LaFarge Building Materials, Inc. v. Federal Insurance Company , 510 F. App'x 884 ( 2013 )

Case: 12-14396 Date Filed: 02/27/2013 Page: 1 of 10
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 12-14396
Non-Argument Calendar
________________________
D.C. Docket No. 1:09-cv-03249-RWS
LAFARGE BUILDING MATERIALS, INC.,
Plaintiff-Appellee,
versus
FEDERAL INSURANCE COMPANY,
CLEVELAND CONSTRUCTION, INC.,
Defendants -Third Party Plaintiffs-
Appellants,
THE PEOPLES BANK, et. al.,
Third Party Defendants.
Case: 12-14396 Date Filed: 02/27/2013 Page: 2 of 10
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(February 27, 2013)
Before TJOFLAT, HULL and PRYOR, Circuit Judges.
PER CURIAM:
Defendants Cleveland Construction, Inc. (“CCI”), a general contractor, and
Federal Insurance Company (“Federal Insurance”), its surety, appeal the district
court’s final judgment of $87,855.64 in favor of Plaintiff Lafarge Building
Materials, Inc. (“Lafarge”), a supplier of rock and concrete. After review, we
affirm.
Defendant CCI was the general contractor on two construction projects, a
Wal-Mart store and the Chamblee Village Retail Shops (“the property”). Plaintiff
Lafarge furnished materials, such as rock and concrete mix, to Michael B. Cline
d/b/a/ Clinecrete (“Clinecrete”), a concrete subcontractor. When Clinecrete failed
and refused to pay, Plaintiff Lafarge filed two materialman’s liens against the
property. Defendant Federal Insurance, as surety, issued two bonds which released
and bonded off Lefarge’s liens. Specifically, Defendant Federal Insurance’s bonds
provided that (1) Defendants CCI and Federal Insurance “are held firmly bound
unto Lefarge Building Materials, Inc., herein after known as Claimant in the sum”
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of $134,999.02 and $51,439.02; (2) that CCI entered into a contract with
Clinecrete and Clinecrete entered into a contract with Claimant Lafarge; (3) that
“Claimant has filed a mechanics’ lien in the amount of $67,499.51” and another
mechanic’s lien for $25,719.51 against certain property; (4) that the correctness of
these claims is disputed; (5) the liens are released in accordance with Georgia law;
and (6) that if CCI pays or causes to be paid the sums which the Claimant may
recover on these claims, together with the cost of suit in a timely filed action, then
this obligation to pay “shall be voided; otherwise it shall remain in full force and
effect.” In other words, Claimant Lefarge’s liens were released on the express
condition that CCI and Federal Insurance would pay the sums Lefarge recovered in
a timely filed lawsuit on these claims against Clinecrete if those sums were not
paid by Clinecrete.
I. STATE COURT LAWSUIT
In March 2007, before the present federal lawsuit commenced, Plaintiff
Lafarge, as the materialman, timely filed a lawsuit against Clinecrete, the
subcontractor, in state court to recover the unpaid amounts and perfect its claims of
lien. After Clinecrete failed to respond to Plaintiffs Lafarge’s motion for summary
judgment, the state court entered final judgment against Clinecrete on March 23,
2009. Among other things, the state court’s judgment awarded Plaintiff Lafarge
the principal sums of $67,189.51 and $25,719.51 (totaling $92,909.20) “for
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building materials purchased on open account by Defendant [Clinecrete] from
Plaintiff [Lafarge] and incorporated into improvements constructed on the property
commonly known as Chamblee Village Shops/Chamblee Tucker Road, Dekalb
County, Georgia.”
After the final judgment against Clinecrete (which included the sums
totaling $92,909.02), Plaintiff Lafarge made claims for payment of those sums
under the bonds, but Defendants refused payment.
II. FEDERAL COURT LAWSUIT
Plaintiff Lafarge then filed this federal civil action against Defendants CCI
and Federal Insurance. 1 Plaintiff Lafarge seeks to recover under the bonds for the
unpaid sums totaling $92,909.02 awarded by the state court’s final judgment, plus
attorney’s fees and costs.
On June 29, 2012, the district court entered an order ruling on Plaintiff
Lafarge’s motion for partial summary judgment. The district court first concluded,
as a matter of law, that the state court’s final judgment of $92,909.02 against
subcontractor Clinecrete “conclusively establishes the value of materials that
Plaintiff [Lafarge] delivered to the Property and that the materials were
incorporated into the improvements thereon.”
