Court of Appeals rules that Clark Atlanta owns 13 acres the City bought from Morris Brown

By Maria Saporta

The City of Atlanta’s Invest Atlanta has lost another legal ruling over its ownership rights of more than 13 acres it thought it had acquired from Morris Brown College in June 2014.

The problem, then as now, was that Clark Atlanta University argued that it actually held the reversionary rights to that property.

But despite Clark Atlanta’s legal challenge at the time, the City of Atlanta went ahead and bought the property, including the13-plus acres that had once belonged to Atlanta University (now Clark Atlanta University).

Gaines Hall

Historic Gaines Hall after the fire (Photo by Maria Saporta)

The City of Atlanta and Friendship Baptist Church paid a total of $14.6 million to Morris Brown College, which was facing bankruptcy, to buy 36 acres of land along Martin Luther King Jr. Boulevard just blocks west of the new Mercedes-Benz Stadium.

In 1940, Atlanta University transferred the property to Morris Brown College with a reversionary clause that stated the property would revert back to Atlanta University if Morris Brown College were to no longer use it for educational purposes.

“We are pleased that the court of appeals has upheld this decision, once again affirming Clark Atlanta University’s reversionary rights to 13 acres of land on the campus of Morris Brown College,” Donna Brock, a spokeswoman for Clark Atlanta, wrote in a text.

The latest ruling against the City of Atlanta was issued Monday from the Court of Appeals of Georgia.The ruling basically upheld all the previous legal rulings that have been made in this case.

The City of Atlanta had appealed a decision made in May, but the result was the same.

Here is the closing paragraph from the Court of Appeals:

On appeal from that grant of summary judgment for CAU, Invest Atlanta contends the Supreme Court’s decision in the earlier appeal does not control this case, because the Supreme Court did not consider the effect of the lease allowing MBC’s continued use of the property. However, as the Supreme Court found the sale triggered CAU’s reversionary interest, we agree with the trial court that MBC’s lease of the property from Invest Atlanta was nugatory. Accordingly, the trial court properly granted summary judgment for CAU.

An email was sent to Jenna Garland, a spokeswoman for the City of Atlanta and Mayor Kasim Reed, to get a comment. This story will be updated when the city sends a response.

The property involved includes several iconic buildings, including Gaines Hall, which was damaged by fire more than two years ago. There has been little progress to protect, preserve and restore the building since then.

Here is the full ruling:

THIRD DIVISION ELLINGTON, P. J., ANDREWS and RICKMAN, JJ.

October 2, 2017

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

In the Court of Appeals of Georgia

A17A1986. THE ATLANTA DEVELOPMENT AUTHORITY d/b/a INVEST ATLANTA v. CLARK ATLANTA UNIVERSITY, INC.

ANDREWS, Judge.

This appeal is from the grant of summary judgment for Clark Atlanta University (CAU) in its declaratory judgment action over the ownership of approximately 13 acres it deeded to Morris Brown College (MBC) in 1940. Because the Supreme Court has already decided the dispositive issue here in CAU’s favor in a previous appeal, we affirm.

CAU deeded the subject property to MBC in 1940, but the deed contained a reversionary clause providing that in the event MBC ceased using the property for designated educational purposes, the property would revert back to CAU. In 2012 MBC filed a Chapter 11 bankruptcy petition and later sought approval to sell the subject property to The Atlanta Development Authority d/b/a Invest Atlanta. The bankruptcy court approved the sale in June 2014 but cautioned Invest Atlanta would be taking the property subject to any interest held by CAU. In conjunction with the purchase, Invest Atlanta leased the property back to MBC for the same use specified in the 1940 deed.

CAU then filed this action seeking a declaratory judgment that the 1940 deed’s reversionary clause had been triggered by MBC’s sale of the property. Invest Atlanta filed a motion to dismiss which the trial court denied, and Invest Atlanta appealed that denial to the Supreme Court. Affirming the trial court, the Supreme Court held that the 1940 deed from CAU to MBC transferred a fee simple determinable estate and that CAU retained a “valid reversionary interest in the property, which was triggered when MBC sold the property to Invest Atlanta.” Atlanta Development Authority v. Clark Atlanta Univ., 298 Ga. 575, 582 (784 SE2d 353) (2016). Subsequently, the trial court granted summary judgment for CAU on three grounds: (1) the Supreme Court’s decision in the earlier appeal was dispositive; (2) MBC’s lease of the property was immaterial; and (3) MBC’s use of the property did not conform with the educational purposes specified in the 1940 deed.

On appeal from that grant of summary judgment for CAU, Invest Atlanta contends the Supreme Court’s decision in the earlier appeal does not control this case, because the Supreme Court did not consider the effect of the lease allowing MBC’s continued use of the property. However, as the Supreme Court found the sale triggered CAU’s reversionary interest, we agree with the trial court that MBC’s lease of the property from Invest Atlanta was nugatory. Accordingly, the trial court properly granted summary judgment for CAU.

Judgment affirmed. Ellington, P. J., and Rickman, J., concur.

Maria Saporta, Editor, is a longtime Atlanta business, civic and urban affairs journalist with a deep knowledge of our city, our region and state.  Since 2008, she has written a weekly column and news stories for the Atlanta Business Chronicle. Prior to that, she spent 27 years with The Atlanta Journal-Constitution, becoming its business columnist in 1991. Maria received her Master’s degree in urban studies from Georgia State and her Bachelor’s degree in journalism from Boston University. Maria was born in Atlanta to European parents and has two young adult children.

3 replies
  1. Sandra Curry says:

    Good job, CAU. Now I challenge you to expediently turn the property into a great school for higher learning, i.e., a International School or School of Nursing or Engineering. Please!Report

    Reply

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