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IN THE SUPERIOR COURT OF GLYNN COUNTYSTATE OF GEORGIA

J. MATTHEW COLEMAN, IV and *ELIZABETH BLAIR COLEMAN, *

*Plaintiffs *

*v. * Civil Action No. CE14-00750-063

**

GLYNN COUNTY, GEORGIA, **

Defendant *

DEFENDANT’S MOTION TO DECERTIFY CLASS ACTIONAND SUPPLEMENTAL RESPONSE IN OPPOSITION

TO PLAINTIFF’S MOTION TO AMEND CLASS CERTIFICATION ORDER

COMES NOW Glynn County, Georgia, Defendant in the above matter, and moves

the Court to decertify the classes previously certified in this action as well as deny

Plaintiff’s Motion to Amend Class Certification Order. In support of this motion, Defendant

shows the following:

Introduction and Statement of Facts

On January 7, 2015, the Court granted class certification in this action and its two

related companion cases. In all three cases, the Court certified classes consisting of

Glynn County property owners receiving the Scarlett Williams Exemptionin the calculation of their tax bills in [a specific year] for whom GlynnCounty used the year in which the Scarlett Williams Exemption was firstgranted as the Base Year rather than the immediately preceding year incalculating the exemption amount under the Scarlett Williams Act forproperty tax bills in [that year] and for whom the value frozen in the yearin which the Scarlett Williams Exemption was first granted is greater thanthe value in the immediately preceding year.Order on Class Certification at 4-6.

FILEDGlynn CO. CLERK'S OFFICE

11/16/2018 5:14 PM

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Classes were certified for tax years 2013 through 2016 in this action, and for additional

years in the two companion cases. Plaintiffs have moved the Court to amend its class-

certification order to certify additional classes for 2017 and 2018.

Following class certification, the parties filed cross motions for summary

judgment. The Court granted Defendant’s motion and denied Plaintiffs’ motion,

holding that Glynn County had properly applied the Scarlett Williams Act and that

Plaintiffs were not entitled to tax refunds in any amount. The Court of Appeals affirmed

in part and reversed in part, ruling that Plaintiffs’ interpretation of the Scarlett Williams

Act is the correct one, but also finding that the trial court properly granted summary

judgment to the County with respect to any class-member claims concerning taxes paid

more than three years prior to the filing of the named Plaintiffs’ complaint. Both parties

petitioned the Supreme Court for certiorari, but both petitions were denied.

When the Court of Appeals issued its order finding that the County had

improperly applied the Scarlett Williams Act, the County began gathering data in an

effort to determine its potential exposure. Almost immediately, it became apparent that

performing class-wide calculations of potential refunds would be impossible. Further, a

preliminary review of the County’s records made clear that numerous class members

are not entitled to relief at all – meaning that, although the order of the Court of

Appeals answers one question critical to the analysis of liability, significant additional

questions remain. For three separate reasons, there is no way to determine whether any

individual class member is entitled to relief, and if so, in what amount, without

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performing individualized research and complex calculations specific to that class

member. The County will explain each of the insurmountable barriers to class-wide

determinations of liability and damages, and will show that those issues may be

avoided only by the decertification of the classes and the bringing of individual refund

actions by aggrieved taxpayers.

Below is a hypothetical sample of the sort of information that can be culled from

Glynn County’s tax records. The information in the table as it pertains to real taxpayers

is available electronically, and the County has produced spreadsheets containing that

data for all taxpayers for each of the years at issue in this action. For the sake of

simplicity, and to avoid singling out real taxpayers, all of the information in the chart

and in the discussion below is fictional.

