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A22A1540 Judgment

The Court of Appeals of Georgia reversed the judgment against the City of Brookhaven and its officials in their official capacity. The Court found that the City did not waive its sovereign immunity through its insurance policy, as the policy specifically stated it did not constitute a waiver. The Court also found that the trial court erred in admitting "other acts" evidence from a prior dispute between the City and a property owner, as the evidence was being used to show the City officials' character rather than for another permissible purpose under evidence rules. The case was remanded for further proceedings consistent with the opinion.

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0% found this document useful (0 votes)
11K views9 pages

A22A1540 Judgment

The Court of Appeals of Georgia reversed the judgment against the City of Brookhaven and its officials in their official capacity. The Court found that the City did not waive its sovereign immunity through its insurance policy, as the policy specifically stated it did not constitute a waiver. The Court also found that the trial court erred in admitting "other acts" evidence from a prior dispute between the City and a property owner, as the evidence was being used to show the City officials' character rather than for another permissible purpose under evidence rules. The case was remanded for further proceedings consistent with the opinion.

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Zachary Hansen
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We take content rights seriously. If you suspect this is your content, claim it here.
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SECOND DIVISION

RICKMAN, C. J.,
MILLER, P. J., and PIPKIN, 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.
https://www.gaappeals.us/rules

December 28, 2022

NOT TO BE OFFICIALLY
REPORTED

In the Court of Appeals of Georgia


A22A1540. CITY OF BROOKHAVEN et al v. THE ARDENT
COMPANIES, LLC et al.

RICKMAN, Judge.

The Ardent Companies, LLC, Ardent Acquisitions, LLC (together “Ardent”),

and Jon and Courtney Wheeler, filed suit against the City of Brookhaven (“the City”),

and John A. Ernst (“the mayor”), Christian M. Sigman (“the city manager”), Linley

Jones, Hyun Jong Park aka John Park, Bates D. Mattison, and Joseph Gebbia (“the

council members”), in their official and individual capacities after Ardent’s effort to

redevelop certain home sites in the City of Brookhaven was unsuccessful. Following

a jury verdict in favor of Ardent and the Wheelers, the defendants1 appeal contending,

inter alia, the trial court erred by finding that the City waived sovereign immunity and

1
The jury found in favor of the council members and they are not parties to this
appeal.
by admitting other acts evidence. For the following reasons, we reverse the judgment

and remand this case for proceedings consistent with this opinion.

We view the facts in the light most favorable to the jury’s verdict. See Maki v.

Real Estate Expert Advisors, 358 Ga. App. 337, 337 (855 SE2d 72) (2021). So

viewed, the record shows that Ardent desired to build a development in the City of

Brookhaven surrounding a dead end street, Bramblewood Drive. At the time Ardent

developed interest in the property, there were 32 individually-owned single family

homes on Bramblewood Drive. Ardent planned to develop a few townhome

communities in the place of the single family homes and ultimately was successful

in getting all 32 properties under contract.

After executing contracts for the properties, Ardent submitted a rezoning

application to the City to allow for townhomes and requested the abandonment of

Bramblewood Drive. Ardent obtained an appraisal for Bramblewood Drive and the

appraiser valued the road at $250,249.00. After submitting the application, the city

manager indicated that the City would like to buy a portion of the properties for a

public safety facility. Despite not knowing the contract price for the properties, the

city manager offered five percent above their contract price for the properties it

sought. Ardent made a counter offer which the City declined.

2
Thereafter, a city official sent Ardent a letter notifying it that the City had

decided it would not recommend abandoning Bramblewood Drive. The city manager

indicated that despite the City’s recommendation to not abandon the road, the City

would abandon it for $3,000,000. Ardent refused to pay $3,000,000 for the road and

the City responded that it would potentially consider a lower price for the road in

exchange for a different kind of development. Ardent then proposed a new site plan

that incorporated more apartments, townhomes, and commercial space.

