Opinion ID: 47304
Heading Depth: 2
Heading Rank: 2

Heading: Highland Properties/Agunac

Text: In November 1997, Highland Properties, acting in a joint venture with Jowers Construction Company, began development of approximately 160 residential units located off of U.S. 19 in Lee County, Georgia, known as North Highland Crossing subdivision. Highland Properties entered into a contract with Agunac, Inc., a private water and sewer provider, whereby Agunac agreed to provide a water and sewer system to North Highland Crossing. The contract provided, in part that “[i]n the event water and sewer are obtained for North Highland Crossing Subdivision from Agunac or its successor, then there shall be no tap fees charged for North Highland Crossing[’]s subdivision lots to hook up to the Agunac water and sewer system.” Additionally, the contract provided Agunac an option to terminate the agreement at any time. There was no provision in the 3 agreement that required written or verbal notice of termination to Highland Properties. On March 25, 1998, the Authority condemned the Agunac private water and sewage system servicing North Highland Crossing subject to the contract. On June 5, 1998, an “Award of Special Master” was entered in the condemnation action awarding $6,994,798 to the condemnees, $6,950,000 of which was awarded to Agunac. There was no appeal filed in the condemnation action. After the condemnation, Jowers began constructing residential units in North Highland Crossing. Jowers met with Kenneth Christopher Boswell, General Manager of the Authority, to discuss the Highland Properties/Agunac agreement that stated Highland Properties was not supposed to pay any water tap fees or sewer tap fees for North Highland Crossing. Boswell told Jowers the Authority now owned the water and sewer system and that Jowers would have to pay the water and sewer tap fees for North Highland Crossing until the Authority told him otherwise. On December 22, 2000, the Authority voted to terminate the Highland Properties/Agunac agreement. That same day, an attorney for the Authority wrote a letter to the attorney for Highland Properties stating it was the Authority’s position the Highland Properties/Agunac agreement was unenforceable under 4 Georgia law. In the event the agreement was enforceable, the Authority was exercising its option to terminate the agreement at will. Highland Properties filed a complaint in the district court asserting the Authority was violating: (1) the Equal Protection Clause of the Fourteenth Amendment because there was no rational basis for treating Highland Properties differently than the Water Plentiful subdivisions, (2) the Contracts Clause of the United States Constitution, (3) the Takings Clause of the United States Constitution, and (4) Georgia statutory condemnation procedures. The parties mutually agreed to drop all claims except the Equal Protection claim. The district court held a bench trial and entered an order in favor of the Authority. The district court concluded Highland Properties did not show they were similarly situated to the Water Plentiful subdivisions or that the Authority had no rational basis for treating them differently than the Water Plentiful subdivisions.