Posts Tagged ‘Harrisburg’

Earlier this year, student guestworkers participating in the State Department’s J-1 Summer Work Travel Program filed complaints with the Department of Labor and State regarding working and housing conditions at three Harrisburg, Pennsylvania area McDonald’s franchises.  Visas under the J-1 Summer Work Travel Program are available to post-secondary students pursuing a full time post-secondary education outside of the United States who come to the United States to work and travel during summer vacation.

The complaint alleges that the franchise owner and its labor supplier, GeoVisions, engaged in various illegal practices that bring the students’ wages below minimum wage, including such practices as, deducting above-market rent from the students’ paychecks while providing substandard basement housing.  The franchisee owner and GeoVisons allegedly capitalized on the students’ desperation to work in order to pay back the debt incurred to cover the Summer Work Travel Program fees by placing the students on call at all times.  The complaint further alleges various violations of the Fair Labor Standards Act, including failure to record all hours worked by students, failure to pay the students for all hours worked, unlawful deductions resulting in payment below the minimum wage, unlawful pre-employment expenses resulting in payment below the minimum wage, and failure to pay overtime wages for hours worked over 40 in a week.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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A Canonsburg, Pennsylvania based painting contractor faces nearly half a million dollars in proposed OSHA penalties for alleged safety violations at three of its projects.  The large citation includes 38 alleged violations, including 14 willful and 11 repeat violations at worksites in Slatington, Harrisburg, and Slatedale, Pennsylvania.

The alleged willful violations include failing to properly protect workers from lead exposure and failing to provide fall protection.  The repeat violations relate to employee exposure to lead above the permissible exposure level, a lack of warning signs posted in lead work areas, failure to ensure workers showered at the end of each shift, and failure to provide medical evaluations and fit tests for respirator users.

Additional alleged violations include:

  1. Failure to notify employees of the results of lead monitoring;
  2. Failure to provide employees with initial medical surveillance for lead;
  3. Failure to provide periodic blood tests for employees exposed to lead;
  4. Allowing workers to have or consume food in an area where lead exposure was above the permissible level;
  5. Failing to notify employees in writing of blood lead test results within five days;
  6. A lack of guarding on electrical wiring to prevent accidental contact; and
  7. Failure to ensure that workers wore respirators while blasting with glass media or when exposed to lead in excess of permissible limits.

 

The cited company has been under OSHA’s scrutiny for the past several years, having been inspected five times in the past five years with four of the inspections resulting in citations for serious violations.  As a result of the painting contractor’s alleged refusal to correct hazards, it has been placed on OSHA’s Severe Violator Enforcement Program, which requires targeted follow-up inspections to ensure compliance with OSHA regulations.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

 

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Posted in OSHA, Safety | No Comments »

In 2012 the Superior Court of Pennsylvania, in the matter of Commerce Bank/Harrisburg, N.A. v. Kessler et al., ruled in favor of a general contractor by finding that the general contractor’s mechanics’ lien had priority over the mortgagee’s lien.  For those outside the construction industry this might not be titillating news, but for members of the industry (and their lawyers) who rely on mechanics’ liens to ensure payment, the holding is welcome news.

The story starts in October 2006 when the general contractor contracted with a couple to build them a luxury home in Harrisburg.  Shortly thereafter, the GC started excavating.  A few months later, in January 2007, the couple got a construction loan from what is now Metro Bank for up to $435,000, which loan was secured by an open-ended mortgage that was recorded that same month.

The home was substantially complete in August 2007.  Unfortunately, the couple was unable to make their mortgage payments and Metro Bank filed a mortgage foreclosure action against the couple and obtained a default judgment against them for $403,994.84 in July 2008.  The couple also failed to make their payments to the general contractor and the general contractor obtained a default judgment against the couple in the amount of $411,304.14 in February 2009.

Thereafter, Metro Bank and the general contractor became entangled in a legal battle over which judgment took priority, in other words, there was a dispute over which party was first in line to collect the proceeds from the sale of the home.  The trial court entered an order holding that the judgment entered in favor of the general contractor took priority over the judgment entered in favor of Metro Bank.  Metro Bank appealed.

Under the 2007 amendments to Pennsylvania’s Mechanics’ Lien Law, Section 1508(c) awards priority to a mortgage over a mechanics’ lien where the mortgage constitutes:

(2) An open-end mortgage as defined in 42 Pa.C.S. 8143(f) (relating to open-end mortgages), the proceeds of which are used to pay all or part of the cost of completing erection, construction, alteration or repair of the mortgaged premises secured by the open-end mortgage.

49 Pa.C.S.A. 1508(c)(2) (emphasis added).  Metro Bank took the position that this section of the Mechanics’ Lien Law gave its mortgage priority over the general contractor’s mechanics’ lien, but the general contractor argued that the open-end mortgage upon which Metro Bank based its lien did not satisfy the requirements of Section 1508.

Indeed, it was undisputed that a portion of the proceeds of the open-end mortgage in this matter paid for expenses other than “completing erection, construction, alteration or repair of the mortgaged premises.”  Rather, some of the proceeds were used to pay costs such as tax claims, closing costs, satisfaction of an existing mortgage on the property, and payment of other judgments and liens.  The general contractor argued that to allow use of funds for reasons other than those expressly set forth in Section 1508(c)(2) would, for example, permit a lender and owner to defeat a contractor’s lien rights by using as little as $1.00 out of $1,000,000.00 for the enumerated purposes set forth in Section 1508(c)(2) and therefore Metro Bank could not rely on Section 1508(c)(2) to subordinate the general contractors mechanics’ lien on the property.

The Superior Court of Pennsylvania agreed with the general contractor finding that Section 1508(c)(2) only extends priority to mortgage loans where the proceeds were used to pay the expenses set forth in Section 1508(c)(2).  The court interpreted the use of the term “the proceeds” to mean all of the proceeds and agreed with the general contractor that any other interpretation of the statute would permit lenders and owners to improperly manipulate the system to defeat lien rights

In ruling in favor of the general contractor, the court also disagreed with Metro Bank’s contention that the mechanics’ lien was invalid on the basis that it allegedly failed to contain the statutorily mandated statement of the kind and nature of materials furnished.  Although the general contractor’s lien claim described the kind and character of the work as “all labor and materials required for the construction of a two story residential dwelling” and referred to the construction contract, Metro Bank argued that because the lien claim failed to attach the drawings and specifications referenced in the contract, the statement of the kind and character of the labor and materials furnished was too vague.  As such, Metro Bank asserted that the mechanics’ lien was invalid.

The general contractor argued that his lien was not invalid because he substantially complied with the requirements of the Mechanics’ Lien Law.  Again, the court agreed with the general contractor noting that multiple Pennsylvania cases interpreting the “contents of the claim” section of the Mechanics’ Lien Law have long held that “in considering a mechanics’ lien claim, it must be kept in mind that substantial compliance with the Act is sufficient” and that the express terms of Section 1503((5) only required a general statement of the kind and character of the labor and materials furnished.  Accordingly the court held that the lien claim sufficiency described the nature of materials furnished.

Lesson Learned:  If all the proceeds of a mortgage were not applied to the cost of completing erection, construction, alteration or repair of the mortgaged premises, a contractor’s mechanics’ lien claim should take priority over the lien of a mortgagee.  Of course, these things can vary depending on the circumstances of an individual case and it is highly recommended that a general contractor consult with a lawyer to ensure that its lien rights are protected to the maximum extent possible.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

 

 

 

 

 

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