Ultimately, Ardent and the City could not come to an agreement because the

City wanted Ardent to use a lower income number to qualify for affordable housing

and the City insisted upon a “clawback” provision which would force Ardent to split

the profits with the City for a period of time. Courtney Wheeler, a Bramblewood

home owner who had a contract with Ardent, testified that she moved to Nevada

because of the deal with Ardent and after the deal fell through, she was unable to sell

her house and ultimately incurred lost profits and expenses because she and her

husband had to rent her house out.

The jury found that the mayor and city manager acted with malice and, together

with the City, tortiously interfered with the business and contractual relationship of

Ardent and the Wheelers, that the City violated Ardent’s right to procedural due

3
process, that the City, the mayor, and the city manager acted in bad faith, were

stubbornly litigous, and/or caused Ardent and the Wheelers unnecessary expense,

entitling them to attorney fees, and that Ardent and the Wheelers were entitled to

punitive damages because the actions of the mayor and the city manager showed

willful misconduct, malice, fraud, wantoness, oppression, or an entire want of care.

1. The City contends that the trial court erred by finding that the City waived

sovereign immunity.

“The Georgia Constitution provides municipalities performing their

governmental functions with immunity from civil liability, which only the General

Assembly (or the Constitution itself) may waive.” Atlantic. Specialty Ins. Co. v. City

of Coll. Park, 313 Ga. 294, 299 (2) (869 SE2d 492) (2022). “A municipal corporation

shall not waive its immunity by the purchase of liability insurance, except as provided

in Code Section 33-24-51 or 36-92-2, or unless the policy of insurance issued covers

an occurrence for which the defense of sovereign immunity is available, and then only

to the extent of the limits of such insurance policy.” OCGA § 36-33-1.

The City obtained coverage through the Georgia Interlocal Risk Management

Agency (“GIRMA”) but the declarations section specifically stated that “this

document is not an insurance contract and . . . shall not waive the sovereign immunity

4
of the Member.” Accordingly, under a plain reading of the declarations, the defense

of sovereign immunity would still apply. See Atlantic Specialty Ins. Co., 313 Ga. at

303 (3) (the city did not waive sovereign immunity where its insurance policy

contained an endorsement stating that the policy “does not constitute, nor reflect an

intent by [the city], to waive or forego any defenses of sovereign and governmental

immunity available to any Insured[.]”); Gatto v. City of Statesboro, 353 Ga. App. 178,

183-184 (2) (834 SE2d 623) (2019) (holding that the city did not waive sovereign

immunity when the liability insurance policy contained an endorsement stating that

“[t]his policy and any coverages associated therewith does not constitute, nor reflect

an intent by you, to waive or forego any defenses of sovereign and governmental

immunity availability to any Insured[.]”). It was Ardent’s burden to prove that the

City waived sovereign immunity and it failed to meet that burden. See Sharma v. City

of Alpharetta, 361 Ga. App. 692, 692-693 (865 SE2d 287) (2021) (“the burden of

proof is on the party seeking the waiver of immunity”). Accordingly, because Ardent

failed to meet its burden to prove that immunity was waived by the City’s purchase

of insurance, we reverse the judgment against the City and its officials in their official

capacity.

5
2. The defendants contend that the trial court erred by admitting other acts

evidence pursuant to OCGA § 24-4-404 (b).

“[E]vidence of other crimes, wrongs, or acts shall not be admissible to prove

the character of a person in order to show action in conformity therewith. It may,

however, be admissible for other purposes, including, but not limited to, proof of

motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of

mistake or accident.” OCGA § 24-4-404 (b).

OCGA § 24-4-404 (b) was borrowed from the Federal Rules of Evidence and

so, when we have considered the meaning of Rule 404(b), we consistently have

looked for guidance in the decisions of the federal appellate courts construing and

applying Federal Rule of Evidence 404(b). See Olds v. State, 299 Ga. 65, 69 (2) 786

SE2d 633) (2016). Federal Rule of Evidence 404 (b) applies in both civil and criminal

cases. See Huddleston v. United States, 485 U. S. 681, 685 (108 SCt 1496, 99 LE2d

771) (1988); Agushi v. Duerr, 196 F.3d 754, 760 III (7th Cir. 1999) (“Neither the

plain language of Rule 404(b) (“a person”), nor any other consideration, suggests that

a court should distinguish between the criminal and civil contexts when determining

the admissibility of such evidence. In either case, of course, the court should balance

6
the evidence’s probative value under Rule 401 against considerations such as

prejudice, undue waste of time and confusion of the issues under Rule 403.”)

