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The Stuttering Foundation, Inc. v. Glynn County

Supreme Court of Georgia

June 19, 2017


          BENHAM, JUSTICE.

         These appeals arise out of the same trial court case and involve common issues. The Stuttering Foundation, Inc. ("Foundation") is the tenant of office space in a commercial development in Glynn County that is owned by Lucas Properties Holdings III, LLC ("Lucas"). In September 2015, Lucas filed with the appropriate Glynn County agency an application for rezoning of the property for the purpose of obtaining authority to construct an addition to the rear of one of the existing buildings in the development, the building in which the Foundation leases its office. It also sought approval of a site plan for the proposed construction. Both were approved on March 17, 2016.

         For various reasons, the Foundation opposed the new development, and on April 15, 2016, the Foundation filed a petition for judicial review of the rezoning application and Site Plan, or in the alternative, for mandamus reversing the County's approval.[1] Both the County and Lucas filed a motion to dismiss the complaint on its merits, and on July 7, 2016, the trial court entered an order granting the County's motion to dismiss, concluding that the Foundation lacked standing to raise its objections to the rezoning. This Court granted the Foundation's application for discretionary appeal, the case was docketed as Case No. S17A0405, and it was later briefed and orally argued by all parties, including Lucas.[2] In the interim, on December 12, 2016, the trial court entered an order granting Lucas's motion to dismiss. This Court granted the Foundation's application for discretionary appeal of this second dismissal order and the case was docketed as Case No. S17A1163. Again, all parties filed briefs in the case, including the County.

         Case No. S17A0405

          1. First, we address the County's assertion that this appeal should be dismissed because the Foundation failed to follow the requisite interlocutory appeal procedure. The County argues that the trial court order granting the County's motion to dismiss was not a final order since it did not adjudicate all the claims against the multiple parties in the case, nor did it contain an express determination of finality with respect to the County as required by OCGA § 9-11-54 (b) in order to make the order one that is final and immediately appealable. But the assertion that the trial court order is not immediately appealable as a final order pursuant to OCGA § 5-6-34 (a) (1) is irrelevant. The order also dismissed the Foundation's claim for mandamus relief, and therefore was, at the time the notice of appeal was filed, immediately and directly appealable to this Court pursuant to OCGA § 5-6-34 (a) (7). All other judgments and rulings raised on appeal are thus properly before this Court. See OCGA § 5-6-34 (d).

         2. The Foundation states that it appeared at the public hearing on Lucas's application for rezoning and presented evidence and argument opposing the application. When the County approved the application, the Foundation then filed its petition in the superior court. In the petition, the Foundation alleged the application for rezoning should have been denied due to various deficiencies in Lucas's application and because various details of the rezoning request did not comply with the applicable zoning ordinance and other regulations. The Foundation further asserted that the property is subject to easements and restrictive covenants created and recorded by the previous owner of the property, and that various details of the plan would violate the terms of these recorded easements and covenants and would thereby require the prior written consent of the owners of other lots within the tract covered by the easements and restrictions.[3] The Foundation alleged these violations would diminish the value of its leasehold interest in the property. The trial court granted the County's motion to dismiss, finding that the Foundation, as a tenant of the property's owner, lacks standing to challenge a rezoning decision made at the request of the fee simple owner. It also found the Foundation was not entitled to mandamus relief.

