Court Opinion

ID: 4645979
Source: CourtListenerOpinion
Date Created: 2020-12-23 15:03:35.707481+00
Date Added: 2024-06-11T08:00:55.372609
License: Public Domain

FIRST DIVISION
                               BARNES, P. J.,
                            GOBEIL and PIPKIN, JJ.

                   NOTICE: Motions for reconsideration must be
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                   days of the date of decision to be deemed timely filed.
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                                                                 December 15, 2020

In the Court of Appeals of Georgia
 A20A1898. RICE et al. v. FULTON COUNTY, GEORGIA et al.

      BARNES, Presiding Judge.

      The plaintiffs brought this putative class action on behalf of all Fulton County

homeowners who purchased their homes in 2015 and 2016, seeking a refund of ad

valorem property taxes under OCGA § 48-5-380 from Fulton County and several of

its municipalities1 based on alleged illegal assessments of their properties. In their

complaint, as amended, the plaintiffs alleged that the Fulton County Board of Tax

Assessors (“Board”) conducted illegal assessments of their properties under state

      1
        The municipalities are the City of Atlanta, City of Alpharetta, City of Johns
Creek, City of Milton, City of Roswell, City of Sandy Springs, City of Chattahoochee
Hills, City of College Park, City of East Point, City of Fairburn, City of Hapeville,
City of Palmetto, City of Union City, and City of South Fulton. The City of Mountain
Park was originally named as a defendant but was later voluntarily dismissed from
the case.
constitutional and statutory law by intentionally singling out their recently sold

properties for reappraisal at the increased sales price while leaving the assessed

values of comparable unsold properties undisturbed. The trial court subsequently

granted the defendants’ motions to dismiss the plaintiffs’ amended complaint for

failure to state a claim upon which relief could be granted, concluding that the

plaintiffs had failed to state a tax refund claim under OCGA § 48-5-380 and instead

should have pursued a tax appeal under a different statute. The plaintiffs now appeal

from the trial court’s dismissal order. For the reasons discussed more fully below, we

reverse.

      We review de novo a trial court’s grant of a motion to dismiss for failure to

state a claim upon which relief can be granted. Southstar Energy Svcs. v. Ellison, 286

Ga. 709, 710 (1) (691 SE2d 203) (2010).

      Under OCGA § 9-11-12 (b) (6), a motion to dismiss for failure to state
      a claim upon which relief can be granted should not be sustained unless
      (1) the allegations of the complaint disclose with certainty that the
      claimant would not be entitled to relief under any state of provable facts
      asserted in support thereof; and (2) the movant establishes that the
      claimant could not possibly introduce evidence within the framework of
      the complaint sufficient to warrant a grant of the relief sought. In
      deciding a motion to dismiss, all pleadings are to be construed most

                                          2
      favorably to the party who filed them, and all doubts regarding such
      pleadings must be resolved in the filing party’s favor.

(Citation and punctuation omitted.) Renton v. Watson, 319 Ga. App. 896, 897 (739

SE2d 19) (2013). See Northway v. Allen, 291 Ga. 227, 229 (728 SE2d 624) (2012).

      Guided by these principles, we turn to the plaintiffs’ amended complaint, which

alleged as follows. The Board assesses all real property located in Fulton County, and

those assessments are then used by the defendants to generate tax bills for property

owners. The named plaintiffs and putative class members are homeowners who

purchased real property in Fulton County in 2015 or 2016. The plaintiffs paid

property taxes in 2016 and 2017 based on assessments of their properties by the

Board that the plaintiffs allege were illegal.

      More specifically, the amended complaint alleged that the Board, in assessing

the fair market values of the plaintiffs’ properties for the 2016 and 2017 tax years, did

not follow its customary appraisal methodology and instead increased the assessed

value of the plaintiffs’ properties to equal the sales prices from 2015 or 2016.

