Court Opinion

ID: 2746324
Source: CourtListenerOpinion
Date Created: 2014-10-29 13:06:41.252768+00
Date Added: 2024-06-11T09:55:11.488814
License: Public Domain

FOURTH DIVISION
                                 DOYLE, P. J.,
                            MILLER and DILLARD, 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/

                                                                    October 15, 2014

In the Court of Appeals of Georgia
 A14A0962. HILL v. VNS CORPORATION d/b/a CHOO CHOO
     LAKE OCONEE et al.

      MILLER, Judge.

      VNS Corporation d/b/a Choo Choo Lake Oconee (“VNS”) sued Craig Hill to

enforce a materialman’s lien on Hill’s real property. Hill appeals from the trial court’s

order granting summary judgment to VNS, contending that factual questions remain

regarding the amount of the materialman’s lien. For the following reasons, we agree.

Therefore, we reverse and remand.

             Summary judgment is proper when there is no genuine issue of
      material fact and the movant is entitled to judgment as a matter of law.
      OCGA § 9-11-56 (c). 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.
(Citation omitted.) Vulcan Constr. Materials, LP v. Franklin Builders Properties,

Inc., 298 Ga. App. 120, 121 (679 SE2d 356) (2009).

      So viewed, the evidence shows that Hill is the owner of real property (the

“Property”) located in Greene County. Hill contracted with Bonacori Custom Homes

of Georgia, LLC (“BCH”) for the construction of a home on the Property. Between

June 26 and August 30, 2012, BCH purchased materials from VNS for use in the

construction of Hill’s home.

      Hill paid BCH a total of $254,336.25, including $89,836.25 for building

materials supplied by VNS. Hill also paid $57,653.10 directly to VNS for custom-

made materials which were ordered for, but not delivered to, the Property.

      On October 25, 2012, after BCH failed to pay for all of the materials supplied

by VNS for the construction of Hill’s home, VNS filed a materialman’s lien against

the Property in the amount of $44,175.99. The next day, VNS filed suit for breach of

contract and other claims against BCH and Richard L. Buonocore Jr. (hereinafter, the

“Buonocore defendants”). VNS also sued Hill contending that VNS was entitled to

a materialman’s lien against the Property.

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      VNS moved for a default judgment against the Buonocore defendants based on

their failure to respond to the complaint. The trial court granted VNS’s motion,

resulting in a default judgment against the Buonocore defendants in the amount of

$43,408.30, plus interest and attorney fees.

      The Buonocore defendants subsequently made a payment to VNS in the

amount of $27,000.1 According to VNS, only $18,797.63 of that payment was applied

to the outstanding balance owed for the materials used to construct Hill’s residence.

The remaining $8,202.37 was applied to prejudgment interest and attorney fees

allegedly owed pursuant to the terms of a June 2011 credit application and personal

guarantee signed by Richard Buonocore.

      VNS subsequently amended its claim against Hill to state that VNS was

entitled to a reduced materialman’s lien against Hill’s property in the amount of

$27,644.69. VNS then moved for summary judgment, and the trial court granted

VNS’s motion, finding that VNS was entitled to a materialman’s lien in the amount

of $27,644.69 plus $1,450.52 in prejudgment interest.

      1
          In June 2013, Richard Buonocore filed for Chapter 7 bankruptcy protection.

                                          3
      Hill contends that the trial court erred in granting summary judgment to VNS,

because factual questions remain regarding the amount of the materialman’s lien VNS

sought. For the reasons that follow, we agree.

      “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.” (Footnote

omitted.) Few v. Capitol Materials, Inc., 274 Ga. 784 (1) (559 SE2d 429) (2002);

OCGA § 44-14-361 et seq.2

      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,
      even though that property owner usually will have no relationship with
      the materialman, contractual or otherwise.

(Citation omitted.) Palmer v. Duncan Wholesale, 262 Ga. 28, 29-30 (1) (413 SE2d

437) (1992). “[B]ecause materialman’s liens are in derogation of the common law,

statutes involving such liens must be strictly construed in favor of the property owner

      2
        OCGA § 44-14-361.1 (a) sets out the provisions for perfecting a lien. Hill
does not challenge the validity of the lien on appeal. Hill argues only that the trial
court erred in calculating the amount of the materialman’s lien requested by VNS.