Parcel Owner Name Exemption

Effective Date

Base Year Base Taxable

Value

Prior to Base

Taxable

Value

01-99990 Adams 01/01/2001 2001 $75,000 $60,000

01-99991 Benjamin 01/01/2007 2007 $90,000 $70,000

01-99992 Collins 01/01/2008 2008 $250,000 $40,000

01-99993 Dalton 01/01/2008 2008 $250,000 $40,000

01-99994 Elliott 01/01/2008 2008 $250,000 $40,000

01-99995 Fitzgerald 01/01/2014 2014 $350,000 $200,000

01-99996 Green 01/01/2012 2012 $350,000 $300,000

01-99997 Hopkins 01/01/2005 2005 $280,000 $160,000

01-99998 Ingram 01/01/2007 2007 $30,000 $25,000

01-99999 Jones 01/01/2002 2002 $200,000 $150,000

The third subsection below will explain why it would not be possible to1

perform these functions in a spreadsheet or otherwise process more than one class memberat a time.

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All ten of the property owners included in the spreadsheet above would be class

members if they were real – the year in which they were first granted the Scarlett

Williams exemption was also used as their base year, and the taxable value of their

properties was lower in the year prior to the given base year. In the abstract, the

calculation of potential refunds seems uncomplicated – take the prior-to-base-year

value, set it as the new base-year value, recalculate the property owner’s tax bill for

each year using the new value, and issue a refund for the amount by which the bill

actually paid exceeds the recalculated bill.

While relatively straightforward, even this hypothetical process that ignores the

complicated reality of tax records would be incredibly time- and labor-intensive; the

frozen value in the County’s computer system would have to be manually reset for each

class member, a new bill for the tax year in question would have to be manually

generated using the new base value, and calculations to determine the difference

between the amount actually paid and the amount that should have been paid would

likewise have to be manually performed. Plaintiffs believe that there are more than six1

thousand members in each class. (Order on Class Certification at 4). With ten years

worth of classes, it would take five thousand hours of work to perform this simplified

Tax Commissioner Chapman testified that it would take an average of two2

minutes to generate each bill; the County estimates that finding the amount actually paidby that taxpayer in the year at issue, calculating the difference between the two numbers,and recording the result would take an additional three minutes per taxpayer. Because themajority of class members entitled to a refund would likely be entitled to additionalrefunds for other years, further work would be necessary to consolidate those multiplepayments.

To avoid cluttering the record unnecessarily, the County is not filing3

duplicate copies of its exhibits, which pertain equally to all three actions, in this case or the2013 case. The exhibits are filed in the record of the 2012 case (No. CE12-01785-063).

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calculation assuming an average of five minutes to handle each class member’s file.

Affidavit of Jeff Chapman, ¶ 6. 2 3

Reality is far more complicated. Before the claim of any individual class member

can be resolved, the County needs to know three things. First, a pure liability question –

was the class member actually entitled to a homestead exemption during the year in

question? Second, a mixed question of liability and damages – what is the proper frozen

value to use for the year in question? And third, another mixed question – what other

exemptions were in place for the class member during the year in question? None of

these questions can be answered without retrieving the class member’s individual file

and performing labyrinth calculations, and in some cases, they cannot be answered by

existing information at all.

I. Numerous class members are not actually entitled to the homestead exemptionsthey are receiving, but identifying those persons will require individualizedtestimony and discovery.

The first problem identified by the County goes to the question of liability, and is

one that extends beyond this suit. A property owner’s eligibility for the Scarlett

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Williams exemption, as for any homestead exemption, is evaluated by the County at the

time the owner’s application for exemption is considered. O.C.G.A. §48-5-49. Neither

the Scarlett Williams Act nor state law contains any provision that enables, much less

requires, the County to re-evaluate a Scarlett Williams recipient’s eligibility once the

exemption is granted. Rather, it is the duty of a homeowner receiving the exemption to

notify the County if that person’s eligibility for the exemption changes:

(e) The exemption shall be claimed and returned as provided in CodeSection 48-5-50.1 of the O.C.G.A. The exemption shall be automaticallyrenewed from year to year as long as the owner occupies the residence asa homestead. After a person has filed the proper application as providedin subsection (c) of this section, it shall not be necessary to makeapplication thereafter for any year and the exemption shall continue to beallowed to such person. It shall be the duty of any person granted thehomestead exemption under subsection (b) of this section to notify the tax commissioner of the county or the designee thereof in the event that person forany reason becomes ineligible for that exemption. Scarlett Williams Act, HB 1690 (2000) (emphasis supplied).

