Recent Case Law Affects Suppliers & Materialmen in Georgia

Whenever we represent a client–and throughout the representation–we are constantly reviewing our strategy to attempt to provide the best service for the lowest legal costs.  Not every strategy works for every client in every situtation.  We are mindful that our clients make business decisions (e.g., the costs of litigation v. the anticipated recovery) while we are called upon to make legal decisions (e.g., do we file a one-count lawsuit for breach of contract or do we file a multiple-count lawsuit which includes breach of contract, foreclosure of a materialman’s lien, a violation of the prompt-payment act, etc.)

Occasionally in a multiple-count lawsuit, we may include a claim for “unjust enrichment” which simply says that it is “unjust” for a project owner to receive the benefit of our client’s work if they have not paid for this work in full.  Recently, Georgia case law has clarified when this claim may be used and when it cannot be used.  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 statutes.

Thus, it before filing your lawsuit, it is very important to know whether or not you have contracted directly with the project owner or the general contractor.  Of couse, even without this claim, sub-contractors and suppliers in Georgia have a number of other options to help them win their lawsuits.  It begins with sending Notices to Owner (NTO’s) and Notices to General Contractors and may include Preliminary Claims of Lien, Materialment Liens, lawsuits and foreclosure actions.  Please contact a construction law lawyer to make sure that you maximize your ability to collect the money that is owed to you.