According to the amended complaint, except in “rare instances,” the Board did not

reassess the values of comparable residential properties that had not been sold. The

amended complaint further alleged that, as a result of the Board’s divergent treatment

                                           3
of sold and unsold properties, the plaintiffs were required to pay property taxes to the

defendants for the tax years of 2016 and 2017 that were significantly higher than the

taxes paid by owners of similarly situated residential properties that did not sell in

2015 or 2016.

      In 2018, the plaintiffs filed their putative class action complaint against Fulton

County seeking property tax refunds pursuant to OCGA § 48-5-380.2 The plaintiffs

thereafter twice amended their complaint and added additional plaintiffs and several

municipalities within Fulton County as defendants. The plaintiffs alleged in their

complaint, as amended, that by appraising their properties in 2016 and 2017 based on

sales price without reappraising similarly situated residential properties that had not

been sold in 2015 and 2016, the Board violated the Uniformity Clause of the Georgia

      2
         OCGA § 48-5-380 (a) (1) provides:
              (a) As provided in this Code section, each county and
       municipality shall refund to taxpayers any and all taxes and license fees:
                     (1) Which are determined to have been erroneously or
              illegally assessed and collected from the taxpayers under the laws
              of this state or under the resolutions or ordinances of any county
              or municipality[.]
Under subsections (b) and (c) of the statute, taxpayers either may file a refund claim
with the governing authority of the county or municipality within a certain time
period, or may proceed directly to filing suit for a refund. See OCGA § 48-5-380 (b),
(c); City of Dublin School Dist. v. MMT Holdings, 346 Ga. App. 546, 547 (1) (816
SE2d 494) (2018) (discussing framework of the tax refund statute).

                                           4
Constitution,3 the Equal Protection Clause of the Fourteenth Amendment to the

United States Constitution, and the equalization requirement imposed by OCGA § 48-

5-306 (a).4 Consequently, the plaintiffs alleged that they were due refunds from the

defendants of the taxes illegally assessed in 2016 and 2017, in addition to pre- and

post-judgment interest and attorney fees and expenses under OCGA § 13-6-11.

      The defendants moved to dismiss the plaintiffs’ amended complaint, asserting

that the plaintiffs had failed to state a claim for a tax refund under OCGA § 48-5-380.

      3
       The Uniformity Clause provides in relevant part:
            (a) All taxes shall be levied and collected under general laws and
     for public purposes only. Except as otherwise provided in [other
     subparagraphs of the Clause], all taxation shall be uniform upon the
     same class of subjects within the territorial limits of the authority
     levying the tax.
Ga. Const. of 1983, Art. VII, Sec. 1, Para. III (a).
      4
       OCGA § 48-5-306 (a) provides in pertinent part:
             The [county] board [of tax assessors] shall see that all taxable
      property within the county is assessed and returned at its fair market
      value and that fair market values as between the individual taxpayers are
      fairly and justly equalized so that each taxpayer shall pay as nearly as
      possible only such taxpayer’s proportionate share of taxes.

                                          5
According to the defendants, the plaintiffs were limited to challenging the Board’s

actions through the tax appeal process set out in OCGA § 48-5-311, which the

plaintiffs had failed to do.5

      Following a hearing, the trial court granted the defendants’ motions to dismiss

in April 2020. The trial court concluded that the facts as alleged in the amended

complaint failed to state a cognizable claim for an illegal assessment of the plaintiffs’

properties so as to bring the claim within the ambit of the tax refund statute, OCGA

