Transp. Ins. Co. v. El Chico Restaurants

• Decision Date: 02 December 1999
• Docket Number: No. S99G0437.,S99G0437.
• Citation: 524 S.E.2d 486,271 Ga. 774
• Parties: TRANSPORTATION INSURANCE COMPANY et al. v. EL CHICO RESTAURANTS, INC.
• Court: Georgia Supreme Court

524 S.E.2d 486

271 Ga. 774

TRANSPORTATION INSURANCE COMPANY et al. v. EL CHICO RESTAURANTS, INC.

No. S99G0437.

Supreme Court of Georgia.

December 2, 1999.

Reconsideration Denied December 17, 1999.

Dye, Tucker, Everitt, Wheale & Long, Thomas W. Tucker, Augusta, Rogers & Hardin, C.B. Rogers, Atlanta, Glover & Blount, Percy J. Blount, Augusta, Arnall, Golden & Gregory, Karen B. Bragman, Robins, Kaplan, Miller & Ciresi, Thomas J. Gallo, Morris, Manning & Martin, Lewis E. Hassett, Atlanta, Hull, Towill, Norman, Barrett & Salley, Patrick J. Rice, Augusta, for appellants.

Bell & James, John C. Bell, Jr., James L. Bentley III, Augusta, for appellee.

HUNSTEIN, Justice.

We granted certiorari from the Court of Appeals' opinion in El Chico Restaurants v. Transp. Ins. Co., 235 Ga.App. 427, 509 S.E.2d 681 (1998) to consider whether a foreign corporation's action is not void, and thus subject to amendment, even if the corporation is not authorized to maintain an action in this State because it has not obtained a certificate of authority to transact business here pursuant to OCGA § 14-2-1502(a). See El Chico Restaurants, supra at (2), 509 S.E.2d 681. Based on the language of OCGA § 14-2-1502(a) and its legislative history, we conclude that a foreign corporation's action is not void for failure to obtain a certificate of authority and thus the Court of Appeals correctly held that El Chico's action could be amended.

OCGA § 14-2-1502(a) provides that "[a] foreign corporation transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority." Transportation argues that the phrase "maintain a proceeding" in the statute includes the commencement of that action, so that the failure of a foreign corporation to obtain a certificate of authority prior to the commencement of the action would render it void ab initio. Contrary to Transportation's argument, however, the primary definitions of "maintain" do not include "commencement" of the item to be maintained. Rather, "maintain" most commonly means the continuation of a pre-existing condition¹ and to "maintain an action" most commonly means the continuation of a lawsuit already begun.²

Although, as the dissent points out, there are some obscure definitions of "maintain" which include the commencement of the item to be maintained, our rejection of Transportation's definition of the verb is not based solely on the atypical meaning it would ascribe to the statutory language. Instead, we look to the clear legislative history of OCGA § 14-2-1502(a) to hold that maintaining a proceeding thereunder does not include the commencement of the proceeding to be maintained. That history reveals that in 1969 the Legislature rewrote the law in this area so as to provide that

No foreign corporation that under this Code is required to obtain a certificate of authority shall be permitted to maintain any action, suit or proceeding in any court of this State unless before commencement of the action it shall have obtained such a certificate.

( Emphasis supplied.) Ga. L.1969, pp. 152, 196. The emphasized language establishes that the Legislature in 1969 did not believe a prohibition against foreign corporations maintaining actions without certificates of authority included the commencement of the action, since the Legislature expressly included the requirement that the certificate be obtained "before commencement of the action" notwithstanding the earlier "maintain" language. Id.

The inclusion of the "commencement" language in the 1969 legislation is important in light of the subsequent enactment of the Georgia Business Corporation Code in 1988. Ga. L.1988, p. 1070. That enactment, as set forth in the preamble, was intended to "revise and replace the laws relating to business corporations." Id. As part of the revision and replacement, the Legislature chose to remove the 1969 language which had previously required foreign corporations to obtain a certificate of authority "before commencement of the action." Id. at p. 1225; OCGA § 14-2-1502(a). The rules of statutory interpretation demand that we attach significance to the Legislature's action in removing the emphasized, limiting language. See Humthlett v. Reeves, 211 Ga. 210(2), 85 S.E.2d 25 (1954) (a legislative body should always be presumed to mean something by the passage of an act). While the Legislature did not include the pre-1969 language expressly permitting a cure, as stressed by the dissent, the Legislature did delete the language expressly disallowing a cure when the certificate was not obtained prior to commencement of the action. We must presume that the Legislature's failure to include the limiting language was a matter of considered choice. See Hollowell v. Jove, 247 Ga. 678, 683, 279 S.E.2d 430 (1981). Further, under the rules of statutory construction, the omitted language cannot be deemed a redundancy or meaningless surplusage. See Gilbert v. Richardson, 264 Ga. 744, 748(3), 452 S.E.2d 476 (1994); State of Ga. v. C.S.B., 250 Ga. 261, 263, 297 S.E.2d 260 (1982).³

