Although it is a part of suburban Atlanta, Marietta and Cobb County, Georgia is an integral part of the metropolitan economy. With a population of almost 700,000, the construction industry in Cobb County is booming, and the Cobb Law Group’s Georgia construction lawyers are able to help you with all of your needs inducing the filing and prosecuting of materialmen’s liens and payment bond claims.
In fact, we have filed so many lien and bond claims in Marietta, that we have lost count! Those who supply labor, services or materials on construction projects in Marietta or Cobb County may have the right to file a claim of lien on private projects. But, with Kennesaw State University and Dobbins Air Force Base, it is important to have an attorney who understands payment bond claims via the Miller Act and The Little Miller Act as well. Our firms focuses its practice on construction law, lien rights and bond rights. If you need help enforcing your payment claims, please contact us.
If you are interested in learning more about our lien and payment bond practice, then, please keep reading. We believe in sharing actual case studies with our readers, and the following is a case study regarding a payment bond claim which resulted in the filing of an enforcement action in the court of Cobb County, Georgia.
Case Study on Perfecting a Payment Bond Claim in Cobb County, Georgia:
The following is a case study of a recent matter which began with the filing of a payment bond claim on a Houston County, Georgia project, then filing a lawsuit in Cobb County, Georgia, and, soon thereafter, resulted in payment in full for our client. Since every matter is distinct, there is no way to know if your results will be similar or not; nonetheless, there are useful lessons to learn for those with Georgia construction law questions:
History: In the early 1990s we expanded the reach of our construction law firm to include each of Georgia’s 159 counties because many of our clients were (and still are) material suppliers who regularly provided their product on different construction projects throughout the state of Georgia. The client in this case study is a Fortune 500 company which provides materials on project sites all over our state including the Georgia National Fairgrounds and Agricenter in Perry Georgia (Houston County) which is the subject of this case study. Unfortunately, our client did not receive payment for the materials which it supplied on the project, thus, we were contacted to assist them with this claim against the general contractor’s payment bond.
Public Works Projects: Most industry experts understand that materialmen’s liens cannot be placed against public works projects as government buildings are not subject to liens and foreclosure as it goes against public policy. Instead, government projects generally require payment bonds (or surety bonds) which allow those working or supplying on the project to make a claim against the bond to ensure payment of their work or materials which were provided. Many of these same industry experts, however, do not realize that different governmental divisions (e.g., the Federal government, State of Georgia, and local municipal governments) are covered by different statutes with different legal requirements. Most commonly, Federal public works projects are controlled by The Miller Act and the state of Georgia public works projects are governed by The Little Miller Act. Although these acts are “similar” they are very different.
Payment Bond Claim: After we determined that our client’s Houston County payment issue involved a government construction project (and not a privately owned project), we knew that filing a claim against the surety’s payment bond would be appropriate. Next, it was essential to determine whether the project involved was a Federal project, a State of Georgia project, or a Houston County or Perry, Georgia owned project in order that proper notice of our client’s bond claim could be given. Typically, payment bond claims must be given within ninety (90) days of the last day in which a bond claimant actually worked on the project or actually provided materials used on the project (this is not the same as an invoice date). Consequently, we had to meet this deadline; otherwise, our client would have lost its rights to seek payment from the surety and the payment bond.
Negotiation of Claim with Surety: Immediately after receiving our notice of our client’s claim against the payment bond covering the Houston County project, the surety contacted us advising that multiple claims were expected, and they anticipated making substantial payments pursuant to the payment bond which would result in payment of most–but probably not all– of our client’s claim; they explained that this might be all our client could expect because the total amounts claimed by various subcontractors and suppliers exceeded the amount of the bond covering the Houston County project. Our client would receive the highest percentage of their claim allowable, however, because our client had met every obligation to exercise its rights under the payment bond. Other bond claimants, for example, may have made a timely claim, but there were other issues related to the claim, back charges, change orders, performance deficiencies, project delays, etc.
Thus, we successfully negotiated payment of approximately 80% of our client’s claim. Despite this quick and easy negotiation for payment of our client’s claim, payment was not forthcoming. The surety advised that the general contractor (against whose bond we were making the claim for payment) made an 11th-hour appeal claiming that (i) they were working with all subcontractors and suppliers to get paid, and (ii) they disputed certain (unidentified) contract issues with various subcontractors (but not our client); we politely gave the surety a short amount of time to have the general contractor resolve the issues, as we did not trust the statements made by the general contractor. In addition, we advised that suit would be filed in Cobb County if the outstanding issues were not resolved.
