Spring 2013
Construction Law Newsletter
& Georgia Construction Law Update
Official Publication of the Atlanta Bar Association Construction Law Section
A Message from the Section Chair
by T. Bart Gary, Freeman, Mathis & Gary, LLP

My term as chair of the section will end shortly and the mantle will pass to Phil Beck. I have enjoyed my years on the Board of Directors, especially the past year.  Our programs this year have been informative and well attended.  As always, we welcome your feedback and suggestions, especially for programs and the newsletter.  Please continue to encourage your colleagues and associates to join the section and support our activities.

I want to recognize Tanya Windham with the Atlanta Bar Association staff, who has been our Section's Director for fifteen years.  She is retiring from the Bar this Spring to serve as Director of Worship Production at Turning Point Church in McDonough.  Many Thanks Tanya, we will miss you.

Bart
Save the Date!
Mark your calendars for the following Construction Law Section Breakfast Meetings at the Buckhead Club. 

Details are subject to change.  Check your emails and the Atlanta Bar Association website for updates.

Wednesday, September 25, 2013
Wednesday, October 23, 2013
Wednesday, November 20, 2013
Wednesday, January 22, 2014
Wednesday, February 26, 2014
Wednesday, March 26, 2014
Wednesday, April 23, 2014

Congratulations to our 2013-2014 Section Board of Directors

Chair  Philip Edward Beck
Vice Chair-Chair-Elect  Herbert H. Gray III
Secretary/Treasurer  C. Damon Gunnels
Immediate Past Chair  T. Bart Gary

Members at Large
Frank L. Bigelis
Deborah Cazan
R. Daniel Douglass
Mark V. Hanrahan
Frank E. Riggs Jr.
W. Henry Parkman
Christy Sanders
Lynn C. Stewart
Legislative Changes
T. Bart Gary, Freeman Mathis & Gary, LLP

This year's session of the Georgia General Assembly saw several new laws and amendments affecting the construction industry. All of them have been signed by the Governor.

Mechanic's Lien Law
The General Assembly adopted a change to O.C.G.A. 44-14-361 regarding the amount that may be claimed in a lien.  Effective July 1, 2013, the amount of a lien may be either (1) the amount due and owing to the claimant under the terms of its contract, subcontract, or purchase order or (2) the unpaid value of the labor, material, and services provided by the claimant for the improvement of the real estate in the absence of a contract, subcontract, or purchase order. 

Read the entire article
Filing Suit Against Contractor Not Named In Lien Meets 365 Day Commencement of Action Requirement
Kent Collier, Sutherland Asbill & Brennan LLP

contract Georgia's lien statutes require a lien claimant to commence an action to recover the amount of a lien claim within 365 days of filing the lien for recording. O.C.G.A. 44-14-361.1(a)(3). This requirement is met when a materialman or subcontractor lien claimant timely commences an action against an upstream party that was responsible for paying the lien amount pursuant to a construction contract, subcontract, or purchase and lien claimant timely files a notice in the superior court of the county where the lien was filed notifying the property owner of the action.

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Contribution in Georgia...
Dead or Alive?
by Neil Wilcove, Freeman Mathis & Gary, LLP

scales and book In what can only be described as a shock to those who believed contribution and joint and several liability were dead, the Georgia Court of Appeals, in Zurich American Insurance Company v. Heard, 2013 WL 1459452 (Ga. App. 2013) ruled that the Georgia Legislature abolish contribution between settling joint tortfeasors when there has been no apportionment of damages by a trier of fact.    

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Surety May Still Be Liable Despite the Fact That Claimant Did Not Contract With the Named Principal
by Steven Campbell, Alston & Bird, LLP

In November 2008, the Board of Regents of the University System of Georgia ("Board of Regents") hired Choate Construction Company ("Choate") to construct fraternity and sorority housing at the University of Georgia (the "Project"). Shortly thereafter Choate hired Dedmon Electrical Services ("Dedmon") to perform electrical installation work on the Project. Pursuant to the terms of Choate's contract with Dedmon (the "Subcontract"), Dedmon was required to furnish payment and performance bonds before commencing work on the Project.

Read the entire article
Pay-If-Paid Clauses Are Still
B
ullet-proof in Georgia
by Kamy Molavi, Freeman Mathis & Gary LLP

sections lady justice
Triad Drywall, Inc. ("Triad") performed sheetrock work under a subcontract with Vratsinas Const. Co. ("VCC").  The subcontract contained a broad and thorough pay-if-paid clause.  During the course of construction, there were rumors about the solvency of the project owner.  One of Triad's owners later testified he was aware of the pay-if-pay provision, and when at a meeting he expressed concern about the project owner's ability to pay, VCC's project manager told him not to worry about the Owner's finances and to keep working, stating that VCC would pay Triad from its "own pocket" if necessary. 

Read the entire article
Maxum Indemnity Co. v. Jiminez
Laura J. Stipanowich, Sutherland Asbill &
Brennan LLP

Comprehensive general liability (CGL) insurance policies issued to contractors often contain exclusions for property damage caused by the insured's negligently constructed work product. Another common exclusion eliminates coverage under any contract other than an incidental contract, but provides that it "does not apply to a warranty of fitness or quality of the named insured's products or a warranty that work performed by or on behalf of the named insured will be done in a workmanlike manner."  Courts in Georgia have held that such CGL policy exclusions are unambiguous and do not provide coverage when an insured offers a structural warranty and damages result due to the insured's negligent construction.

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Lawsuit Alleging Claims in Contract and in Tort Collectively Prevents Waiver of Sovereign Immunity
by William D. Ezzell, Freeman Mathis & Gary LLP

The doctrine of sovereign immunity is well-established.  While the Georgia State Legislature waived the defense in actions derived in contract without exception, the same cannot be said for tort claims. O.C.G.A. 50-21-1.  Pursuant to the Georgia Tort Claims Act ("GTCA"), the State has waived immunity subject to specific exceptions, largely shielding the State from liability. O.C.G.A. 50-21-24. 

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2012-2013 Section Board of Directors

Newsletter Editors
Frank L. Bigelis
T. Bart Gary


Chair
T. Bart Gary

Vice Chair/Chair-Elect
Philip E. Beck

Secretary/Treasurer
Herbert H. Gray III

Immediate Past Chair
Danielle J. Cole

Members at Large
Frank L. Bigelis
Deborah Cazan
R. Daniel Douglass
C. Damon Gunnels
Mark V. Hanrahan
W. Henry Parkman
Frank E. Riggs Jr.
Lynn C. Stewart
In This Issue
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