Fowler v. City of Marietta

• Decision Date: 16 July 1998
• Docket Number: No. A98A0480.,A98A0480.
• Citation: 233 Ga. App. 622,504 S.E.2d 726
• Parties: FOWLER et al. v. CITY OF MARIETTA.
• Court: Georgia Court of Appeals

504 S.E.2d 726

233 Ga. App. 622

FOWLER et al. v. CITY OF MARIETTA.

No. A98A0480.

Court of Appeals of Georgia.

July 16, 1998.

Reconsideration Denied July 29, 1998.

Moore, Ingram, Johnson & Steele, John H. Moore, J. Kevin Moore, Marietta, for appellants.

Haynie & Litchfield, Douglas R. Haynie, Marietta, for appellee.

BLACKBURN, Judge.

On June 24, 1994, the City of Marietta petitioned to condemn certain parcels of land within its historic district for a road-widening project. The condemnation affected residential property owned by appellants Eileen Davis Fowler n/k/a Mrs. Albert Weir (Weir) and Julian and Nancy Edwards. The special master recommended that the condemnation cases be dismissed because the city had exercised its condemnation powers in bad faith, arbitrarily, capriciously, and beyond powers conferred by law. The city excepted to the special master's recommendation, and the superior court granted the city's motion for summary judgment.

Generally, in reviewing non-value issues following a report by a special master, the superior court conducts a de novo review of the evidence and acts as the finder of fact. See Walker v. Ga. Power Co., 177 Ga.App. 493, 496-497(1), 339 S.E.2d 728 (1986). However, the record does not reflect that the superior court in this case acted in its capacity as factfinder. Rather, the court granted summary judgment to the city, holding that there were no genuine issues of material fact. As discussed below, however, the superior court considered certain facts to be immaterial based on its misapprehension of the relevant law. Under these circumstances, we must apply a summary judgment standard of review to the superior court's ruling. "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. OCGA § 9-11-56(c). A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant." Matjoulis v. Integon Gen. Ins. Corp., 226 Ga.App. 459(1), 486 S.E.2d 684 (1997).

1. With respect to appellants Julian and Nancy Edwards, the evidence viewed in the light most favorable to the Edwardses showed the following. In July 1993 the city, which owned a piece of property at 57 Whitlock Avenue, solicited bids for the property. The Edwardses submitted a bid, which was accepted on September 8, 1993. On October 12, 1993, before the completion of the sale, counsel for the city asked whether the Edwardses would be willing to sell a portion of the property to the city for use as a right-of-way. The Edwardses declined. Concerned about possible condemnation by the city, the Edwardses inquired of Tom Boland, the city's facilitator of the sale, regarding the city's intentions on condemnation. Boland assured the Edwardses that, if they refused the city's request to sell a portion of the property, the city would not take any action to condemn the property for a right-of-way. On November 12, 1993, the Edwardses closed the purchase of the property for $217,500. After completion of the sale, the Edwardses spent approximately $400,000 on renovations and improvements to the property, operating it as a bed-and-breakfast known as the Whitlock Inn.

The Edwardses were dealing with Boland, the agent designated by the city to negotiate the sale of the property. Under these circumstances, the city cannot escape responsibility for the representations of the agent appointed by it to deal with the Edwardses. City councilman Dan Cox's comments to the Edwardses indicates some knowledge of Boland's representation. On February 8, 1994, councilman Cox came to the Edwardses' residence and spoke to Mrs. Edwards. He said that "I'm not supposed to let you know about this, but I thought you should know" that the city was going to be doing something about the right-of-way. The next night, the city voted to condemn a right-of-way along the frontage of the property.

"[A] condemning authority may not act in bad faith in the exercise of the right of eminent domain.... [B]ad faith is neither negligence nor poor judgment, but involves conscious wrongdoing and a dishonest intent." Earth Mgmt. v. Heard County, 248 Ga. 442, 446-447(4), 283 S.E.2d 455 (1981). "The term `bad faith' has been used side by side with the word `fraud' in describing those exercises of official discretion to condemn lands with which the courts will interfere." City of Atlanta v. First Nat. Bank of Atlanta, 246 Ga. 424, 425, 271 S.E.2d 821 (1980). "In the absence of bad faith, the exercise of the right of eminent domain rests largely in the discretion of the authority exercising such right, as to the necessity, and what and how much land shall be taken." (Punctuation omitted.) Id. at 424, n. 2, 271 S.E.2d 821.

