Sjn Properties, LLC. v. Fulton County Board of Assessors
296 Ga. 793
| Ga. | 2015Background
- In 2009 John Sherman (later SJN Properties) sued the Fulton County Board of Assessors (FCBOA) challenging the board’s method for valuing leasehold estates created by sale-leaseback bond transactions with the Development Authority of Fulton County (DAFC).
- The transactions: DAFC issues revenue bonds, takes fee simple title, leases property back to the developer, and the agreement sets a formula valuing the developer’s leasehold at 50% of fee simple initially, increased 5% per year to 100% by year 11 (the “50% ramp-up”).
- Sherman I (Ga. 2010) reversed dismissal, holding that the plaintiffs had sufficiently alleged that the formula might be arbitrary and that factual development was required.
- On remand SJN (successor plaintiff) amended to seek declaratory, injunctive, and mandamus relief (also claimed some DAFC-owned properties were wrongly treated as tax-exempt). Parties filed cross-motions for summary judgment.
- The trial court struck two late-filed affidavits from SJN; the Supreme Court found that striking them was error because they were served one day before the hearing in compliance with OCGA § 9-11-56(c), but reviewed the merits de novo including those affidavits.
- The Supreme Court ultimately affirmed summary judgment for defendants: SJN failed to show the FCBOA’s assessments were not at fair market value, its declaratory and injunctive claims fail (injunctions barred by sovereign immunity), and its DAFC tax-exemption challenge lacked admissible evidentiary support.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FCBOA’s 50% ramp-up formula produces valuations that are arbitrary or unreasonable | The formula systematically underestimates leasehold value given transaction structure; therefore assessments are below fair market value | The formula is an analytically sound, simplified appraisal method consistent with appraisal practice and prior decisions; no evidence any specific assessment is below fair market value | Court: No; on record SJN produced no evidence any particular assessment was below fair market value, so mandamus fails |
| Whether injunctive relief may be granted to stop use of the formula | Seek injunction to prohibit FCBOA from using the 50% ramp-up and to compel reappraisals | Sovereign immunity bars injunctions against state actors unless Legislature waives it | Court: Injunctive claims barred by sovereign immunity under Sustainable Coast |
| Whether mandamus is available to compel FCBOA to reappraise and assess back taxes | Mandamus appropriate to enforce FCBOA’s statutory duty to assess at fair market value | FCBOA argues no clear legal right shown because no proof of incorrect assessments; mandamus requires clear right | Court: Mandamus not warranted—plaintiff failed to show clear legal right or that FCBOA failed to perform its duty |
| Whether certain DAFC properties are improperly tax-exempt | SJN contends specific DAFC properties fall into statutory categories ineligible for exemption | DAFC/FCBOA contest; defendants point to lack of admissible evidence proving the properties meet excluded categories | Court: SJN’s only evidence was its counsel’s affidavit (improper and insufficient); summary judgment for defendants affirmed |
Key Cases Cited
- Sherman v. Fulton County Bd. of Assessors, 288 Ga. 88 (2010) (reversed dismissal; held valuation method required factual development to determine arbitrariness)
- Georgia Dept. of Natural Resources v. Ctr. for a Sustainable Coast, 294 Ga. 593 (2014) (sovereign immunity bars injunctions against the State absent legislative waiver)
- Southern LNG, Inc. v. MacGinnitie, 290 Ga. 204 (2011) (mandamus remains available against public officials despite sovereign immunity)
- DeKalb County Bd. of Tax Assessors v. W.C. Harris & Co., 248 Ga. 277 (1981) (approved use of formula for valuing leasehold estates; not arbitrary per se)
- Coweta County Bd. of Tax Assessors v. EGO Products, Inc., 241 Ga. App. 85 (1999) (noting long-standing practice of taxing such leasehold interests at 50% during lease term)
- Jones v. Kirk, 290 Ga. 220 (2011) (standard: de novo review on summary judgment)
- Colvard v. Ridley, 218 Ga. 490 (1962) (assessors must use best information obtainable; no single required appraisal method)
- Fourth St. Baptist Church of Columbus v. Bd. of Registrars, 253 Ga. 368 (1984) (declaratory relief requires actual controversy or uncertainty affecting party’s future conduct)