Court Opinion

ID: 9576987
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:30:32.684077+00
Date Added: 2024-06-11T13:19:46.857535
License: Public Domain

Benham, Judge,
dissenting.
I am unable to agree with the harsh results obtained from the ruling of the majoriy that, as a matter of law, every contractor which is a foreign corporation that fails to file a bond with the State Revenue Commissioner as required by OCGA § 48-13-32 is thereby denied access rights to the Georgia courts under OCGA § 48-13-37. In my view, the statutory scheme, as well as the cases interpreting these laws, contemplates that when such a foreign corporation obtains the status of a resident contractor it acquires the same rights and privileges as a Georgia corporation, and that whether it has done so is a question of fact to be determined by a jury.
OCGA § 14-2-310 (a) recites in pertinent part: “No foreign corporation shall have the right to transact business in this state until it shall have procured a certificate of authority to do so from the Secretary of State. . . . Any foreign corporation to which a certificate of authority is granted shall be subject to all the licensing and regulatory statutes of this state relating to businesses of the kind which the foreign corporation proposes to transact in this state.” OCGA § 14-2-311 provides that until withdrawn or revoked, once a certificate of authority is issued the foreign corporation shall “enjoy the same, but no greater, rights and privileges as a domestic corporation . . . and, except as otherwise provided in this chapter, shall be subject to the same duties, restrictions, penalties and liabilities now or hereafter imposed upon a domestic corporation of like character.”
While this court held in Image Mills v. Vora, 146 Ga. App. 196 *262(1) (245 SE2d 882) (1978), that mere registration in compliance with OCGA § 14-2-310 does not mean that a foreign corporation necessarily sheds its nonresident status, that holding does not dictate that it cannot do so. Here, in addition to obtaining a certificate of authority from the Secretary of State, the appellant, at all times pertinent, maintained a registered office and a business office in Columbus, Georgia, and obtained a business license in LaGrange, Georgia. The affidavit of appellant’s president showed that he had filed all state tax and withholding tax returns and reports for the years in question and acquired all the necessary state business and vehicle licenses; in addition the State Department of Revenue conducted an audit of appellant’s records, including a review of all taxes it paid in Georgia, for the years 1981 through 10- V2 months of 1985.
The Supreme Court stated in Gorrell v. Fowler, 248 Ga. 801, 803 (5) (286 SE2d 13) (1982) (appeal dismissed, 457 U. S. 1113 (102 SC 2918, 73 LE2d 1324) (1982)), that the Nonresident Contractors Act (OCGA § 48-13-30 et seq.) “is not designed to discriminate against non-resident contractors, but to bring them into a parity with resident contractors relative to the compliance with an important obligation under the Georgia Employment Security Law.” The brief of the State Revenue Commissioner filed as an amicus curiae in this case also makes it clear that the purpose of OCGA § 48-13-32 in imposing the bond requirement upon nonresident contractors in contracts over $10,000 is to alleviate the “tremendous audit and enforcement problems” due to the large amounts of revenue generated by this industry in Georgia. However, the question in the instant case is whether appellant could be considered a resident within the meaning of the Georgia Business Corporation Code (OCGA § 14-2-1 et seq.) and the Nonresident Contractors Act so as to have the statutory right to bring an action to recover under its contracts.
As I view these statutes, the bond requirement is a condition precedent to the filing of a suit to recover payment for the performance of a contract only when a factual determination of nonresidency has been made. See Gorrell v. Fowler, supra at 802; American Hosp. Supply v. Starline Mfg. Corp., 171 Ga. App. 790 (2) (320 SE2d 857) (1984). “Although the definition of ‘corporation’ [in OCGA § 14-2-1] excludes ‘foreign corporations,’ it does not expressly exclude foreign corporations authorized by certificate to transact business in Georgia. Nor does the definition of ‘foreign corporations’ expressly include those which are certificated.” Miller & Meier & Assoc. v. Diedrich, 174 Ga. App. 249, 251 (329 SE2d 918) (1985); reversed in part on other grounds sub nom. Diedrich v. Miller & Meier & Assoc., 254 Ga. 734 (334 SE2d 308) (1985). Likewise, while OCGA § 48-13-30 defines the term “contractor,” it does not distinguish between a resident and nonresident contractor. OCGA § 14-2-331 (b) prohibits access to the *263courts of this state only if a certificate of authority is not obtained, and subsection (c) makes the contracts of a foreign corporation which does not obtain a certificate voidable at the instance of any other party to the contract. OCGA § 48-13-35 further contemplates that a nonresident contractor would be unlikely to establish an office within the state since it requires a nonresident contractor to appoint the Secretary of State as agent for service of process.
Decided March 19, 1987.
J. Philip Day, for appellant.
Timothy S. Minors, for appellee.
Michael J. Bowers, Attorney General, H. Perry Michael, First Assistant Attorney General, Verley J. Spivey, David A. Runnion, Senior Assistant Attorneys General, amicus curiae.
There was uncontradicted evidence in this case that appellant had submitted itself to the jurisdiction of this state and complied with all the applicable statutes to achieve the status of a domestic corporation or resident contractor. Moreover, appellant showed that it had duly paid all state and local taxes and license fees, thereby posing no risk of loss of revenue which would require the posting of a nonresidence bond. There being no explicit statutory definition of what a nonresident contractor is, in my opinion the motion for partial summary judgment should have been denied and the issue as to whether appellant was a nonresident contractor or a resident contractor with standing to sue should have been submitted to the jury. Accordingly, I respectfully dissent.
I am authorized to state that Presiding Judge Deen and Judge Pope join in this dissent.