion of those persons entitled to the mechanic’s lien to include
registered professional engineers, registered land surveyors, and
registered architects. See Murdock Const. Management, Inc., 766 N.E.2d at
762. The list in these two statutes is exclusive, i.e., unless Ace
Construction falls within one or more of these listed categories, it is not
entitled to the benefits of the mechanic’s lien statute. Id. Thus, Cho
must show that under a proper construction of the mechanic’s lien statute,
a construction manager acting as it did in this case may acquire a
mechanic’s lien. See id.
Cho argues that Ace Construction qualifies as a “laborer” or “persons
performing labor or furnishing materials” as those terms and that phrase
are used in the mechanic’s lien statute. PRF counters that Ace
Construction provided only supervisory or management services, and thus, is
not entitled to the benefits of the statute.
In determining whether Ace Construction’s services are the type of
“labor or materials” that are lienable under the mechanic’s lien statute,
we conclude that the supreme court opinion, Premier Inc. v. Suites of
America, Inc., 644 N.E.2d 124 (Ind. 1994), addressing the issue of
mechanic’s liens where supervisory services are involved, is of controlling
authority. In Premier, the developer, Premier Investments, entered
into a contract with Howard Johnson Franchise Systems, Inc. (Howard
Johnson) under which Premier Investments agreed to develop certain real
estate into a hotel. The contract required Premier Investments to “develop
plans, specifications and construction budgets, and otherwise be
responsible for the construction, equipping, staffing, and opening of the
hotel.” Id. at 125-26. Specifically, Premier Investments obtained the
necessary zoning and building approvals, bid the project and hired the
general contractor, monitored the construction on a day-to-day basis, made
sure that the owner was not paying for any materials that were not on site
and that the materials on site were to be used in the construction of the
hotel. Id. Furthermore, Premier Investments coordinated with the
architects, recommended and authorized design and construction changes.
Id. at 126. The agreement was a classic turn-key arrangement where
developer, using financing provided by the owner, would deliver to the
owner a completed hotel ready to turn the key and begin business. Id.
Soon after ownership of the property was conveyed from Howard Johnson
to Fairfield Development IV, Inc. (Fairfield), Fairfield ceased
construction. Premier Investments then filed a Sworn Statement and Notice
of Intention to Hold Mechanic’s Lien. Id. Subsequently, ownership was
conveyed to Suites of America, Inc., pursuant to an order by the Bankruptcy
Court. At trial, Suites of America, Inc., filed a Motion for Partial
Summary Judgment contending that Premier Investments did not have a valid
mechanic’s lien. This court reversed the trial court’s grant of partial
summary judgment in favor of Suites of America, Inc., determining that
Premier Investments’ mechanic’s lien was void as a matter of law. The
supreme court granted transfer. The decision of the court of appeals was
vacated, and the supreme court affirmed the trial court’s grant of partial
summary judgment in favor of Suites of America, Inc. The court concluded
that in narrowly construing the statute, Premier Investments was not
included in the categories of persons entitled to a mechanic’s lien, as
purely supervisory services do not constitute labor under the mechanic’s
lien statute. Id.
According to the instant record, Ace Construction performed on-site
supervision and coordination of the work, arranged for delivery and
storage, protection and security for the materials, systems, and equipment
used for the clean room, as well as site clean-up. The record reveals that
Ace Construction also used its construction skill and expertise in
developing plans and specifications used in the construction and
supervision of the construction. We fail to see any meaningful distinction
between the purely supervisory duties performed by Ace Construction and
those performed by the developer in Premier.
Nonetheless, Cho argues that since Ace Construction completed the
minor demolition work, as approved by PRF, they performed more than
supervisory and management services. However, as discussed above, PRF
approved the demolition work because it was minor in scope and nature and
in the long run PRF incurred an additional expense because of the work.
Moreover, the contract agreement between Optolynx and Ace Construction
explicitly provided that Ace Construction would “professionally manage” the
project and, further, Ace Construction would procure required
subcontracting services, and an experienced technical crew to perform the
turnkey installation. Therefore, consistent with the supreme court’s
holding in Premier, we conclude that Ace Construction is not a “laborer”
within the meaning of the mechanic’s lien statue. See Premier, 644 N.E.2d
at 129-30.
Accordingly, in narrowly construing the mechanic’s lien statute, we
conclude that Ace Construction’s claim seeks compensation for supervisory
services that are not covered under the statute. See Murdock Const.
