Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

City of College Park v. Paradies- Atlanta, LLC

Court of Appeals of Georgia, Second Division

June 1, 2018

THE CITY OF COLLEGE PARK et al.
v.
PARADIES- ATLANTA, LLC et al.

          ELLINGTON, P. J., ANDREWS and BROWN, JJ.

          BROWN, JUDGE.

         In this ad valorem real property tax refund suit, Clayton County, the Clayton County Board of Commissioners and its individual members, and the Clayton County Tax Commissioner (collectively, "Clayton County") and the City of College Park (with Clayton County, the "defendants") appeal the superior court's order granting summary judgment to Paradies-Atlanta, LLC ("Paradies") and Paradies-Atlanta II, LLC ("Paradies II, " and, with Paradies, the "plaintiffs"). The defendants primarily challenge the superior court's ruling that the plaintiffs' interests in the premises at issue in this action constitute non-taxable usufructs. For the reasons that follow, we affirm.

         Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Pinnacle Properties V v. Mainline Supply of Atlanta, 319 Ga.App. 94, 94 (735 S.E.2d 166) (2012); see also OCGA § 9-11-56 (c). "We review a trial court's grant of summary judgment de novo, construing the evidence, and all reasonable conclusions and inferences drawn from it, in favor of the nonmovant." (Citation and punctuation omitted.) Thomas v. Summers, 329 Ga.App. 250, 250 (764 S.E.2d 578) (2014); see also Pinnacle Properties V, 319 Ga.App. at 94.

         So viewed, the evidence shows that the City of Atlanta, which owns Hartsfield-Jackson Atlanta International Airport (the "Airport"), entered into two seven-year agreements, one with each plaintiff (the "Agreements"), for the plaintiffs to operate retail establishments at various locations within the Airport (the "Parcels"). Each of the four Parcels at issue in this appeal is located in Clayton County, and two of the Parcels also are within the city limits of College Park. The term of each Agreement included the 2015 tax year.

         In 2015, the defendants assessed ad valorem real property taxes against the plaintiffs' interests in the Parcels.[1] Clayton County assessed real property taxes in the amounts of $80, 757.90 against Paradies and $159, 149.46 against Paradies II, and College Park assessed $29, 110.86 in real property taxes against Paradies. After the plaintiffs paid these taxes, they instituted this action to recover these amounts under OCGA § 48-5-380, which governs refunds of taxes by counties and municipalities.

         Following discovery, the trial court granted the plaintiffs' motion for summary judgment, concluding that the rights in the Parcels that the City of Atlanta has granted to the plaintiffs constitute non-taxable usufructs. The court rejected Clayton County's alternative contention that the plaintiffs' interests in the Parcels are taxable as franchises. This appeal followed.

         1. In an enumeration of error not joined by the City of College Park, Clayton County contends that the trial court erred when it determined that the plaintiffs do not have taxable "franchise interest[s]" in the Parcels. In this action, however, the plaintiffs seek refunds of real property taxes they paid to Clayton County and the City of College Park; they do not seek refunds of any purported franchise taxes. See OCGA § 48-5-3 ("All real property including, but not limited to, leaseholds, interests less than fee, and all personal property shall be liable to taxation and shall be taxed, except as otherwise provided by law.") (emphasis supplied). Compare OCGA § 48-5-421 ("All franchises of value not provided for in this article shall be returned for taxation and taxed pursuant to law as is other property."). Whether the plaintiffs' interests in the Parcels potentially may subject them to franchise taxes has no bearing on the relief they seek in this action, and the record contains no indication that the defendants have collected or assessed - or even sought to collect or assess - franchise taxes from the plaintiffs. Because the plaintiffs are not seeking a refund of franchise taxes for which they filed a return, the trial court properly concluded that Clayton County could not deny the refund of real property taxes on this ground.[2]

         2. The defendants contend that the trial court erred when it concluded that the plaintiffs' interests in the Parcels are usufructs, rather than estates for years. We disagree.

[A] usufruct 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 either for a fixed time or at the will of the grantor. In such a case, no estate passes out of the landlord" and the usufruct may not be conveyed except by the landlord's consent, nor is it subject to levy and sale.

Richmond County Bd. of Tax Assessors v. Richmond Bonded Warehouse Corp., 173 Ga.App. 278, 279 (325 S.E.2d 891) (1985) (quoting OCGA § 44-7-1 (a)); accord Diversified Golf, LLC v. Hart County Bd. of Tax Assessors, 267 Ga.App. 8, 10 (598 S.E.2d 791) (2004) ("[A] usufruct is not considered an interest in land and therefore it is not subject to ad valorem taxation."). "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." (Citation, punctuation, and footnote omitted; emphasis in original.) Jekyll Dev. Assoc. v. Glynn County Bd. of Tax Assessors, 240 Ga.App. 273, 274 (1) (523 S.E.2d 370) (1999). By way of contrast, an estate for years, which does not involve the landlord-tenant relationship, "carries with it the right to use the property in as absolute a manner as may be done with a greater estate and is subject to ad valorem taxation." (Citations and punctuation omitted.) Richmond County Bd. of Tax Assessors, 173 Ga.App. at 279; see also OCGA §§ 44-6-101; 44-6-103; Diversified Golf, LLC, 267 Ga.App. at 14 ("[A] usufruct exists where the lessee takes only a circumscribed and limited use of the premises and facilities, where the restrictions imposed are so pervasive as to be fundamentally inconsistent with the concept of an estate for years, or where the owner retains dominion and control over the property or the business operated thereon.") (citations and punctuation omitted).

Where the term of a lease is for a period greater than five years, a rebuttable presumption arises that the parties intended to create an estate for years rather than a usufruct. To resolve whether the presumption has been overcome in this case, we must examine the terms of the lease agreements and determine what interests the parties intended to convey.

(Citations and punctuation omitted.) Richmond County Bd. of Tax Assessors, 173 Ga.App. at 279; see also Diversified Golf, LLC, 267 Ga.App. at 10 ("[W]hether an estate in the land passes to the tenant, or he obtains merely the usufruct depends upon the intention of the parties; and this is true without regard to the length of the term.") (citation and punctuation omitted). In a case such as this, involving a tax dispute with government authorities, the terms of each instrument of conveyance "must be scrutinized objectively to determine whether the legal effect of the agreement between [the parties] is to give [the grantee] a usufruct or an estate for years." Allright Parking of Ga. v. Joint City-County Bd. of Tax Assessors, 244 Ga. 378, 386 (3) (260 S.E.2d 315) (1979); accord Macon-Bibb County Bd. of Tax Assessors v. Atlantic Southeast Airlines, 262 Ga. 119, 120 (414 S.E.2d 635) (1992).

         Factors to be considered in determining whether the parties intended to create a usufruct include: (i) the terms used in the instrument of conveyance to describe the grantee's rights; (ii) any provisions in the instrument addressing the parties' understanding as to liability for ad valorem taxes, see Diversified Golf, LLC, 267 Ga.App. at 11-12; (iii) the grantor's "retention of dominion or control over the leased property, " Richmond County Bd. of Tax Assessors, 173 Ga.App. at 279; (iv) which party has retained the duties to keep and maintain the premises and appurtenances; and (v) whether the grantee may assign the lease or allow any part of the leased premises to be used by others without the grantor's consent, see id. at 280; accord Macon-Bibb County Bd. of Tax Assessors, 262 Ga. at 121; Allright Parking of Ga., 244 Ga. at 386-387 (3). "Although an estate for years may be encumbered or somewhat limited without being reduced to a usufruct, if the lease imposes ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.