Filing Payment Bond Suit in Cobb County, Georgia: Unfortunately, the general contractor was unable to resolve the issues related to the various claims against its payment bond on the Houston County, GA project. Thus, our client and we decided it was time to file the lawsuit to collect on the payment bond. Pursuant to the terms of the payment bond, our client had one-year from the date that the governmental authority in charge of the project accepted the building. Our client did not want to wait that long so we began taking the steps to enforce their rights under the payment bond in court. The corporate registered agent for the prime contractor was located in Marietta in Cobb County, Georgia; and the registered agent for the surety was located in Atlanta, in Fulton County, Georgia. Since we were confident that we had resolved the bulk of the claim with the surety, we decided to file our lawsuit in the State Court of Cobb County. Filing this Cobb County lawsuit to enforce our client’s payment bond claim rights got everyone’s attention!
Settlement with the Surety: The pressure of the pending litigation in Cobb County gave the surety the ability to proceed with the completion of the settlement of our client’s claim without the GC’s consent. Thus, before the expiration of the time in which the surety had to answer to our client’s lawsuit, we negotiated and consummated the settlement we had reached prior to filing the Cobb County matter. Our client received 80% of its claim from the surety in certified funds, and the surety was released as a party to our lawsuit.
Settlement with the Prime Contractor: Approximately 20% of the balance remained; since we had been required to file a lawsuit in Cobb County, GA to enforce the terms of the payment bond, our client had incurred additional legal costs and fees and they had been delayed in receiving their payment; thus, we decided to continue with the Cobb County suit and seek payment in full from the general contractor. They asked for an extension of time before filing their response to our Cobb County litigation which we granted (yes, they wanted another delay!) But, this gave the general contractor an opportunity to weigh the merits of its case presumably with its legal counsel, the potential legal costs, and the potential exposure to damages. They promptly made an offer to pay the outstanding balance in full!
Lesson Learned: In this case study, the construction lawyers at the Cobb Law Group utilized their negotiation skills and their understanding of business to encourage prompt payment as well as payment in full of a payment bond claim which began on a Houston County, Georgia project and resulted in a lawsuit in Cobb County, Georgia. Furthermore, we understood that payment bonds claims add additional obligors to insure payment thus we were able to package an 80% payment from the surety and a 20% payment from the GC to result in a 100% recovery for our client.
Payment Bond Claims as well as materialmen’s liens and mechanics liens in Georgia must be filed within ninety days of the last day in which labor, equipment or materials were supplied to a project. Bond claims have specific notice requirements and lien claims must be filed in the real estate records of the Superior Court in the county in which the construction project is located (e.g., a lien on any project in Cobb County, GA would have to be filed with the real estate records with the Cobb County Clerk of Superior Court.). Due to the difficulty in properly drafting and filing a materialmen lien and making payment bond claims, it is important to have an experienced Georgia constructionlawyer prepare and file your liens to ensure all requirements of the Georgia lien laws are met. We are Georgia construction lawyers with experience filing and enforcing our client’s lien claims and payment bond claims throughout Georgia including all of Cobb County!
If you have a construction lien, payment bond claim or construction contracting issued in Marietta or Cobb County, Georgia, please contact us today!
Liens are Filed with the Cobb County, Georgia Superior Court:
Although we highly recommend using a licensed attorney to handle your lien and payment bond claim, listed below is the contact information for the Cobb County Clerk of Court in Marietta, Georgia (please note this information may change without notice):
Clerk of Court’s Address:
Cobb County Superior Court Clerk
Real Estate Division
10 E. Park Square, Bldg. C
Marietta, GA 30090-9640
Real Estate Division
P.O. Box 3430
Marietta, GA 30061-3430
Clerk of Court’s Telephone Number:
Mechanic’s Lien Filing Fees:
$5.00 for the first page and $2.00 for each additional page
Contact an Experienced Georgia Construction Law Attorney
The information contained on this website is for information purposes only; you are directed to consult with your attorney regarding the risks involved in filing mechanics and materialmen’s liens and payment bond claims as well as all other aspects of lien filing including, but not limited to proper forms, conditions precedent, legal descriptions, notice requirements, and the statutes of limitations. Nothing contained herein creates an attorney-client relationship between the Cobb Law Group and you. Furthermore, no warranties, expressed or implied, are provided for the data herein, its use or interpretation. Please contact us for further information.