1
Plaintiff Lafarge originally filed this action in Fulton County Superior Court, but the
Defendants CCI and Federal Insurance removed the action to federal court on the basis of
diversity of citizenship.
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The district court, however, found there was a genuine issue of material fact
as to whether the full amount of $92,909.02 should be offset by two waivers of the
rights to lien executed by Plaintiff Lafarge. After mediation, the parties reached an
agreement as to the offset amount, and Plaintiff Lafarge dismissed its remaining
claim (for bad faith). The district court then entered an order incorporating its June
29, 2012 summary judgment order and entering final judgment for Plaintiff
Lafarge in the amount of $87,855.64 after the offset. This appeal challenging the
district court’s June 29, 2012 summary judgment order followed. 2
III. DISCUSSION
A. Materialman’s Liens
Under Georgia law, materialmen who furnish material to a subcontractor
have a “special lien” on the property “for which they furnish labor, services, or
materials.” O.C.G.A. § 44-14-361(a)(2). When a property owner obtains a release
bond for a materialman’s lien, “the bond stands in the place of the real property as
security for the lien claimant.” Few v. Capitol Materials, Inc., 274 Ga. 784, 786,
559 S.E.2d 429, 430 (2002). In these circumstances, the materialman “must still
comply with the statutory requirements for perfecting the lien,” except for the
2
The Defendants appeal the district court’s June 29, 2012 interlocutory order denying
summary judgment, which “merged into the final judgment and is open to review on appeal from
that judgment.” Aaro, Inc. v. Daewoo Int’l (America) Corp., 755 F.2d 1398, 1400 (11th Cir.
1985). We review a district court’s summary judgment ruling de novo, drawing all inferences
and construing the evidence in the light most favorable to the non-moving party. Craig v. Floyd
County, Ga., 643 F.3d 1306, 1309 (11th Cir. 2011).
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notice of suit requirement, and “the principal and the surety on the bond are
entitled to raise any defense that would have been available as a defense to the lien
foreclosure.” Id., 559 S.E.2d at 430-31.3
Additionally, the materialman “must first seek to recover monies owed from
the contractor, the party with whom it has a contract, before seeking to recover
from the property owner, with whom the supplier has no contractual relationship.”
Id. “It is in [this] antecedent suit against the contractor that the adjudication is
made as to items furnished and the amount due with respect to a particular
contract.” Tri-State Culvert Mfg., Inc. v. Crum, 139 Ga. App. 448, 449, 228
S.E.2d 403, 405-06 (1976) (quotation marks omitted). More importantly, the
judgment the materialman obtains against the contractor “is not conclusive against
the (property owner), but it does establish prima facie that the (materialman) has a
valid claim against the (contractor) for the amount of the judgment.” Id. at 450,
228 S.E.2d at 406. Thus, if there is proof of a judgment against the contractor,
“[t]he burden is upon the (owner) to introduce evidence sufficient to rebut the
correctness of the judgment.” Id. Moreover, “[t]his rule applies to litigated cases
against the (contractor) and . . . to judgments rendered against him by default.” Id.(quotation marks omitted).
B. Analysis of this Case
3
The parties do not dispute that Plaintiff Lafarge complied with the statutory lien
requirements.
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Here, Plaintiff Lafarge first obtained a state court judgment for $92,909.02
against the party with whom it had a contract—subcontractor, Clinecrete. Plaintiff
Lefarge then submitted that state court judgment to the district court. And, the
district court properly applied the rebuttable presumption in Tri-State Culvert to
conclude that Plaintiff Lafarge’s judgment was prima facie evidence that Plaintiff
Lafarge furnished materials in the amount of $67,189.51 and $25,719.51 (totaling
$92,909.02) that were “incorporated into improvements constructed on the
property.” 4 Further, the Defendants CCI and Federal Insurance did not present any
evidence to rebut the correctness of Plaintiff Lafarge’s state court judgment against
Clinecrete.
