GLYNN COUNTY v. COLEMAN Et Al. (Three Cases)

FIRST DIVISION
DOYLE, C. J.,
PHIPPS, P. J., and BOGGS, 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.
http://www.gaappeals.us/rules
November 16, 2015
In the Court of Appeals of Georgia
A15A1522, A15A1523, A15A1524. GLYNN COUNTY, GEORGIA
v. COLEMAN, et al. (three cases).
BOGGS, Judge.
In these consolidated appeals, Glynn County (“the County”) appeals from
orders certifying three related class actions brought by Elizabeth and J. Matthew
Coleman, IV (“the Colemans”). In each of these cases, the County asserts that the trial
court erred by granting the class certification. In Case No. A15A1522, the County
also asserts that the trial court should have considered and granted its motion to
dismiss the class allegations in the Colemans’ complaint. For the reasons explained
below, we affirm.
The record shows that the Colemans filed three class action lawsuits against
the County seeking a refund of ad valorem taxes under OCGA § 48-5-380, a
declaratory judgment, as well as equitable, injunctive, and mandamus relief. In Case
No. A15A1522, the trial court certified four classes: (1) taxpayers for whom an
exemption was miscalculated in any year between 2001 and 2007; (2) taxpayers for
whom an exemption was miscalculated in 2008; (3) taxpayers for whom an
exemption was miscalculated in 2009; and (4) taxpayers for whom an exemption was
miscalculated in 2010. In Case No. A15A1523, the trial court certified a class for tax
years 2011 and 2012, and in Case No. A15A1524, the trial court certified a class for
tax years 2013 and 2014. The County appeals from these class certification orders.
In Case No. A15A1522, it also appeals from the trial court’s denial of its motion to
dismiss the class allegations in the Colemans’ complaint.
As a preliminary matter, we note that “[o]n appellate review of a trial court’s
decision on a motion to certify a class, the discretion of the trial judge in certifying
or refusing to certify a class action is to be respected in all cases where not abused.”
(Citation and punctuation omitted.) State Farm Mut. Auto Ins. Co. v. Mabry, 274 Ga.
498, 499-500 (1) (556 SE2d 114) (2001).
When a court determines the propriety of a class action, the first issue
to be resolved is not whether the plaintiffs have stated a cause of action
or may ultimately prevail on the merits but whether the requirements of
OCGA § 9-11-23 have been met. Any assertion that the named plaintiff
cannot prevail on [his] claims does not comprise an appropriate basis for
denying class certification. Further, any argument that [plaintiff] is not
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an adequate representative because [he] will not ultimately prevail on
[his] claim does not comprise an appropriate basis for denying class
certification.
(Citations and punctuation omitted.) Peck v. Lanier Golf Club, 298 Ga. App. 555, 556
(680 SE2d 595) (2009).
1. In Case No. A15A1522, the County contends the trial court erred in denying
its motion to dismiss as premature. The record shows that the County filed a motion
to dismiss “all class action allegations in plaintiff’s Complaint pursuant to OCGA §
9-11-12 (b) (6). This Motion is based upon the record in this case and is made for the
reasons set forth in the brief filed contemporaneously herewith.” On the same day, the
County filed a “Supplemental Response to Plaintiffs’ Motion to Certify Suit as Class
Action and in Support of Motion to Dismiss.” In this brief, the County asserted that
class actions are not generally available in tax refund cases and that the only available
remedy is the tax refund statute. It also asserted that a class should not be certified
based upon the doctrine of sovereign immunity, asserted limitation periods that would
apply to the Colemans, both individually and as representatives of a class, and
pointed to alleged flaws in the Colemans’ claims for non-monetary relief.
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In its orders certifying the class actions, the trial court addressed the County’s
claim that class actions are not generally available in tax refund cases, and, for the
reasons explained below, properly concluded that class actions are permissible in
cases involving refunds under OCGA § 48-5-380, and also that class actions, in
general, may assert claims for non-monetary relief. The trial court did not, however,
address any other portion of the County’s motion to dismiss. In a footnote, it stated,
“Defendant’s remaining arguments against class certification are merits based
arguments which will be addressed in this Court’s Order on Defendant’s Motion to
Dismiss.”
The trial court’s order denying the County’s motion to dismiss states, in its
entirety: “Defendant filed a Motion to Dismiss Named Plaintiff’s class allegations
under OCGA § 9-11-12 (b) (6). For the reasons set forth in Whitaker v. Department
of Human Resources of State of Georgia, 86 FRD 689, 692 (ND Ga. 1980), the
motion is premature and therefore is DENIED.”
In Whitaker, supra, the Northern District of Georgia ruled as follows:
The other pending motions relate to the issue of class certification. They
are defendant’s motion for partial dismissal of class allegations and
defendant’s motion to strike class allegations, and plaintiff’s motion for
class determination. The court DENIES defendant’s motion for partial
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dismissal of class allegations relating to discrimination on the basis of
sex. The defendant does not state which of the Federal Rules of Civil
Procedure forms the basis of the motion for partial dismissal of class
allegations. One leading commentator has stated that “one opposing the
class action may move for an order determining that the action may not
be maintained as a class suit.” 3B Moore’s Federal Practice P 23.50, p.