The trial court in its order dismissed the misrepresentation by the city's agent, Tom Boland, that the city would take no action to condemn the right-of-way if the Edwardses refused to voluntarily sell a portion of the property. The trial court relied upon the proposition that "[p]owers of all public officers are defined by law and all persons must take notice thereof. The public may not be estopped by the acts of any officer done in the exercise of an unconferred power." OCGA § 45-6-5. However, this Code section is not applicable in this case, where the agent was specifically appointed by the city to negotiate the subject transaction and to deal with the Edwardses. Cities, like any other citizen, are bound to act in good faith. Given the reasonable inferences of prior knowledge of the misrepresentations by the city, this raises a jury question as to bad faith, therefore barring summary judgment.

The issue in this case is not estoppel, but bad faith. Although Boland's statement may not work an estoppel, it clearly constitutes evidence from which bad faith on the part of the city may be inferred. See Earth Mgmt., supra at 447, 283 S.E.2d 455 (statements by county commissioners and the county attorney considered as evidence supporting finding of bad faith). The fact that the city asked if the Edwardses, upon purchasing the property, would be willing to sell a portion of it for a right-of-way indicates that the city had already considered the necessity of condemnation. By falsely assuring the Edwardses that the property would not be condemned against their opposition, the city induced the Edwardses to proceed with the consummation of the purchase and to invest substantial sums of money in renovating the property. The subsequent visit of a city councilman, Dan Cox, who told Mrs. Edwards that he was not supposed to tell them about the condemnation, is further indicative of bad faith by the city in the condemnation process.

The totality of the evidence suggests that the city intentionally misled the Edwardses as to its desire to condemn the right-of-way, in an attempt to induce the Edwardses to consummate their purchase of the entire lot. In granting summary judgment to the city, the trial court erred in failing to give proper consideration to the above evidence, instead mistakenly focusing on the city's estoppel argument. Accordingly, the grant of summary judgment with respect to the Edwardses' property must be reversed and this case remanded to the trial court for proper consideration of this issue in its capacity as factfinder.

The dissent attempts to immunize the city from the effects of its bad faith by arguing that such bad faith occurred in the context of the sale of the property to the Edwardses, and not in the context of the condemnation process. However, the dissent fails to recognize that the city's actions are part of a continuous transaction. It is clear that the city was contemplating the possibility of the condemnation of the property at the time it was negotiating the sale with the Edwardses through its agent who at best misrepresented the city's position to them. The evidence would even support the conclusion that the city intentionally misled the Edwardses as to its desire to condemn for the purpose of inducing the Edwardses to purchase the property at a premium price and only after such purchase was consummated did the city reveal its plans for condemnation. In the meantime, the Edwardses had spent approximately $400,000 in renovation costs. The Edwardses reasonably relied on the representations of the city's agent and were harmed thereby. Under these circumstances, the entire condemnation process was infected by the city's bad faith, and the dissent's attempt to artificially bifurcate the city's conduct is without merit.

2. Appellant Weir has pointed to no evidence raising a factual question as to the city's bad faith in condemning her property. Weir contends that the city did not sufficiently investigate the necessity for condemning the property prior to the vote to condemn. However, the record reflects that the city did conduct investigations regarding traffic flow on Whitlock Avenue before the vote on condemnation and further studied the specific intersection at issue before the filing of the condemnation petition. Moreover, in the absence of bad faith, the condemnor has discretion to determine the necessity for condemnation and what land is to be condemned. City of Atlanta v. Heirs of Champion, 244 Ga. 620, 621, 261 S.E.2d 343 (1979). "While a court may disagree with the methods the condemning authority may choose to accomplish its objectives, it is not authorized to substitute its judgment for that of the authority." Id. at 621-622, 261 S.E.2d 343.

Weir also contends that the city showed bad faith by failing to comply with OCGA § 44-10-27(a), which prohibits changes to a historic property unless the owner obtains a certificate of appropriateness from the historic preservation commission. However, this section provides that local governments are exempt from this requirement,...