Indiana Construction Law
Summary of R.T. Moore Co., Inc. v. Slant/Fin Corp.
By: Jeremy L. Fetty
The Indiana Court of Appeals recently reversed a trial court’s grant of judgment in favor of equipment supplier where a subcontractor filed suit against that supplier to challenge the supplier’s claim under the Personal Liability Notice (PLN) Statute. In R.T. Moore Co., Inc. v. Slant/Fin Corp, 966 N.E.2d 636 (Ind. Ct. App. 2012), the materials supplier (“Slant/Fin”) provided construction materials which were ordered from a second supplier who received the original order from a subcontractor. When the second supplier failed to pay Slant/Fin for the materials, Slant Fin filed a “Notice of Personal Liability” claim pursuant to Ind. Code section 32-28-3-9 (“the PLN Statute”) against the owners of the construction project for monies it believed it was owed. To protect against the possibility of double payment, the owners withheld monies owed to the construction project participants. The subcontractor then filed suit against Slant/Fin.
The PLN Statute imposes personal liability on project owners in favor of subcontractors, along with other parties specifically listed in the statute that have not been paid by their contractors. The statute is an additional or alternative remedy to the subcontractor’s rights under the Mechanics’ Lien Statute (“MLS”). The MLS enables certain persons defined by the statute to establish and enforce a lien on projects which they have performed labor or furnished materials or machinery for the amount owed.
The Court emphasized the difference between the two statutes concerns the limitation on recovery. That recovery under the PLN Statute is limited to the amount that is due or will become due from the owner to the employer, lessee, or subcontractor, whereas the MLS creates a secured interest that gives the subcontractor priority over the owner’s unsecured creditors. This means the amount the subcontractor can recover under the MLS is not limited to the amount the owner owes the contractor.
The Court agreed with the subcontractor that because Slant/Fin was merely a material supplier which supplied materials to another materials supplier, it was unable to invoke the protections of the PLN Statute. It determined that Slant/Fin did not fall with in the class of persons/entities entitled to seek a remedy under the PLN Statute. Utilizing the reasoning from previous case law that established that the protected class under the PLN Statute is the same as under the MLS, the court concluded that Slant/Fin and the second supplier did not perform any labor on the projects and was simply a “materialman to a materialman” who was not permitted to seek the protections of the PLN Statute.
Jeremy Fetty is a partner in the law firm of Parr Richey Obremskey Frandsen & Patterson with offices in Lebanon and Indianapolis. He often advises businesses and utilities (for profit, non-profit and cooperative) on organizational, human resources, and transactional matters and drafts and reviews commercial contracts.
The statements contained herein are matters of opinion and general information only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have any questions regarding this article, please contact an attorney.
JAMES A.L. BUDDENBAUM is a partner with the Indianapolis office of Parr Richey Obremskey Frandsen & Patterson, where he concentrates in corporate law, acquisitions, business transactions, utility, real estate, employment, and complex insurance, and other business litigation. 
JEREMY FETTY joined the firm in 2006. Mr. Fetty’s practice focuses on utility law, corporate law, cooperative law, labor and employment law, and creditor's rights law. 
RANDY HOLT Randy Holt practices in the areas of corporate law and governance, electric cooperative law and taxation, corporate formation, mergers and acquisitions, utility law, commercial contracts, real estate transactions, zoning and land use, and employment law. 
PAUL KRUSE graduated cum laude from Indiana University School of Law at Indianapolis in 1981 and has been a partner in the firm since 1984. 
DON MORTON was admitted to practice in 1966 and, following a tour of duty in Vietnam with the U.S. Army, commenced a general practice with emphasis on civil litigation, business law, real estate, and probate. 
TONY PATTERSON has extensive experience representing personal injury victims and wrongful death survivors throughout Indiana and the Midwest. 
CHARLES RITZ has practiced with the firm since 1978, concentrating in the areas of utility law, labor law, employment law, employee benefits, complex litigation, estate planning and estate administration. 
MIKE SCHULTZ concentrates his practice on civil litigation. He routinely handles a wide variety of employment related disputes, representing both business and employees, and is a frequent lecturer on compliance with federal employment laws. 
LARRY WALLACE was the first chairman of Parr Richey Obremskey Frandsen & Patterson's Utility Law Section. He received his law degree from Indiana University and was admitted to the Indiana bar in 1963. His practice is focused on legal issues of particular concern to regulated and unregulated public utilities, including regulatory and governmental relations services, corporate and real estate law. 