      5
        OCGA § 48-5-311 sets out a statutory scheme for appealing tax assessments.
As explained by our Supreme Court,
      the statutory scheme outlined in OCGA § 48-5-311 does not provide for
      a single, unified appeal. Instead, in OCGA § 48-5-311 (e) (1) (A) (i)-(iv)
      the [statute] enumerates multiple administrative avenues for appealing
      the original tax assessment by the county board of tax assessors, after an
      initial appeal to the county board itself under OCGA § 48-5-311 (e) (2)
      (A). If the taxpayer is dissatisfied with the result of this initial appeal,
      three options are available, depending upon the property and the issues
      appealed: appeal to the county board of equalization under OCGA §
      48-5-311 (e) (2) (C); appeal to an arbitrator under OCGA § 48-5-311 (f);
      or appeal to a hearing officer under OCGA § 48-5-311 (e.1). Each
      method of appeal prescribes a different process in considerable detail.
      Only at the conclusion of one of these three separate administrative
      appeals do the taxpayer and the county board of tax assessors have the
      option of appealing to the superior court under OCGA § 48-5-311 (g).
(Emphasis omitted.) Hall County Bd. of Tax Assessors v. Westrec Properties, 303 Ga.
69, 74 (2) (809 SE2d 780) (2018).

                                           6
§ 48-5-380.6 The trial court further concluded that the gravamen of the plaintiffs’

allegations was that the Board, in assessing the value of their properties for the 2016

and 2017 tax years, had failed to consider other factors beyond the recent sale price,

and the court ruled that such a claim could only be pursued through the tax appeal

process set forth in OCGA § 48-5-311.

      On appeal from the dismissal order, the plaintiffs argue that the trial court erred

in holding that their complaint failed to state a claim for a tax refund under OCGA

§ 48-5-380 and that they thus were limited to pursuing a tax appeal under OCGA §

48-5-311. We agree.

             Taxpayers generally have two avenues for challenging an
      improper tax assessment: (1) the appeal process in OCGA § 48-5-311,
      and (2) the refund procedure in OCGA § 48-5-380. These distinct
      remedies, however, serve different purposes. An appeal under OCGA §
      48-5-311 provides the most expeditious resolution of a taxpayer’s
      dissatisfaction with an assessment, preferably before taxes are paid. In
      contrast, an OCGA § 48-5-380 refund action . . . [provides a ] procedure

      6
         In its dismissal order, the trial court addressed the plaintiffs’ arguments
regarding the Uniformity Clause and OCGA § 48-5-306 (a), but the court did not
address the plaintiffs’ Equal Protection Clause argument. Because the trial court did
not rule on whether the Board’s alleged actions would violate the Equal Protection
Clause, we do not consider that question on appeal. See City of Decatur v. DeKalb
County, 284 Ga. 434, 438 (2) (668 SE2d 247) (2008).

                                           7
      to protect taxpayers from later-discovered defects in the assessment
      process which have resulted in taxes being erroneously or illegally
      assessed and collected.

(Citation and punctuation omitted.) Slivka v. Nelson, 328 Ga. App. 468, 470 (1) (762

SE2d 162) (2014).

      In distinguishing between OCGA § 48-5-311 and OCGA § 48-5-380, our

Supreme Court has held that

      [a]lthough a taxpayer may raise issues of valuation, uniformity, and
      equalization under both statutes, . . . the taxpayer should assert any error
      in the assessment of the real property in an appeal proceeding under §
      48-5-311 whereas the refund action under § 48-5-380 is reserved for
      claims of factual or legal error that have resulted in erroneous or illegal
      taxation.

Nat. Health Network v. Fulton County, 270 Ga. 724, 726 (1) (514 SE2d 422) (1999).

See Gwinnett County v. Gwinnett I L.P., 265 Ga. 645, 646-647 (458 SE2d 632)

(1995). To determine whether a claim can be brought as a tax refund claim under

OCGA § 48-5-380, courts must look “not [at] the general nature of the ground

asserted, but the underlying facts supporting the asserted ground.” Gwinnett County,

265 Ga. at 647. In this regard,

                                           8
      [a] claim based on mere dissatisfaction with an assessment, or on an
      assertion that the assessors, although using correct procedures, did not
      take into account matters which the taxpayer believes should have been
      considered (e.g., different comparable sales for the purpose of
      establishing value), is not . . . one which asserts that an assessment is
      erroneous or illegal within the meaning of § 48-5-380.