         (a) The parties agree that the proper standard to apply when determining a party's standing to challenge a rezoning decision is the "substantial interest-aggrieved citizen" test.[4] By this test, "there [are] two steps to standing: First, a person claiming to be aggrieved must have a substantial interest in the zoning decision, and second, . . . this interest [must] be in danger of suffering some special damage or injury not common to all property owners similarly situated." DeKalb County v. Wapensky, 253 Ga. 47, 48 (1) (315 S.E.2d 873) (1984). See also Brand v. Wilson, 252 Ga. 416, 417 (1) (314 S.E.2d 192) (1984) ("[T]he gauge for standing . . . is simply this: that a citizen must have a substantial interest, which must suffer substantial damage by reason of the contested zoning change.") The threshold issue posed in this case is whether the Foundation's status as a short-term tenant[5] confers upon it a "substantial interest" in the zoning decision sufficient to create standing to challenge it.[6]

          The parties cite no Georgia cases, and we have found none, that address whether a short-term tenant of real property has standing to challenge to a zoning decision made at the request of the tenant's landlord.[7]

         (i) The Foundation's lease expressly states: "This Lease shall create the relationship of Landlord and Tenant between the parties hereto; no estate shall pass out of Landlord and this Lease shall create a usufruct only." Whether a lease passes an estate in land or merely a usufruct depends upon the intent of the parties, and in a case like the one now before us involving private parties, the terms of the lease control. See Macon-Bibb County Bd. of Tax Assessors v. Atlantic Southeast Airlines, Inc., 262 Ga. 119, 119-120 (414 S.E.2d 635) (1992). Even the Foundation appears to agree that the lease between Lucas and the Foundation creates a usufruct, not an estate for years. Under Georgia law, a significant distinction exists between the interest conveyed by a usufruct and the interest conveyed by an estate for years.

Distinctions between an estate for years and usufruct are set forth in various Georgia statutes. The grant by one person to another of an estate for years is usually termed a lease, but an estate for years concerning realty does not involve the relationship of landlord and tenant. The relationship of landlord and tenant is created when the owner of real estate grants to another person ... the right simply to possess and enjoy the use of such real estate.... In such a case, no estate passes out of the landlord and the tenant has only a usufruct which may not be conveyed except by the landlord's consent and which is not subject to levy and sale. A usufruct has been referred to as merely a license in real property, which is defined as authority to do a particular act or series of acts on land of another without possessing any estate or interest therein. On the other hand, an estate for years carries with it the right to use the property in as absolute a manner as may be done with a greater estate, provided that the property or the person who is entitled to the remainder or reversion interest is not injured by such use.

(Citations and punctuation omitted.) Jekyll Development Assocs., L.P. v. Glynn County Bd. of Tax Assessors, 240 Ga.App. 273, 274 (1) (523 S.E.2d 370) (1999) (holding that an estate for years constitutes a taxable interest in land).

         A lease that conveys a usufruct creates a right to possess and enjoy the use of real property, but it does not convey an estate or interest in real property. See OCGA § 44-7-1 (a). Consequently, the courts of this State have drawn distinctions between the rights and duties of a holder of a usufruct and those of a title holder. For example, a usufruct is not subject to ad valorem taxation pursuant to OCGA § 48-5-3. See Macon-Bibb County, supra, 262 Ga. at 119. As another example, because a tenant who holds a usufruct is not one who owns real property, or any interest in real property, that interest is not sufficient to satisfy the statutory requirements of OCGA § 44-9-40 (b) to authorize the tenant to seek an easement by necessity over adjacent property. See Read v. Georgia Power Co., 283 Ga.App. 451, 453 (641 S.E.2d 680) (2007). By comparison, in Hollberg v. Spalding County, [8] the Court of Appeals held that an individual who was not yet a title holder to an estate to land at the time he filed a challenge to a zoning decision, but was the devisee of a life estate in that property, had standing to challenge a zoning decision relating to adjacent property. The Court of Appeals reasoned that the devisee's inchoate title to the real property was sufficient to give him a substantial interest in the zoning decision that was sufficient to satisfy the first prong of the test for standing to appeal the decision. Id. That reasoning, however, does not apply to persons holding a usufruct. As noted, a usufruct does not pass an estate in real property.

