Department of Transp., State of Ga. v. Moseman Const. Co., S90A0836

• Decision Date: 12 July 1990
• Docket Number: No. S90A0836,S90A0836
• Parties: DEPARTMENT OF TRANSPORTATION, STATE OF GEORGIA v. MOSEMAN CONSTRUCTION CO.
• Court: Georgia Supreme Court

Page 258

393 S.E.2d 258

260 Ga. 369

DEPARTMENT OF TRANSPORTATION, STATE OF GEORGIA v. MOSEMAN CONSTRUCTION CO.

No. S90A0836.

Supreme Court of Georgia.

July 12, 1990.

Reconsideration Denied July 26, 1990.

Michael J. Bowers, Atty. Gen., Marion O. Gordon, First Asst. Atty. Gen., Roland F. Matson, Sr. Asst. Atty. Gen., Lawson & Davis, G. Thomas Davis, Sp. Asst. Atty. Gen., Atlanta, for Dept. of Transp.

Rogers & Hardin, James W. Beverage, Lian A. Schleifer, Richard H. Sinkfield, Theodore J. Sawicki, Atlanta, Bryan, Schiffrin, McMonagle & Twiss, Carrol L. Bryan II, Daniel W. Galvin, William R. Zoberst, for appellee.

Michael J. Bowers, Atty. Gen., Daniel M. Formby, Sr. Asst. Atty. Gen., Amelia Waller Baker, Smith, Currie & Hancock, Overton A. Currie, Brian G. Corgan, Frederick L. Wright II, Atlanta, amici curiae.

SMITH, Presiding Justice.

The appellee, Moseman Construction Company (Moseman), filed a complaint for additional compensation under a contract between it and the appellant, the Georgia Department of Transportation (DOT). The DOT filed a motion to dismiss which was denied by the trial court. We affirm.

The appellee is a firm organized under California law with its principal place of business in Denver, Colorado. Its action against the DOT alleged that the DOT owed it additional money for work done on the I-85/I-285 interchange south of Atlanta. The DOT moved to dismiss based on Moseman's noncompliance with the Georgia Nonresident Contractors Act (NCA), OCGA § 48-13-30 et seq.

The NCA provides that nonresident contractors must register with the Revenue Commissioner for all contracts in Georgia exceeding $10,000; pay a $10 fee for all such contracts; appoint the Secretary of State as its agent for service of process in Georgia; and, prior to beginning work, post a bond for 10% of the amount of the contract with the Revenue Commissioner to cover all taxes and unemployment contributions that may accrue to the State under the contract. The purpose of the NCA is revenue collection enhancement or, in other words, protection of the State and its political subdivisions from nonresident contractors who leave the State without paying their taxes and unemployment contributions. Clover Cable of Ohio, Inc. v. Heywood et al., Burnup & Sims Telcom, Inc. v. Clover Cable of Ohio, 260 Ga. 341, 343, 392 S.E.2d 855, 858-859 (1990).

Moseman did not comply with the NCA prior to beginning work on the interchange, and for that reason the DOT claims its action must be dismissed under the NCA's forum-closing provision, OCGA § 48-13-37, which provides:

No contractor who fails to register with the commissioner as required by this article or who fails to comply with any provision of this article shall be entitled to maintain an action to recover payment for performance on the contract in the courts of this state.

Although Moseman did not comply prior to beginning its work, it did, as part of its contract with the DOT, sign performance and payment bonds for 100% of the amount of the contract ($28 million) that expressly covered the payment of all State and local taxes. Additionally, prior to completion of the project, Moseman completed all steps to comply with the NCA.

The DOT correctly asserts that OCGA § 48-13-32(b) states: "The execution and filing of the bond required by [the NCA] shall be a condition precedent to commencing work on any contract in this state." However, failure to file such a bond does not invalidate the contract, Taco Bell Corp. v. Calson Corp., 190 Ga.App. 481, 379 S.E.2d 6 (1989), nor does it prevent a nonresident, noncomplying contractor from commencing its work under a contract in ...