Id. In contrast, “[i]f the taxpayer alleges that the assessment is based on matters of

fact in the record which are inaccurate, or that the assessment was reached by the use

of illegal procedures, then the taxpayer has asserted a claim that the taxes were

‘erroneously or illegally assessed and collected’” under OCGA § 48-5-380. Id.

Furthermore, in Nat. Health Network, 270 Ga. at 727 (2), the Supreme Court pointed

out that an “illegal” tax assessment that can be pursued under OCGA § 48-5-380

includes the circumstance where “a taxing authority assessed and collected taxes in

violation of federal or state law.” (Footnotes omitted.) And, as an example of such a

circumstance, the Supreme Court cited to Griggs v. Greene, 230 Ga. 257, 266 (3)

(197 SE2d 116) (1973),7 a case from that Court holding that the Uniformity Clause

had been violated when county tax digests were adjusted by impermissibly raising

      7
       Griggs was subsequently abrogated in part on other grounds as stated in SJN
Properties v. Fulton County Bd. of Assessors, 296 Ga. 793, 799 (2) (b) (ii), n. 7 (770
SE2d 832) (2015).

                                          9
assessments according to sub-classes of property. See Nat. Health Network, 270 Ga.

at 727 (2), n. 20.

      Here, in their amended complaint, the plaintiffs did not simply express

dissatisfaction with the assessed value of their properties or, as suggested by the trial

court, merely allege that the Board, using correct procedures, failed to take into

account other factors that should have been considered as part of the assessments.

Compare Trans Link Motor Express v. Dougherty County, 265 Ga. App. 10, 12 (592

SE2d 859) (2003) (taxpayer could not pursue tax refund claim under OCGA § 48-5-

380 based on allegation that county collected the wrong amount of taxes because it

failed to take into account interstate mileage as part of tax assessment); Parian Lodge

v. DeKalb County, 225 Ga. App. 853, 855 (1) (485 SE2d 545) (1997) (plaintiff could

not pursue tax refund claim under OCGA § 48-5-380 where plaintiff “merely asserts

that the 1991 assessed value [of the property] established the fair market value of the

property in 1990”). Rather, viewed most favorably to the plaintiffs, the amended

complaint alleged that the Board engaged in “sales chasing”8 by selectively targeting

      8
        “‘Sales chasing,’ also known as selective reappraisal, is the practice of
selectively changing values for properties that have been sold, while leaving other
values alone.” County of Douglas v. Nebraska Tax Equalization and Review Comm.,
635 NW2d 413, 419 (Neb. 2001). See Big Foot Stores v. Franklin Township
Assessor, 919 NE2d 621, 623, n. 5 (Ind. T.C. 2009). According to one jurisdiction,

                                           10
recently sold properties for reappraisal at the increased sales price while leaving the

assessed values of similarly situated unsold properties unchanged. See generally

Callaway v. Carswell, 240 Ga. 579, 583 (2) (242 SE2d 103) (1978) (noting that

question of whether county “could reassess property piecemeal” was different from

question regarding valuation of the taxpayers’ property). According to the amended

complaint, such a procedure, predicated on the intentional targeting of a subclass of

property owners for increased assessments and taken without regard to establishing

