L & W Supply Corp. v. Whaley Const. Co., Inc., A90A0767

• Decision Date: 21 November 1990
• Docket Number: No. A90A0767,A90A0767
• Citation: 197 Ga.App. 680,399 S.E.2d 272
• Court: Georgia Court of Appeals
• Parties: L & W SUPPLY CORPORATION v. WHALEY CONSTRUCTION COMPANY, INC.

Page 272

399 S.E.2d 272

197 Ga.App. 680

L & W SUPPLY CORPORATION v. WHALEY CONSTRUCTION COMPANY, INC.

No. A90A0767.

Court of Appeals of Georgia.

Nov. 21, 1990.

Stein & Cauthen, Robert H. Cauthen, St. Marys, for appellant.

Dickey, Whelchel, Brown & Readdick, J. Thomas Whelchel, Brunswick, for appellee.

BEASLEY, Judge.

Defendant Whaley Construction Company, a general contractor, subcontracted with defendants Drury and Swain d/b/a Southeastern Custom Services to install sheetrock on two separate construction projects. Southeastern purchased its sheetrock materials on an open account from plaintiff, a building materials supplier. When Southeastern failed to pay plaintiff for the materials, plaintiff filed a claim of lien against the real property of both projects pursuant to OCGA § 44-14-361 et seq. Whaley filed discharge bonds, releasing the real property from the liens as provided by OCGA § 44-14-364.

Plaintiff subsequently sued to recover on the bonds. Whaley answered, cross-claimed, and moved for summary judgment. It contended, in part, that the liens were insufficient as a matter of law because they failed to specify the date the claims became due as required by OCGA § 44-14-361.1. It provides the procedure for creating and declaring those liens specified in OCGA § 44-14-361. The trial court granted Whaley's motion, and plaintiff appeals. ¹

Mechanics' and materialmen's liens under OCGA § 44-14-361 are in derogation of common law and thus are to be strictly construed against the mechanic and materialman. See, e.g., Pacific So. Mtg. Trust v Melton, 151 Ga.App. 593, 594, 260 S.E.2d 910 (1979). Although as a general proposition strict compliance with the statute is required, Roberts v. Porter, Davis, etc., 193 Ga.App. 898, 902(3), 389 S.E.2d 361 (1989), the statute itself expressly provides for "substantial compliance" with the underlying contract and the providing of certain information in the claim "in substance." OCGA § 44-14-361.1(a).

As to the form of the claim, which is what we are solely dealing with here, the statute sets out what it shall be "in substance." OCGA § 44-14-361.1(a)(2). The filed document is to identify the claim by specifying, for one thing, the date upon which the claim became due.

By stating in the forms that the "last day ... material [was] delivered was [August 16, 1988 and September 21, 1988 respectively]," rather than that "the claim was due" on the said date in each case, the lienholder did not lose its right to enforce the liens against the property owners. What it stated was the same thing as what is required.

There are two critical dates for the enforcement of mechanics' liens. One is that the claim of lien must be filed within three months after, as it relates to this case, "the material ... is furnished." OCGA § 44-14-361.1(a)(2). The other is that an action for recovery of the amount of the claim must be commenced within 12 months from "the time the [claim] shall become due." OCGA § 44-14-361.1(a)(3). Foster & Kleiser v. Coe & Payne Co., 185 Ga.App. 284, 286, 363 S.E.2d 818 (1987), rev'd on other grounds, 258 Ga. 161, 366 S.E.2d 292 (1988); Allied Asphalt Co. v. Cumbie, 134 Ga.App. 960, 961(1), 216 S.E.2d 659 (1975). In both instances, the date from which the measurements are made is the same. That was recognized long ago: "The lien comes into potential existence only when the statute is satisfied. Its vitality as an enforceable lien depends upon the concurrence in fact of three things, viz., the furnishing of the materials, the record of the claim of lien within three months, and the institution of foreclosure suit in twelve months; if there is a failure in either, the lien is inoperative." Chamlee Lumber Co. v. Crichton, 136 Ga. 391, 393, 71 S.E. 673 (1911).

As recognized in Dixie Lime etc., Co. v. Ryder Truck Rental, 140 Ga.App. 188, 189(1), 230 S.E.2d 322 (1976): "Generally, the account becomes due 'upon the delivery of the last item constituting a part of the ... account.' [Cit.]" In other words, the supplier did specify the date the claim was due; it was by its statement the last date material was delivered. The date specified was, for legal purposes, the equivalent of the due date.

The phrases have been used fairly interchangeably. For instance, the 12-month requirement of subsection (a)(3) "from the time the [claim] shall become due" is referred to in subsection (a)(4) as "12 months from the date such ... supplies ... are furnished to [the contractor or subcontractor]...." Another example is that the title of the act amending subsection (a)(3) in 1968 recites that it is to provide that lien enforcement "shall be brought within twelve (12) months from the time such ... supplies were furnished," whereas the content of the change recites that lien actions are to be filed "within 12 months from the time the same shall become due, ..." A third illustration is Dodson v. Earley, 161 Ga.App. 666, 667(1), 290 S.E.2d 105 (1982): February 1 was the last day on which labor and materials were furnished. That date a year hence was therefore, the court concluded, the last date on which suit could be brought because that was the date on which the claim became due.

The date the material was "furnished" or "delivered" is crucial to the timeliness of the lien. See Williamscraft Dev. v. Vulcan Materials Co., 196 Ga.App. 703, 397 S.E.2d 122 (1990). The date the claim is due means the same thing for mechanics' lien purposes, even if the parties agree on a different due date. Dixie Lime & Stone Co., supra, 140 Ga.App. at 190, 230 S.E.2d 322. The latter is of no consequence in determining the validity of the lien.

Most telling is an analysis of the language of the statute. A reading of subsection (a) shows that "the date the claim was due" is the comprehensive term used to cover all of the events which will trigger the lien for the various types of purveyors who can claim this statutory lien. Subsection (a)(1) sets out the types of activities covered, and subsection (a)(2) specifies the date in the various categories from which timeliness of filing is to be measured. For "building, repairing, or improving" real property, the lien arises on the date of "the completion of the work"; for "architectural services" it arises on the date of the "furnishing" thereof; for land surveying or professional engineering services it arises on the date of the "furnishing or performing" of such; for materials or machinery it arises on the date the material or machinery is "furnished." Then, in setting out the form to be followed "in substance," the Code draws all of these types of events together under the umbrella of "the date the claim was due."

The Supreme Court has held that if the lien is filed on time and the action is commenced on time, it is still effective against the property owner despite the lienholder's failure to specify the amount or due date in the lien claim. J.H. Morris Bldg. Supplies v. Brown, 245 Ga. 178, 264 S.E.2d 9 (1980). This holding is not adversely affected by the subsequent change in the statute in 1983 (Ga.L.1983, p. 1450) insofar as property owners are concerned. The change simply deleted the caveat that if the claim of lien did not specify the amount and due date it would not constitute notice for any purpose. The Supreme Court had carved out from this death knell and saved lien claims but only as against property owners under certain conditions. The removal of the caveat in 1983 left the principle of strict construction, tempered by the statute's "in substance" standard, to govern the efficacy of lien claims and their enforceability.

Supplier L & W Supply Corporation's stating the specific rather than the generic did not deviate from the requirements of the Code so as to render its lien claim defective and...