23-421. Professor Moore points out in a footnote that “[t]he proper way
to test class action treatment is a motion under Rule 23 (c) (1), not a
motion to dismiss . . . under Rule 12 (b) (6).” The court finds that the
motion dismiss class allegations, filed with defendant’s answer, is
premature. The motion is DENIED.
Id. at 693.
It is well-established that [in determining whether a class action should proceed
under OCGA § 9-11-23, “the first issue to be resolved is not whether the plaintiffs
have stated a cause of action or may ultimately prevail on the merits, but whether the
requirements of OCGA § 9-11-23 (a) have been met.” (Citations and punctuation
omitted.) MCG Health, Inc. v. Perry, 326 Ga. App. 833, 835 (1) (755 SE2d 341)
(2014). Here, the County’s motion sought to dismiss only the class action allegations
in the complaint based upon legal theories that would apply to both the individual and
class action claims of the Colemans. In essence, the County asked the trial court to
dismiss only the class action claims because the complaint generally was subject to
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dismissal based upon sovereign immunity, limitation periods in the refund statute,
and alleged flaws with the Colemans’ claims for non-monetary relief. As the trial
court apparently recognized when it denied the motion to dismiss the class allegations
in the Colemans’ complaints, this is not the proper procedure to avoid certification
of a class under OCGA § 9-11-23.
While a defendant can certainly seek a ruling on a dispositive motion before
certification of a class, it cannot use a dispositive motion as a vehicle to deny class
certification. See 5-23 Moore’s Federal Practice - Civil § 23.81 [2] (court may rule
on dispositive motion before deciding whether to certify class); Village Auto Ins. Co.
v. Rush, 286 Ga. App. 688, 692 (2) (649 SE2d 862) (2007) (“merit-based disputes are
not ripe for resolution at the class certification stage”). We therefore affirm the trial
court’s denial of the County’s motion to dismiss only the class allegation portions of
the Colemans’ complaint. We express no opinion about whether the certified class
actions are subject to dismissal for the reasons asserted in the motion to dismiss that
have not yet been considered by the trial court. See Taylor Auto Group v. Jessie, 241
Ga. App. 602, 604 (2) (527 SE2d 256) (1999) (refusing to consider merits of defense
in appeal from order certifying a class action).
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2. In each of the three cases before us, the County asserts that trial court erred
by granting the Colemans’ motion for class certification because class action
certification is generally improper in a tax refund lawsuit. As the trial court ruled on
this issue in its certifcation order, we will consider it.
In support of its argument that class certification is improper in a tax refund
action, the County relies upon the Supreme Court of Georgia’s decisions in Sawnee
Elec. Membership Corp. v. Ga. Dept. of Revenue, 279 Ga. 22 (608 SE2d 611) (2005)
and Henderson v. Carter, 229 Ga. 876 (195 SE2d 4) (1972), as well as a 2003
amendment to a different tax refund statute, OCGA § 48-2-35. The Colemans assert
that the Supreme Court’s decisions in City of Atlanta v. Barnes, 276 Ga. 449 (578
SE2d 110) (2003) (Barnes I) and Barnes v. City of Atlanta, 281 Ga. 256 (637 SE2d
4) (2006) (Barnes II), expressly authorize class actions for refund claims under the
statute at issue here, OCGA § 48-5-380. The trial court reviewed this body of law in
its orders certifying the classes and correctly concluded that class actions can be
maintained in tax refund cases involving OCGA § 48-5-380.
In Henderson, supra, the Supreme Court concluded that a statute authorizing
a tax refund against the State
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provides the method by which refunds and suits for refunds may be
made by taxpayers. It does not provide for the bringing of a class action
in either instance. The State has waived her sovereign immunity only to
the extent provided by the express terms of this statute. It follows that
a class action in the instant case is not authorized.
229 Ga. at 879 (2). In Barnes I, the Supreme Court reconsidered its decision in
Henderson, and concluded, in a case involving a tax refund claim under the same
statute at issue here (OCGA § 48-5-380):
When a statute provides the right to bring an action for a tax refund
against a governmental body, that statute provides an express waiver of
immunity and establishes the extent of the waiver (the amount of the
refund), but does not purport to provide for the form of action to be
utilized. By participating as a plaintiff in a class action that includes a
claim for a tax refund, a taxpayer is unquestionably bringing an action
for a refund, which is what the statute permits. We conclude, therefore,
that the holding in Henderson that there can be no class actions brought
for tax refunds was error.
276 Ga. at 452 (3).
Following the Supreme Court’s decision in 2003 to overrule Henderson, in
Barnes I, the General Assembly amended OCGA § 48-2-35, the statute governing tax
refunds sought from the Georgia Department of Revenue, to expressly prohibit class
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actions under that Code provision. See OCGA § 48-2-35 (c) (1) (D) (“A claim for
refund may not be submitted by the taxpayer on behalf of a class consisting of other
taxpayers who are alleged to be similarly situated.”). The General Assembly did not
make a similar amendment to OCGA § 48-5-380, the statute governing the
procedures for obtaining ad valorem tax refunds that was at issue in Barnes I.