Management, Inc., 766 N.E.2d at 765. Consequently, we find that the trial
court did not err in concluding that Ace Construction’s services were
management services and therefore do not support a mechanic’s lien.
B. Equipment and Materials Procured by Ace Construction
Next, Cho asserts that the trial court erred in determining that the
materials ordered, but not delivered or installed on PRF’s property, cannot
be a component of Ace’s Mechanic’s lien. In particular, Cho contends that
Ace Construction purchased custom equipment and materials for the clean
room that could not be returned to the vendor; as a result, Ace
Construction claims that they should be entitled to a mechanic’s lien. On
the contrary, PRF maintains that the equipment and materials procured by
Ace Construction, but not installed, do not support a mechanic’s lien.
The statutory and common law requirements as to ‘such materials’
which must be furnished are that: (1) the materials must be sold to the
property owner or his agent for that purpose; (2) the materials must be
furnished for the purpose of being used in constructing the particular
improvement; (3) the improvement must have been authorized by or consented
to by the property owner; and (4) the materials must have actually been
used in the construction. Stanray Corp. v. Horizon Const., Inc., 342
N.E.2d 164, 653 (Ind. Ct. App. 1976). As to when such materials are
furnished, we mean simply that they have been ordered for and delivered to
such person. Id.
In the instant case, the record shows that the equipment and
materials that Ace Construction purchased for the construction of the clean
room were never delivered nor installed in the Technology Center. The
record reveals that PRF never took possession of the materials and
equipment. Furthermore, the record is devoid of evidence that PRF
specifically requested Ace Construction to purchase any of the equipment or
materials for the Technology Center.
Moreover, as we have determined above, PRF did not give Ace
Construction its approval to begin the construction work. The record
clearly shows that PRF continuously informed Ace Construction that PRF’s
approval of the design was required before Ace Construction could begin
building the clean room. However, due to PRF’s concerns about the design
plan that were conveyed to Ace Construction and most importantly, due to
the fact that Optolynx and PRF could not reach an agreement on the lease
for the clean room space, Ace Construction did not have the authority to
begin purchasing materials to construct the clean room.
Indiana law places a burden upon a mechanic’s lienholder who seeks to
foreclose such a lien to show that the purported lien meets all statutory
requirements necessary to its creation. Gooch v. Hiatt, 337 N.E.2d 585,
587 (Ind. Ct. App. 1975). In light of the above, we find that Cho has not
satisfied these requirements. See id.; see also Stanray Corp., 342 N.E.2d
at 653. Consequently, we hold that the trial court did not err in finding
that Ace Construction cannot maintain a mechanic’s lien for the value of
the materials and equipment purchased but not installed or delivered to
PRF.
C. Professional Engineering Services
Cho also contends that the trial court erred in determining that Ace
Construction cannot maintain a mechanic’s lien against PRF for the
professional engineering services rendered to Optolynx. In response, PRF
claims that the trial court correctly determined that the lien rights
available under Ind. Code § 32-38-11-1 are not available to Ace
Construction since they are not registered or licensed engineers in the
State of Indiana.
Indiana Code section 32-28-11-1, provides:
Registered professional engineers, registered land surveyors, and
registered architects may secure and enforce the same lien that is now
given to contractors, subcontractors, mechanics, journeymen, laborers,
and materialmen under IC 32-28-3 and any statues that supplement IC 32-
38-4.
Although Cho acknowledges that the employees of Ace Construction are not
registered engineers in the State of Indiana he, nevertheless, maintains
that since the employees are registered in the State of California, the
statue is extended to them.
We disagree with Cho. As previously mentioned, because the mechanic’s
lien is purely a creature of statute, the burden is on the party asserting
the lien to bring itself clearly within the strictures of the statute. See
Murdock Const. Management, Inc., 766 N.E.2d at 762. Ind. Code § 24-31-1-21
provides for engineers registered in other states to become registered in
Indiana only upon application to, and approval of, the State Board of
Registration for Professional Engineers. See Ind. Code § 23-31-1-21.
Thus, upon doing business in the State of Indiana, Ace Construction was
required to register and comply with the requirements as set forth in Ind.
Code § 23-31-1-21, to be afforded the protections under the statutes.
However, the record is devoid of evidence that Ace Construction completed
these requirements.
Therefore, we find that the term “registered engineer” as used in Ind.