the practice of sales chasing “creates inequities between properties and, unless
adjusted for, renders sales ratio studies invalid.” County of Douglas, 635 NW2d at
423. See County of Douglas v. Nebraska Tax Equalization & Review Comm., 894
NW2d 308, 321 (Neb. 2017) (“Sales chasing makes a sales ratio study unreliable
because the assessed values of sold properties are no longer representative of the
assessed values of all the other properties in the study area.”). Another jurisdiction
referred to the practice of sales chasing as the “‘welcome stranger’ pattern” of spot
assessment because under the practice, “[t]he ‘new’ owner–the ‘stranger’–will pay
higher taxes proportionately than the owner of a long-held parcel who ‘welcomes’ the
fact that he consequently pays lower taxes.” (Citation and punctuation omitted.)
Township of West Milford v. Van Decker, 576 A2d 881, 885 (N. J. 1990). See Orban
v. Alexandria Township, 21 N.J. Tax 1, 11-12 (N.J. T.C. 2003) (“The practical effect
of spot assessment [of the “welcome stranger” variety] is that recent purchasers have
their property reassessed on the basis of current market values, whereas properties of
equivalent market value that have not recently been sold have their existing
assessments continued from year to year. Assuming that property values are
increasing, the new owner will have a greater proportionate tax burden than an owner
who has held property of equal market value over a long period of time.”).

                                          11
uniformity and equalization between taxpayers with like properties, violates the

Uniformity Clause of the Georgia Constitution and the equalization requirement

imposed by OCGA § 48-5-306 (a).

      We cannot say that within the framework of the amended complaint, the

plaintiffs would be unable to come forward with evidence that the Board used an

illegal procedure and violated state law in its assessment of the plaintiffs’ properties

for the 2016 and 2017 tax years. See Champion Papers v. Williams, 221 Ga. 345, 346

(144 SE2d 514) (1965) (holding that “attempt to increase revenue by arbitrary and

discriminatory assessments against one group of taxpayers without consideration of

an increase for all others” violated well established rule that the “[t]axation of all

kinds of property of the same class must be uniform and by the same standard of

valuation, equally with other taxable property of the same class”); Dade County v.

Eldridge, 229 Ga. App. 401, 401 (494 SE2d 106) (1997) (concluding that “it is illegal

for a taxing authority simply to pick and choose particular pieces of property to assess

and reassess without regard to uniformity, proportionality and equalization among

properties of the same class”).9 Indeed, courts from several other jurisdictions have

      9
        See also Griggs, 230 Ga. at 266 (3) (Uniformity Clause violated where
tangible property was divided into different sub-classes and then different percentage
adjustments were applied to individual assessments according to sub-class, with “no

                                          12
concluded that selective reappraisals and sales chasing are illegal and violate the

principle of uniformity.10 Contrary to the conclusion reached by the trial court, the

plaintiffs stated a claim under the tax refund statute, OCGA § 48-5-380.

      In reaching this conclusion, we are mindful that our Supreme Court has held

that “county boards of tax assessors are not required to use any particular appraisal

approach or method when determining the fair market value of property for purposes

of ad valorem taxation.” Sherman v. Fulton County Bd. of Assessors, 288 Ga. 88, 91

(701 SE2d 472) (2010). Our Supreme Court also has held that “the utilization of

different methods to determine fair market value does not contravene the Constitution

adjustments at all as to still other sub-classes”); Thorpe v. Benham, 161 Ga. App. 116,
116 (1) (289 SE2d 275) (1982) (spot reappraisal of subset of properties within city
limits that resulted in increased property taxes violated equalization statute, where the
tax “assessors do not claim that the tax structure as a whole was considered, that there
was any attempt to equalize the tax burden throughout the municipality, that there
was any plan for an overall reappraisal, or that there were not throughout the city
other residential properties as least equally underassessed”).
      10
         See Township of West Milford, 576 A2d at 884-886; Ernest W. Hahn, Inc.
v. County Assessor for Bernalillo County, 592 P2d 965, 967-969 (N. M. 1978); Penn
Phillips Lands v. State Tax Comm., 430 P2d 349, 351-352 (Or. 1967); Picerne v.
DiPrete, 428 A2d 1074, 1077-1079 (R.I. 1981); Town of Castleton v. Parento, 988
A2d 158, 160-164 (Vt. 2009). “[T]hese cases explain that such assessment practices
cannot be upheld, as they arbitrarily, but purposefully, subject the owners of
comparable properties to both disparate treatment and disproportionate rates of
taxation.” Big Foot Stores, 919 NE2d at 625, n. 8.

