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City of Atlanta v. Hotels.com, L.P.

Court of Appeals of Georgia

July 9, 2015

CITY OF ATLANTA
v.
HOTELS.COM, L.P. et al

Cert. applied for.

Conversion, etc. Fulton Superior Court. Before Judge Dempsey.

Pope, McGlamry, Kilpatrick, Morrison & Norwood, C. Neal Pope, William U. Norwood, Wade H. Tomlinson, for appellant.

Jones Day, E. Kendrick Smith, Lucas W. Andrews; Bondurant, Mixson & Elmore, Frank M. Lowrey IV; Rogers & Hardin, Brett A. Rogers, Richard H. Sinkfield, for appellees.

MCFADDEN, Judge. Ellington, P. J., and Dillard, J., concur.

OPINION

Page 277

McFadden, Judge.

This is the latest chapter in litigation between the City of Atlanta, Georgia (the City) and several online travel companies (OTCs) regarding occupancy taxes due on hotel rooms in the City that are booked by customers through the OTCs pursuant to contracts between the OTCs and hotels. In earlier proceedings, our Supreme Court affirmed the trial court's summary judgment rulings on most of the claims brought by the City against the OTCs. City of Atlanta v. Hotels.com, 289 Ga. 323 (710 S.E.2d 766) (2011). This appeal challenges the trial court's grant of summary judgment to the OTCs on the two remaining claims in the case: conversion and breach of trust. We affirm the grant of summary judgment because the undisputed

Page 278

evidence shows that the City seeks to recover property not subject to [332 Ga.App. 889] a conversion claim and because earlier proceedings in the case preclude the breach of trust claim. The City also appeals from the trial court's denial of its motions seeking additional discovery. We affirm that ruling as well because the City has shown no abuse of discretion.

1. Facts and procedural posture.

Our Supreme Court set forth the facts of this case in City of Atlanta v. Hotels.com, supra, 289 Ga. 323. The OTCs " book hotel rooms and make other travel arrangements for customers who access their services over the internet." Id. at 323. Under their business model, known as the " merchant model,"

the consumer pays the OTC a retail " room rate" and a line item for " taxes and fees" in order to reserve and later occupy one of the City's hotel rooms. The consumer pays nothing to the hotel for occupancy or taxes and only provides a credit card at check-in. ... [T]he OTCs calculate the hotel occupancy tax amount [required by the City pursuant to OCGA ยง 48-13-50 et seq.] based on the wholesale rate the OTC negotiates with hotels for the right to broker rooms and not on the retail room rate the OTC charges the customer for the right to occupy a room. The OTC retains whatever it has collected from the consumer over the amount of the remittance to the hotel. If the hotel fails to submit an invoice or charge to the OTC in the time period ...

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