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Ronfra Dev. Corp. v. Pennington

Court of Appeals of Georgia
Feb 19, 1974
205 S.E.2d 448 (Ga. Ct. App. 1974)





Action on account. Fulton Superior Court. Before Judge Shaw.

Rose Stern, George S. Stern, Benjamin Landey, for appellant.

Hicks Scroggins, Frank W. Scroggins, Smith, Currie Hancock, Glower W. Jones, Philip L. Fortune, for appellees.

The admitted open account obligation of the defendant to the plaintiff was not subject to the set off defenses urged against the creditor, nor could damages be recouped against a third party based on a claim of malicious use of process by the latter.


Dan Austin Properties, Inc. and other owners of property engaged in erecting apartment complexes employed Ronfra Development Corp. as general contractor. Ronfra purchased close to $100,000 in materials from J J Building Supply, Inc. for use on the various premises. J J obtained many of these materials from Georgia Pacific Corp. and Carolina Mills Lumber Company. At the time when this litigation started J J had been adjudicated bankrupt and Pennington, the plaintiff here, had been appointed trustee. Because of stipulations that the rights of Georgia Pacific Corp. would be controlling on the other suppliers in similar circumstances, we confine our statements to this company. It traced its unpaid materials to the various projects and filed claims of lien against the owners of the properties involved, followed by foreclosure actions, the dismissal of which was affirmed in Georgia-Pacific Corp. v. Dan Austin Properties, Inc., 126 Ga. App. 191 ( 190 S.E.2d 131) and affirmed on certiorari in 229 Ga. 803 ( 194 S.E.2d 472). This court, stating that the sole question for decision was "whether the supplier of a supplier of materials to be used in the improvement of realty is entitled to a claim of lien therefor under Code Ann. § 67-2001," found no statutory authority for such a procedure.

In the present case Pennington, as trustee in bankruptcy for J J, has sued Ronfra for $43,151.68, the balance admittedly due it on the materials purchased. Ronfra, however, defended by stating that it was unwilling to pay Pennington directly because, should Georgia Pacific collect the amount of its liens out of the various owners, Ronfra would have to make good these losses, for which reason it prayed that this supplier be impleaded in the account suit and the rights of all parties determined simultaneously. It also contended that because of these facts it had furnished counsel and expense money in defending the owners against the lien foreclosures and that it is entitled to recoup these sums out of its payments to J J. Finally, it seeks to join Georgia Pacific as a party defendant and to recover damages for alleged malicious use of process against it because of the filing of liens which were adjudged invalid, based on the contention that by filing these liens and by informing the owners and lenders of this action Georgia Pacific damaged Ronfra's and the owner's credit and caused them additional expense. It appears that one Bruce Davis, president of Ronfra, also held a controlling interest, either directly or through stock holdings, in some or all of the properties involved, from which it follows that the interests of Ronfra and the property owners were closely allied, and Ronfra contends that this fact was known to Georgia Pacific and was attempted to be used by it as the basis for undue leverage in the collection of its debts, since in fact Ronfra was responsible for all expenses of litigation incurred by the owner as well as its own expenses.

The court first allowed Georgia Pacific to be impleaded at Ronfra's instance, but after hearing sustained its motion to dismiss, and also the plaintiff's motion for summary judgment for the full amount owing on the account, thus disallowing any set-off.

1. The contention that Ronfra is entitled to have sums spent for litigation, attorney fees and interest, in defending the owners against Georgia Pacific's claims of lien paid for by the materialman J J, or set off against what Ronfra owed J J on account, is without merit. There can be no quantum meruit recovery under Code § 3-107. In addition to other equally good reasons, it should be pointed out that J J was not a required defendant in the foreclosure suits, being a bankrupt (Code Ann. § 67-2002 (3)) and that as such bankrupt it had listed Georgia Pacific as a creditor in its bankruptcy schedule. There is no reason to believe that J J wanted to be defended or that successful prosecution of the liens would have accomplished anything to its ultimate advantage. "The relation of attorney and client is created by contract; and litigants who have not thus assumed liability for attorney's fees can not generally be held liable therefore, although they have been benefited, directly or indirectly, by the attorney's services." Christian Women's Benevolent Assn. v. Atlanta Trust Co., 181 Ga. 576 ( 183 S.E. 551).

2. The third party action fails to state a claim against Georgia Pacific based on malicious use of process. The lien suit, questioning whether a supplier of materials to a prime materialman who supplies them to general contractor who uses them in construction of real estate may take advantage of Georgia lien foreclosure procedure, had not previously been decided in this state. After the decision in this court holding it could not do so ( 126 Ga. App. 191, supra), application for writ of certiorari was made to and granted by the Supreme Court on behalf of this litigant, which held ( 229 Ga. 803, supra) that upon "further careful consideration of the issues presented by the appeal, we have concluded that the opinion of the Court of Appeals correctly states the law." The Supreme Court is bound by Code Ann. § 24-4537 (j) which states: "A review on certiorari [to the Court of Appeals] is not a matter of right, but of sound judicial discretion. An application for the writ will be granted only in cases involving gravity and importance." Had the Supreme Court considered Georgia Pacific's claim of lien so obviously lacking in merit as to show an absence of probable cause on its face, it could not under its own rules have granted the writ, or at most, the improvident grant would ultimately have resulted in dismissal. Wender Roberts, Inc. v. Jones, 213 Ga. 375 ( 99 S.E.2d 142). The right to pursue lien foreclosure being an open question at the time which necessitated careful consideration at both appellate levels, it is obvious that lack of probable cause, one of the three essentials for maintaining such a suit, is absent. See Crawford v. Theo, 112 Ga. App. 83, 85 ( 143 S.E.2d 750).

Judgment affirmed. Hall, P. J., and Stolz, J., concur.

Summaries of

Ronfra Dev. Corp. v. Pennington

Court of Appeals of Georgia
Feb 19, 1974
205 S.E.2d 448 (Ga. Ct. App. 1974)
Case details for

Ronfra Dev. Corp. v. Pennington

Case Details


Court:Court of Appeals of Georgia

Date published: Feb 19, 1974


205 S.E.2d 448 (Ga. Ct. App. 1974)
205 S.E.2d 448