In ALA Construction Services,
LLC v. Controlled Access, Inc., ALA Construction Services, LLC (“ALA
Construction”) hired subcontractor Controlled Access, LLC (“Controlled Access”)
to provide equipment and related services for the construction of townhomes.
2019 WL 4463305 (Ga. App. Ct. 2019). Pursuant to their written contract,
Controlled Access signed two documents entitled “Interim Waiver and Release
Upon Payment”, which required it to file an affidavit of nonpayment or a claim
of lien within a 60 day period or else the amount due to it by ALA Construction
would be considered paid in full. ALA Construction failed to pay the agreed
upon amount, but Controlled Access did not file an affidavit within the
required time period.
Controlled Access filed suit for
breach of contract, and ALA Construction filed a motion for summary judgment
based on OCGA § 44-14-366(f), upon which the Parties’ Waiver and Release was
based, which states: “(1) When a waiver and release provided for in this Code
section is executed by the claimant, it shall be binding against the claimant
for all purposes, subject only to payment in full of the amount set forth in
the waiver and release. (2) Such amounts shall conclusively be deemed paid in
full upon the earliest to occur of: (A) Actual receipt of funds; (B) Execution
by the claimant of a separate written acknowledgment of payment in full; or (C)
Sixty days after the date of the execution of the waiver and release, unless
prior to the expiration of said 60 day period the claimant files a claim of
lien or files in the county in which the property is located an affidavit of
nonpayment[.]”
The trial court held a hearing on
ALA Construction’s motion, and ultimately entered a judgment against it in the
amount of $17,666.78. ALA Construction appealed, arguing that the trial court’s
interpretation of the Georgia statute was erroneous.
The Court of Appeals of Georgia
reversed the trial court and concluded that OCGA § 44-16-366 is plain and
unambiguous, and is binding against all parties for “all purposes” and the
statute clearly and unambiguously provides that upon signing the Waivers,
Controlled Access had a statutorily imposed responsibility to file either a
claim of lien or an affidavit of nonpayment if it wished to keep the debt alive
beyond 60 days. Controlled Access did neither, so the debt is extinguished.
This case shows a clear obligation of a subcontractor to comply with contractual requirements, even when it relates to a seemingly obvious expectation of payment by a general contractor. Had Controlled Access filed the affidavit of nonpayment within the 60-day period, but did not receive payment from ALA Construction, its lawsuit would have likely resulted in a judgment against ALA Construction.