Code § 32-38-11-1 is limited to engineers registered to practice in Indiana
by the State Board of Registration for Professional Engineers. See I.C. §
23-31-1-21. We further conclude that the statute must be narrowly
construed in determining those persons entitled to its protection. See
Premier Investments, 644 N.E.2d at 130. If the legislature intending
developers, in the same position as Ace Construction, to be entitled to a
mechanic’s lien for their services, it must expressly so provide. See id.
IV. Untimely Filed Mechanic’s Lien
Further, Cho argues that the trial court erred in finding that Ace
Construction’s mechanic’s lien was not filed in a timely manner. In
particular, Cho maintains that Ace Construction provided labor and
materials for the clean room within the 90-day period prior to filing its
notice of mechanic’s lien. Consequently, Cho contends that the filing of
the mechanic’s line was timely.
Indiana Code section 32-8-3-3, provides, in pertinent part:
a) Except as provided in subsection b, a person who wishes to acquire
a lien upon any property, whether the claim is due or not, must
file in duplicate a sworn statement and notice of the person’s
intention to hold a lien upon the property for the amount of the
claim:
1) in the recorder’s office of the county; and
2) not later than ninety (90) days after performing labor or
furnishing materials or machinery described in section 1 of
this chapter.
Here, the record shows that Ace Construction completed the minor demolition
work of the ceiling and grid that PRF approved of on May 18, 2000.
However, the record discloses that Ace Construction did not file its
mechanic’s lien until September 17, 2000. Thus, the filing of Ace
Construction’s mechanic’s lien was after the 90-day time period as required
by Indiana Code section 32-8-3-3.
Nonetheless, Cho argues that Ace Construction provided labor and
materials for the clean room up to and beyond Optolynx’s contract
termination notice of September 7, 2000. As a result, Cho claims to have
timely filed its mechanic’s lien. We find that Cho’s argument without
merit. Particularly, as this court previously determined, Cho was not
entitled to a mechanic’s lien on the work performed or materials purchased
due to lack of approval by PRF. Accordingly, we find that the trial court
correctly determined that Ace Construction’s mechanic’s lien was invalid
because it was not timely filed.
V. Expenses Incurred
Lastly, Cho argues that the trial court erred in determining that Ace
Construction cannot maintain a mechanic’s lien for the costs and expenses
incurred in connection with building the clean room. However, Cho is
merely restating his previous arguments for our review. As determined
above, Ace Construction is not entitled to recoup these expenses because:
1) Ace Construction’s services are classified as “management” not “labor”
services and 2) PRF did not get a directly bargained-for benefit from the
work performed by Ace Construction; rather, PRF incurred an additional cost
from the work that Ace Construction performed. See Premier Inv., 644
N.E.2d at 126; see Stern & Son, Inc, 530 N.E.2d at 309. Furthermore,
because we previously held that Ace Construction cannot maintain a
mechanic’s lien for the materials and equipment purchased without the
consent of PRF, we also find that Ace Construction is not entitled to a
mechanic’s lien for the costs and expenses they incurred in connection with
the unauthorized purchase of these items.
Accordingly, we find that there is no genuine issue of material fact
appropriate for trial regarding Ace Construction’s mechanic’s lien for the
expenses they incurred. See T.R. 56(C). Consequently, we find that the
trial court did not err in granting summary judgment in favor of PRF on
this issue.
CONCLUSION
Based on the foregoing, we conclude that the trial court properly
denied Cho’s Motion for Summary Judgment. Therefore, we affirm the trial
court’s grant of summary judgment in favor of PRF.
Affirmed.
SULLIVAN, J., and FRIEDLANDER, J., concur.
-----------------------
[1] PRF is an Indiana corporation located in West Lafayette, Indiana, and
the sole and exclusive holder of fee simple title to the Purdue Technology
Center. PRF leased space in that facility to Optolynx, Inc. and others.
None of PRF’s tenants in the Purdue Technology Center have an ownership
interest in the property.
[2] Optolynx is an Indiana corporation and a former tenant in the Purdue
Technology Center.
[3] Deason’s responsibilities at PRF included development of PRF’s real
estate and lease issues with tenants, including tenant improvements.
[4] Ace Construction has been engaged in commercial and residential
construction since 1992. Although Ace Construction is not incorporated,
Cho’s title is President. In April of 2000, Ace Construction had about
seven employees, namely: Cho, President and Project Manager; James Seo
(Seo), Chip Engineer; Tony Cho, Manufacturing Manager; Brad Cho, Office
Manager; Samuel Cho, Clean Room Specialist; Chong Kim, Clean Room
Specialist; and Joshua Kim, Purchasing Manager.
