Greene County School District v. Circle Y Construction, Inc.
291 Ga. 111
Ga.2012Background
- In April 2008 Greene County School District contracted with Circle Y Construction for construction management services, with no termination date.
- The District terminated the contract in March 2009, and Circle Y sued for breach and other claims.
- The District moved to dismiss, arguing the contract was void as an illegal multi-year contract lacking OCGA § 20-2-506(b) provisions.
- The trial court denied the motion; the Court of Appeals affirmed, and this Court granted certiorari.
- OCGA § 20-2-506(b) authorizes multi-year contracts for specified acquisitions with required provisions; OCGA § 36-60-13(a) imposes similar requirements on counties/municipalities.
- These statutes are tied to the constitutional restriction on incurring new debt without voter approval; a multi-year contract can create a new debt.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the contract was void for lacking 20-2-506(b) provisions | Greene County | Circle Y | No, not void on the pleading facts. |
| Whether the contract falls within a proprietary function under 20-2-506(h) avoiding 20-2-506(b) requirements | Greene County | Circle Y | The Court of Appeals' alternate ruling on 20-2-506(h) was examined but not necessary for decision. |
| Whether voter approval concerns apply given ELOST context and referendum | Circle Y’s reliance on ELOST implies legitimacy | District contends multi-year debt requires voter approval | Not reached as the contract was sustained by other reasoning; remand guidance followed. |
Key Cases Cited
- Barkley v. City of Rome, 259 Ga. 355, 381 S.E.2d 34 (1989) (1989) (new debt concept under constitutional limits)
- City of Decatur v. DeKalb County, 289 Ga. 612, 614, 713 S.E.2d 846 (2011) (2011) (new debt and voter approval principles)
- Wasilkoff v. Douglas County, 227 Ga. App. 232, 488 S.E.2d 722 (1997) (1997) (application of 36-60-13(a) to multi-year contracts)
- Bauerband v. Jackson County Bd. of Commrs., 278 Ga. 222, 598 S.E.2d 444 (2004) (2004) (construction of 36-60-13 related to multi-year contracts)
- Kerr v. OB/GYN Assoc. of Savannah, 314 Ga. App. 40, 723 S.E.2d 302 (2012) (2012) (standard for appellate review of complaint allegations)