GA COURT OF CIVIL APPEALS HOLDS DISMISSAL OF HOMEOWNER’S CASE AGAINST CONTRACTOR WAS IMPROPER

GEORGIA COURT OF CIVIL APPEALS HOLDS THAT DISMISSAL OF HOMEOWNER’S CASE AGAINST CONTRACTOR FOR FAILURE TO GIVE PRE-LITIGATION NOTICE WAS IMPROPER PURSUANT TO THE REPAIR ACT (O.C.G.A. § 8-2-38)

In Lumsden et al. v. Williams et al., 704 S.E. 2d 458 (Ga. App. 2010) the Plaintiff homeowners filed an action against the Contractor to recover for construction defects in their home. The homeowners appealed the granting of summary judgment by the trial court. They argued, among other things, that the trial court erred in granting the contractor’s motion for summary judgment on the grounds that the homeowners failed to give pre-litigation notice of defects to the contractor pursuant to the Repair Act (O.C.G.A. § 8-2-38).

The court of appeals held the trial court erred in determining that the buyers' remedial repair efforts entitled the sellers to summary judgment under the Repair Act. Additionally, nothing in the Repair Act contemplated that a claimant's action be dismissed for failing to provide the pre-litigation notice under O.C.G.A. § 8-2-38. Rather, any pre-notice action was stayed to afford the parties time to try to resolve their disputes.

The court reasoned that the Repair Act was passed to facilitate a method of alternative dispute resolution for construction disputes by requiring pre-litigation notice of such claims and providing the contractor with the opportunity to resolve the claim without litigation. O.C.G.A. § 8-2-35. Under O.C.G.A. § 8-2-38(a), a party who has a claim for construction defects is required to provide the contractor written notice of these defects no later than 90 days before initiating an action. The statute then contemplates that the contractor will have the option of offering a monetary settlement or making an inspection of the premises and potentially making repairs. If the matter is not resolved, then the claimant may file suit. O.C.G.A. § 8-2-38(b) - (p). If a claimant files an action without first providing notice, however, the Repair Act states that on application by a party to the action, the court or arbitrator shall stay the action until the claimant has complied with the requirements of this part. O.C.G.A. § 8-2-37. Thus, nothing in the Repair Act contemplates that a claimant's action be dismissed for failing to provide the pre-litigation notice under OCGA § 8-2-38. Rather any pre-notice action is stayed to afford the parties time to try to resolve their dispute.

This case is important to Contractors for two reasons; (1) it affirms the requirement that a homeowner provide a Contractor with pre-litigation notice of alleged defects at least 90 days prior to filing a lawsuit, allowing the contractor an opportunity to settle or remedy the defects; and (2) the proper method for challenging the failure of pre-litigation notice pursuant the Repair Act is to file a motion to stay the case until such time as the homeowner has complied with the Repair Act. This gives the contractor ample time to cure the alleged defects.