Host Int'l Inc. v. Clayton County

• Decision Date: 16 August 2011
• Docket Number: No. A11A1314.,A11A1314.
• Citation: 311 Ga.App. 414,11 FCDR 2713,715 S.E.2d 805
• Parties: HOST INTERNATIONAL, INC.v.CLAYTON COUNTY et al.
• Court: Georgia Court of Appeals

311 Ga.App. 414

715 S.E.2d 805

11 FCDR 2713

HOST INTERNATIONAL, INC.

v.CLAYTON COUNTY et al.

No. A11A1314.

Court of Appeals of Georgia.

Aug. 16, 2011.

Sutherland, W. Scott Wright, Jennifer Nava Ide, Atlanta, Madison James Barnett, for appellant.Freeman, Mathis & Gary, Jack R. Hancock, Forest Park, Brian Richard Dempsey, Atlanta, for appellees.ELLINGTON, Chief Judge.

Host International, Inc. (“Host”) brought this action in the Superior Court of Clayton County against the county, its Board of Commissioners, and the commissioners in their official capacities (collectively, “the county”), seeking a refund of ad valorem taxes Host paid the county for the years 1999–2005.¹ Host alleged that it has a usufruct (that is, a mere possessory interest that is not an estate in land) in the subject property, which it leases at the Hartsfield–Jackson Atlanta International Airport for the purpose of operating food and beverage concessions; that usufruct interests in property generally are not subject to ad valorem taxation; and that the Code section upon which the county relies for assessing and collecting such taxes, OCGA § 6–3–21, ² is unconstitutional.

The county moved to dismiss, contending, inter alia, that Host's claims are barred under the doctrine of collateral estoppel. The trial court found that it had resolved in previous litigation concerning a different tax year the issue of the county's right to tax Host's usufruct interest. Based on this, the court determined that Host's claims are barred under the doctrine of collateral estoppel and granted the county's motion. On appeal, Host contends that, in the previous litigation, the trial court did not decide on the merits whether OCGA § 6–3–21 is constitutional and, therefore, that litigation of that issue is not precluded in the case at bar. For the reasons explained below, we vacate the trial court's ruling and remand.

1. As an initial matter, we consider the procedural posture of this case and the applicable standard of review. OCGA § 9–11–12(b) provides in pertinent part that “[i]f, on a motion to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in [OCGA §] 9–11–56[.]” Because the trial court considered matters outside the pleadings in this case, including the pleadings and judgment in Host Intl. v. Clayton County Board of Tax Assessors, (Civil Action No. 1998–cv–3404–8) (“ Host I ”), we will treat the appealed order as one granting summary judgment to the county. Fernandez v. WebSingularity, 299 Ga.App. 11, 13(1), 681 S.E.2d 717 (2009).³ “We review de novo a trial court's grant of summary judgment, construing the evidence in a light most favorable to the nonmoving party.” (Footnote omitted.) Id.

2. Host contends that, in Host I, which concerned its application for a refund of ad valorem taxes it paid for 1997, the trial court did not decide on the merits Host's claim that OCGA § 6–3–21 is unconstitutional. As a result, Host contends that the trial court erred in ruling that Host is precluded from claiming that the statute is unconstitutional in the case at bar.

The doctrine of collateral estoppel or issue preclusion bars

the re-adjudication of an issue that has previously been litigated and adjudicated on the merits in another action between the same parties or their privies. Like res judicata, collateral estoppel requires the identity of the parties or their privies in both actions. However, unlike res judicata, collateral estoppel does not require identity of the claim—so long as the issue was determined in the previous action and there is identity of the parties, that issue may not be re-litigated, even as part of a different claim. Furthermore, collateral estoppel only precludes those issues that actually were litigated and decided in the previous action, or that necessarily had to be decided in order for the previous judgment to have been rendered. Therefore, collateral estoppel does not necessarily bar an action merely because the judgment in the prior action was on the merits. Before collateral estoppel will bar consideration of an issue, that issue must actually have been decided.

(Footnotes omitted.) Waldroup v. Greene County Hosp. Auth., 265 Ga. 864, 866–867(2), 463 S.E.2d 5 (1995).⁴

(a) In response to Host's contention that the issue of whether OCGA § 6–3–21 is constitutional was not decided in Host I, the county argues that the trial court decided that issue on the merits when it found that Host had not supported its constitutionality arguments with any binding legal authority.

In Host I, the trial court ruled that, even if Host's interest in the subject property is merely a usufruct or possessory interest,⁵ which is otherwise not a taxable estate,⁶ OCGA § 6–3–21 by its plain terms authorizes the county to assess and collect ad valorem taxes for the subject property, which is owned by the City of Atlanta, located outside of the territorial limits of Atlanta, part of the airport, and leased and occupied by a private party (Host).⁷ The court then held as follows:

In [Host's] Response to [the county's] Cross–Motion for Summary Judgment, [Host] argues that OCGA § 6–3–21 is unconstitutional. However, to assert a constitutional issue before the superior court in a de novo appeal, [the] appellant must have timely raised the issue before the board of equalization. Vann v. DeKalb County Board of Tax Assessors[,] 186 Ga.App. 208, 214

[ (2), 367 S.E.2d 43]

(1988). Here, although there is no record in the file of what transpired at the Clayton County Board of Equalization hearing, [Host] did not include any constitutionality arguments in its Notice of Appeal [to the superior court] of May 26, 1998. It appears that [Host] argued unconstitutionality of the law for the first time in its response brief on appeal. Thus, the argument is not timely.

Moreover, even if the argument had been timely, [Host] attempts to rely on an order by the Fulton County Superior Court which was appealed to the Georgia Supreme Court in Roberts v. Eastern Airlines, 257 Ga. 273

[, 357 S.E.2d 585]

(1987). The Fulton County order is not binding precedent, and it should be noted that the Georgia Supreme Court does not address any of the constitutionality issues on which the lower court focused.

Pretermitting whether the trial court even had jurisdiction to rule on Host's belated constitutionality challenge to OCGA § 6–3–21 in Host I, absent a waiver of any procedural bar by the county, we conclude that untimeliness was the basis of the court's ruling on Host's constitutionality argument. Consequently, contrary to the county's position, the concluding paragraph, wherein the court commented hypothetically on whether Host's argument would have had merit “if” it had been timely raised can only be construed as obiter dictum and not a ruling on the merits. Royal Arcanum v. Riley, 143 Ga. 75, 79–80(2), 84 S.E. 428 (1915); Piggly Wiggly Southern v. Eastgate Assoc., 195 Ga.App. 10, 12, 392 S.E.2d 337 (1990).

(b) In addition, the county argues that, in Host I, the trial court decided the issue of “taxability” and that the issue is identical in the case at bar. This argument also lacks merit. The issue...