Haney v. Development Authority of Bremen

519 S.E.2d 665, 271 Ga. 403, 99 Fulton County D. Rep. 2504, 1999 Ga. LEXIS 659
CourtSupreme Court of Georgia
DecidedJuly 8, 1999
DocketS99A1141, S99A1142, S99A1281
StatusPublished
Cited by14 cases

This text of 519 S.E.2d 665 (Haney v. Development Authority of Bremen) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Haney v. Development Authority of Bremen, 519 S.E.2d 665, 271 Ga. 403, 99 Fulton County D. Rep. 2504, 1999 Ga. LEXIS 659 (Ga. 1999).

Opinions

Fletcher, Presiding Justice.

The Development Authority of Bremen sought to issue $7.2 million in revenue bonds to finance a public golf course in an industrial park in the City of Bremen. Two hundred sixty-five city residents intervened to oppose the bonds and project. The trial court validated the bonds and related documents and ordered the intervenors to post a $3 million surety bond to cover all damages and costs that the city and authority might incur during the appeal. Because the trial court abused its discretion in requiring a bond and the proposed project does not promote trade, commerce, or industry, we reverse the judgment confirming and validating the issuance of the revenue bonds.

[404]*404In 1979, the authority purchased 400 acres of land for an industrial park. It financed the purchase by issuing purchase money notes to the sellers, which must be paid by December 31, 1999. After environmental regulations made the land unsuitable for industrial development, the authority last year proposed constructing a golf course to generate revenue to pay off the notes.

In November 1998, a petition was filed in superior court for the validation of revenue bonds to finance the Turkey Creek Golf Course Project. The project includes an 18-hole public golf course, club house, pro shop, maintenance building, practice putting greens, and driving range. The authority will use the bond proceeds to pay the debt on its 1979 notes, the design and construction costs of the golf course, and the costs of issuing the bonds. The authority and city intend to hire a private management company that will employ 25 people to operate the golf course once it is constructed. If the project’s operating revenues are insufficient to pay for the expenses of operating the golf course and the debt service on the bonds, the city is obligated to pay both.

After the trial court entered its order validating the proposed bonds and contracts, the intervenors announced their intention to appeal and the authority and city filed a petition requesting that the intervenors post a bond under the Public Lawsuits Act.1 The trial court found that the appeal will delay the issuance of the bonds and prevent the authority from completing the golf course and retiring the notes due on December 31,1999. Without explaining the basis for its figure, it ordered the intervenors to post a $3 million surety bond to cover increased costs, lost revenues, and potential losses during the appeal. The intervenors did not post the surety bond, and their appeal was dismissed by operation of law under OCGA § 50-15-2.

In S99A1141, the intervenors appeal from the validation judgment, challenging the authority’s power to finance and construct a golf course and the means and method used to finance and operate the project. In S99A1142, they appeal from the order requiring the surety bond.

S99A1142, S99A1281. BONDS IN PUBLIC LAWSUITS

1. The Public Lawsuits Act gives courts the authority to require a bond of any party who opposes a public improvement project in a public lawsuit. The purpose of the act is to protect the public from increased financial costs caused by the filing of non-meritorious or frivolous litigation against the project.2

[405]*405Although enacted 30 years ago, the act has never been interpreted by an appellate court. As codified, the act permits any political subdivision in a public lawsuit to petition for a court order that the opposing party or intervenors be dismissed unless they post a bond.3 OCGA § 50-15-1 defines a “political subdivision” as any state or local body with the right to sue or issue bonds. A “public lawsuit” is defined as any action that questions or opposes “the construction, improvement, financing, or leasing of any public improvement, project, or facility by any political subdivision . . . including, but not limited to, actions for declaratory judgments or injunctions or interventions.”

The bond requirement is not limited to appeals, but may be imposed by the trial court whenever it determines that a bond would be in the public’s interest.

If, at the hearing of the petition on the order to show cause, the court determines that it is in the public interest to do so, the court shall set the amount of bond to be filed by the opposing party or parties or intervenors in an amount found by the court to cover all damage and costs which may accrue to the political subdivision by reason of the opposition or intervention in the event the political subdivision prevails.4

If no bond is filed within ten days of an order, the opposing party or intervenor shall be dismissed by operation of law, but may appeal the order. The appellate courts have the authority to stay the lower court order, set the bond to be filed, modify the lower court order, or enter a final order. OCGA § 50-15-3 directs both trial and appellate courts to give expeditious consideration to public lawsuits, and § 50-15-4 prohibits the filing of other actions related to the same subject matter after a public lawsuit is commenced.

Given the broad statutory definitions of the terms “political subdivision” and “public lawsuit,” we conclude that the provisions of the Public Lawsuits Act apply to proceedings under the Revenue Bond Law.5 The development authority and city are political subdivisions with the right to bring and defend actions or to issue bonds or other obligations as evidence of indebtedness; the bond validation proceeding is an action in which city residents have intervened to prevent the construction and financing of a public improvement project.

2. On appeal, we must determine whether the trial court abused its discretion in requiring the intervenors to post a $3 million surety [406]*406bond.6 The issue is whether the trial court correctly concluded that it was in the “public interest” to require a surety bond in this validation proceeding.7

In construing this term, we must consider the legislative intent in passing the Public Lawsuits Act.8 The bill was enacted “to protect the public from financial damages due to non-meritorious or frivolous litigation.”9 Thus, while any lawsuit filed against a public project may increase its costs, the act makes clear that the legislature intended to discourage frivolous or non-meritorious challenges because their harm to the public purse offsets any benefit. Here, the intervenors have raised meritorious claims concerning whether the proposed contracts meet the constitutional requirements for intergovernmental contracts that are not subject to the constitutional debt clause and whether the proposed golf course is a project that promotes the development of trade, commerce, industry, and employment opportunities as required under the constitution and statute. Therefore, we hold that the trial court abused its discretion in requiring the intervenors to post a surety bond in this proceeding.

S99A1141. VALIDATION OF THE REVENUE BONDS

3.

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Haney v. Development Authority of Bremen
519 S.E.2d 665 (Supreme Court of Georgia, 1999)

Cite This Page — Counsel Stack

Bluebook (online)
519 S.E.2d 665, 271 Ga. 403, 99 Fulton County D. Rep. 2504, 1999 Ga. LEXIS 659, Counsel Stack Legal Research, https://law.counselstack.com/opinion/haney-v-development-authority-of-bremen-ga-1999.