                                           13
or the laws of Georgia” and has noted, as an example, that “real property recently sold

may be valued at sales price, while other property is valued by comparable sales.”

Dougherty County Bd. of Tax Assessors v. Burt Realty Co., 250 Ga. 467, 469 (298

SE2d 475) (1983). Additionally, Georgia’s tax statutes and regulations contemplate

that the recent sales price of a property may be used to determine its fair market value

for tax assessment purposes under certain circumstances. See OCGA § 48-5-2 (3);11

Ga. Comp. R. & Regs. r. 560-11-10-.09 (4) (b) (1) (i).12

      11
         OCGA § 48-5-2 (3) provides in pertinent part:
            “Fair market value of property” means the amount a
      knowledgeable buyer would pay for the property and a willing seller
      would accept for the property at an arm’s length, bona fide sale. . . .
      Notwithstanding any other provision of this chapter to the contrary, the
      transaction amount of the most recent arm’s length, bona fide sale in any
      year shall be the maximum allowable fair market value for the next
      taxable year.
      12
        Ga. Comp. R. & Regs. r. 560-11-10-.09 (4) (b) (1) (i) provides that when a
county appraisal staff uses the sales comparison approach for valuing property,
      [a] bona fide sale of a subject property should be carefully analyzed by
      the appraisal staff to determine if it is an accurate indicator of such
      subject property’s fair market value. When such a sale is supported by
      sufficient other sales of similar property to reasonably estimate the
      market, the appraisal staff shall consider the sale as the best evidence of
      fair market value. In the absence of such a sale of the subject, sales
      prices of comparable properties shall be considered the best evidence of
      fair market value.

                                          14
      Nevertheless, “[t]he law still requires valuations to be just and fair between all

taxpayers of the county,” Sherman, 288 Ga. at 91, and “the duty to assess at full value

is not supreme but yields to the duty to avoid discrimination” among taxpayers.

(Citation and punctuation omitted.) McLennan v. Undercofler, 222 Ga. 302, 307 (149

SE2d 705) (1966). And, here, the amended complaint did not simply allege that the

Board erred by using the recent sales price to value the plaintiffs properties and/or

used different valuation methods when reassessing sold and unsold property for the

2016 and 2017 tax years. Instead, as previously noted, the amended complaint,

construed in favor of the plaintiffs, alleged that the Board intentionally singled out

for reassessment and increased taxation only that small group of taxpayers who

purchased real property in 2015 and 2016, while leaving undisturbed the assessments

of other property in the same class that had not been sold, thereby creating significant

tax disparities between similarly situated taxpayers. Consequently, the plaintiffs’

allegations in this case go beyond a claim that the Board improperly relied on sales

prices for valuation or used different valuation methods when reappraising different

types of property. Compare Dougherty County Bd. of Tax Assessors, 250 Ga. at 468-

469 (Uniformity Clause not violated when board used one valuation method for

appraising residential property held for resale and another method for appraising

                                          15
merchants’ inventory);Rogers v. DeKalb County Bd. of Tax Assessors, 247 Ga. 726,

728 (2) (279 SE2d 223) (1981) (Uniformity Clause not violated when board

“utilize[d] a ‘blue book’ method of valuation in determining the fair market value of

an aircraft for ad valorem tax purposes while utilizing a cost-less-depreciation method

in determining the fair market value of other types of tangible personal property”).

      For these reasons, the defendants failed to demonstrate that the plaintiffs could

not possibly introduce evidence within the framework of the amended complaint

entitling them to a tax refund for tax years 2016 and 2017 under OCGA § 48-5-380.

We therefore reverse the trial court’s grant of the defendants’ motion to dismiss the

plaintiffs’ amended complaint for failure to state a claim upon which relief could be

granted.

      Judgment reversed. Gobeil and Pipkin, JJ., concur.

                                          16