City of Albany v. South Georgia Rails to Trails, Inc.

CourtCourt of Appeals of Georgia
DecidedMay 6, 2025
DocketA25A0061
StatusPublished

This text of City of Albany v. South Georgia Rails to Trails, Inc. (City of Albany v. South Georgia Rails to Trails, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Albany v. South Georgia Rails to Trails, Inc., (Ga. Ct. App. 2025).

Opinion

FOURTH DIVISION MERCIER, C. J., DILLARD, P. J., and LAND, J.

NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. https://www.gaappeals.us/rules

May 6, 2025

In the Court of Appeals of Georgia A25A0061. CITY OF ALBANY v. SOUTH GEORGIA RAILS TO TRAILS, INC.

DILLARD, Presiding Judge.

The City of Albany appeals the trial court’s denial of its motion to dismiss

South Georgia Rails to Trails, Inc.’s1 breach-of-contract action against it. The City

argues the trial court erred in finding (1) OCGA § 36-30-13 (a) does not render the

agreement between the parties void and unenforceable; (2) the agreement was not

void and unenforceable because of a lack of assent as to its essential terms; (3) the

prohibition delineated in OCGA § 36–30-3 (a) is inapplicable to the agreement; and

(4) the agreement does not violate the Constitution of the State of Georgia’s

1 South Georgia Rails to Trails, Inc. will be referred to as “SGRT” throughout the opinion. Gratuities Clause. For the following reasons, we affirm.2

Accepting all well-pleaded factual allegations in the complaint as true and

resolving all doubts in favor of SGRT,3 the record shows that on April 30, 2015, the

City executed a contract with SGRT—the owner of a 13.62-mile inactive railroad

corridor running between Albany and Sasser, Georgia, as well as the designated trail

manager for the property under federal railbanking law.4 Under the terms of the

agreement, SGRT conveyed the property to the City for $150,000; and in return, the

City promised to develop it for “public open space and recreational purposes,

2 Oral argument was held on December 3, 2024, and is archived on the Court of Appeals of the State of Georgia’s website. See Court of Appeals of the State of Georgia, Oral Argument, Case No. A25A0061. (Dec. 3, 2024), available at https://vimeo.com/1036763901. 3 See Premier Eye Care Assocs., P.C. v. Mag Mut. Ins. Co., 355 Ga. App. 620, 623 (844 SE2d 282)(2020) (“[I]n ruling on a motion to dismiss, the trial court must accept as true all well-[pleaded] material allegations in the complaint and must resolve any doubts in favor of the plaintiff.” (punctuation omitted)). Here, the factual background underlying this appeal is largely undisputed, and the subject contract is an exhibit to the complaint. See OCGA § 9-11-10 (c) (“A copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes.”). 4 A “trail manager” in this context “must agree to assume all responsibility for: (1) managing the right-of-way, (2) any legal liability arising out of the transfer or the use of the right-of-way (unless the sponsor is immune from liability, in which case it need only indemnify the railroad against any potential legal liability), and (3) the payment of any and all taxes that may be levied or assessed against the right[-]of[- ]way.” 2 including the development of a multi-use trail and installation of City utility lines.”

More precisely, the City agreed to “complete the trail along its 13.62 mile corridor

within five (5) years of the closing of the purchase of the property,” and the “trail

design, including the trail’s riding surface material, will be specified in a trail plan to

be jointly developed by and formally approved by the parties.”

In the years that followed, the City did not act to approve a trail plan, and it

never constructed any portion of the trail. In fact, minutes taken at a meeting of the

City’s mayor and board of commissioners revealed that they never considered a

master plan for construction of the trail or any alternatives. But as permitted by the

agreement, the City did construct utility lines along the property to increase its utility

revenues and expand its service to more customers—many of whom are located

outside of the City and Dougherty County. And according to SGRT, its contractual

relationship with the City is inextricably “intertwined with the regulatory provisions

of the federal railbanking law,[5] and the City’s default under the [a]greement

5 Federal railbanking law regulates right-of-ways previously owned by a railroad. s e e R a i l s t o T r a i l s C o n s e r v a t o r y , https://www.railstotrails.org/trail-building-toolbox/railbanking (last visited May 5, 2025) (“Railbanking, established in 1983 as an amendment to Section 8(d) of the National Trails System Act, is a voluntary agreement between a railroad company and a trail sponsor (such as a trail organization or government agency) to use an out-of-service rail corridor as a trail until a railroad might need the corridor again for rail service. This interim trail use of railbanked corridors has preserved thousands of miles of rail 3 endangers the [p]roperty’s interim trail use status and, possibly, the City’s ownership

interest in the [p]roperty.”

As a result of the foregoing, on October 26, 2022, SGRT filed a complaint

against the City for breach of contract. And in doing so, SGRT alleged that to comply

with federal railbanking law and preserve the property’s railbanked status, SGRT and

the City must ensure the property is “kept intact, continuous, unencumbered by the

accumulation of substantial future financial burdens, and unobstructed by significant

structures that would impede or impair rail reactivation.” Thus, the City’s failure to

“keep the [p]roperty intact and continuous for future rail service could result in a

severance of the corridor, invalidation of the interim trail[-]use status, and a final

abandonment of the corridor, with attendant circumstances.”

In 2018, the City’s mayor and board of commissioners adopted a state-required

strategic plan, and under the “Economic Development and Jobs” section, it stated

objectives of “complet[ing] the installation of natural gas and telecom infrastructure

along the rails-to-trails property” and “construct[ing] rails-to-trails with associated

utility infrastructure.” Then, in a 2019 budget report, the City listed those objectives

as “ongoing.” And while the City never constructed a trail along the property, it did

corridors that would otherwise have been abandoned.”). 4 construct a nine-foot wide “multipurpose trail,” which extended from downtown

Albany to a dead end where it intersected with the property—which then extended

from there to Sasser.

Later, the mayor and board of commissioners authorized a Transportation

Special Purpose Local Option Sales Tax (“TSPLOST”) referendum, which the

City’s voters approved in 2019. The TSPLOST included $4,200,000 for multi-

purpose trails and its promotional materials referenced the Albany-Sasser trail. Also

in 2019, the City identified funding for and developed detailed construction plans for

a significant portion of the Albany-Sasser trail. The City also solicited bids for paving

“Phase I and II” of the trail and opened them in March 2019; but it did not accept the

low bids for those phases before the time for doing so expired. The five-year deadline

under the agreement for the City to construct the trail then expired on May 14, 2020.

Even so, the City continued to operate utility lines along the property to service

customers.

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