Although a subcontractor, supplier or materialman can only make “one” recovery of money they are owed, they may be able to proceed under more than one legal theory in order to increase their chances of prevailing in their lawsuit. Quantum meruit or unjust enrichment is one such theory which may be closed to those entitled to file materialmen’s liens. The case Callahan v. Hall recently held that a subcontractor could not assert quantum meruit claim against homeowners but, rather, was limited to the remedies provided by the lien statute, where subcontractor had no direct contractual relationship with homeowners.
Thus, a materialman or subcontractor may not recover against an owner or general contractor with whom it has no contractual relationship, based on the theory of unjust enrichment or implied contract; rather, it is limited to the statutory remedies provided by Georgia’s lien statute. Thus, it is imperative that materialmen and suppliers timely file mechanics and materialmen’s liens in order to protect themselves and increase their likelihood of recovery.
What you think about this limitation on a subcontractor or a materialman’s ability to file a claim for unjust enrichment?
Many construction contracts have provisions that parties must arbitrate–rather than litigate–their claims. Although these mandatory arbitration provisions can be useful, saving the parties time and money, they can also cause hiccups in the enforcement of materialmen liens. For example, in order to perfect a mechanics lien in Georgia, a lawsuit must file within one year of the date the lien was filed; failure to do this voids the lien. But, if the supplier or sub-contractor files suit, then he might lose the benefits of the arbitration provision of his contract.
Recently, the Georgia Court of Appeals helped to clarify that a lienholder did not waive his rights to compel arbitration even if he files suit to perfect and foreclose a lien. The court goes on to state that the construction company was required by law to file suit in order to perfect and foreclose its mechanics lien, and other claims were expressly alternative, rather than separate and cumulative, claims for recovery.
What do you think about using arbitration provisions in construction contracts? What benefits have you experienced or what pitfalls should be avoided?
During these difficult economic times, most people have been very sensitive to cost increases; in fact, many businesses and law firms (ours included) have reduced fees in order to help our friends and clients. Unfortunately, the costs of dealing with Georgia courts have just gone up. They didn’t go up a couple of dollars or even $10.00; instead, court filing fees have increased dramatically, sometimes doubling! Each county has determined the date for these increases, so please be prepared to see more and more increases as these new fees are instituted. Click here to see a copy of House Bill 1055.
Since our construction law firm practices throughout the State of Georgia, we are beginning to see lawsuit filing fees increase over $100 per filing; the sheriff service fees have doubled as well–they are now $50.00 per service attempt! Similarly, appeals from lower courts fees and case transfer fees have effectively doubled. These fees are the result of House Bill 1055 and, although they are charged by the local clerks, most of the money is paid to the State. Thus, these amounts do not include fees charged by the county.
What can we learn from this?
People’s access to justice has become considerably more expensive.
That’s a shame, particularly in an economic climate where contractors and subcontractors are not being paid. It’s also a shame because many courts have had to reduce services and take furloughs in order to maintain their budgets, yet they will not see any of this revenue.
Remember, that due to county fees and add-ons, filing fees vary in each county; furthermore, these mandated increases are taking effect on different dates so be sure to contact the clerk’s office before mailing in your filing fees. If you have any questions, please feel free to contact the Cobb Law Group. Please tell us what you think about these fees and how they may impact your business decisions.