Can a Mechanics or Materialmen’s Lien Result in a Slander of Title Claim in Georgia?

As founding member of the Cobb Law Group, Mark A. Cobb has been a Georgia construction attorney for more than 25 years; he regularly speaks and writes legal articles regarding Georgia Materialmen’s Liens, Construction Contracts, Miller Act Claims, Construction Litigation, and other areas related to construction law

Preparing and filing mechanics and materialmen’s liens on Georgia construction projects is not always easy. Often, the lien claim is result of a payment issue or breach of contract issue between the lien claimant and the entity which engaged the lien claimant (typically a general contractor or subcontractor). The claim of lien, however, legally attaches to the real estate where the project was located and, consequently, the lien can be a cloud against the title to the owner’s real estate which can prevent the owner from conveying clear title to a third party or a lender.

Real estate owners or project owners have several remedies at their disposal to avoid liens, reduce the number of lien claimant, and remove liens altogether. This article, however, focuses on how Georgia case law looks at slander of title caused by the filing of a materialmen’s lien. On of the clearer cases discussing this issue is Amador v. Thomas, 259 Ga. App. 835, 578 S.E.2d 537 (2003).

Background and Facts:

In this case, a property owner had two materialmen’s liens filed against his construction project. One lien was filed by the general contractor and another lien was filed by a subcontractor who worked on the project; both these claimed that they had not been paid for the work they performed and services which they provided.

In an attempt to have the two construction liens removed, the owner of the property filed a petition to quiet title to his real estate. In this case, the owner claimed that neither lien claimant complied with the strict requirements of Georgia’s Mechanics and Materialman Lien Act codified at O.C.G.A. § 44-14-361.1. Specifically, the property owner alleged the following flaws with the two liens:

  1. the materialmen’s liens had been filed after the deadline to file any liens;
  2. copies of the liens had not been properly sent to the property owner; and
  3. that reasonable or contractual payments had already been paid to the lien claimants.

Eventually, the petition to quiet title when to trial before a jury. While the jury was deliberating the merits of the case, the jury sent the following question to the court for clarification:  The jurors wanted to know “Whether a lien is rendered illegal if the claimant fails to follow rules such as the one requiring that notice of a lien claim be given to the owner of the property by registered or certified mail.” The court responded that “the violation of such a rule renders the lien invalid and makes the claimant liable for damages.”

Court of Appeals Disagrees with Lower Court’s Answer:

The Georgia Court of Appeals disagreed with the lower court’s answers, and, instead, the Appellate Court clarified how an invalid lien can impact an owner’s ability to claim slander of title holding as follows:

In Georgia, there is no tort for the wrongful filing of a claim of materialman’s or mechanic’s lien. Where a materialman’s or mechanic’s lien is improperly filed, the cause of action, if any, is for defamation concerning land under O.C.G.A. § 51-9-11. “‘In order to sustain an action of this kind, the plaintiff must allege and prove the uttering and publishing of the slanderous words; that they were false; that they were malicious; that he sustained special damage thereby; and that he possessed an estate in the property slandered.’ [Cits. Omitted]” Consequently, the court erred in instructing the jury that failure to provide the property owner with statutory notice renders the lien claimant liable for damages.

Thus, O.C.G.A. § 51-9-11 is the Georgia statute which governs slander of title (or defamation of title) to real estate caused by an invalid mechanics or materialmen’s lien.

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