Pursuant to Rule 404 (b), other acts evidence is admissible only if:

(1) the evidence is relevant to an issue in the case other than the
defendant’s character; (2) the probative value of the evidence is not
“substantially outweighed by the danger of unfair prejudice, confusion
of the issues, or misleading the jury or by considerations of undue delay,
waste of time, or needless presentation of cumulative evidence,” OCGA
§ 24-4-403; and (3) there is sufficient proof for a jury to find by a
preponderance of the evidence that the defendant committed the other
act.

Rouzan v. State, 308 Ga. 894, 899 (2) (843 SE2d 814) (2020).

In this case, Ardent sought to introduce evidence of a prior act involving the

City and another property owner. The prior act included allegations that officials with

the City improperly threatened to take property using eminent domain when their

offer to buy the property was not accepted. Ardent’s trial counsel argued in favor of

the admission of the other act under Rule 404 (b), but only cited to cases under

Georgia’s previous evidence code involving the introduction of similar transactions.2

2
“Georgia lawyers do this Court no favors—and risk obtaining reversible
evidence rulings from trial courts—when they fail to recognize that we are all living
in a new evidence world and are required to analyze and apply the new law.” Davis

7
When the trial court admitted the evidence, it found that

there are some similarities between the [other act] and this case; there
are some differences as well. I think both partes will have the
opportunity to present to the jury whether or not . . . they are, in fact,
similar. . . . I don’t think it’s my job right now to say, okay, well, there
might be some differences, so to that extent, they shouldn’t come in. I
think that would be left to the jury.

Here, the trial court erred in performing the 404 (b) analysis. “The new

Evidence Code continues Georgia’s existing harmless error doctrine for erroneous

evidentiary rulings. The test for determining nonconstitutional harmless error is

whether it is highly probable that the error did not contribute to the verdict.” (Citation

and punctuation omitted.) Fassnacht v. Moler, 358 Ga. App. 463, 475-76 (2), (855

SE2d 692) (2021). See Rouzan, 308 Ga. at 900 (2) (applying the harmless error

doctrine to the erroneous admission of Rule 404 (b) evidence). “In determining

whether legal error by the trial court was harmless, we review the record de novo and

weigh the evidence as we would expect reasonable jurors to have done so.” Id.

We cannot say that any error in the admission of the other act evidence was

harmless. The jury expressly found that the mayor and city manager acted with malice

v. State, 299 Ga. 180, 192 (3) (787 SE2d 221) (2016).

8
when they interfered with the business and contractual relationship with Ardent and

the Wheelers. It would be impossible to say that any admission of evidence that the

mayor and the city manager engaged in potentially similar conduct with another

property owner did not contribute to the verdict.

“The proper course under this Court’s precedents for similar errors is to vacate

the trial court’s judgment and to remand the case to the trial court with direction to

exercise its discretion to determine under the correct OCGA § 24-4-404 (b) test if the

other acts evidence was properly admitted.” Rouzan, 308 Ga. 894 at 901 (2). “If the

trial court decides under the correct test that the other acts evidence was properly

admitted, then the court should reenter the judgment against [the defendants], who

could then take another appeal challenging that ruling.” Id. If, on the other hand, the

court decides that the other acts evidence should have been excluded, then a new trial

will be necessary.” Id.3

Judgment reversed and case remanded with direction. Miller, P. J., and Pipkin,

J., concur.

3
“We do not address the defendants’ other enumerations of error because they
relate to issues that are unlikely to recur in the event of a retrial. The defendants may
raise them again in a renewed appeal if the trial court does not grant [them] a new
trial and reenters the judgment.” Rouzan, 308 Ga. at 901-902 (3).

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