Zoning and Land Use Law - Dennis J. Webb, Jr., Marcia Mccrory Ernst, Victor A. Ellis, Amitabha Bose, and Joseph L. Cooley

• Publication year: 2006

Zoning and Land Use Lawby Dennis J. Webb, Jr.^* Marcia McCrory Ernst^** Victor A. Ellis^*** Amitabha Bose^**** and Joseph L. Cooley^*****

This Article provides a succinct and practical analysis of the significant judicial decisions in the area of zoning and land use law handed down by Georgia appellate courts between June 1, 2005 and May 31, 2006. The cases surveyed fall primarily within five categories: (1) condemnation, (2) restrictive covenants, (3) easements, (4) zoning, and (5) miscellaneous.

I. Condemnation

During the survey period, Georgia appellate courts decided several condemnation cases, many of which did not involve novel issues. The Georgia Court of Appeals did, however, consider one case with an interesting temporary work easement issue. Furthermore, in two other cases, the Georgia Court of Appeals examined the proper legal and evidentiary basis for an award of business loss damages. Two different panels of the court, with one common judge, held business losses appropriate in the first case and precluded business losses in the second.

A. Temporary Work Easement

In Georgia 400 Industrial Park v. Department of Transportation,¹ the Georgia Department of Transportation ("DOT") filed a petition and declaration of taking pursuant to Official Code of Georgia Annotated ("O.C.G.A.") sections 32-3-1 to 32-3-20² to acquire certain land for transportation purposes and the right to dismantle and remove a building sitting partly on the condemned land and partly on adjacent land, as well as a temporary work easement to enter the adjacent land for purposes of removing the building. The condemnees filed a motion pursuant to O.C.G.A. section 32-3-11 to set aside, vacate, and annul the declaration of taking, arguing in part that the declaration failed to provide a sufficient description of the temporary work easement. The trial court denied the motion.³

In an interlocutory appeal, the Georgia Court of Appeals reversed the trial court with respect to the temporary work easement.⁴ The court of appeals noted that the Georgia Supreme Court has consistently held that a condemning body seeking to acquire an easement must describe the easement with the same degree of definiteness required for a land deed.⁵ A condemnee is entitled to have an accurate, definite description of the property it is to lose and nothing must be left open to the judgment or interpretation of another.⁶ The appellate court determined that the language of the temporary work easement did not provide the width of the easement or any limitation regarding a pathway to be utilized when traversing the adjacent land.⁷ Although the DOT argued that the description contained a temporal limitation, the appellate court held that the limitation did not convey even a hint of the extent of the physical invasion contemplated.⁸

The court of appeals also rejected the DOT's argument that the issue was moot because the building was dismantled during the pendency of the interlocutory appeal.⁹ The court noted that due process requires a condemnee to be provided a legally sufficient description of its land interest sought to be acquired and that this type of description is required for the easement to be accurately valued for purposes of just and adequate compensation.¹⁰ Based on this, the court remanded the case with instructions to the trial court requiring the DOT to amend the declaration of taking to provide an accurate and legally sufficient description of the land it traversed, along with the period of time it was used, for purposes of determining the value of the land taken or consequential damages to land not taken.¹¹

B. Business Loss Damages

The Georgia Court of Appeals decided two cases during the survey period that involved business loss damages. In one case, the appellate court determined that the business loss award for a well-established business was not too speculative and remote. However, in another case, the court held that such an award was precluded when the business was not established and the award was based on speculative evidence of business losses.

