Steel products company files breach of contract claim against law firm

An Ohio steel products company that claims it got stuck with an outstanding bill after a contractor it employed for a job went bankrupt, has filed a federal complaint against a Philadelphia law firm whose services the plaintiff initially retained in order to recoup the money it was owed by the now-defunct company.

In a lawsuit filed Oct. 24 at federal court in Philadelphia, Youngstown Pipe & Supply, of Boardman, OH, alleges that procedural errors by defendant Spector Gadon & Rosen, P.C., cost the company more than $200,000 in outstanding payments, plus various legal fees related to prior civil actions as well as this one.

The lawsuit, which was filed at the U.S. District Court for the Eastern District of Pennsylvania by Philadelphia attorneys Steven J. Engelmyer and Paul G. Gagne, of the Philadelphia firm Kleinbard Bell & Brecker, claims that the defendant failed to prepare and file a mechanics’ lien claim against American Compost Corporation, “in accordance with the mandatory detailed statement requirements of the Pennsylvania mechanics’ lien statute.”

Harleysville, Pa.-based American Compost Corporation had retained the services of Youngstown Pipe & Supply back in 2004 in connection with a project that was to be built on ACC’s property. Clark Building Systems, which later declared bankruptcy, was the firm that was contracted by Youngstown to do the project.

According to the complaint, Youngstown sent out its final shipment of materials to Clark in early November 2004. In mid December, Youngstown mailed Clark and outstanding invoice in the amount of $206,690.41. Clark, however, declared bankruptcy and subsequently failed to pay Youngstown the outstanding money owed.

Youngstown retained the legal services of the defendant, Spector Gadon & Rosen, in January 2005, to help recover the sum owed to the plaintiff by Clark.

In early March 2005, the lawsuit states, Spector filed a mechanics’ lien against the property in question with the Lancaster County, Pa. Prothonotary’s Office. Then, in late February 2007, Spector filed Youngstown’s complaint on the mechanics’ lien claim in Lancaster County’s Court of Common Pleas.

In mid May 2007, the complaint states, ACC filed preliminary objections to the mechanics’ lien complaint, asserting that the contents of the lien claim were not in compliance with the Pennsylvania mechanics’ lien statute because the claim did not contain the statutorily required detailed statement of the claim.

Common Pleas Court overruled the objections, but ACC continued with its assertions throughout the legal process.

Trial was held in June 2006. In July of that year, Spector filed Youngstown’s petition to amend the mechanics’ lien claim to include the invoices underlying the claim, the suit states. The petition to amend the claim was denied by common pleas court in August 2009.

The court then denied Youngstown’s claim in November 2009 on the grounds that the mechanics’ lien claim did not comply with the mandatory detailed statement requirements as per Pennsylvania law, the suit states.

Judgment was entered following the denial of various post-trial motions filed on behalf of Youngstown.

Pennsylvania Superior Court eventually went on to affirm the trial court’s decision.

“The denial of Youngstown’s mechanics’ lien claim against ACC was as a result of Spector’s failure to prepare and file the claim in accordance with the mandatory detailed statement requirements of the Pennsylvania mechanics’ lien statute,” the complaint states. “The denial of Youngstown’s petition to amend the mechanics’ lien claim was as a result of Spector’s failure to file the petition before trial, even though Spector was on notice that ACC contended that the mechanics’ lien claim did not comply with the mandatory detailed statement requirements of the Pennsylvania mechanics’ lien statute.”

If it wasn’t for Spector’s conduct, the suit claims, Youngstown would have been able to recover the $206,690.41, plus interest at a rate of 7 percent per annum.

The lawsuit contains counts of professional negligence and breach of contract.

The plaintiff demands unspecified monetary damages against the defendant, in addition to prejudgment interest, attorney’s fees and other court costs.

The federal case number is 2:11-cv-06639-LP.