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Leeper v. Safebuilt Georgia, Inc.

Court of Appeals of Georgia, Fourth Division

November 1, 2019

LEEPER et al.
v.
SAFEBUILT GEORGIA, INC.

          DOYLE, P. J., COOMER and MARKLE, JJ.

          DOYLE, PRESIDING JUDGE.

         Jeffrey and Ashley Leeper filed suit in Fulton County Superior Court against Safebuilt Georgia, Inc., and other defendants, asserting various claims arising out of the construction of a home. The Leepers subsequently voluntarily dismissed the Fulton County action and refiled the case in Gwinnett County Superior Court. After filing an untimely answer, Safebuilt filed a motion to extend the time to answer and/or to open default, and the trial court granted the motion on both grounds and certified its order for immediate review. The Leepers challenge the trial court's order in this interlocutory appeal. For the reasons that follow, we reverse.

         The record shows that in December 2017, the Leepers filed suit in Fulton County Superior Court against Safebuilt (as indemnitor for the City of Milton) and several other defendants asserting claims including breach of contract and fiduciary duty, negligence, fraud, breach of warranties, and punitive damages arising out of the construction of a home in Milton. The Leepers alleged that Safebuilt (1) provided inspection services throughout the construction process pursuant to an agreement with the City of Milton, and (2) failed to identify various defects and code violations during its inspections. Later that same month, the Leepers voluntarily dismissed the Fulton County action without prejudice.

         On December 26, 2017, the Leepers refiled the case in Gwinnett County Superior Court; they served Safebuilt's agent with a copy of the summons and complaint on December 28, 2017. Nevertheless, in February 2018, the Leepers and Safebuilt, through counsel, filed a stipulation in the Fulton County action extending the deadline for Safebuilt to file an answer. On February 13, 2018, Safebuilt filed an answer in Fulton County, and it responded to the Leepers's discovery requests in that case the same month.

         On May 21, 2018, the Leepers filed a motion for default judgment against Safebuilt in the Gwinnett County case. The following day, Safebuilt filed an answer. On June 8, 2018, Safebuilt filed in the Gwinnett County action an "emergency motion" to extend the time to answer or open default. Safebuilt asserted that (a) it never received notice of the dismissal of the Fulton County action, (b) it first learned of the Gwinnett County action in May 2018, [1] and (c) due to a misunderstanding and mistake on the part of both Safebuilt and the Leepers, all of Safebuilt's prior filings had been submitted in the Fulton County action. Safebuilt further contended that if the court determined that it was in default, opening default was warranted because, in relevant part, it is entitled to sovereign immunity.

         The trial court granted Safebuilt's motion to open default on the ground of excusable neglect and, alternatively, also granted the motion for an extension of time to file its answer for the same reason. The court observed in the order that the Leepers lacked "clean hands" given their superior knowledge of the dismissal of the Fulton County action. The trial court subsequently certified its order for immediate review, and this appeal followed.

         1. Motion to open default.

The Leepers argue that the trial court erred by granting Safebuilt's emergency motion to open default. We agree.

         Unless otherwise provided by statute, a defendant in a civil case must file an answer within 30 days of service of the summons and complaint upon the defendant.[2] If an answer is not filed within the time required by the Civil Practice Act, "the case shall automatically become in default unless the time for filing the answer has been extended as provided by law."[3]

Under OCGA § 9-11-55 (b), a prejudgment default may be opened on one of three grounds if four conditions are met. The three grounds are: (1) providential cause, (2) excusable neglect, and (3) proper case; the four conditions are: (1) showing made under oath, (2) offer to plead instanter, (3) announcement of ready to proceed with trial, and (4) setting up a meritorious defense. Generally, the opening of a default rests within the sound discretion of the trial court. However, compliance with the four conditions is a condition precedent; in its absence, the trial judge has no discretion to open default.[4]
Thus, the failure to set up a meritorious defense
is, in and of itself, fatal to the motion to open default, such that no other condition need be considered. In order to establish a meritorious defense, a defendant must demonstrate that the outcome of the case "may be different" if the motion is granted. But, in making that showing, a defendant cannot rely on mere conclusions; he must set forth facts that establish the essential elements of a meritorious defense.[5]

         In this case, the trial court erred by concluding that Safebuilt pleaded under oath a meritorious defense.[6]

         (a) Sovereign immunity.

The primary defense Safebuilt asserted is sovereign immunity based on its argument that the Leepers's claims are premised on work that Safebuilt did on behalf of the City of Milton. "The doctrine of sovereign immunity, also known as governmental immunity, protects all levels of governments from legal action unless they have waived their immunity from suit."[7]

         Here, Safebuilt was acting as an independent contractor working for the City of Milton when it undertook the inspections at issue in this case; the parties' inspection contract explicitly provides that Safebuilt "is engaged in an independent business and agrees to perform the services as an independent contractor and not as the agent or employee of the City."

         The Georgia Tort Claims Act ("GTCA") indicates that sovereign immunity applies only to the State and to "State officers and employees" engaged in "the performance or nonperformance of their official duties or functions."[8] And OCGA § 50-21-22 (7) specifically excludes "an independent contractor doing business with the [S]tate" from the definition of "[S]tate officer or employee" for purposes of the GTCA. And this Court has held that "corporations and independent contractors doing business with the State are not included within the GTCA's definition of 'employee.'"[9]

         Safebuilt has not identified any binding precedent indicating that a company acting as an independent contractor for a government entity may be entitled to sovereign immunity in Georgia. The sole case on which Safebuilt relies to support its claim in this respect - Yearsley v. W. A. Ross Constr. Co.[10] - is inapposite. Yearsley concerned a federal contractor conducting work on the Missouri River for the purpose of improving navigation on the river "under the direction of the Secretary of War and the supervision of the Chief of Engineers of the United States."[11] The plaintiff claimed that the contractor's work had caused part of the plaintiff's land to wash away, in violation of the plaintiff's Fifth Amendment rights.[12] The U.S. Supreme Court held that there could be no liability on the part of the contractor for executing the will of Congress in the conduct of a project that was within Congress's constitutional power.[13] Notably, the Court held that to the extent that the contractor's action constituted a taking of property requiring just compensation, the plaintiff's remedy was to seek such compensation from the federal government by filing suit in the Court of Claims.[14] On its face, the decision in Yearsley results primarily from the intersection of the U.S. Constitution's Takings Clause and the availability of a remedy for a federal taking. Nothing in Yearsley suggests that the Court in that case was ruling that all contractors doing any work for any level of government are entitled to sovereign immunity for causes of action arising out of such work, even in the absence of a federal Takings Clause issue. And we decline to so extend the doctrine of sovereign immunity, particularly in light of clear statutory authority to the contrary.

         (b) Additional defenses.

Safebuilt purported to raise two additional meritorious defenses in support of its motion to open the default in the affidavit of its attorney: (1) that it "provided inspections properly"; and (2) that "[m]any of the asserted negligent construction claims are inapplicable to Safebuilt due to the nature of Safebuilt's business and services and lack of privity with Plaintiffs." However, ...


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