FOUNDERS KITCHEN & BATH, INC. v. ALEXANDER Et Al. , 334 Ga. App. 389 ( 2015 )

THIRD DIVISION
ELLINGTON, P. J.,
DILLARD and MCFADDEN, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
November 10, 2015
In the Court of Appeals of Georgia
A15A1262. FOUNDERS KITCHEN & BATH, INC. v.
ALEXANDER et al.
MCFADDEN, Judge.
This is a materialman’s lien case in which the trial court granted a defense
motion for summary judgment on the grounds that the parties are in privity of contract
and thus the complaint is barred by the 365 day time limit imposed by OCGA § 44-
14-361.1 (a) (3). But contrary to the trial court’s finding, there exist genuine issues
of material fact as to whether the parties are in privity of contract and whether the
time limit provided by OCGA § 44-14-361.1 (a) (3) applies to the complaint in this
case. Accordingly, we reverse.
“Summary judgment is appropriate when no genuine issues of material fact
remain and the moving party is entitled to judgment as a matter of law. On appeal, we
review a trial court’s grant of summary judgment de novo, construing the evidence
and all inferences drawn from it in a light favorable to the nonmovant.” Stennette v.
Miller, 316 Ga. App. 425, 426 (729 SE2d 559) (2012) (citation omitted).
So viewed, the evidence shows that Debra and James Alexander (the
“Alexanders”) contracted with Cirillo Custom Homes, Inc. (“Cirillo”) for the
construction of a house. Cirillo contracted with Founders Kitchen & Bath, Inc.
(“Founders”) for the installation of kitchen cabinets. Pursuant to its agreement with
Cirillo, Founders installed cabinets in the Alexanders’ home. On September 25, 2007,
Founders filed a claim of lien against the property. It provided notice of the claim of
lien to the Alexanders on March 5, 2008. On February 28, 2008, Founders filed an
action on its claim of lien against Cirillo, claiming that Cirillo had not paid. The
record does not reveal what has become of that action against Cirillo. But on May 2,
2014, Founders filed the instant complaint to foreclose its materialman’s lien against
the Alexanders.
The Alexanders moved for summary judgment, claiming that Founders’
president admitted in deposition testimony that Founders had a contract with the
Alexanders; that as a result of such contractual privity, Founders was required by
OCGA § 44-14-361.1 (a) (3) to commence its lien action against them within 365
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days of when the claim became due; that Founders failed to meet that deadline,
having filed its complaint against them more than six years after its claim of lien was
filed; and that Founders’ action is thus time-barred. The trial court granted the
motion, stating that it was “treating [Founders’] complaint as having been filed under
OCGA § 44-14-361.1 (a) (3), thus construing [Founders’] owner’s conflicting
deposition testimony against him, finding that [Founders] was in privity [of contract]
with the defendant property owners [the Alexanders] concurrently with being in
privity with Cirillo.” The trial court went on to conclude that Founders’ action against
the Alexanders was time-barred since it was filed “well outside the 365-day term
provided by OCGA § 44-14-361.1 (a) (3).”
Founders appeals, asserting that the trial court erred in finding that its
complaint against the Alexanders is barred by the 365 day time limit set forth in
OCGA § 44-14-361.1 (a) (3). We agree.
Our Supreme Court has summarized the statutory scheme at issue.
The Georgia General Assembly has enacted a detailed statutory
scheme for creating special liens on real property, including liens of
materialmen who furnish materials for the building, repairing, or
improving of the property. O.C.G.A. § 44-14-361.1 (a) sets out the
provisions for perfecting a lien. These provisions require a materialman
who has substantially complied with the contract for materials to (a) file
a claim of lien in the county where the property is located within three
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months of furnishing the materials; (b) send a copy of the lien claim to
the property owner; (c) commence an action against the contractor to
recover the amount of the claim within [365 days] of when the claim
became due; and (d) file a notice of the action with the superior court
clerk of the county where the lien was filed so that the clerk can enter
information about the lawsuit in county records. [See O.C.G.A. §§
44-14-361.1 (a) (1) - (3).]
Subparagraph (a) (4) of O.C.G.A. § 44-14-361.1 permits the
materialman to bring an action directly against the property owner to
enforce the lien against the property without filing an action or obtaining
judgment against the contractor as a prerequisite to enforcing a lien
against the property in limited circumstances. A direct action against the
owner is allowed when the contractor dies or leaves the state, is
adjudicated a bankrupt, or has a contract with the lien claimant requiring
that the contractor be paid before the supplier. O.C.G.A. § 44-14-364
permits the property owner to discharge the lien on its real estate by
filing a bond in the superior court clerk’s office.
The legislature has mandated strict compliance with these
statutory provisions. O.C.G.A. § 44-14-361.1 expressly provides that
liens shall not be effective or enforceable unless created or declared
according to the statute. In addition, this [c]ourt has followed the rule
that lien statutes in derogation of the common law must be strictly
construed in favor of the property owner and against the materialman.
The rationale is that there is usually no contract between the owner and
supplier. Instead, a materialman’s lien effectively permits the transfer of
liability from the person who actually contracted with the materialman
for materials to be used in improving real estate to the owner of the
improved property.