         Those cases in which the Georgia appellate courts have found a zoning decision challenger to have a substantial interest in the zoning decision, which satisfies the first prong of the standing test, have all involved holders of vested or inchoate title to real property. See, e.g., DeKalb County v. Wapensky, supra, 253 Ga. at 49 (1); Brand v. Wilson, supra, 252 Ga. at 417 (1); Hollberg v. Spalding County, supra, 281 Ga.App. at 773 (2) (a). A number of cases have found a challenger who has no estate or interest in real property has no standing because he can show no substantial interest in the zoning decision. See, e.g., Miller v. Fulton County, 258 Ga. 882, 883 (1) (375 S.E.2d 864) (1989) (a husband who did not have an ownership interest in the property owned by his wife, which was allegedly injured by the zoning decision, lacked standing to join his wife in challenging the zoning decision, and this Court rejected the husband's argument that his marital status bestowed upon him an equitable interest sufficient to establish standing); Bersch v. Hauck, 122 Ga.App. 527 (177 S.E.2d 844) (1970). See also Lindsey Creek, etc., Assn. v. Consolidated Govt. of Columbus, 249 Ga. 488 (292 S.E.2d 61) (1982) (a civic association comprised of members who own affected property lacks standing to challenge a zoning decision unless joined in the suit by a plaintiff who owns affected property). Because the usufruct granted in the Foundation's lease does not convey an interest in real property, the Foundation has no cognizable interest in this zoning decision that it could assert adversely to the actual property owner's interest. Under these circumstances, it cannot be said that the tenant has a substantial interest in this zoning decision that grants it standing to challenge the decision.

         As the trial court noted, the terms of a lease may impose a duty on the landlord to seek or oppose a zoning decision in order to effectuate the intent of parties, [9] but such a duty is contractual and may be enforced by an action against the landlord. Conversely, if the landlord obtains or resists a zoning decision such that the tenant's rights under the lease are adversely impacted or damaged, the tenant may have a remedy against the landlord for breach of contract.

         The Foundation cites case law from other jurisdictions to support its assertion that a tenant has standing to challenge a zoning decision. But the only cases cited involving a tenant are inapposite.[10] And, in any event, reliance upon cases from other jurisdictions is unpersuasive because Georgia's landlord and tenant law is unusual in that it is based not on the common law but upon the statutory provision that the grant of a right simply to possess and enjoy the use of real estate passes no estate to the tenant but only a usufruct. See OCGA § 44-7-1 (a); Thompson v. Crownover, 259 Ga. 126, 127 (1) (381 S.E.2d 283) (1989).

         (ii) The Foundation's efforts to analogize its right to contest the County's decision to grant the property owner's request for rezoning of its property to the rights of a tenant in a condemnation proceeding are unavailing. A condemnation proceeding involves the constitutional right to fair compensation for a governmental entity's taking of private property for a public use. See Ga. Const. of 1983, Art I, Sec. III, Par. 1 (a) ("[P]rivate property shall not be taken . . . for public purposes without just and adequate compensation being first paid."). In that context, the value of a tenant's contract right under a lease to possess and use the condemned property may constitute an additional aspect of the taking over and above the property rights taken from the fee simple owner. See, e.g., Franco's Pizza, etc. v. Dept. of Transportation, 178 Ga.App. 331 (1) (343 S.E.2d 123) (1986) (both a leasehold and a usufruct involve a property right that "cannot be taken for public use without first paying just and adequate compensation"); Ellis v. Dept. of Transportation, 175 Ga.App. 123 (333 S.E.2d 6) (1985). Eminent domain cases apply a broad definition of "property rights" that extends beyond an interest in real property to encompass, for example, contract rights that are impacted by a governmental taking. See, e.g., DeKalb County v. United Family Life Ins. Co., 235 Ga. 417, 419 (219 S.E.2d 707) (1975) (a mortgagee's contractual right to a prepayment penalty is a property right to be compensated in a condemnation proceeding); Dept. of Transportation v. Arnold, 243 Ga.App. 15, 16 (1) (530 S.E.2d 767) (2000) (the good will of a business operated on ...

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