Construction Law
| Jurisdiction | Georgia,United States |
| Publication year | 2017 |
| Citation | Vol. 69 No. 1 |
Construction Law
Frank O. Brown Jr.
This Article focuses on noteworthy opinions by Georgia appellate courts between June 1, 2016 and May 31, 2017 that are relevant to the practice of construction law.1
A. Period for Foreclosure
In Lang v. Brand-Vaughan Lumber Co.,2 the Georgia Court of Appeals addressed whether a lien claimant could foreclose on a mechanics' and materialmen's lien more than seven years after the judgment the lien claimant obtained on the underlying judgment for the debt.3 The court held that it could not because, under Georgia's dormant judgment statute,4 the judgment was no longer valid.5 Not directly addressed by the court was whether the result would have been different if the judgment had been renewed or revived per Georgia law.6
B. Notice of Commencement of Project
To perfect a mechanics' and materialmen's lien, a person providing labor, services, or materials for the improvement of property, and who has a right to a lien but does not have privity of contract with the
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contractor, is required by section 44-14-361.5(a)7 of the Official Code of Georgia Annotated (O.C.G.A.) to give a written "notice to contractor" with information set forth in O.C.G.A. § 44-14-361.5(c).8 The information must be provided within thirty days from the date that the owner, agent for owner, or contractor files a notice of commencement per O.C.G.A. § 44-14-361.5(b),9 or thirty days following the first delivery of the labor, services, or materials to the property, whichever is later.10 The purpose of the notice to contractor is to alert the contractor and owner that a person not in privity with the contractor has lien rights relating to the property so that care can be taken by the contractor and owner to make sure that person is paid. However, under O.C.G.A. § 44-14-361.5(d),11 a notice to contractor is not required if the owner, agent for owner, or contractor fails to file the project notice of commencement.12
O.C.G.A. § 44-14-361.5(b) lists the information to be included in a project notice of commencement.13 Several prior Georgia Court of Appeals opinions have addressed, with mixed results, whether a failure to provide all of that information, or to otherwise strictly comply with project notice of commencement requirements, is fatal to the effectiveness of that notice.14Capitol Materials, Inc. v. JLB Buckhead, LLC15 once again dealt with that question. There, Capitol Materials, Inc., a supplier to a subcontractor, contended that it was excused from timely giving a notice to contractor because the subject project notice of commencement allegedly did not include several statutorily required items of information.16 The Georgia Court of Appeals did not analyze compliance with each of those items, but determined that the failure of the project notice of commencement to identify or provide contact information for the owner's construction lender, as required by O.C.G.A.
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§ 44-14-361.5(b)(6),17 was alone sufficient to render the project notice of commencement fatally defective.18 Consequently, the supplier was not required to provide a notice to the contractor as a condition to the effectiveness of its lien, meaning that the trial court erred in granting summary judgment to the owner on the supplier's in rem claim lien against the subject property.19
Construction lawyers often encounter mold claims. In Barko Response Team, Inc. v. Sudduth,20 a homeowner sued his homeowner's insurer and a mold remediation company alleging, in part, that the company was negligent in its mold remediation services and that he was injured by mold exposure. The company moved for summary judgment, contending that there was no evidence that the alleged negligence caused the homeowner's illness. The trial court denied that motion.21
On appeal, the Georgia Court of Appeals noted that the Georgia Supreme Court recently explained, in Scapa Dryer Fabrics, Inc. v. Knight,22 that an expert's opinion on causation in a toxic tort case, which includes a mold claim, is admissible only if the expert concludes that the plaintiff's exposure to a toxic substance made at least a "meaningful contribution" to his injuries.23 The Georgia Court of Appeals concluded that the affidavit and letter from the plaintiff's physician expert failed to meet that standard because it did not give any opinion on the degree to which the homeowner's exposure to mold contributed to his injuries, the basis for his understanding that there were high levels of toxic mold in the home, or the factual basis for his opinion that the mold caused the homeowner's illnesses.24 The court also concluded that the gap left by the medical testimony was not cured, as is sometimes the case, by non-expert testimony of a causal link between the alleged negligence and the plaintiff's alleged injuries.25 Thus, the trial court erred in denying summary judgment.26
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Construction lawyers need to be mindful of contractor licensing issues because they can have a profound impact on the rights of parties in a construction project. Section 43-41-17(b)27 of the O.C.G.A. states in relevant part that:
As a matter of public policy, any contract entered into on or after July 1, 2008, for the performance of work for which a residential contractor or general contractor license is required by this chapter and not otherwise exempted under this chapter28 and which is between an owner and a contractor who does not have a valid and current license required for such work in accordance with this chapter shall be unenforceable in law or in equity by the unlicensed contractor . . . . Notwithstanding any other provision of law to the contrary, if a contract is rendered unenforceable under this subsection, no lien or bond claim shall exist in favor of the unlicensed contractor for any labor, services, or materials provided under the contract or any amendment thereto. This subsection shall not affect the rights of parties other than the unlicensed contractor to enforce contract, lien, or bond remedies.29
A key issue in Ussery v. Goodrich Restoration, Inc.,30 was whether, under the facts of this case, O.C.G.A. § 43-41-17(b) authorizes a homeowner to recover funds that he paid to an unlicensed restoration company.31 In addressing that question, the Georgia Court of Appeals first noted that there is no authority applying O.C.G.A. § 43-41-17(b) to a claim for return of funds from an unlicensed contractor.32 The court then noted that, by its terms, O.C.G.A. § 43-41-17(b) does not expressly authorize such a claim.33
The court then turned to the specific facts of the case, which included that the unlicensed contractor had paid all funds received from the homeowner to subcontractors who had performed the restoration work, the unlicensed contractor had made no profit on the project, and the homeowner had not claimed any damages as a result of the work performed by the contractor and its subcontractors.34 Based on these facts, the court held that the trial court had properly entered judgment
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in favor of the contractor on the refund claim following a bench trial on that and other claims.35
Construction lawyers should be familiar with Georgia's apportionment statute, O.C.G.A. § 51-12-33,36 because it may substantially impact the amount of recoverable damages. Although not a construction case, Camelot Club Condominium Ass'n v. Afari-Opoku37 addresses apportionment issues that might be relevant in some construction-related disputes.
In Camelot, the spouse of a murdered resident of a condominium complex brought action against the complex and a security firm alleging negligence and nuisance. The jury apportioned 25% fault to the complex and 25% to the security firm. The trial court thereafter entered a judgment that imposed liability on the complex for the security firm's 25% fault.38
The complex appealed, arguing the trial court erred in doing so. Because the complex was vicariously liable for the security firm's actions under either O.C.G.A. § 51-2-5(4)39 or O.C.G.A. § 51-2-5(5),40 the plaintiff argued that the assignment of the security firm's fault to the complex was proper.41 The former 'statute imposes liability on an employer for an independent contractor's performance in connection with a statutory duty, such as the duty under O.C.G.A. § 51-3-142 to keep premises safe.43 The latter imposes liability on an employee who maintains control over an independent contractor.44
The Georgia Court of Appeals first noted that O.C.G.A. § 51-12-33 generally precludes any post-verdict reassignment of damages based on a jury's apportionment of fault.45 Signaling that a post-verdict reassignment might sometimes be proper, the court nevertheless addressed the plaintiff's contention that a post-verdict reassignment was
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necessary because apportionment under O.C.G.A. §...
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