Court Opinion

ID: 9846523
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:43:08.99198+00
Date Added: 2024-06-11T09:19:36.900494
License: Public Domain

Deen, Presiding Judge,
dissenting.
I must respectfully dissent. A few weeks after Willard had agreed to construct and lease the restaurant, he obtained financing, and F.S.A. notified him that his 120-day construction period had begun. Prior to this time, Willard had begun negotiation with McMichael’s to construct the restaurant. Willard’s architect prepared plans and forwarded them to McMichael’s. They were reviewed, and construction costs were estimated at $230,000. Shortly thereafter, Willard met with F.S.A. to review the restaurant plans, and it approved them. The agreement between F.S.A. and Willard provided that a construction allowance be paid to Willard, and that the restaurant and all its fixtures and improvements belonged to F.S.A. Shortly before construction was completed, an F.S.A. representative inspected the premises and found the improvements to be a “tremendous asset to the land*709lord.” After Willard filed Chapter 7 bankruptcy, F.S.A. took possession of the premises and leased them to another tenant at a higher rental rate.

Case No. A90A1056

1. OCGA § 44-14-361 (a) (2) permits contractors to have a special lien on real estate for which they furnish labor, services, or materials if (b) “they are furnished at the instance of the owner, contractor, or some person acting for the owner or contractor.” Materialman’s liens “are creatures of statute and must be strictly construed as they relate to classes of persons who may claim a lien and the improvements and kind of property on which it may be obtained. Other than these, the weight of authority holds that the courts should give the statutes a fair and equitable construction. [Cit.]” Atlanta Jewish Comm. Center v. Tom Barrow Co., 130 Ga. App. 608, 609 (203 SE2d 921) (1974). In determining whether McMichael’s was within the class of persons who may claim a lien, we note that OCGA § 44-14-361 clearly envisions that an agent of the owner of the property can authorize the use of labor, services, or materials, which could subject the owner’s property to a lien if the contractor is not paid. The sole question is therefore whether Willard was the agent of F.S.A. in contracting for the construction of a restaurant, which F.S.A. required to be built to its specifications within 120 days of signing the rental agréement.
In Columbus Square Shopping Center Co. v. B & H Steel Co., 150 Ga. App. 774, 777 (258 SE2d 600) (1979), the leases, which were to take effect 60 days after delivery of the premises to the tenant, provided for a construction allowance to the tenant by reducing the rent by a fixed amount for 12 months. The tenant, in turn, contracted with B & H Steel for goods, materials, and labor, which were used to improve the property owned by the shopping center. After the tenant failed to pay the contractor, it filed a lien against the property owned by the shopping center company. This court, in affirming the jury verdict, noted that a tenant cannot order work done on the landlord’s property and charge the owner for the work unless there is a relationship between himself and the landlord other than lessor and lessee whereby the landlord expressly or impliedly consents to the contract under which the improvements are made. “There need be no contract between the materialman and the true owner, but there must be a contract between the true owner and some person for erection of the improvements.” Id. at 777. As in the Columbus Square case, the record shows that there was a contract between the tenant and the landlord signed prior to the effective date of the lease, which required the tenant to make improvements to the landlord’s property, and a stated allowance was to be given to the tenant for construction purposes. At *710the end of the lease, all the improvements and fixtures on the property were to become the property of the landlord. There was also a contract between the tenant and the contractor, which was approved by the landlord as to cost and design. After the restaurant was constructed, the landlord’s representative who inspected the premises felt that it would provide the landlord with a substantial benefit. Accordingly, I believe that the trial court did not err in finding that the tenant acted as the landlord’s agent in contracting for the improvements, and the lien was valid.
2. I would also agree with the trial court that there was no issue of fact as to the amount of the lien. The balance owed to McMichael’s under the construction contract ($129,109), and not the partial construction allowance ($59,400) under the lease, determines the amount of the lien. Under OCGA § 44-6-2, Willard’s interest merged with F.S.A.’s fee interest when Willard abandoned the leasehold, and the amount sought by McMichael’s was less than the contract amount. See Bennett Iron Works v. Underground Atlanta, 130 Ga. App. 653 (204 SE2d 331) (1974).

Case No. A90A1057

McMichael’s cross-appeals and argues that the trial court erred as a matter of law in omitting prejudgment interest on its liquidated lien claim. It claims that while the lien law does not specifically allow prejudgment interest, this law is to be liberally construed in favor of contractors, and that such interest was tacitly approved in Columbus Square Shopping Center Co., supra.
I further believe that the trial court erred in omitting prejudgment interest on McMichael’s lien, although Georgia’s lien law does not specifically allow prejudgment interest. In reviewing Columbus Square Shopping Center Co., supra, the issue of prejudgment interest was not addressed by the court. In the instant case the amount of damages was liquidated as there was no issue of fact as to the amount of the lien. A liquidated debt is for an amount certain and fixed. International Indem. Co. v. Terrell, 178 Ga. App. 570 (344 SE2d 239) (1986). OCGA § 7-4-15 permits the recovery of prejudgment interest on “[a]ll liquidated demands, where by agreement or otherwise the sum to be paid is fixed or certain, [and this amount] bear[s] interest from the time the party shall become liable and bound to pay them.” Accordingly, F.S.A. was bound to pay the contractor at the time the lien attached. The trial court therefore erred in not awarding prejudgment interest to McMichael’s.
I am authorized to state that Presiding Judge McMurray joins in this dissent.
*711Decided September 10, 1990
Rehearing denied November 26, 1990
Chamberlain, Hrdlicka, White, Johnson & Williams, George L. Murphy, Jr., for appellant.
Kilpatrick & Cody, H. Quigg Fletcher III, for appellee.