Taxation. Fulton Superior Court. Before Judge Baxter.
Judgment reversed and case remanded with direction.
Hillis, Robison & Coffelt, Lindsey W. Hillis, Eric A. Coffelt, for appellant.
Shalanda M. J. Miller, for appellee.
BRANCH, Judge. Barnes, P. J., and Boggs, J., concur.
This interlocutory appeal arises out of a dispute between CPF Investments, LLLP (" CPF" ) and the Fulton County Board of Assessors (" the Board" ) over the Board's valuation of certain real property owned by CPF. CPF purchased the property in 2011 from the Federal Home Loan Mortgage Corporation (" Freddie Mac" ), and CPF contends that OCGA § 48-5-2 (3) requires the Board to value the property at its 2011 sale price for the 2012 tax year. CPF moved for summary judgment on this issue in the court below and the Board opposed that motion. The Board argued that OCGA § 48-5-2 (3) does not apply to sales involving government agencies because such entities are obligated to act in the best interests of their constituents, rather than in the best interests of the entities themselves. Thus, sales involving government agencies cannot meet the statutory
definition of an arm's length, bona fide transaction, which requires that both parties to the transaction be acting in their own best interests. The Board further asserted that Freddie Mac constitutes a government agency.
The trial court agreed with the Board and denied CPF's motion for summary judgment. The court then certified its order for immediate review, and we granted CPF's application for an interlocutory appeal. For reasons explained below, we find that the trial court erred as a matter of law when it found that a tax authority may presume that any sale of property that involves a government agency is not an arm's length, bona fide transaction. Additionally, the record shows that the Board failed to come forward with any evidence supporting [330 Ga.App. 745] its assertion that the 2011 sale of the property by Freddie Mac was not an arm's length, bona fide transaction. Thus, regardless of whether Freddie Mac is a government agency, the trial court erred in denying CPF's summary judgment motion.
The facts in this case are undisputed and show that the property at issue is located in a residential subdivision and that a five-bedroom house is situated on the land. On March 2, 2010, Chase Home Finance, LLC (" Chase" ), purchased the property for $271,735. That same day, Chase sold the property to Freddie Mac for the price at which Chase had purchased it. In June 2010, Freddie Mac offered the property for sale with an asking price of $306,900. The property remained on the market for approximately seven months, until Glenn French, the general partner of CPF, purchased it from Freddie Mac for $207,000 in February 2011. On June 16, 2011, French executed a quitclaim deed transferring the property to CPF.
The Board appraised the property at $370,400 for the 2012 tax year. CPF appealed that valuation to the Board of Equalization (" BOE" ) asking that the appraisal be lowered to the 2011 purchase price. The BOE subsequently adjusted the appraisal to $340,000. The " Appraiser Notes" in the BOE file state that CPF " was asking for sales price of $207,000[,] which does not reflect the market in 2011. The sale was a Fannie Mae [sic] sale, which the county [does] not recognize. The BOE agreed with the county on a value of $340,000."
CPF appealed the BOE decision to the Fulton County Superior Court, seeking to have the appraised value of the property reduced to the 2011 sales price and asserting a claim for attorney fees. After the case had been pending for six months, CPF moved for summary judgment on the issue of valuation, asserting that under OCGA § 48-5-2 (3) the valuation for the 2012 tax year could be no higher than the 2011 sale price of $207,000. In support of its motion, CPF submitted the affidavit of French, who stated that he was not and never had been " related to or affiliated with Freddie Mac," and that the 2011 sale was an arm's length transaction, entered into in good faith and without fraud or deceit. The Board opposed the motion, arguing that sales involving government agencies were presumed not to meet the definition of a bona fide sale under OCGA § 48-5-2 (3) and that Freddie Mac was a government agency. To support these assertions, the Board submitted the affidavit of Douglas Kirkpatrick, the [330 Ga.App. 746] deputy chief appraiser of the residential division of the Fulton County Board of Tax Assessors. Kirkpatrick averred that " [b]ecause government agencies are not willing sellers acting out of self-interest, but acting in the interest of the public, the Tax Assessors' residential staff is trained that sales involving government agencies do not meet the definition of a bona fide sale" ; that " [b]ased on its charter, purpose[,] and mission, [Freddie Mac] is acting in the interest of the United ...