Pinnacle Properties V, LLC v. Mainline Supply of Atlanta, LLC
319 Ga. App. 94
| Ga. Ct. App. | 2012Background
- Pinnacle appeals a summary-judgment order that granted Mainline a materialman’s lien, establishing a special lien against Pinnacle’s interest in a building on land leased from Kennesaw Development Authority (KDA).
- The building was constructed under four agreements dated December 1, 2007, including a Rental Agreement and an Option Agreement (plus related use/management agreements).
- The agreements contemplated Pinnacle selling the land to KDA, leasing it back for Pinnacle to construct, and an option for KDA to buy the improvements or Pinnacle to buy land and improvements; Pinnacle’s ownership of the improvements was to terminate when the Rental Agreement terminated (latest November 30, 2012).
- Mainline supplied piping, valves, and fittings through the general contractor, which failed to pay; Mainline filed liens against KDA and Pinnacle, with only the Pinnacle lien at issue here.
- The trial court previously granted partial summary judgment to KDA, concluding ownership of land and building were severed, with Pinnacle holding a usufruct in the land and ownership in the building; subsequently, Mainline moved for summary judgment against Pinnacle and obtained a judgment creating a special lien on Pinnacle’s interests in the building, options, and deed to secure debt.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Mainline may impose a special lien on Pinnacle’s building interest. | Pinnacle asserts Pinnacle held only a usufruct in the building, not an encumbrance subject to a lien. | Mainline contends Pinnacle has a property interest in the building that can be liened. | Yes; Pinnacle had an estate in the building capable of being liened (not a mere usufruct). |
| What is Pinnacle’s actual interest in the building (fee simple, estate for years, or usufruct)? | Pinnacle argues it possessed only a usufruct in the land and no fee simple in the building. | Mainline asserts Pinnacle had a property interest in the building sufficient for a lien. | Pinnacle did not have a fee simple; the agreements show an estate for years in the improvements. |
| Whether the lien extends to Pinnacle’s contractual option rights. | Pinnacle contends options are not subject to a lien. | Mainline argues lien can attach to Pinnacle’s encumbrable rights in the project, including options. | Liens may attach to encumbrances in Pinnacle’s interest, including option rights, depending on the estate. |
| Whether the lien may extend to Pinnacle’s rights under a deed to secure debt. | Pinnacle argues the deed-securement rights are not lienable. | Mainline asserts the lien covers Pinnacle’s security-interest rights as part of the dispute. | The lien extends to Pinnacle’s deed-to-secure-debt rights as part of the asserted interests. |
| Was Pinnacle barred from raising certain arguments on appeal (new arguments/issues)? | Yes; issues raised for the first time on appeal are not reviewable. |
Key Cases Cited
- Sawyer Coal & Ice Co. v. Kinnett-Odom Co., 192 Ga. 166 ((1941)) (severing ownership in land from building; liens attach to property interests at time work performed)
- Consolidated Warehouse Co. v. Smith, 189 S.E. 724 ((1937)) (fixtures passing with title when land/building ownership is vested differently)
- Jekyll Development Assocs. v. Glynn County Bd. of Tax Assessors, 240 Ga. App. 273 ((1999)) (whether an estate for years may be encumbered; intent governs)
- Diversified Golf, LLC v. Hart County Bd. of Tax Assessors, 267 Ga. App. 8 ((2004)) (property interests and taxation distinctions)
- Meco of Atlanta v. Super Valu Stores, 215 Ga. App. 146 ((1994)) (landlord's equitable interests and liens)
- Read v. Ga. Power Co., 283 Ga. App. 451 ((2007)) (admissions in pleadings as conclusive)
- James G. Wilson Mfg. Co. v. Chamberlin & Co., 140 Ga. 593 ((1913)) (estate for years may be encumbered; not necessarily usufruct)
- Powell v. Harris, 39 Ga. App. 295 ((1929)) (lease term length not determinative of estate type)
- Read v. Ga. Power Co., 283 Ga. App. 451 ((2007)) (reiteration of pleadings-based presumptions)