Gwinnett-Club Assocs. v. Southern Elec. Supply Co.

Even though debtor's bankruptcy stayed enforcement of creditor's action to recover on a materialman's lien, creditor still had to file a notice of commencement of that action to preserve its right to enforce the lien.

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Gwinnett-Club Associates Gwinnett-Club appeals from the trial court’s judgment entered after a bench trial, finding that Southern Electric Supply Southern Electrichad fully complied with OCGA § 44-14-361.1 of Georgia’s Materialman’s Lien Statute, and granting it a judgment in rem against the real property owned by Gwinnett-Club. Because we conclude that Southern Electric was required to file a notice of commencement of suit against the contractor and failed to do so, we reverse.

The parties agreed to allow the trial court to decide this case on stipulated facts. A review of those facts shows that the case arose when Gwinnett-Club contracted with Cajun Electric to furnish improvements for an apartment project. Cajun bought materials from Southern Electric totaling $70,997.23, but failed to pay for them. Southern Electric filed a materialman’s lien against the improved property in Gwinnett County for the $70,997.23 on January 30, 1996, in accordance with OCGA § 44-14-361.1. On May 6, 1996, Southern Electric filed a Complaint against Cajun in Clayton County State Court in accordance with OCGA § 44-14-361.1 3. But, Southern Electric did not comply with the requirement of OCGA § 44-14-361.1 a 3 that it file a notice of commencement of the action with the Superior Court of Gwinnett County, the County in which the lien was filed. Southern Electric claimed that it did not file the required notice because it received notice that Cajun had filed bankruptcy and the automatic stay provisions were in effect. The Notice sent to all creditors stated that creditors were prohibited from taking certain actions against the debtor, among which were taking action against the debtor to collect money owed or starting or continuing foreclosure actions or repossessions.

Gwinnett-Club Assocs. v. Southern Elec. Supply Co.

Even though debtor's bankruptcy stayed enforcement of creditor's action to recover on a materialman's lien, creditor still had to file a notice of commencement of that action to preserve its right to enforce the lien.

Share with Email

Thank you for sharing!

Trending Stories

More From ALM

Subscribe to Daily Report