Unfortunately, many Glynn County property owners do not comply with this

provision of the Scarlett Williams Act. The County has neither the responsibility, nor

the resources, to identify those persons, but from time to time they are incidentally

discovered. Chapman Aff., ¶ 3. The County’s undersigned counsel have, for example,

handled a case in which it was brought to the County’s attention by the Coffee County

Tax Commissioner that a person who owned property in both counties had been

claiming a homestead exemption on both properties for twelve years before he was

discovered. This is not an isolated issue. See, e.g., Masters v. DeKalb Cty. Bd. of Tax

Assessors, 288 Ga. 241, 241, 703 S.E.2d 320, 321 (2010) (married couple illegally claimed

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homestead exemptions on two properties, including one in Glynn County, for seven

years); Chapman Aff., Ex. 1 (four property owners incidentally discovered to be

improperly claiming Scarlett Williams exemption while using properties as rentals).

Parcel Owner Name Exemption

Effective Date

Base Year Base Taxable

Value

Prior to Base

Taxable

Value

01-99990 Adams 01/01/2001 2001 $75,000 $60,000

01-99991 Benjamin 01/01/2007 2007 $90,000 $70,000

In reviewing the spreadsheets identifying the tens of thousands of potential

claimants in this case, staff members in the office of Defendants’ counsel began to notice

names of persons whom they were personally aware were not entitled to homestead

exemptions. This is not information that appears anywhere in the County’s files,

because it is information that has been improperly withheld from the County by the

homeowners in question. For example, the sample spreadsheet above suggests that the

hypothetical Mr. Adams is entitled to have his taxes recalculated, and refunds issued,

based on a prior-to-base-year assessed value that is $15,000 lower than his current base

value. But – linking a real situation to a hypothetical taxpayer – a staff member for

defense counsel happens to know “Mr. Adams,” and is aware that he actually moved

out of state four years ago and is currently using the property for which he has the

homestead exemption as a rental. “Mr. Benjamin” likewise appears to be entitled to

multiple years worth of refunds, but he actually passed away the year after he received

his exemption, and the property now sits vacant as his heirs cannot come to an

The County cannot provide an educated guess as to how many persons4

would be identified as improper recipients without actually going through such a process,but believes, given the rate at which such persons are incidentally identified by the TaxCommissioner and the number of improper recipients identified based on a cursory reviewof the class spreadsheets, that the number is significant. Chapman Aff., ¶ 3.

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agreement regarding its disposal. Again, although fictional names have been used for

these homeowners, the situations discussed apply to real tax payers.

The Tax Commissioner’s records show that ineligible Scarlett Williams recipients

are regularly, though only incidentally, identified. Chapman Aff., Ex. 1. Were the class-

member lists passed around to County staff and officials, a significant number of

additional improper recipients would be identified through the personal knowledge of

the persons reviewing the list. Such an effort, even if feasible, would still miss countless

additional persons who have passed away, moved away, or begun claiming an

exemption on a different piece of property since their Scarlett Williams exemption was

granted.

There is no mechanism, short of discovery directed to each class member, by

which the County can identify and remove ineligible Scarlett Williams recipients from

the classes certified in this action. More importantly, the onus is not on the County to4

ensure the eligibility of its Scarlett Williams recipients. The onus is on recipients to

notify the County when they lose eligibility, and a cursory scan of the County’s records

based only on the knowledge of the County’s counsel reveals that there are numerous

instances in which recipients have not met this obligation. A mechanical class-wide

computation of damages would result in the issuance of refunds to persons like Mr.

