Allright Parking of Georgia, Inc. v. Joint City-County Bd. of Tax Assessors for City of Atlanta--Fulton County
| Decision Date | 27 September 1979 |
| Docket Number | 34998,CITY-COUNTY,Nos. 34961,s. 34961 |
| Citation | 244 Ga. 378,260 S.E.2d 315 |
| Parties | ALLRIGHT PARKING OF GEORGIA, INC., et al. v. JOINTBOARD OF TAX ASSESSORS FOR the CITY OF ATLANTA COUNTY OF FULTON et al. JOINTBOARD OF TAX ASSESSORS FOR the CITY OF ATLANTA COUNTY OF FULTON et al. v. ALLRIGHT PARKING OF GEORGIA, INC., et al. |
| Court | Georgia Supreme Court |
Alston, Miller & Gaines, Conley Ingram, Benjamin T. White, Kutak, Rock & Huie, Jay J. Levin, Charles N. Pursley, Jr., Atlanta, for appellants (Case No. 34961).
Webb, Young, Daniel & Murphy, Thomas L. Murphy, Robert O. McCloud, Jr., Harold T. Daniel, Jr., Ferrin Y. Mathews, James A. Barnett, Charles F. Barnwell, Arthur K. Bolton, Atty. Gen., Gerald W. Bowling, Asst. Atty. Gen., Atlanta, for appellees (Case No. 34961).
Thomas L. Murphy, Robert O. McCloud, Jr., Ferrin Y. Mathews, James A. Barnett, Atlanta, for appellants (Case No. 34998).
Conley Ingram, Benjamin T. White, Jay J. Levin, Charles N. Pursley, Jr., Arthur K. Bolton, Atty. Gen., Gerald W. Bowling, James C. Pratt, Asst. Attys. Gen., Atlanta, for appellees (Case No. 34998).
Allright Parking of Georgia, Inc. (Allright) brought this suit on July 7, 1977, to contest a determination by the Joint City of Atlanta-Fulton County Board of Tax Assessors (Board of Tax Assessors) that Allright's interest in certain real estate under an agreement of May 28, 1976, with the Metropolitan Atlanta Rapid Transit Authority (MARTA) is subject to ad valorem property taxation.
Allright leased the subject property from the State of Georgia in 1972, for a term of 73 years. See Ga.L. 1972, pp. 58-132, Ga.L. 1974, pp. 1247-1407. The property consists of approximately 10 acres in downtown Atlanta, which are bounded generally on the southeast by the Forsyth Street Viaduct, on the northeast by the Western & Atlantic Railroad, on the northwest by Foundry Street, and on the west by the Central of Georgia Railroad. Under the lease, Allright was required to pay ad valorem taxes on "its interest or estate" in the property. Allright paid the City of Atlanta and Fulton County ad valorem taxes on this property for the years 1973-1976. In 1976, Allright's leasehold interest was valued at $2,541,900 and assessed at $1,016,760. On this basis, the 1976 city and county taxes paid by Allright on this property totalled $60,409.53.
On April 5, 1976, MARTA acquired fee simple title to this property from the State of Georgia, pursuant to an agreement entered into between them in 1975. On April 8, 1976, the City of Atlanta, acting on behalf of MARTA, filed a condemnation action against Allright's interest in the property. The City of Atlanta, MARTA, and Allright negotiated a settlement in compromise of the condemnation proceeding. In the settlement agreement, MARTA agreed to pay Allright $1,900,000 in consideration for executing an amendment to the lease, which would supersede the lease. The amendment to the lease was entered into between MARTA and Allright on May 28, 1976.
Initially, Allright's interest in the property as of January 1, 1977, was valued by the Board of Tax Assessors at $2,055,330 and assessed at $822,130. On this basis, Allright's city and county ad valorem tax bill would have been $49,231.26. However, Allright demanded arbitration as to the valuation and assessment on the property. And, through arbitration proceedings, the valuation and assessment subsequently were reduced to $1,350,000 and $540,000, respectively. The city and county ad valorem tax assessment on this basis is $32,362.78.
Allright also filed a protest before the Board of Tax Assessors, taking exception to the board's determination that Allright's interest in the property was subject to ad valorem taxation. Before the board, Allright's position was that its interest in the property is a mere usufruct, which is not subject to ad valorem taxation (Whitehead v. Kennedy, 206 Ga. 760, 58 S.E.2d 832 (1950)), rather than an estate for years, which is taxable. Delta Airlines v. Coleman, 219 Ga. 12, 131 S.E.2d 768 (1963). Allright received notice from the Board of Tax Assessors in mid June 1977 that its protest had been rejected. As stated earlier in the opinion, this suit was filed on July 7, 1977.