In Carroll County v. L.J.S. Grease & Tallow,¹² the county water authority condemned 37.959 acres of land for construction of a reservoir. A special master awarded the condemnee $140,000 as the market value of the property taken. The condemnee appealed the award and demanded a jury trial. By consent of the parties, the case was heard by a court-appointed arbitrator with further right of appeal. The arbitrator awarded the condemnee $265,000 as the value of the land and $1,250,000 for business loss damages. The water authority appealed, arguing that the business loss damages were too speculative and remote.¹³

The condemnee had operated a long-established grease rendering plant on the condemned land. Grease rendering plants perform a sanitation service for restaurants by collecting used grease for a pickup fee and then converting the grease into an end product, which is sold for use in animal feed, cosmetics, and lubricants. When the water authority announced its intent to construct the reservoir, the condemnee began losing its customers due to the threatened closure of the plant. Therefore, the condemnee began winding down plant operations until its federal permits expired. Subsequently, the water authority filed its petition to condemn approximately one-half of the condemnee's acreage.¹⁴

The water authority challenged the business loss award on the ground that the condemnee had ceased operations more than a year before the condemnation and that the award violated the general rule that business losses occurring before the date of taking are not recoverable.¹⁵ The Georgia Court of Appeals, however, rejected this argument on the ground that when the "imminency of a condemnation forces an established business to close before the date of condemnation, the absence of a business in operation on the property on the date of taking does not automatically end all inquiry into the relevancy of business loss evidence."¹⁶

The water authority also challenged the business loss award on the ground that the condemnee failed to relocate the grease rendering plant.¹⁷ The appellate court rejected this argument as well, holding that the evidence showed that the condemnee found an alternate plant site, but that the water authority refused to help relocate the plant because the estimated cost of relocation was in excess of two million dollars.¹⁸ Accordingly, the appellate court concluded that the arbitrator was authorized to find that the water authority bore responsibility for not relocating the plant.¹⁹ Recognizing that a condemnee may be required to relocate a business to mitigate business loss damages, the court held that where the estimated relocation costs exceed the value of the business, as in this case, the condemnee cannot be charged with a failure to mitigate damages by not relocating.²⁰

The water authority also challenged the amount of the business loss award as remote and speculative.²¹ The court of appeals noted that a condemnee may recover business losses as a separate item if it operated an established business on the property, if the loss is not remote or speculative, and if the property is unique.²² First, the court held that the condemnee's grease rendering plant was an established business.²³ Next, the court held that "[b]ased on evidence showing that grease rendering plants are not generally bought and sold on the open market, the arbitrator was authorized to find the property unique."²⁴

Finally, the court of appeals determined that the business loss damages were not too speculative or remote to warrant recovery.²⁵ The court first reviewed Georgia Supreme Court authority that allows a condemnee to recover for the destruction of an established business as a separate item of recovery in addition to the value of the underlying real estate.²⁶ The court then noted that the general rule, "that lost profits are too speculative to authorize a direct recovery, is not necessarily a bar to the admission of evidence of lost profits to aid in establishing the value of a business."²⁷ After reviewing in detail the business valuation evidence, which included the condemnee's total capital investment in the plant, an appraiser's determination of the plant's asset-based value, and an appraiser's determination of the plant's income-based value, the court held that the business loss award was well within the range of the evidence presented.²⁸ Accordingly, the court of appeals affirmed the condemnation award.²⁹

In Georgia Power Co. v. Jones,³⁰ however, the court of appeals held that the condemnees were precluded from seeking business loss damages separately from the lost value to their land, and that the trial court abused its discretion in admitting speculative evidence of business losses.³¹ In 1997 the Joneses purchased mountain property, which had space for a lodge, six cottages, nature trails, and a pond. In 1999 the Joneses built a road to the property and began constructing a lodge. In the spring of 2001, Georgia Power notified the Joneses that it intended to seek an easement across their property for a power line with tall towers. Because the Joneses were concerned about the negative impact of the power line on their business, they delayed the development of the other planned improvements. They continued construction of the lodge, which was substantially complete in the fall of 2002. In November 2002 Georgia Power filed a condemnation action for a power line easement approximately 1000 feet from the back of the lodge.³² A special master awarded the Joneses $26,000 as the actual fair market value of the condemned property and $5880 for consequential damages.³³ The Joneses filed an exception to the special master's award and a jury trial followed. The Joneses claimed that the power lines completely destroyed their plans for a bed and breakfast inn, and they sought damages for the loss of the business separately...