One way to dispute a lien claim is to scrutinize the timeline, and find that the lien claimant was not timely in taking required actions. The case Cent. Atlanta Tractor Sales, Inc. v. Athena Dev., LLC, 289 Ga. App. 355, 657 S.E.2d 290 (2008) shows that a lien claim can be defeated even when the equipment supplier files their case just 1 day too late.
In 2003, property owner Athena Development, LLC (“Athena”) entered into a contract with West Georgia Excavation, Inc. (“WGE”) for construction work on a project in Powder Springs Georgia.
Central Atlanta Tractor Sales, Inc. (“CATS”) supplied equipment to WGE for the project. The last piece of equipment was returned to CATS on February 16, 2004, which was the last day WGE did work on the construction project.
CATS claimed it wasn’t paid $101,090.75 for the use of the equipment by WGE, and on March 12, 2004 it filed a claim of lien against the project.
Athena’s surety was Accredited Surety & Casualty Company, Inc. (“Accredited Surety”), and on July 28, 2005 a bond was provided to discharge the lien by CATS on the project. (This type of bond is permitted by O.C.G.A. 44-14-364).
CATS (the equipment supplier) sued WGE (the contractor) on February 16, 2005 on the $101,090.75 claim.
Was this lawsuit timely filed within “12 months from the time the [claim] shall become due” as required by O.C.G.A. 44-14-361.1(a)(3)? Quite clearly, the lawsuit was filed 366 days after the last day WGE did work, which would be 1 day too late.
But CATS argued for an exception. They argued that sums due under a rental contract could not yet be determined until the equipment was returned to them such that they had a chance to inspect it for damage. CATS argued that its “claim” was not “due” until the inspection date which was within 12 months of when they filed their lawsuit.
The Georgia Court of Appeals disagreed, however. It held that the “due date” does not include any inspection period, but is determined from the last date the equipment was provided for the improvement of the real estate. Because CATS filed 1 day too late, they could not recover on the bond.