In the complaint, Allright alleged that its interest in the property is a nontaxable usufruct. The Board of Tax Assessors answered, denying the allegations of the complaint. Subsequently, MARTA was allowed to intervene as a party-plaintiff.
Allright's city ad valorem tax bill became delinquent after August 15, 1977, and Allright paid it on that date. Allright paid its county ad valorem tax bill on September 29, 1977, and these taxes subsequently became delinquent after October 15, 1977.
The parties eventually agreed to try the case upon a stipulation of facts at a bench trial on November 3, 1978. On October 18, 1978, the defendants filed a motion to dismiss for lack of jurisdiction under Code Ann. § 92-6413 (Ga.L. 1976, p. 1154), which provides: "Notwithstanding any other provision of law to the contrary, before the superior court shall have jurisdiction to entertain any civil action, appeal, or affidavit of illegality filed by any aggrieved taxpayer respecting liability for ad valorem property taxes, taxability of property for ad valorem property taxes, valuation of property for ad valorem taxes, or uniformity of assessments for ad valorem property taxes, such taxpayer shall pay the amount of ad valorem property taxes assessed against the property at issue for the last year for which taxes were finally determined to be due on such property." See North by Northwest Civic Assn. v. Cates, 241 Ga. 39, 243 S.E.2d 32 (1978). In the motion to dismiss, the defendants argued that, "1977 ad valorem taxes based on the 1976 ad valorem assessment were not paid prior to the filing of the above action on July 7, 1977, and that pursuant to Georgia Code Ann. § 92-6413 (Ga.L. 1976, p. 1154 et seq.), this court does not have jurisdiction of plaintiffs' action." The plaintiffs responded by arguing that Code Ann. § 92-6413 is either inapplicable to this case or unconstitutional.
Following a hearing, the trial court ruled that Allright's interest in the subject property is a nontaxable usufruct, rather than a taxable estate for years. However, the trial court also ruled that under Code Ann. § 92-6413 it lacked jurisdiction to entertain this action, because Allright had not paid its 1977 ad valorem taxes on the property prior to filing suit. The court also ruled that the plaintiffs' attacks on the constitutionality of Code Ann. § 92-6413 were not raised in a timely fashion. Accordingly, the complaint was dismissed by the trial court.
In Case No. 34961, the plaintiffs appeal the trial court's ruling that their failure to comply with Code Ann. § 92-6413 deprived it of jurisdiction in this case. In Case No. 34998, the defendants cross appeal the trial court's ruling that Allright's interest in the property is a nontaxable usufruct. Held :
1. At the outset, it is necessary to undertake a rather exhaustive review of the material provisions of the 1976 amendment to the lease:
Allright's interest in the property is reduced from 73 years to 35 years, with provision for earlier termination. (Section 2). Allright, as tenant, agrees with MARTA, as landlord, that it, Allright, will not have the full use of the premises during the construction, operation, and maintenance of MARTA's rapid transit system, as well as other "public projects." Throughout the term of the lease, the landlord shall have "sole discretion" to determine those portions of the premises, " if any," which the tenant shall be entitled to use and occupy during any period of time. In order to preclude the tenant's use and occupancy of a portion of the premises, the landlord is required to give the tenant at least 30 days' prior notice. (Section 2a, b, c). The premises shall be used by the tenant only for purposes related to tenant's "parking business or any other legitimate business purpose." (Section 3e).
Section 4a provides,
The tenant agrees to pay the landlord a rental equal to 50% Of the tenant's monthly gross receipts from any and all uses of the premises. (Section 5). The landlord is not required to make any repairs or improvements to the premises, to maintain the premises, or to incur any expenses in connection therewith. (Section 5b). The tenant is required to pay all utilities supplied to the premises in connection with the tenant's use of the premises. (Section 6). The tenant agrees to pay "all personal property taxes and all governmental charges of any nature whatsoever, general or special, ordinary or extraordinary, which may be levied or assessed upon, or which may become a lien upon the Premises or Tenant's rights to occupy the Premises . . ." (Section 7).
Section 8 provides: ...
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Usufructs vs. Estates for Years
...Ga. Real Estate Law & Procedure § 4:12 (7th ed. 2020 update). [15] Allright Parking of Ga., Inc. v. Joint City-Cty. Bd. of Tax Assessors, 244 Ga. 378, 385, 260 S.E.2d 315, 320 (1979) (citing Delta Air Lines, Inc. v. Coleman, 219 Ga. 12, 131 S.E.2d 768 (1963)); see also Evans Theatre Corp., ......