Few v. Capitol Materials, 274 Ga. 784, 784-785 (1) (559 SE2d 429) (2002).
The instant case involves an action brought by materialman Founders directly
against the Alexanders as property owners, not the action brought against contractor
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Cirillo. As noted above, OCGA § 44-14-361.1 (a) (3) requires that “the lienholder
must commence an action for the recovery of the amount of the claim against the
contractor within [365 days] of when the claim became due,” Action Concrete v.
Portrait Homes - Little Suwanee Point, LLC, 285 Ga. App. 650, 652 (2) (647 SE2d
353) (2007) (emphasis supplied). Our Supreme Court has held that 365 day deadline
applicable only to claims against the contractor.
[T]he requirement of the statute as to the time within which the action
shall be commenced relates to the action in personam against the
contractor, and not to the action against the owner of the real estate. If
this were not true, the right of the materialman to foreclose his lien
against the real estate might be wholly defeated, without fault on his
part, by such delay in the trial of the action against the contractor as to
make it impossible to commence foreclosure proceedings against the
owner within [365 days] from the time when the claim became due.
Southern Railway Co. v. Crawford & Slaten Co., 178 Ga. 450 (173 SE 91) (1934)
(citation omitted).
Consequently, as the underlying action in this case is not against the contractor,
the time limit set forth in OCGA § 44-14-361.1 (a) (3) does not apply unless the
Alexanders were effectively acting as their own contractors and had a contract for
supplies directly with Founders. See Southern Railway, supra at 451 (distinguishing
“Cherry v. North & South Railroad, 65 Ga. 633, in which the lien was claimed under
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a contract made directly with the owner”); Roofing Supply of Atlanta v. Forrest
Homes, 279 Ga. App. 504, 506 (1) (632 SE2d 161) (2006) (finding that property
owner may also be its own contractor within meaning of the statute). But contrary to
the trial court’s finding, the record shows that there is, at the very least, a genuine
issue of material fact as to whether such contractual privity exists between Founders
and the Alexanders.
We first note that Founders’ complaint makes no allegation of any contract
with the Alexanders, and instead only alleges its contract with Cirillo. Likewise, the
answer of the Alexanders expressly averred that they had no contract with Founders.
Moreover, the Alexanders both deposed that there was no contract with Founders.
Thus, trial court’s decision to “treat [ Founders’] complaint as having been filed under
OCGA § 44-14-361.1 (a) (3)” is directly contradicted by the pleadings and the
summary judgment movants’ own testimony.
As for the trial court construing Founders’ president’s conflicting deposition
testimony against him as basis for finding that the parties are in privity of contract,
we note that the trial court failed to identify precisely what testimony it was
construing. The Alexanders argue that the trial court was referring to the president’s
deposition testimony describing a list of the cabinets and other items that were
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installed by Founders as “[a] contract between us and the Alexanders.” However,
whether that document constituted a binding contract between the parties was a legal
conclusion that should not have been considered as evidence on a motion for
summary judgment. GE Capital Mortg. Servs. v. Clack, 271 Ga. 82, 84 (1) (b) (515
SE2d 619) (1999).
Furthermore, the trial court mistakenly applied the self-contradicting testimony
rule set out in Prophecy Corp. v. Charles Rossignol, Inc., 256 Ga. 27 (343 SE2d 680)
(1986). “The Prophecy rule requires trial courts, when considering summary
judgment motions, to (1) eliminate all portions of a party’s self-contradictory
testimony that are favorable to, and left unexplained by, that party; and (2) consider
the remaining evidence in favor of the party opposing summary judgment.”
Thompson v. Ezor 272 Ga. 849, 851 (1) (536 SE2d 749) (2000) (citation omitted).
However, “[c]ontradictory testimony is not to be construed against a party if he offers
a reasonable explanation for the contradiction.” Bradley v. Winn-Dixie Stores, 314
Ga. App. 556, 557, n. 8 (724 SE2d 855) (2012) (citation omitted).
In this case, the purported contradiction in the testimony of Founders’ president
is not unexplained. At the same deposition where the president identified the list of
supplies as being a contract with the Alexanders, the president later testified that the
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contract to sell materials was actually with Cirillo, and he further acknowledged that
there was nothing on the list which provided that it was a contract between Founders
and the Alexanders. The president also provided an affidavit in which he stated that
his testimony regarding the existence of any contract was mistaken and that no
contractual privity had existed between the parties. Indeed, a review of the document
reveals that it does not constitute a contract between Founders and the Alexanders.
See OCGA § 13-3-1. Thus, the purported contradictory statements of the Founders’
president were not left unexplained and should not have been construed against
Founders by the trial court.
Under these circumstances, there is, at the very least, a genuine issue of
material fact as to whether Founders and Alexander are in contractual privity.
Because there exists such a genuine issue of material fact, the trial court erred in
finding otherwise and in granting summary judgment to the Alexanders on the basis
that the complaint is barred by the 365 day time limit of OCGA § 44-14-361.1 (a) (3).
We do not decide what statute of limitation does apply to the complaint in this
case. That is an issue better developed upon the return of the case to the trial court.
Judgment reversed. Ellington, P. J., and Dillard, J., concur.
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