Gwinnett County Board of Tax Assessors v. Network Publications, Inc.

Citations: 429 S.E.2d 696; 208 Ga. App. 15; 93 Fulton County D. Rep. 1441; 1993 Ga. App. LEXIS 440; 1993 WL 188246Docket: A92A2272

Court: Court of Appeals of Georgia; March 18, 1993; Georgia; State Appellate Court

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The Court of Appeals of Georgia addressed an interlocutory appeal concerning the Gwinnett County Board of Tax Assessors' denial of a summary judgment motion in the case of Gwinnett County Board of Tax Assessors v. Network Publications, Inc. Network Publications applied for an 80 percent freeport exemption from ad valorem taxation on personal property after relocating to Gwinnett County in 1989. Their initial application was denied, leading to litigation that was dismissed due to both parties failing to appear. A subsequent application in 1990 was not received by the Board, prompting Network to reapply on March 11, 1991. This application was denied on March 29, 1991, without a prior visit by Tax Assessors' representatives to Network's operations. Following Network's appeal, officials visited the site but maintained the denial. Network's appeal to the Gwinnett Board of Equalization claimed violations of due process and equal protection under the Fourteenth Amendment and alleged that the denial was part of an official policy that discriminated against them. The Board of Equalization upheld the assessed property value and affirmed the denial. Network then appealed to Superior Court, arguing the exemption was wrongfully denied and seeking punitive damages. The Board of Tax Assessors later confessed partial judgment regarding the exemption but moved for summary judgment against Network's claims under 42 USCA § 1983 and for punitive damages. The Gwinnett County Superior Court denied this motion, identifying genuine issues of material fact, leading to the current appeal. The initial two enumerations challenge the trial court's decision on the § 1983 claims. Under OCGA § 48-5-311 (e. 1), tax appeals can address issues of taxability, uniformity of assessment, and valuation.

Network argues that its claim regarding taxability falls under Section 1983, distinct from issues of unequal valuation. However, the precedent set in Backus v. Chilivis prohibits such claims, as it involved a class action on unequal valuation of property taxes. In that case, the court recognized a lack of uniformity in tax digest valuations but did not allow a 1983 claim, emphasizing that Georgia statutes provide adequate remedies for tax disputes and that allowing such claims would undermine the state's interests in efficient tax dispute resolution.

The Supreme Court case Logan v. Zimmerman Brush Co. indicates that procedural due process requires pre-deprivation hearings when property deprivation results from established state procedures, not random actions. Although taxpayer claims concerning tax collection are unique and often require swift state action, the court finds that Network's 1983 claim is fundamentally linked to the allegedly nonuniform appraisal processes sanctioned by the county.

Despite Network's assertion that "taxability" differs from valuation, the court sees no distinction, as the denial of tax exemptions impacts property valuation. The Backus rationale remains applicable, and the statutory review process offers taxpayers the opportunity to contest constitutional issues related to taxation. The U.S. Supreme Court requires state remedies to provide a full hearing for constitutional objections, affirming that the existing review processes are sufficient to address such claims.

The commerce clause establishes "rights, privileges, or immunities" relevant to 42 U.S.C. § 1983, allowing for a right of action in cases of violation. The Gwinnett County Board of Tax Assessors was granted summary judgment regarding the availability of a § 1983 claim. Network's claims for punitive damages were withdrawn, citing MARTA v. Boswell, leaving no grounds for the trial court or for appellate review. The Board also sought summary judgment on Network's attorney fees under OCGA § 13-6-11, which are typically awarded only in cases of bad faith or unnecessary litigation. The mere failure to pay a claim does not indicate bad faith. The Board's actions were scrutinized regarding their awareness of exemptions granted by other counties to similar companies, which raises a factual issue about their good faith in denying Network's exemption. Consequently, the determination of whether to award litigation expenses remains a question for the jury. The court affirmed the denial of summary judgment on the attorney fee issues while reversing other aspects of the judgment, with concurrence from Birdsong, P.J. and Beasley, P.J.