Our interpretation of OCGA § 14-2-1502(a) is consistent with the statutory language and the legislative history. Further, this interpretation, which recognizes that an uncertified foreign corporation may initiate the action but not continue it without obtaining a certificate of authority, allows an aggrieved party the opportunity to preserve its cause of action but not to reduce it to judgment until the certification process is followed, thereby avoiding the statute of limitation problems arising from the construction proposed by Transportation and the dissent which would deprive aggrieved parties of access to the courts of this State for administrative reasons unrelated to the validity of the asserted causes of action.⁴

Therefore, we affirm the Court of Appeals' holding that the suit filed by El Chico was not void at its inception and thus was subject to amendment.

Judgment affirmed.

All the Justices concur, except FLETCHER, P.J., SEARS and HINES, JJ., who dissent.

FLETCHER, Presiding Justice, dissenting.

I dissent because the majority's interpretation conflicts with the statutory language and with this Court's interpretation of an identically-worded statute and is not justified by the policy of saving suits from the bar of the statute of limitations.

The statutory language and legislative history of OCGA § 14-2-1502(a) are not crystal clear. OCGA § 14-2-1502(a) provides that "[a] foreign corporation transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority." On its face, this language may be read to provide that a certificate of authority is required before filing an action because the word "until" signifies a condition precedent⁵ and "maintains" signifies at least the commencement of an action, if not the prosecution to final judgment.⁶

Additionally, the legislative history shows that the intention of the legislature was to carry forward the prior law, which held that suits by foreign corporations without a certificate of authority were void and subject to dismissal without prejudice. Prior to 1969, a corporation was permitted to obtain a certificate of authority after initiating an action.⁷ However, the legislature changed the law in 1969 and expressly stated that a corporation could not "maintain any action, suit or proceeding in any court of this State unless before commencement of the action it shall have obtained such a certificate."⁸ This provision was interpreted to mean that a foreign corporation could not sue a Georgia defendant if it had not obtained a certificate of authority.⁹ The majority relies upon a slight modification of this section in 1988. However, the comment to the 1988 revision notes the legislature's intention that the previous bar to suits by unqualified corporations was being carried forward.¹⁰ Significantly, the 1988 revision continued to omit the pre-1969 language that unambiguously permitted a cure after filing of an action.

Any ambiguity in the language and history of subsection (a), however, is resolved by reviewing the remainder of OCGA § 14-2-1502 and a similar statute, OCGA § 48-13-37, which contains identical language. The majority's interpretation of OCGA § 14-2-1502(a) renders a portion of subsection (b) meaningless. OCGA § 14-2-1502(b) imposes a civil penalty on a foreign corporation that transacts business without a certificate of authority. This civil penalty "shall be in addition to other consequences set out in this Code section...." Thus, the legislature clearly intended that there be an additional consequence for a failure to comply with the laws of this state. The inability to begin an action in the courts of this state is the only other consequence set forth in OCGA § 14-2-1502. The majority's reading of the statute, however, excises this legislatively-created consequence from the statute.¹¹

Additionally, subsection (c) specifically prevents a foreign corporation that has not obtained a certificate of authority from avoiding the consequences of this section by providing that a successor corporation or assignee of a cause of action must obtain a certificate of authority before commencing a suit on that cause of action. There would be no need for this provision if the foreign corporation were able to comply with the certificate of authority requirement anytime after commencing its action.

Finally, the appellate courts' interpretation of a similar statute, OCGA § 48-13-37, supports this result. That statute provides that non-resident contractors who fail to register with the revenue commissioner and post bond before commencing work under a contract are not entitled "to maintain an action to recover payment for performance on the contract in the courts of this state."¹...