In its 2005 Sawnee decision, the Supreme Court held that an Electrical Member
Corporation could not bring a lawsuit on behalf of its 108,000 members against the
Georgia Department of Revenue for a tax refund under OCGA § 48-2-35. 279 Ga. at
24-25 (3). After observing that the particular claim before it was barred by the express
prohibition against bringing tax refund actions on behalf of other taxpayers in OCGA
§ 48-2-35, the Supreme Court stated in a footnote that this prohibition “was passed
during the 2003 legislative session and constitutes a legislative overruling of this
Court’s holding in City of Atlanta v. Barnes, supra, 276 Ga. at 449 (3), that a class
action was a permissible means for a taxpayer to pursue a tax refund action.” Sawnee,
supra, 279 Ga. at 25 (3) n. 1.
One year later, in Barnes, II, a case involving OCGA § 48-5-380, the Supreme
Court clarified its footnote in Sawnee and explained:
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In [Barnes I], . . . we held that OCGA § 48-5-380 does not “provide for
the form of action to be utilized. By participating as a plaintiff in a class
action that includes a claim for a tax refund, a taxpayer is
unquestionably bringing an action for a refund, which is what the statute
permits.” Barnes I, supra at 452 (3). Compare Sawnee Elec. Membership
Corp. v. Ga. Dept. of Revenue, 279 Ga. 22, 25 (3), fn. 1 (608 SE2d 611)
(2005) (former OCGA § 48-2-35 (b) (5), now designated subsection (c)
(5), superseded Barnes I only as to refund claims against the State).
Thus, any taxpayer whom the named plaintiffs represent and who does
not ultimately opt out of the class action is considered to have brought
suit for a refund at the same time as the named plaintiffs. Although
OCGA § 48-5-380 is applicable to that suit, so too are those principles
which apply generally in class actions, including that which permits a
representative to act on behalf of an entire class. Where, as here,
“exhaustion of administrative remedies is a precondition for suit, the
satisfaction of this requirement by the class plaintiff normally will avoid
the necessity for each class member to satisfy this requirement
individually.” 2 Newberg on Class Actions § 5:15, p. 438 (4th ed. 2002).
Decisions to the contrary, such as U.S. Xpress v. N.M. Taxation &
Revenue Dept., 136 P3d 999 (N.M. 2006), are “based on genuinely
unique statutory requirements.” 2 Newberg, supra at 440. OCGA §
48-5-380, unlike certain tax refund statutes, neither prohibits utilization
of a class action, nor expressly requires individual exhaustion of
administrative remedies. See Arizona Dept. of Revenue v. Dougherty, 29
P3d 862, 869 (B) (Ariz. 2001). Compare OCGA § 48-2-35 (c) (5).
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Based upon Barnes II and the General Assembly’s failure to preclude class
actions under OCGA § 48-5-380 following the Supreme Court’s decision in Barnes
I, we conclude that a class action for a tax refund can be maintained under OCGA §
48-5-380. See Nuci Phillips Mem. Foundation v. Athens-Clarke County Bd. of Tax
Assessors, 288 Ga. 380, 383 (1) (703 SE2d 648) (2010) (courts should presume that
General Assembly has full knowledge of existing condition of statutory and case law
at time statute is enacted). Cf. Bd. of Regents &c. v. Rux, 260 Ga. App. 760, 764 (2)
(580 SE2d 559) (2003) (waiver of sovereign immunity for contract cases generally
allows for class action even though no explicit waiver for class actions in a contract
case). We therefore find no merit in the County’s claim on appeal that the Colemans
were precluded from maintaining a class action for a tax refund under OCGA § 48-5-
380.
3. In each of the cases before us, the County asserts that the trial court erred by
certifying class action claims for injunctive relief, mandamus, and declaratory
judgment. In its orders certifying the classes, however, the trial court did not address
the merits of the County’s specific claims with regard to the relief available. Instead,
it merely held that non-monetary relief can be sought in class actions generally. As
this is a correct conclusion generally, State Farm Mut. Automobile Ins. Co. v. Mabry,
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274 Ga. 498, 499-500 (1) (556 SE2d 114) (2001), we affirm the trial court’s class
certification orders, but only as to this general principle. We express no opinion about
whether the certified class actions are subject to dismissal based upon the doctrine of
sovereign immunity, limitation periods within the tax refund statute, or alleged fatal
flaws with the Colemans’ claims for non-monetary relief, as these issues have not yet
been ruled upon by the trial court. See Luyando v. Bowen, 124 FRD 52, 56 (III) (C)
(SDNY 1989) (refusing to address merits of sovereign immunity when considering
motion for class certification).
For all of the above-stated reasons, we affirm the trial court’s orders certifying
classes in Case No. A15A1522, Case No. A15A1523, and Case No. A15A1524, as
well as the trial court’s order denying the County’s motion to dismiss in Case No.
A15A1522.
Judgments affirmed. Doyle, C. J. and Phipps, P. J., concur.
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