Contrary to the Defendants’ contention, Plaintiff Lafarge did not rely on the
affidavit of Linda Bobo, Lafarge’s Lien and Legal Manager, to show it supplied
over $92,000 in materials that were incorporated into the property. Further, as the
district court explained, any alleged infirmities in Bobo’s testimony about the
materials supplied or the amounts due are immaterial in light of the undisputed
4
In the district court, the Defendants agreed with Plaintiff Lafarge that Tri-State Culvert
is “analogous to the facts of this case,” and that under Tri-State Culvert, “the judgment creates
this prima facie case and then the burden is on us to rebut the presumption.” Accordingly, we do
not address the Defendants’ argument, raised for the first time on appeal, that Tri-State Culvert’s
rebuttable presumption does not apply. See Ramirez v. Sec’y, U.S. Dep’t of Transp., 686 F.3d
1239, 1249-50 (11th Cir. 2012) (“It is well-settled that we will generally refuse to consider
arguments raised for the first time on appeal.”).
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state court final judgment against Clinecrete. 5 Once Plaintiff Lafarge produced
that state court judgment, the burden shifted to the Defendants to produce some
evidence from which a jury could conclude that the judgment was incorrect, such
as, for example, evidence that Lafarge’s materials were not in fact delivered to the
construction site or were not actually incorporated into the property. Compare Tri-
State Culvert, 139 Ga. App. at 450, 228 S.E.2d at 450 (concluding that owner’s
cross-examination of materialman’s general manager established that the
underlying judgment against the subcontractor corporation was incorrect because
the account was opened in the name of two individuals rather than the
subcontractor corporation); see also Kelly v. Pierce Roofing Co., 220 Ga. App.
391, 393, 469 S.E.2d 469, 472 (1996) (concluding that, under Tri-State Culvert,
materialman’s default judgment operated as an admission of the truth of the
allegation that the materialman completed the work and therefore the materialman
was entitled to summary judgment because the property owner failed “to come
forward and point to specific evidence” to defeat summary judgment).
5
The Defendants argue that Bobo’s affidavit is insufficient as a matter of law because she
had no personal knowledge of the amounts Clinecrete owed Lafarge or whether the materials
associated with Clinecrete’s open account were delivered to or incorporated into the property.
The Defendants contend that Plaintiff Lafarge needed to produce testimony from workers who
loaded the materials, the driver who delivered them to the site, and Clinecrete’s agent who
received them. As discussed above, under the rule in Tri-State Culvert, once Plaintiff Lafarge
produced the state court judgment against Clinecrete, it was the Defendants’ burden to produce
this sort of evidence. Moreover, given Bobo’s tacit admission that she had no personal
knowledge of whether Lafarge’s materials actually were delivered to the construction site and
incorporated into the property, the Defendants cannot use her deposition testimony to rebut the
presumption that the state court judgment is correct.
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Because the Defendants did not present the requisite type of evidence, the
presumption of correctness remained unrebutted. Thus, as the district court
concluded, Plaintiff Lafarge’s state court judgment “conclusively establishe[d] the
value of materials that Plaintiff delivered to the Property and that the materials
were incorporated into the improvements thereon.”
The Defendants point to a joint check in the amount of $65,556.84 that
Defendant CCI issued payable jointly to subcontractor Clinecrete and Plaintiff
Lafarge. A CCI employee, David Sawicki, testified that after he sent the joint
check to Lafarge, one of Lafarge’s employees told him that she had learned that
“the check was turned back over to the subcontractors.” However, as the district
court noted, the check is virtually illegible, and the Defendants do not dispute that
Plaintiff Lafarge did not endorse or deposit the check. 6 Further, the Defendants
did not present any evidence that Plaintiff Lafarge received any of the joint check’s
proceeds. Under these circumstances here, the joint check and Sawicki’s
testimony do not rebut the correctness of the state court judgment against
Clinecrete or create a jury question as to the amount the Defendants owed to
Plaintiff Lefarge under the plain language of the bonds. Thus, this evidence did
6
Indeed, the Defendants asserted in a third-party complaint against the FDIC that the joint
check was deposited into Clinecrete’s bank account without Plaintiff Lafarge’s endorsement.
The Defendants later dismissed this third-party complaint.
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not create a genuine issue of material fact as to the amount Plaintiff Lafarge has
already been paid pursuant to its claims.
For all these reasons, we find no reversible error in the district court’s June
29, 2012 summary judgment order and affirm the district court’s final judgment in
favor of Plaintiff Lafarge in the amount of $87,855.64 and against the Defendants.
AFFIRMED.
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