Sherman v. Development Authority
317 Ga. App. 345
| Ga. Ct. App. | 2012Background
- Sherman appeals a Fulton County Superior Court judgment validating and confirming DAFC’s revenue bonds for a Lowe’s warehouse project, which the court vacated and remanded.
- The State initiated the bond validation in July 2011 under the Revenue Bond Law, naming DAFC and Lowe’s; bonds would finance acquisition/renovation of Lowe’s project in Fulton County.
- The transaction created a bond transaction leasehold estate: Lowe’s would transfer fee simple title to DAFC and then lease back the Project for ten years, with a nominal option to reacquire at term end.
- A Memorandum of Agreement established the ad valorem tax valuation method, including a ramp-up schedule measuring Lowe’s leasehold value against the fee simple value; Wise testified the true value lies in the reversionary interest.
- Sherman, an intervenor, objected to the valuation method and other aspects; after a hearing, the trial court issued a Validation Order validating the bonds and security.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Validation Order is void for lack of personal jurisdiction over Lowe’s | Sherman relied on faulty acknowledgment to attack jurisdiction. | Lowe’s waived jurisdiction objections by appearing on the merits. | Court ruled no void judgment; jurisdiction waived; argument rejected. |
| Whether the Memorandum’s validity was properly adjudicated under the Act and related statutes | Memorandum falls outside proper scope of validation under the Act. | Memorandum is integral to the lease and properly before the court. | Memorandum properly before court; valid/enforceable as part of lease. |
| Whether the Board was an indispensable party under OCGA § 9-11-19(a) | Board’s absence could impair its interests. | Board had no intervention interest and relief could be granted without it. | Board not indispensable; no intervention required. |
| Whether the court failed to provide adequate findings of fact and conclusions of law on Sherman’s objections | Findings needed to show Sherman I/Harris analysis applied. | Valuation method deemed compliant with Sherman I and Harris. | Findings of fact/conclusions of law were inadequate; remand to cure. |
| Whether the ramp-up valuation methodology and related tax/value issues were adequately reviewed | Ramp-up may not reflect fair market value per Sherman I/Harris. | Method complies with governing precedents and methodology. | Findings insufficient to review ramp-up adequacy; remand for proper factual articulation. |
Key Cases Cited
- Sherman v. Fulton County Bd. of Assessors, 288 Ga. 88 (2010) (Sherman I addresses ramp-up valuation and due process concerns)
- DeKalb County Bd. of Tax Assessors v. W. C. Harris & Co., 248 Ga. 277 (1981) (factoring fair market value; income approach relevant to leasehold value)
- Sherman v. Dev. Auth. of Fulton County, 314 Ga. App. 237 (2012) (Sherman II; intervenor rights in bond validations; ramp-up issues remanded)
- Pruitt v. First Nat. Bank of Habersham County, 142 Ga. App. 100 (1977) (OCGA 9-11-52(a) findings required in certain contexts)
- C&H Couriers v. American Mut. Ins. Co., 166 Ga. App. 853 (1983) (findings of fact and law aid appellate review)
- Sherman II, Sherman v. Dev. Auth. of Fulton County, 314 Ga. App. 237 (2012) (remand for requisite findings on objections)