Murray v. Chulak
Murray v. Chulak
Opinion of the Court
Plaintiffs each own a portion of a tract of developed property referred to as the “Delk Road property.” They brought this complaint in equity to set aside a judgment obtained by the defendant, Murray, based on architectural services rendered in connection with the Delk Road property. A part of that judgment gave Murray a special lien on the property, and he has requested plaintiffs pay the amount of the judgment to prevent him from levying on the property. The plaintiffs also sought declaratory judgment establishing the superiority of their interests in the property over Murray’s lien. The trial court granted plaintiffs’ motions for summary judgment, finding in their favor on both issues,
In the summer of 1972 one Partiss orally engaged Murray to provide architectural services for various projects. By agreement Murray was required to work on any project requested by Partiss, but Murray was free to work on projects for third parties. All fees received from third parties were to be divided 70% for Partiss and 30% for Murray. Partiss was to provide office space and equipment for Murray, rent free, and to pay all expenses and any drafters or other personnel required by Murray, but Murray interviewed and selected his assistants. Murray was to receive $30,000 per year in equal monthly payments; this compensation was labelled a “draw.” Partiss agreed to convey to Murray a 5% interest in any projects on which Murray worked for Partiss. This 5 % interest was to have been either a 5% partnership interest or a 5% stock interest, depending on the form in which the particular project was ultimately held. Murray has steadfastly maintained that the foregoing constituted his agreement with Partiss and that such was their agreement from September, 1972, until February, 1974.
One project developed by Partiss involved the construction of an apartment complex with clubhouse, restaurant, motel, and office complex on the Delk Road property. At the time Murray began architectural work on this project in September, 1972, Partiss did not own the property or have an executory contract for its purchase. Shell Oil Co. owned the property. Murray contends that Partiss submitted his plans to First National Bank of Atlanta as part of his loan application for funds to finance acquisition of the property and construction of the project. On December 22,1972, Partiss acquired the property and, as a part of the same transaction, granted a security deed to Shell and granted First National two security deeds, each covering a separate portion of the property. These deeds were recorded on December 26, 1972. Pursuant to a loan participation agreement with First National, UMET, a real estate investment trust and a plaintiff here, furnished 90% of money advanced by First National.
Murray continued providing architectural services for the project until February, 1974, when he terminated his relationship with Partiss for several reasons including their inability to agree on the terms of their oral contract. The next month Murray filed an
In June, 1975, First National foreclosed on its security deeds from Partiss. ROH Properties, Inc., purchased the property and granted First National a security deed. A second security deed was later granted by ROH to First National for additional funds advanced. In 1976 UMET and First National terminated their relationship and swapped ownership interests in their jointly-held assets. In this exchange UMET received the security deeds from ROH covering the Delk Road property. Several months later UMET foreclosed on these deeds and purchased the property for itself.
In February, 1978, Murray obtained an order from the bankruptcy court lifting the automatic stay and obtained a default judgment in his action against Partiss for $625,000 and a special lien on the Delk Road property in that amount. UMET sold one portion of the property in 1978 to CFC 78, also a plaintiff, and another portion to Surfside 6 Floating Homes, Inc., the third plaintiff, in February, 1979. Murray notified plaintiffs of his lien and of his intention to levy on it if it were not paid. This action to set aside Murray’s judgment and lien was then commenced.
1. A superior court of appropriate jurisdiction may set aside a judgment “for fraud, accident, or mistake, or the acts of the adverse party unmixed with the negligence or fault of the complainant.” OCGA § 9-11-60 (e) (Code Ann. § 81A-160). A person adversely affected by a judgment may bring a suit in equity to set it aside. Canal Ins. Co. v. Cambron, 240 Ga. 708 (1) (242 SE2d 32) (1978). As the owners of the property on which the judgment under attack imposes a lien, plaintiffs are obviously adversely affected by that judgment. Plaintiffs allege three bases for setting aside Murray’s judgment.
Plaintiffs first assert that Murray’s attempt to claim superiority after having dismissed Shell and First National in the state court action constitutes fraud. Plaintiffs claim that by dismissing as to Shell and First National when venue was challenged, Murray impliedly represented that he was abandoning his claim of superiority and that to revive such claim now constitutes fraud. We disagree. We do not accept the proposition that it is fraudulent to assert a claim against a person voluntarily dismissed as a defendant in an earlier suit. To rule otherwise would be to give voluntary
Plaintiffs next argue the state court judgment should be set aside because the amount of damages is excessive. Because resolution of this issue might not be dispositive of the case, we do not decide it.
