Recent Court Ruling Favors Georgia Suppliers & Subcontractors

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!

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