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and against the materialman.” (Citations omitted.) Browning v. Gaster Lumber Co.,

267 Ga. 72, 73 (475 SE2d 576) (1996).

       The right to a materialman’s lien is based upon “the theory that the work and

material . . . for which the lien is sought have increased the value of the realty by

becoming a part thereof.” (Citation and punctuation omitted.) 182 Tenth, LLC v.

Manhattan Constr. Co., 316 Ga. App. 776, 780 (3) (730 SE2d 495) (2012).

Accordingly, lien statutes allow a materialman to secure a lien only for the materials

and work which actually went into the structure. Id. Moreover, VNS had the burden

of proving the lien amount, if any, to which it was entitled by producing evidence of

lienable items included in the default judgment against BCH. 182 Tenth, supra, 310

Ga. App. at 779 (2).

       (a) A question of fact remains regarding the lien amount to which VNS is

entitled.

       In a suit to enforce a materialman’s lien directly against the improved property,

the property owner “who has paid the agreed price or any part of same, may set up the

payment in any lien action brought and proved by competent and relevant evidence

that the payments were applied as provided by law, and no judgment shall be

rendered against the property improved.” OCGA § 44-14-361.1 (a) (4). Payments are

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properly applied when the money paid to the contractor is in fact used for payment

of labor and materials. See Mayer Elec. Supply Co. v. Fed. Ins. Co., 195 Ga. App.

191, 192 (393 SE2d 270) (1990).

      Here, VNS presented affidavit evidence showing that BCH failed to pay for

more than $29,000 in materials used for the construction of Hill’s home. Hill

responded by presenting his own affidavit showing the payments that he made to

BCH for the materials used in the construction of his home. Hill stated in his affidavit

that he made payments to BCH totaling $254,336.25 and these payments included

$89,836.25, which was supposed to be paid to VNS for building supplies.

Additionally, the evidence shows that BCH made a $27,000 payment to VNS less

than one month after the trial court entered a default judgment against BCH. As set

forth above, VNS had the burden of proving the lien amount, if any, to which it was

entitled and it failed to do so at this stage of the proceedings. The conflicting

affidavits and other record evidence present material issues of fact regarding the lien

amount which must be determined at trial. See Durham v. Marchman, 246 Ga. 645,

647 (2) (272 SE2d 343) (1980). Consequently, the trial court erred in granting

summary judgment to VNS.

                                           6
      (b) Hill is entitled to full credit for the Buonocore defendants’ $27,000

payment against the amount of any materialman’s lien awarded to VNS.

      Here, the evidence shows that the Buonocore defendants paid $27,000 to VNS

after the trial court entered a default judgment against BCH. Rather than applying the

full amount of that payment to the outstanding balance owed for the materials used

to construct Hill’s residence, VNS applied $8,202.37 to prejudgment interest and

attorney fees allegedly owed by BCH. VNS then sought a reduced materialman’s lien

in the amount of $27,644.69, in addition to $1,450.52 in prejudgment interest, which

the trial court granted.

      The attorney fees and interest allegedly owed by the Buonocore defendants are

not lienable items under the Georgia lien statutes. See Bush v. Northside Trucking,

352 Ga. App. 729, 731 (2) (556 SE2d 909) (2001) (attorney fees are not lienable);

182 Tenth, supra, 310 Ga. App. at 781 (2) (interest due on unpaid payment

applications was not a lienable item). Accordingly, the trial court erred in failing to

credit the full amount of the $27,000 payment against VNS’s claim for a

materialman’s lien.

      c. VNS was not entitled to prejudgment interest.

                                          7
      Prejudgment interest on a lien may not be claimed, where as here, there is no

agreement fixing the amount of the lien. Bush, supra, 352 Ga. App. at 731 (1).

Accordingly, the trial court erred in awarding prejudgment interest to VNS.

      In sum, we hold that VNS is not entitled to summary judgment at this stage of

the proceedings because it failed to prove the lien amount, if any, to which it was

entitled; VNS is not entitled to a lien for the attorney fees and interest allegedly owed

by the Buonocore defendants; VNS is not entitled to recover prejudgment interest;

and Hill is entitled to full credit for the $27,000 payment. Accordingly, we reverse the

trial court’s judgment and remand this case for further proceedings not inconsistent

with this opinion.

      Judgment reversed and case remanded. Doyle, P. J., and Dillard, J., concur.

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