Transportation Insurance v. El Chico Restaurants, Inc.

524 S.E.2d 486, 271 Ga. 774, 99 Fulton County D. Rep. 4298, 1999 Ga. LEXIS 1027

• Court: Supreme Court of Georgia
• Decided: December 2, 1999
• Docket: S99G0437
• Status: Published

Opinions

Hunstein, Justice.

We granted certiorari from the Court of Appeals’ opinion in El Chico Restaurants v. Transp. Ins. Co., 235 Ga. App. 427 (509 SE2d 681) (1998) to consider whether a foreign corporation’s action is not void, and thus subject to amendment, even if the corporation is not authorized to maintain an action in this State because it has not obtained a certificate of authority to transact business here pursuant to OCGA § 14-2-1502 (a). See El Chico Restaurants, supra at (2). Based on the language of OCGA § 14-2-1502 (a) and its legislative history, we conclude that a foreign corporation’s action is not void for failure to obtain a certificate of authority and thus the Court of Appeals correctly held that El Chico’s action could be amended.

OCGA § 14-2-1502 (a) provides that “[a] foreign corporation transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of .authority.” Transportation argues that the phrase “maintain a proceeding” in the statute includes the commencement of that action, so that the failure of a foreign corporation to obtain a certificate of authority prior to the commencement of the action would render it void ab initio. Contrary to Transportation’s argument, however, the primary definitions of “maintain” do not include “commencement” of the item to be maintained. Rather, “maintain” most commonly means the continuation of a pre-existing condition¹ and to “maintain an action” most commonly means the continuation of a lawsuit already begun.²

Although, as the dissent points out, there are some obscure definitions of “maintain” which include the commencement of the item to be maintained, our rejection of Transportation’s definition of the verb is not based solely on the atypical meaning it would ascribe to the statutory language. Instead, we look to the clear legislative history of OCGA § 14-2-1502 (a) to hold that maintaining a proceeding thereunder does not include the commencement of the proceeding to be maintained. That history reveals that in 1969 the Legislature rewrote the law in this area so as to provide that

No foreign corporation that under this Code is required to obtain a certificate of authority shall be permitted to maintain any action, suit or proceeding in any court of this State unless before commencement of the action it shall have obtained such a certificate.

(Emphasis supplied.) Ga. L. 1969, pp. 152,196. The emphasized language establishes that the Legislature in 1969 did not believe a prohibition against foreign corporations maintaining actions without certificates of authority included the commencement of the action, since the Legislature expressly included the requirement that the certificate be obtained “before commencement of the action” notwithstanding the earlier “maintain” language. Id.

The inclusion of the “commencement” language in the 1969 legislation is important in light of the subsequent enactment of the Georgia Business Corporation Code in 1988. Ga. L. 1988, p. 1070. That enactment, as set forth in the preamble, was intended to “revise and replace the laws relating to business corporations.” Id. As part of the revision and replacement, the Legislature chose to remove the 1969 language which had previously required foreign corporations to obtain a certificate of authority “before commencement of the action.” Id. at p. 1225; OCGA § 14-2-1502 (a). The rules of statutory interpretation demand that we attach significance to the Legislature’s action in removing the emphasized, limiting language. See Humthlett v. Reeves, 211 Ga. 210 (2) (85 SE2d 25) (1954) (a legislative body should always be presumed to mean something by the passage of an act). While the Legislature did not include the pre-1969 language expressly permitting a cure, as stressed by the dissent, the Legislature did delete the language expressly disallowing a cure when the certificate was not obtained prior to commencement of the action. We must presume that the Legislature’s failure to include the limiting language was a matter of considered choice. See Hollowell v. Jove, 247 Ga. 678, 683 (279 SE2d 430) (1981). Further, under the rules of statutory construction, the omitted language cannot be deemed a redundancy or meaningless surplusage. See Gilbert v. Richardson, 264 Ga. 744, 748 (3) (452 SE2d 476) (1994); State of Ga. v. C. S. B., 250 Ga. 261, 263 (297 SE2d 260) (1982).³

Our interpretation of OCGA § 14-2-1502 (a) is consistent with the statutory language and the legislative history. Further, this interpretation, which recognizes that an uncertified foreign corporation may initiate the action but not continue it without obtaining a certificate of authority, allows an aggrieved party the opportunity to preserve its cause of action but not to reduce it to judgment until the certification process is followed, thereby avoiding the statute of limitation problems arising from the construction proposed by Transportation and the dissent which would deprive aggrieved parties of access to the courts of this State for administrative reasons unrelated to the validity of the asserted causes of action.⁴

Therefore, we affirm the Court of Appeals’ holding that the suit filed by El Chico was not void at its inception and thus was subject to amendment.

Judgment affirmed.

All the Justices concur, except Fletcher, P. J., Sears and Hines, JJ., who dissent.

1 For example, the most recent edition of Black’s Law Dictionary defines “maintain” as “1. To continue (something). 2. To continue in possession of (property, etc.)...Id. (7th ed. 1999), p. 965. Standard dictionaries, such as The American Heritage Dictionary, define “maintain” as'“l. To keep up or carry on; continue .... 2. To keep in an existing state; preserve or retain ...” Id. (3rd ed. -1992), p. 1084. See also Webster’s Third New International Dictionary (Unabridged, 1967), p. 1362 (“maintain” defined as “1: to keep in a state of repair, efficiency, or validity: preserve from failure or decline ....”).

2 Ballentine’s Law Dictionary (3rd ed. 1969), p. 764, defines “maintain an action” as “to uphold, continue on foot, and keep from collapse a suit already begun. [Cit.]”

3 The fact that the revision notes to OCGA § 14-2-1502 reflect a failure to recognize the significance in the deletion of the limiting language in the 1969 version of the statute has no impact on our interpretation of the meaning of OCGA § 14-2-1502 (a). Because of the clear legislative history behind OCGA § 14-2-1502 (a), our interpretation cannot be controlled by the construction given to OCGA § 48-13-37, which reflects no comparable change in statutory language. See Ga. L. 1961, p. 480, § 6; Ga. L. 1978, pp. 309, 738, § 2. The latter statute, in fact, specifically provides that “[flailure to register precludes [the] right to sue.” (Emphasis supplied.) Id. Furthermore, nonresident contractors are expressly required to register “before beginning the performance of any contract” to avoid being denied the right to perform the contract, OCGA § 48-13-34, and OCGA § 48-13-37 merely provides that the failure to so register precludes the nonresident contractor from maintaining sin action only where such action is initiated “to recover payment for performance on [such] contract.” Accord Clover Cable v. Heywood, 260 Ga. 341 (3) (392 SE2d 855) (1990). The situation addressed in OCGA § 48-13-37 is thus distinguishable from OCGA § 14-2-1502.

4 We note that our interpretation is also consistent with the position taken by the majority of states which have addressed the issue. See 23 ALR5th 744, Application of Statute Denying Access to Courts or Invalidating Contracts Where Corporation Fails to Comply with Regulatory Statute as Affected by Compliance after Commencement of Action.