Tag: Georgia

Does a Foreclosure Sale Determine Fair Market Value in Georgia?

The answer is a resounding yes according to an interesting case that came out recently. SeeDekalb County Board Of Tax Assessors v. Astor Atl, LLC, A19A0516 (April 1, 2019). In that case, the Georgia Court of Appeals rejected DeKalb County’s argument that it could assess property taxes in an amount higher than the price paid for the same property at a foreclosure sale.

Dekalb County argued that a foreclosure sale does not qualify under as an arm’s length, bona fide sale, and that it had appraised the property in conformity with its rules using the sales comparison approach.

In deciding the case, the Georgia Court of Appeals referenced O.C.G.A. § 48-5-2(3), which provides a limitation on the maximum allowable fair market value. Under that statute, “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.”

The decision concluded by holding that foreclosure sales can be arm’s length, bona fide sales. Moreover, the fact that the sale may not bring in the true market value of the property does not require a different rule; the fact that the sale results in a financial loss is not relevant.

The court noted that foreclosure sales are distinct from tax sales. While foreclosures are considered arm’s length, bona fide sales, tax sales are considered “forced sales” because owner retains a right of redemption, so the tax deed purchaser does not obtain proper title until the redemption period has run.

While this isn’t super helpful in the current market with surging property values, it would definitely help investors should the real estate market turn south down the road. Something to keep in mind.

Please call us at 404-382-9994 for real estate related questions.

Georgia Personal Injury: Smoke Detectors and Causation

In Georgia, if you’re injured due to someone else’s negligence, you can sue the party who caused your injuries. These cases are generally filed in the county where the party that caused the injuries resides, and are decided by what are known as trial courts. In the trial court, the parties collect evidence related to the cause and extent of the injuries. After the evidence is collected (this happens during “discovery”), the parties present this evidence to a jury, who decides who the outcome of the case.

The right to a jury trial, i.e., having the right to present disputes to randomly selected members of your community, is one of the founding principles of this country. In Georgia, Article I, Para. 6 of the Georgia Constitution and O.C.G.A. § 9-11-38 guarantee the right to a jury trial.

There is an exception to the right to a jury trial. This is when the party accused of the wrongdoing files a motion for summary judgment. These motions allege that, even with the evidence viewed in favor of the injured party, the facts and the law are so one-sided that the accused party should win without the need for a trial. In other words, a jury trial is a waste of time.

This is what happened recently in a case called Yearty v. Scott Holder Enterprises, A18A2074 (March 14, 2019). In that case, a woman, who had nodded off to sleep while waiting for her food to cook, badly burned her hand in a grease fire. She sued the company who installed the smoke detectors at her house. She claimed the smoke detectors didn’t go off, which made the fire much worse than if the alarm had timely sounded. After the evidence was collected, the trial court granted summary judgment to the company, ruling the woman could not prove that the company’s misconduct “caused” her injuries.

The injured woman appealed. In what appears to be a fundamentally flawed decision (at least to this writer), the Georgia Court of Appeals agreed with the trial court that summary judgment was proper based on the principle of causation. Incredibly, the Georgia Court of Appeals reasoned that “[the injured party] has not pointed to any evidence showing that but for a non-functioning smoke detector, [the injured party] would not have sustained her injuries.” This rationale is hard to understand when the very purpose of a smoke detector is to provide an early warning of a fire. Here, the woman claimed that had she had an early warning, she wouldn’t have been injured. This seems both logical and reasonable. Perhaps even more incredible, the court went on to rule that because the woman burned her hand while trying to put out the fire, she was to blame, regardless of whether the smoke alarm should have sounded.

Fortunately, there was a dissenting opinion. Three Georgia Court of Appeals judges decide these types of cases. Here, one of the judges disagreed with the other two. The dissenting judge pointed out the obvious, which is the purpose of a smoke detector is to “provide an early warning of fire  . . . to reduce injuries.” Thus, had the smoke alarm sounded in a timely manner, the injuries might have been prevented. Moreover, trying to put a fire out to minimize property damage, and possibly to save human life, is a natural reaction and shouldn’t get the smoke alarm company off the hook.

After hearing the evidence, maybe the jury would have sided with the woman or maybe the company, but this is case that should have been decided by a jury hearing evidence at a trial. Not by a judge or an appellate court.

If you are injured, please call us at 404-382-9994 to discuss your case.

Attorney’s Fees in Georgia: Part One

Part 1: Contractual Attorney’s Fees

Virtually without fail, one of the first things our clients ask is whether they’ll be able to recover attorney’s fees from the other side. This is a fair question because it seems wrong to have pay an attorney when the other side has acted improperly or has caused the dispute. While not necessarily intuitive, the default rule, with exceptions, is that each side is responsible for their own attorney’s fees. We’re going to discuss some of the statutes and cases contrary to the default rule–these laws allow the winner of a lawsuit to recover reasonable attorney’s fees.

The most clear cut situation in which the winning party can recover attorney’s fees is when parties have signed a contract that provides for the recovery of  attorney’s fees. For example, a typical provision in a contract might say that “the prevailing party is entitled to attorney’s fees incurred to enforce or collect monies due under the contract.” In these situations, a trial court doesn’t have the authority to alter such an arrangement unless it is prohibited by statute, and the winning party is entitled to reasonable attorney’s fees as a matter of law.

Contractual attorney’s fees were discussed by the Georgia Court of Appeals in Summit At Scarborough Homeowners Association, Inc. v. Williams, A17A1289 (decided November, 16, 2017). In that case, the trial court’s decision to deny a homeowner’s association attorney’s fees related to unpaid association dues was reversed because the association documents, which are considered a contract, provided for the collection of attorney’s fees. Thus, in cases where a contract provides for attorney’s fees, the trial court must award attorney’s fees based upon evidence of the reasonable value of the professional services provided by the attorney.

In the next installment, we’ll discuss what happens when there’s no contractual provision for attorney’s fees, but the opposing party has acted in bad faith.