Optum Constr. Grp., LLC v. City Elec. Supply Co.
| Citation | 356 Ga.App. 797,849 S.E.2d 238 |
| Decision Date | 29 September 2020 |
| Docket Number | A20A1010 |
| Parties | OPTUM CONSTRUCTION GROUP, LLC et al. v. CITY ELECTRIC SUPPLY COMPANY. |
| Court | United States Court of Appeals (Georgia) |
George Marshall Kent Jr., Dorothy Hubbard Cornwell, Atlanta, for Appellant.
Eric Noyes Van De Water, for Appellee.
City Electric Supply Company furnished materials to Palmetto Power Services, LLC ("Palmetto Services") an entity that represented itself as a subcontractor for a hotel construction project on which Optum Construction Group, LLC was the general contractor. After Palmetto Services failed to pay City Electric for the materials, City Electric sued Palmetto Services and filed a materialman's lien on the hotel and real estate on which it was constructed. Optum and its surety, Fidelity and Deposit Company of Maryland, discharged the lien by filing a bond. City Electric obtained a confession of judgment from Palmetto Services and filed suit against Optum and Fidelity to recover on the lien release bond. The trial court granted summary judgment to City Electric and denied Optum and Fidelity's motion for summary judgment. Optum and Fidelity appeal, claiming, inter alia, that the trial court erred by granting City Electric's motion for summary judgment and by denying their motion for summary judgment. For the following reasons, we affirm in part and reverse in part.
Optum was a general contractor for the construction of improvements to a Hampton Inn property ("Property"). Accordingly, Optum entered into a subcontract with "Palmetto Power Services Palmetto Power Unlimited, [I]nc" ("Palmetto Unlimited") for the performance of electrical work on the Property. The pay applications received and paid by Optum were from "Palmetto Power Services."
Palmetto Services entered into a commercial credit account with City Electric for building materials related to Palmetto Services’ work on the property. City Electric thereby provided materials to Palmetto Services for use on the Property. On July 16, 2015, City Electric sent a notice to Optum, stating that it was providing materials at the instance of "Palmetto Power."
Edwin Maxwell, the CEO of Optum, averred that Palmetto Unlimited "abandoned the Project, and failed to pay City Electric amounts incorporated in Palmetto Unlimited pay applications for which Optum previously paid." On May 11, 2016, City Electric obtained a materialman's lien on the Property in the amount of $123,716. On June 23, 2016, Optum discharged the lien by filing a lien bond in the amount of $247,432.
City Electric filed a lawsuit in South Carolina against Palmetto Services and Doug Cummings, its CEO, which was settled and dismissed with prejudice on September 28, 2017. A confession of judgment against Palmetto Services was filed on November 3, 2017, in the amount of $150,519 regarding five separate projects, including the Property.
In October 2016, City Electric filed the underlying lawsuit against Optum and Fidelity, claiming that pursuant to a contract it had supplied materials to Palmetto Services, Optum's subcontractor, for improvements to the Property and was not paid for the materials.1 Both sides filed motions for summary judgment, and the trial court granted City Electric's motion and denied Optum's and Fidelity's motion.
1. Optum and Fidelity contend that the trial court erred in granting summary judgment to City Electric because City Electric did not satisfy the lien requirements set out in OCGA § 44-14-361. Summary judgment is properly granted when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Robertson v. Ridge Environmental, 319 Ga. App. 570, 571, 737 S.E.2d 578 (2013). "A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant." Id. (citation and punctuation omitted).
Id. at 51-52 (1), 609 S.E.2d 99 (citation and punctuation omitted). OCGA § 44-14-361.1 "is in derogation of the common law and must be strictly construed." Robertson , supra at 572 (1), 737 S.E.2d 578 (citation and punctuation omitted).
Optum claims that City Electric did not qualify as a lien claimant because it was not in direct privity of contract with Optum. It argues that because the subcontract identifies the subcontractor as "Palmetto Power Services Palmetto Power Unlimited [I]nc", and not Palmetto Power Services, LLC, there was no privity of contract between Palmetto Services and Optum and thus no chain of contracts between the owner and City Electric and therefore the lien did not attach.
OCGA § 44-14-361 (b) provides that a lien "may attach to the real estate of the owner for which the labor, services, or materials are furnished if they are furnished at the instance of the owner, contractor, or some other person acting for the owner or contractor[.]" Furthermore, "[a]bsent proof of a contractual relationship, either directly or through a chain of contracts, between the owner of the property and the person to whom the materials are furnished, a lien created under OCGA § 44-14-361 et seq. will not attach." Benning Constr. Co. v. Dykes Paving & Constr. Co. , 263 Ga. 16, 18-19, 426 S.E.2d 564 (1993). See Ben Hill Ready Mix Concrete Co. v. Prather , 160 Ga. App. 149, 150 (1), 286 S.E.2d 481 (1981).
In Ben Hill ,...
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