Our experienced Georgia construction lawyers have drafted & negotiated construction contracts, handled complex construction litigation, and filed hundreds–perhaps thousands–of mechanics and materialmen’s liens and payment bond claim throughout the entire State of Georgia; this means, that we have experience with the courts (and politics) in virtually every county in Georgia including Franklin County, Marietta in Cobb County, Laurens County, and Treutlen County. Our statewide construction law practice allows us to offer contractors, subcontractors and material suppliers the finest legal representation at very fair costs regardless where they are located or where their projects are located. We are not a “cookie-cutter” materialmen’s lien law firm nor are we a legal form service, but the sheer number of defect, delay, materialmen liens, and payment bond claims which we have handled in Georgia and have successfully prosecuted have made our ability to file liens, for example, very efficient, very quick, while retaining the quality you need to enforce your rights as a construction professional.
Each and every lien and bond situation, for example, is different, but the vast majority result in payment to our clients. Sometimes, it is a negotiated settlement and other times it takes more effort to resolve the claim. The following is a case study of a recent matter which we handled on behalf of our client and resolved within 9 months. Although it took some effort, we were able to quickly secure payment in full (including attorney’s fees and interest) by chasing the debtor from Franklin County to Cobb County to secure a judgment and then finding them working on a school project in Treutlen County which led to a garnishment in Laurens County (Dublin, GA) resulting in the full payment to our client.
Our Client: Our client base is very diverse as we represent property owners, developers, design professionals, architects, engineers, contractors, specialty contractors and construction materialmen. Many of the material suppliers whom we are fortunate to represent are foreign corporations based in other states who supply materials for use on Georgia construction projects. In this case study, our client is one of the top three suppliers of heavy equipment in the country, and we are pleased to say that we have represented them in hundreds of matters during the last twenty years.
The Problem: Our client agreed to rent equipment to its customer (the debtor). The customer was a general construction company based in Marietta, Georgia in Cobb County; sometimes this company plays the role of a general contractor and other times it wears the hat of a second-tier contractor working for another general contractor. At one point, they rented equipment for use on a construction project in Franklin County, Georgia (its county seat is Carnesville, Georgia). Unfortunately, in the current economic climate, more and more construction companies are failing to pay their subcontractors and suppliers. And, in this case, the customer failed to pay our client for its equipment.
The Georgia Supplier’s Lien: As a result of the nonpayment of the rental invoices, our client filed a claim of lien pursuant to the Georgia Mechanics and Materialmen’s Lien Act (O.C.G.A. Section 44-14-360 et seq.) in Franklin County, Georgia. This lien was filed before the statute of limitations for filing a lien expired (all construction liens must be filed within 90 days of the last day in which the lien claimant actually worked on site or within 60 days of the date of an unpaid lien waiver whichever is shorter) and proper notice had been given to the owners of the real property.
Personal Guarantor: Fortunately, our client had been prudent prior to giving credit to this customer. Not only did our client have a complete credit application and credit agreement (with banking information and tax identification numbers), they had also obtained a personal guaranty for the customer’s rentals. Consequently, our client was in a great legal position: the original corporate customer owed our client money, a personal guaranty had also agreed to pay the debt, and our client had filed a valid Georgia Claim of Lien thereby effectively making the property liable for the debt.
The Collection Lawsuit: Prior to foreclosing upon the lien, Georgia law requires that the lien claimant file a lawsuit directly against the party who owes them the money. Although the lien had been filed in Franklin County, Georgia, our client’s customer’s registered agent was located in the Marietta / Kennesaw area in Cobb County; in addition, the guarantor was located in Cobb County as well. Thus, we filed suit against the corporate debtor and its guarantor in Cobb County State Court, and, pursuant to Georgia’s lien laws (O.C.G.A. § 44-14-361.1), we duly filed a Notice of Action of Filing Suit for Claim on Mechanics and Materialmen’s Liens within thirty days of filing the lawsuit in order to perfect the Franklin County lien. The Cobb County Sheriff served both defendants with our lawsuit and the summons. For some reason unknown to us, neither party responded to the lawsuit in a timely fashion. As a result the Cobb County judge entered judgment in favor of our client in the full sum of the unpaid rental due as well as pre-judgment interest and attorney’s fees. A Georgia FiFa (a “judgment lien”) was issued and recorded by the clerk of court in the Cobb County records.
Partial Settlement: After judgment was entered in favor of our client, the debtor began to contact us and offer some small, partial payments to put towards the debt which we, of course, were glad to accept on behalf of our client.
Garnishment of a Construction Job: After receiving the second, small payment, it was obvious that the defendant was working on a construction job somewhere in Georgia. Our statewide construction law firm offers many advantages over other firms including our ability to find current construction projects no matter where they are located in Georgia. Thus, we put on our investigators’ cap and began looking for the defendant’s job site. We hit the jackpot! We found that the corporate debtor was working on an elementary school construction project in Treutlen County, Georgia (in Soperton); furthermore, we discovered that they were working as a subcontractor for the project’s prime contractor. The prime contractor was based in Dublin, Georgia in Laurens County. After discovering this information, we quickly took action to file a post-judgment garnishment action in Laurens County in order to seize any payments which the prime contractor was making to our client’s debtor and/or to seize the retainage which the general contractor may have been withholding. Our timing could not have been better as the general contractor paid every penny of our client’s claim (including interest, court costs and attorney’s fees) into the registry of the court which, subsequently, was forwarded to us on behalf of our client.
Follow-Up: In law, there is always follow-up work to do. Upon our receipt of the payment in full, we released the materialmen’s lien in Franklin County, and we cancelled the FiFa issued in Cobb County before closing our file.
Results Oriented Construction Collection Process: In less than nine months, we were able to take all the steps necessary to enforce our client’s lien rights as a material supplier on a Georgia construction project including (i) filing a materialmen’s lien to secure our client’s claim in Franklin County, (ii) prosecuting a lawsuit on open account in Cobb County against the debtor and its guarantor, (iii) locating a current construction job site for the debtor and its possible revenue stream in Treutlen County, and (iv) filing a garnishment action in Dublin (Laurens County), Georgia to seize the general contractor’s payments to our debtor. It was a very quick process and we recovered attorney’s fees as well!
Every Georgia lien situation is different, but if you seek a Georgia construction law firm with an emphasis on filing and enforcing Georgia Mechanics and Materialmen’s Lien Laws, then we urge you to contact us and see how we can help you.