Richardson v. Phillips

711 S.E.2d 358, 309 Ga. App. 773, 2011 Fulton County D. Rep. 1664, 2011 Ga. App. LEXIS 448
CourtCourt of Appeals of Georgia
DecidedJune 3, 2011
DocketA11A0405
StatusPublished
Cited by1 cases

This text of 711 S.E.2d 358 (Richardson v. Phillips) 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
Richardson v. Phillips, 711 S.E.2d 358, 309 Ga. App. 773, 2011 Fulton County D. Rep. 1664, 2011 Ga. App. LEXIS 448 (Ga. Ct. App. 2011).

Opinion

McFadden, Judge.

Bobby E. Richardson, Sr., a resident of Miller County, petitioned to remove Miller County commissioner Frankie C. Phillips from office for alleged illegal and unethical conduct. After the parties filed cross-motions for summary judgment, the trial court entered judgment for Phillips. Richardson appeals. Because the record shows that no illegal or unethical conduct occurred, we affirm.

This is the second time this case has been before us. See Richardson v. Phillips, 302 Ga. App. 305 (690 SE2d 918) (2010). The facts are detailed in our prior opinion, and we will not repeat them all here. Briefly, however, the evidence shows that in 1995, before her election to the county commission, Phillips purchased a building on the Miller County courthouse square. The seller, Hilda J. Grow, *774 financed the transaction. As part of the acquisition, Phillips gave Grow a promissory note for $42,000, as well as a deed to secure debt. Pursuant to the note, Phillips agreed to pay Grow $5,367 per year for 15 years. The note also subjected Phillips to a prepayment penalty if she paid off the debt before July 1, 2005. Id. at 305-306.

Phillips was elected to the Miller County Board of Commissioners in 1996. Four years later, she decided to sell the building to an entity that, in turn, planned to gift it to the County. That sale is at the crux of this dispute.

As we noted in our prior opinion, “[a] complex, multi-party transaction was structured under which title to the Property ultimately was to be conveyed to Miller County so that the Property could be used as a county office building.” Richardson, supra at 306. The deal involved not only Phillips and the County, but Union Investment, Inc. and the Ruth T. Jinks Foundation, Inc., two corporations that managed the estate of a local family. Phillips sold the property to Union; which agreed to assume and pay off Phillips’s outstanding indebtedness to Grow. Union then leased the property to the County. Although the County was obligated under the lease to make yearly payments of $5,367, the Jinks Foundation donated the required funds to the County prior to each payment. In July 2005, when the original prepayment penalty was no longer at issue, the Foundation donated to the County the amount needed to pay off the promissory note to Grow. Union then deeded the property to Miller County as a gift. See id. at 307. Ultimately,

[t]he transaction was structured with the intent and purpose that the Property be deeded to Miller County without the use of any taxpayer funds, but in a manner that would compensate Phillips for the Property, would avoid having to pay the prepayment penalty to Grow, and would have tax advantages for the Jinks family estate.

Id. at 306.

Although Miller County obtained title to the property as a gift, Richardson filed the instant action in 2007, asserting that Phillips unethically and illegally transacted business with the County while she was a county commissioner. Richardson sought an order removing Phillips from office, as well as other declaratory relief. Following cross-motions for summary judgment, the trial court found that Richardson’s claims were moot because the transaction had been completed and the County owned title to the property free and clear of any debt. It thus granted summary judgment to Phillips on all claims.

Richardson appealed, giving rise to our first opinion in this case. *775 We agreed with the trial court that Richardson’s declaratory judgment claims should be dismissed. See Richardson, supra at 309-310 (1). But we refused to find that the completed transaction mooted Richardson’s effort to remove Phillips from office. Id. at 310-311 (2). We thus vacated that portion of the summary judgment order and remanded the case for further proceedings on the removal claim. Id. at 311.

On remand, the trial court considered the merits of the parties’ summary judgment arguments with respect to removal. Following a hearing, the court once again granted summary judgment to Phillips. This appeal followed.

In support of removal, Richardson argues that Phillips violated the Local Act creating the Miller County Board of Commissioners. See Ga. L. 1983, pp. 4594, 4603, § 14 (the “Local Act”). Pursuant to Section 14 of that Act:

No member of the board . . . shall be financially interested directly or indirectly in any contract to which the county is a party, either as a principal, surety, or otherwise; nor shall such member of the board . . . purchase from or sell to the county any real or personal property, goods, or services. Any contracts made in violation of any of the foregoing provisions shall be illegal and the person who violates this section shall be removed from office upon proper proceedings instituted by any taxpayer of the county in accordance with the provisions of Code Section 36-1-14 of the OCGA, relating to the purchase of goods or property by interested county officers with county funds.

Id.

Phillips had an indirect financial interest in this transaction. Although Union agreed to assume her obligations to Grow, Grow “did not sign or otherwise agree to the Assumption Agreement, and it is undisputed that Phillips remained liable on the original promissory note.” Richardson, supra at 306. Continued and timely payments under the note — including through the County’s lease — were important to Phillips.

Based on this indirect financial interest, Richardson argues that Section 14 of the Local Act mandates Phillips’s removal. As noted by Phillips, however, Section 14 references OCGA § 36-1-14, which also addresses the removal of county government officials. That Code section prohibits a county official from purchasing goods or property for public or county purposes

from any person or partnership of which he is a member or *776 by whom he is employed, unless by sanction of the majority of the members of the county governing authority or unless it is made clearly to appear that such individual [or] partnership . . . offers and will sell the goods or property as cheaply as or cheaper than the same can be bought elsewhere.

OCGA § 36-1-14 (a).

Reading OCGA § 36-1-14 (a) together with the Local Act, Phillips contends that a commissioner who engages in a County-involved real estate transaction should not be removed if the County receives property at no cost. In this case, the County was gifted a building on the courthouse square at no cost and free of any debt. Phillips certainly benefitted from the transaction. But so did the County, undermining the appearance of improper self-dealing.

Richardson, on the other hand, argues that the Local Act’s reference to OCGA § 36-1-14

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Related

Board of Commissioners v. Callan
720 S.E.2d 608 (Supreme Court of Georgia, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
711 S.E.2d 358, 309 Ga. App. 773, 2011 Fulton County D. Rep. 1664, 2011 Ga. App. LEXIS 448, Counsel Stack Legal Research, https://law.counselstack.com/opinion/richardson-v-phillips-gactapp-2011.