LFR Invs., LLC v. Van Sant

• Decision Date: 01 May 2020
• Docket Number: A20A0142
• Citation: 842 S.E.2d 574,355 Ga.App. 101
• Parties: LFR INVESTMENTS, LLC et al. v. VAN SANT.
• Court: Georgia Court of Appeals

355 Ga.App. 101

842 S.E.2d 574

LFR INVESTMENTS, LLC et al.

v.VAN SANT.

A20A0142

Court of Appeals of Georgia.

May 1, 2020

Larry C. Oldham, Cumming, for Appellant.

Moore Ingram Johnson & Steele, G. Phillip Beggs, Lesley M. Rowe, for appellee.

Miller, Presiding Judge.

LFR Investments, LLC, seeks review of the trial court's grant of partial summary judgment to David Van Sant in LFR's dispute with Van Sant over a contract to transfer property and build a house. LFR challenges the trial court's conclusion that it was not properly licensed to build the house and therefore could not sue to enforce the contract under OCGA § 43-41-17 (b). The trial court correctly determined that LFR was not properly licensed, and so we affirm.

Summary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. OCGA § 9-11-56 (c). On appeal, we review the grant or denial of summary judgment de novo, construing the evidence and all inferences in a light most favorable to the nonmoving party.

(Citations and punctuation omitted.) HA&W Capital Partners, v. Bhandari , 346 Ga. App. 598, 599 (1), 816 S.E.2d 804 (2018).

So viewed, the record shows that, in March 2016, Van Sant contracted with LFR to purchase a property in Forsyth County, Georgia and hired LFR to build a house on that property. About a year later, before the house was completed, Van Sant terminated the contract to build the house and hired other contractors to finish the project.

At the time the contract was executed, LFR was a Georgia limited liability company whose sole member was Louis Reynaud. Reynaud was properly licensed as a residential basic qualifying agent, and he was registered with the Georgia Secretary of State as a qualifying agent for the entity Peachtree Gardens Development, Inc., but he was not licensed as an agent for LFR. Reynaud obtained the permit to build Van Sant's house through his capacity as an agent of Peachtree Gardens Development, Inc., and not as an agent of LFR.

LFR filed a complaint against Van Sant, raising claims for breach of contract, unjust enrichment, and attorney fees stemming from Van Sant's termination of the house-building portion of the contract.¹ Van Sant answered and filed numerous counterclaims against LFR, Reynaud, and a related entity Cornerstone Residential, LLC, alleging numerous deficiencies in their performance and construction of the house.

Van Sant filed a motion for partial summary judgment, arguing that LFR lacked the ability to enforce the contract because it was not licensed to build homes and because Reynaud was not properly registered as a qualifying agent on LFR's behalf. Following a hearing, the trial court granted the motion for partial summary judgment.² LFR, Reynaud, and Cornerstone then filed this appeal.³

1. In two related enumerations of error, LFR first argues that the trial court erred in granting summary judgment on the grounds that it could not enforce the contract because it was not properly licensed. In particular, LFR argues that, because Reynaud was a licensed qualifying agent, his status as a licensed qualifying agent should be imputed to LFR as a whole. After a close examination of the relevant statutory framework, we conclude that the trial court correctly concluded that Reynaud's status could not be imputed to LFR, and thus LFR cannot enforce the contract.

"On appeal, we review the lower court's interpretation of a statute de novo, as statutory interpretation is a question of law."

Hill v. First Atlantic Bank , 323 Ga. App. 731, 732, 747 S.E.2d 892 (2013). Our construction of a statute also "must square with common sense and sound reasoning[,]" and we must avoid "unreasonable or absurd consequences not contemplated by the legislature." (Citations and punctuation omitted.) Tolleson Lumber Co. v. Kirk , 200 Ga. App. 689, 691 (2), 409 S.E.2d 260 (1991).

Georgia law provides:

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 chapter 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. . . .

OCGA § 43-41-17 (b).

Here, the contract identified LFR as the "Builder" and, in a section marked "Contract Work," specified that LFR "shall perform the labor and services and provide all materials necessary to construct" the house on the property; thus, LFR met the statute's definition of a "contractor."⁴ The record is clear that LFR itself did not have a Georgia contractor's license when the construction contract was executed, nor did it have one when the work was performed pursuant to the contract. "Thus, under OCGA § 43-41-17 (b), the construction contract is not enforceable by [LFR] in law or in equity unless an exemption applies." Baja Properties v. Mattera , 345 Ga. App. 101, 103 (1), 812 S.E.2d 358 (2018).

LFR does not argue that any particular exemption applies, but it instead argues that, because its sole member Reynaud was properly licensed as a statutory "qualifying agent," LFR should be considered properly licensed and able to enforce the contract. We find LFR's argument to be foreclosed by the plain text of the statute. The statute first specifically provides that

[N]o person, whether an individual or a business organization, shall have the right to engage in the business of residential contracting or general contracting without a current, valid residential contractor license or general contractor license, respectively, issued by the division under this chapter or, in the case of a business organization, unless such business organization shall have a qualifying agent as provided in this chapter holding such a current, valid residential contractor or general contractor license on behalf of such organization issued to such qualifying agent as provided in this chapter. . . .

(Emphasis supplied.) OCGA § 43-41-17 (a). For a business to be considered properly licensed, therefore, it must have at least one qualifying agent that is properly licensed, and that qualifying agent must specifically hold a license on that business's behalf. The statute further provides the following in terms of what an individual must do to hold a license on a business's behalf:

Where an applicant under this chapter is seeking issuance of a residential or general contractor license on behalf and for the benefit of a business organization seeking to engage in residential or general contracting as a business organization, the application for a license under this chapter must be submitted by and through an individual qualifying agent for such business organization or entity and expressly on behalf of such business organization or entity. . . .

(Emphasis supplied.) OCGA § 43-41-9 (a). For Reynaud to be considered a qualifying agent on LFR's behalf, the statute therefore makes clear that Reynaud must hold a license specifically on LFR's behalf, and to obtain that license, Reynaud must have applied for such license with the Secretary of State "expressly on behalf of" LFR. The plain language of the statute thus compels a conclusion that the mere fact that LFR has in its employ a person who is otherwise licensed as a qualifying agent is insufficient. If we accepted LFR's position that Reynaud's status as a licensed qualifying agent could be imputed to LFR merely through his employment, the work that he performed, or through his status as LFR's sole member, it would entirely nullify these express statutory requirements that a business must have an individual apply as a qualifying agent on behalf of that business,...