Development Authority of Columbus v. Four Js Family, Lllp
340 Ga. App. 474
| Ga. Ct. App. | 2017Background
- DACG (Development Authority of Columbus, Georgia) agreed to sell 1.75 acres of downtown property to Vision Hospitality for $50,000, conditioned on Vision building a 125-room hotel and parking garage.
- The Property adjoins Four JS’s Marriott and was acquired by DACG from the City; it had a prior 2001 valuation of about $3 million and had been targeted for hotel development to support the convention center.
- Four JS filed for injunctive relief, claiming DACG’s sale at below fair market value violated OCGA § 36-62-6 and would cause Four JS irreparable harm (including loss of a Hampton Inn franchise opportunity).
- The trial court denied DACG’s motion to dismiss and granted a preliminary injunction barring the sale, reasoning the Development Authorities Law prohibits below-market disposals except as set out in OCGA § 36-62-6(a)(7.1).
- DACG appealed, arguing the trial court misread the statute: the statutory restrictions in paragraphs (7) and (7.1) apply only when the board has determined the property no longer can be used advantageously as a “project.”
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Act forbids a development authority from selling project property for less than fair market value except under OCGA § 36-62-6(a)(7.1). | Four JS: Act requires board to declare property unusable as a project before any below-market or fair-market-only rule; sale below FMV violates § 36-62-6. | DACG: Paragraphs (7) and (7.1) only constrain dispositions when board determines property can no longer be used as a project; sale for a project is authorized under other powers. | Reversed trial court: § 36-62-6( a)(7) and (7.1) apply when board determines property cannot be used as a project; they do not bar below-market sales of property being used for a project. |
| Whether Four JS stated a viable claim to survive a motion to dismiss. | Four JS: Pleading alleges statutory violation, entitling it to relief. | DACG: Complaint cannot state a claim because the alleged sale is for a project and the cited statutory restrictions don’t apply. | Court: Complaint fails as a matter of law; dismissal was required. |
| Whether preliminary injunction was properly granted based on likely statutory violation. | Four JS: Likely to succeed on merits that sale violated the Act; irreparable harm shown. | DACG: Under correct statutory reading Four JS unlikely to succeed; injunction rests on erroneous legal premise. | Court: Preliminary injunction unsupportable because underlying legal theory was wrong; injunction reversed. |
Key Cases Cited
- Austin v. Clark, 294 Ga. 773 (2014) (motion to dismiss standard; plaintiff entitled to relief only if claim could succeed under any provable facts)
- Babalola v. HSBC Bank, USA, N.A., 324 Ga. App. 750 (2013) (appellate standard reviewing dismissal de novo; pleadings construed favorably to plaintiff)
- Slakman v. Continental Cas. Co., 277 Ga. 189 (2003) (statutory construction principles: give words plain meaning and avoid surplusage)
- Meinhardt v. Christianson, 289 Ga. App. 238 (2008) (an injunction based on an erroneous legal theory cannot be affirmed)
- Sherman v. Development Authority of Fulton County, 317 Ga. App. 345 (2012) (projects under the Act must be leased, sold, or managed by private entities)