An inadvertent error on a 1992 land deed continues to haunt local officials and taxpayers, as the City of Dahlonega’s recent lawsuit against Lumpkin County over the ownership of the Fire Station #1 property located at 57A Pinetree Way shows no signs of a speedy resolution.
In newly-filed court documents submitted by the law office of Jarrard & Davis and obtained by The Nugget, the County aggressively denied any impropriety in the matter, and filed their own verified counterclaims against the City.
While the City and County were originally intended to be joint grantees to the property deed, the only party listed on the original document was the “Lumpkin County Commission of Georgia,” leading to over two decades of confusion and a protracted legal conflict between the governing bodies.
Thus far the City has reported a total of $7,819.88 in legal bills related to the current dispute. The County, meanwhile, has not yet received its first invoice in the matter. However, this comes fresh on the heels of another costly legal battle between the two parties earlier this year that left taxpayers on the hook for a combined $191,336 in legal fees.
On September 15, 1998, the prior owner of 57A Pinetree Way, Burlington Industries, issued a Corrective Warranty Deed naming the City of Dahlonega as a grantee to the property. While a corrective deed may highlight defects in the original deed and issue a correction, it may not be used to transfer title.
Limitations on the types of revisions allowable under a corrective deed also vary from state to state. The Burlington Corrective Warranty Deed was issued in North Carolina, adding to the legal confusion.
FIRST ACTION
A special legal proceeding began on October 8, 2014, when Lumpkin County filed a Petition to Quiet Title against the City of Dahlonega. The stated goal of the County was “to clear the cloud on its title to the Subject Property due to the purported Corrective Warranty Deed.”
The County’s attorneys argued that they never consented to the Corrective Warranty Deed issued in 1998. In addition, they stated that Burlington Industries, Inc. “had fully divested itself of all real property interests in and around the Subject Property” by the time the Corrective Warranty Deed was issued.
On November 5, 2018, the court appointed Ralph L. Taylor III as the new Special Master in the case. On January 28, 2020, a Recommendation of the Special Master was filed. Finally, on March 30, 2022, after eight years of legal wrangling, a March 30, 2022 Final Order was issued by Judge G. Grant Brantley which formally adopted Taylor’s recommendation.
In a win for the County, the Special Master granted their motion for summary judgement in regards to the 1998 Deed. Taylor wrote that he found “no direct case law which would disallow the addition of a grantee to a prior conveyance by corrective deed as a matter of law. However … the law requires that the corrective deed must be accepted by the grantee to the original conveyance.”
The City picked up a victory of their own, however, as The Special Master concluded that “based on the intentions of the parties to the 1992 transaction, the City is entitled to an equitable interest in the Property. Therefore, a constructive trust is imposed on the County’s legal title to the Property, recognizing the equitable interests of the City to a fifty percent interest in and to the Property.”
Unfortunately the court’s split decision would fail to bring the disagreement to a conclusive end. In fact, differing interpretations of the Special Master’s 2022 findings are at the heart of the current case.
DIFFERING VIEWS
On March 29 of this year, the City filed its own civil action against Lumpkin County. The City’s verified complaint, prepared by the law firm of Smith, Welch, Webb & White, alleges that the County failed to transfer its one-half interest in the Fire Station #1 property located at 57A Pinetree Way, despite official requests from the City to do so.
The City’s legal team argues that the constructive trust established by the adoption of the Special Master’s Recommendations entitles them to half of all cell tower rent payments received by the County since the tower was built on the Pinetree property back in 1998.
Attorneys for the County, on the other hand, state that they retain fee simple ownership of the property despite the constructive trust established by the Special Master. They further argue that the City has not contributed any money to the maintenance or operating costs of the Fire Station #1 property since it was built, and that the City’s half of those cumulative costs exceed the total from the cell tower lease payments.
However, the 2022 ruling previously found that “there are disputed issues of fact on the respective contributions of the governments as to operational costs,” and that “this evidence is not material to the equitable considerations” of the constructive trust. That same filing further defines a constructive trust as “a remedy created by a court in equity to prevent unjust enrichment.”
As for the request by the City to have its one-half equitable interest in the property transferred to a fee simple interest, the County argues that if the City “had any right to execution and delivery of a new deed” they would have been “required to bring a claim for a new deed during the 2014 Quiet Title Case.”
COUNTERCLAIMS
Prefacing their counterclaims to the City’s lawsuit, lawyers for the County state that “the City has been stubbornly litigious, has acted in bad faith, and has caused the County unnecessary trouble and expense.” They also allege that “the City’s Complaint seeks to deprive residents of unincorporated areas of Lumpkin County, Georgia of beneficial services by demanding an unjustified windfall for City residents.”
In addition to requesting that the City’s complaint be dismissed with prejudice, the County asks that the Plaintiff “bear all costs of this action including attorneys’ fees and litigation expenses.” The County is also seeking damages from the City in the form of compensation for administering the constructive trust, reimbursement for expenses in administering the trust, and “all maintenance and upkeep costs since 1992 and all future maintenance and upkeep costs for the Subject Property.”
FAILED NEGOTIATIONS
In comments provided to The Nugget, Dahlonega Mayor JoAnne Taylor expressed her continued belief that a resolution to the matter can be reached without the need for further litigation.
“Since February, the City has been negotiating with the County with the goal of securing long-term fire services in the City for our citizens. The City suggested 25 years as part of the package, and the County came back with 50 years,” Taylor said in an apparent reference to a March 9, 2023 written proposal from the Lumpkin County Board of Commissioners.
“The terms offered would provide Lumpkin County with an additional one million dollars in exchange for continuing the service they are already providing; in other words, a win-win solution. The offer made was discussed over several months and provided in written documentation,” the Mayor continued.
One such document was a March 24 letter from City Manager Allison Martin to Commissioner Rhett Stringer, in which Martin said “I am prepared to recommend that the City release the County from payment of our share of all prior rents and would also recommend that future rents be assigned as part of the IGA establishing the provision of fire service for 50 years.”
However, at the time these negotiations were also part of a broader effort to bring a halt to the County’s lawsuit against the City over distribution of Local Option Sales Tax (LOST) funds. Once the County voluntarily dropped its LOST suit against the City on March 29, the Board of Commissioners issued a press release that same day stating that they are “not willing to bind future boards to a 50-year intergovernmental agreement” to provide fire service to the City.
“We continue to be optimistic that the focus on the good of our collective community will result in a swift settlement benefitting all,” Taylor said.
The Nugget also reached out to Chairman Dockery, but he declined to speak about the ongoing litigation.
“I would love to comment, but have been advised by council not to do so,” Dockery said.