Georgia Construction, Bond & Lien Law Blog

Conflicting Property Identification in Georgia Materialmen’s Lien

Posted in Georgia Case Law,Materialmen's Lien (enforcement) by Administrator on the June 17th, 2011

We love writing this blog!  Particularly when two entries in a row provide good news to some of our clients (and prospective clients!)

Recently, the Georgia Court of Appeals ruled on the matter 3400 Partners, LLC v. Chavez (No. A11A0554).  In this lawsuit, a painting and concrete subcontractor had filed a materialmen’s lien against a condominium and retail complex which he, subsequently, attempted to foreclose upon.  Unfortunately, the subcontractor filed his lien with a conflict as to which property against which he intended to place the lien.  The face of the lien claimed to lien “all buildings and improvements” of the entire condominium complex, but the legal description of the property to be lien only identified one unit of the complex.  Thus, when the subcontractor brought the foreclosure proceeding the owner of the complex argued that the lien only covered one individual unit.  After hearing both sides, the court looked at all the evidence and held in favor of the subcontractor!

Although it is very good news that the Georgia Court of Appeals upheld a materialmen and mechanics lien which may have been ambiguous, there are at least two lessons which every supplier and subcontractor in Georgia should take away with them.

First, make sure that the real estate against which you want to lien is properly identified.  Although the conflicting property identification in 3400 Partners was ultimately resolved in favor of the subcontractor, it probably took a lot of the subcontractor’s time and money to pursue their Georgia materialmen lien rights.  If steps had been taken to file a lien with consistent real estate description, then the supplier would have prevailed sooner (i.e., no appeal!) and at a much lower cost.  Contact a Georgia Construction Lawyer to help you correctly identify the real estate.

Second, although the court ruled in favor of the Georgia supplier/subcontractor when the real estate was, arguably, incorrectly or incompletely identified, the court might not always decide the matter in favor of the supplier or subcontractor.  The court, in this case, looked at all of the facts some of which included the language of the lien, the language of the legal description, the plat referenced in the lien, correspondence between the parties, the value of the work performed vs. the value of the individual condominium unit.  Thus, the court’s ruling was fact specific–different facts or unprovable facts may have resulted in a different opinion.  As a result, we are reminded that there are few clear answers, and your need to consult a Georgia lawyer to help you decipher your specific fact pattern.

If you know about any materialmen’s liens which have been contested based upon a confusing, incomplete, or conflicting identification of the real estate, let us hear from you!

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Recent Court Ruling Favors Georgia Suppliers & Subcontractors

Posted in Materialmen's Lien (enforcement),Materilamen's Liens by Administrator on the June 9th, 2011

It is always a great pleasure to share good news with our readers–particularly when that good news stems from a Georgia Court of Appeals ruling in favor of a subcontractor!

Just a few days ago, the Georgia Court of Appeals ruled on the matter Madison Retail Suwanee, LLC et. al v. Orion Enterprises Sales & Service. In this case, a subcontractor has filed a materialmen’s lien against the owner’s real estate for money they were owned on a construction project.  The owner of the liened property brought two issues before the Court of Appeals:

First, the real property owner claimed that the subcontractor did not fully comply with Georgia’s lien filing requirements.  Specifically, Georgia’s lien statute states (among other requirements) that a lien claimant must “send a true and accurate copy of the claim of lien . . . to the owner of the property.”  O.C.G.A. § 44-14-361.1.  The property owner pointed out that the copy of the claim of lien that he received from the subcontractor was different from the claim of lien that the subcontractor filed with the clerk of court.  What was the difference?  The copy which was filed with the clerk of court identified the real estate owner as “Owned by Madison Retail Suwannee [sic], LLC”, and the copy sent to the real property owner omitted the word “Retail”.  On this, the real property owner tried to get the lien dismiss, but the Georgia Court of Appeals agreed with the subcontractor.  In fact, the Court sternly states that the copy which the property owner “served the purpose of ensuring that the owner timely receive[d] notice” of the subcontractor’s lien even though one word of the real property’s owner was omitted.

Second–and this is even more important for Georgia’s subcontractors and suppliers–the court allowed the subcontractor to enforce his lien even though there was a variance between the name of the party which executed the Subcontract Agreement and the party which filed the claim of lien.  Basically, the Subcontract Agreement was signed by a corporation, yet the lien was filed under the corporation’s dba.  The real property owner asserted that the lien was invalid unless the subcontractor had previously registered the dba as a trade name.  The Court of Appeals disagreed stating that, “[W]hether the trade-name was properly registered or not does not have any impact on the issue at hand. [The subcontractor] fulfilled its obligations under the Subcontract Agreement . . . [it] filed its claim of lien for work it had performed and for which it had not been paid.”

As you know, filing construction liens in Georgia can be tricky; thus, it is very important that you contact a Georgia lawyer who understands and regularly stays up to date on the issues relevant to those in the construction industry.  If you have any questions or need to file a materialmen’s lien in Georgia, please contact the Cobb Law Group today!