GEORGIA COURT OF CIVIL APPEALS DECIDES TWO IMPORTANT CASES ON SUBCONTRACTORS’ NOTICE REQUIREMENT WHEN PERFECTING MATERIALMAN’S LIEN

GEORGIA COURT OF CIVIL APPEALS DECIDES TWO IMPORTANT CASES ON SUBCONTRACTORS’ NOTICE REQUIREMENT WHEN PERFECTING MATERIALMAN’S LIEN

In the cases of Southeast Culvert, Inc. v. Hardin Brothers, LLC, 2011 Ga. App. Lexis 858 (2011) and Madison Retail Suwanee, LLC v. Orion Enterprises Sales & Service, Inc., 309 Ga. App. Lexis 388 (2011), the Georgia Court of Civil Appeals clarified what will be considered sufficient notice of a materialman’s lien by a subcontractor pursuant to OCGA § 44-14-361. That code section provides that a subcontractor must, among other things, file a notice of lien within 90 days following the completion of delivery of labor, services or materials with the clerk of the Superior Court and within two days of filing the lien provide written notice to the property owner, the agent of the owner and the general contractor.

In Southeast Culvert, Inc., a subcontractor (“Southeast”) filed an action to recover on a materialman’s lien it recorded against the general contractor and property owner for work and materials supplied on a construction project. The trial court granted summary judgment in favor of the general contractor and the property owner based on Southeast’s failure to satisfy the notice requirements of OCGA § 44-14-361. The Court of Civil Appeals held that the subcontractor failed to provide notice of the lien to the general contractor within two days and affirmed the trial court’s granting of summary judgment in favor of the contractor and owner.

In Madison Retail Suwanee, however, the subcontractor (“Orion”) sued Madison Retail to recover under a lien discharge bond for materials and services performed on a construction project. In the trial court, Orion moved for summary judgment. The property owner and bond surety opposed that motion on the grounds that Orion failed to satisfy the notice requirements of OCGA § 44-14-361 because the notice of lien served on them was slightly different than the lien filed with the Clerk of the Superior Court. The trial court held in favor of Orion, finding that Orion substantial complied. The Court of Civil Appeals affirmed the trial courts entry of summary judgment in favor of Orion, finding that notice of lien was provided to the property owner and general contractor pursuant to OCGA § 44-14-361 and that it was not a fatal error for the notice to be slightly different than what was filed with the clerk of the Superior Court.

These cases are important to Georgia subcontractors because they stress the importance of both providing notice of the lien to the general contractor and property owner and making sure the lien provided to the general contractor and property owner is substantially the same as the lien filed with the Clerk of the Superior Court. Failure by Georgia subcontractors to satisfy both these requirements will result in dismissal of your lien claim.