2. Plaintiffs next argue that Murray, as a partner with Partiss in the development of the Delk Road property, was a part-owner and not entitled to a lien on the property. They correctly contend that the owner of property cannot create a lien against his own property and that this rule applies to partnership or jointly owned property. Clay v. Banks, 71 Ga. 363 (2) (1883); Stephens v. Clark, 154 Ga. App. 306 (2) (268 SE2d 361) (1980). Here Murray had contracted for a 5% ownership interest in the property and was receiving a monthly draw. Pursuant to this oral agreement, Partiss paid Murray for over a year. Partiss provided Murray with office space, equipment, and supplies and paid the salaries of Murray’s architectural assistants. In addition Murray was permitted to contract with third parties for architectural services and to use the facilities provided by Partiss in fulfilling these contracts. Murray and Partiss agreed to split these outside fees 30 % for Murray and 70% for Partiss.
3. Murray contends that the trial court erred in denying his motion for summary judgment declaring his lien to be superior. Although the foregoing holding reaches the contrary result, because Murray proceeds on a different theory, we will examine it.
Murray seeks to establish an architect’s lien under OCGA § 44-14-360 et seq. (Code Ann. §§ 67-1701,67-2001 et seq.), particularly OCGA § 44-14-361 (a) (3) (Code Ann. § 67-2001).
December 22 is also the date on which First National received security deeds to the property. Our next inquiry is which interest, First National’s or Murray’s, has priority. A purchase money security
Murray contends his lien is superior because, he contends, First National had actual notice of his lien prior to closing the loan, Murray relies upon Picklesimer v. Smith, supra; Wager v. Carrollton Bank, 156 Ga. 783 (120 SE 116) (1923); Oglethorpe Savings &c. Co. v. Morgan, 149 Ga. 787 (102 SE 528) (1919).
That is, the materialman’s lien takes priority over the title acquired by a subsequently made security deed granted by the owner of the property if the grantee of the security deed has actual notice of the claim of lien.
We need not decide in this case whether the “actual notice” cases cited above are applicable to a purchase money lender who takes with actual notice of an architect’s claim of lien against the purchaser; i.e., whether the “actual notice” cases create an exception to the rule set forth in Federal Land Bank v. Bank of Lenox, supra.
We find that Murray has no interest in the Delk Road property and thus the trial court did not err in denying Murray’s motion for summary judgment. Although we have found that the trial court erred in vacating Murray’s judgment against Partiss (Division 1), we find that the trial court was correct in finding plaintiffs’ claims to be superior to Murray’s.
Judgment affirmed in part and reversed in part.
One proposed written agreement tendered to Murray by Partiss in October, 1972, contains the foregoing terms, but referred to Murray as an employee and was rejected by Murray for this reason among others.
Murray contends that because UMET’s partner, First National, had notice of his claim of lien by virtue of First National’s having been named a party to the state court suit, plaintiffs cannot now set the judgment obtained therein aside due to the “negligence or fault” of their predecessor in title and partner. See OCGA § 9-11-60 (e) (Code Ann. § 81A-160), supra. Thus, Murray urges that plaintiffs are'bound by a judgment to which they were not a party by reason of constructive notice of the pendency of that action. If plaintiffs were to be so bound, then clearly First National would be so bound, but a party voluntarily dismissed from a suit prior to judgment is not bound by the later judgment on the basis that such party had notice of the suit.
We find ample part performance to remove this case from the application of the statute of frauds, OCGA § 13-5-31 (Code Ann. § 20-402).
In the court below, the parties treated the judgment itself as being valueless and focused their attention on the lien. This undoubtedly accounts for the technical error pointed out above.
We assume without deciding that an architect’s lien can be claimed in a suit against the property owner arising from breach of a contract with the owner giving the architect an interest in the property.
Old Stone Mtg. &c. Trust v. New Ga. Plumbing, 140 Ga. App. 686 (231 SE2d 785) (1976), affirmed 239 Ga. 345 (236 SE2d 592) (1977), also relied upon, is inapposite as there was no subordination agreement here. The loan in issue in Gellis v. B. L. J. Constr. Co., 148 Ga. App. 527 (251 SE2d 800) (1978), was solely a construction loan.
070rehearing
On motion for rehearing, Murray urges that there was no oral contract between himself and Partiss, that there were negotiations but no meeting of the minds. Murray’s testimony of record is to the contrary. Regarding the construction to be given the testimony of a party on motion for summary judgment, see Chambers v. Citizens &c. Nat. Bank, 242 Ga. 498, 502 (249 SE2d 214) (1978).
Murray also urges that Tanner v. Bell, 61 Ga. 584 (1878), is applicable here. Tanner involved a mortgage, not security deeds. See Bennett Lumber Co. v. Martin, 132 Ga. 491, 493, 495 (64 SE 484) (1909); Williams Bros. Lumber Co. v. Massey, 179 Ga. 508 (3) (176 SE 378) (1934); OCGA § 44-14-362 (6) (Code Ann. § 67-2002).
Motion for rehearing denied.
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