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Adams and Mr. Benjamin, despite the fact that they are unable to establish liability.

Indeed, such taxpayers actually underpaid their taxes for the years in question, because

they were claiming an exemption to which they were not entitled. This double windfall,

for persons who were at best absentminded or at worst deliberately deceptive, cannot

be permitted to occur.

Not only would the issuance of refunds to taxpayers who were not actually

entitled to the Scarlett Williams exemption be immoral and unfair – it would constitute

an illegal gratuity. “Art. III, § VI, Par. VI(a) of [the Georgia] Constitution provides that

the General Assembly shall not have the power to grant any donation or gratuity.”

Rabun Cty. v. Mountain Creek Estates, LLC, 280 Ga. 855, 859, 632 S.E.2d 140, 145 (2006)

(punctuation omitted). This provision applies “to cities and counties.” Id., citing Grand

Lodge of Ga. v. City of Thomasville, 226 Ga. 4, 8, 172 S.E.2d 612 (1970). Glynn County

cannot issue a refund to any taxpayer until it is absolutely certain that the refund will

not constitute an illegal gratuity – and it cannot ensure that a refund will not constitute

an illegal gratuity absent an opportunity to conduct discovery into whether the

taxpayer actually maintained the property as his primary residence during the year for

which the refund is sought.

The County will discuss the additional legal reasons this case should be

decertified as a class action below, but the first of the three practical reasons for

decertification is plain – the insurmountable liability issues regarding determination of

class members’ eligibility for the Scarlett Williams exemption would be immediately

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resolved. The classes contain an untold but significant number of persons who were not

eligible for a Scarlett Williams exemption in any amount during some or all of the years

for which they now seek refunds. If each current class member were required to bring

an individual action for a refund, his verified complaint would include a sworn

recitation of the history of his ownership and occupation of the property and a sworn

identification all of the years for which he contends he is entitled to the Scarlett

Williams exemption. It is likely that the majority of ineligible Scarlett Williams

recipients simply did not know that they were required to inform the County when

they became ineligible for the exemption, and the County is confident that most such

recipients would submit truthful complaints identifying the years for which they were

actually eligible. In any case where the County has reason to question a plaintiff’s

eligibility, discovery would be available to flesh out that plaintiff’s history with regard

to the property.

The classes certified by the Court contain persons who were not eligible for the

Scarlett Williams exemption. Those persons cannot establish liability against the County

and are ineligible for refunds, but identifying and removing them will require sworn

testimony and the opportunity for individualized discovery from all class members.

This is logistically infeasible and legally improper within a class-action framework, and

for this reason alone, this case should be decertified as a class action.

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II. Calculating the correct frozen value to use in a given year requires analysis ofcomplex and individualized information on an owner-by-owner basis, and insome cases requires information not currently available.

Assuming that all persons ineligible for the Scarlett Williams exemption could be

identified and removed on a class-wide basis, which they cannot, the next question

would be what frozen value should be used to re-calculate each class member’s tax

obligations. The simple answer, based on the Court of Appeals’ ruling, is the prior-to-

base-year value.

Parcel Owner Name ExemptionEffec

tive Date

Base Year Base Taxable

Value

Prior to Base

Taxable

Value

01-99992 Collins 01/01/2008 2008 $250,000 $40,000

01-99993 Dalton 01/01/2008 2008 $250,000 $40,000

01-99994 Elliott 01/01/2008 2008 $250,000 $40,000

The hypothetical Mr. Collins, Mr. Dalton, and Mr. Elliott have all paid taxes based on a

$250,000 frozen value ever since the date their exemptions were granted. The order of

the Court of Appeals suggests that each of them should have his frozen value adjusted

to $40,000, as that was the value in the year prior to the current base year. Re-calculating

these owners’ taxes based on a frozen value of $40,000 rather than the $250,000

previously used, would result in a refund of approximately $2,000 per eligible year to

each of them. But things are not so straightforward.

A. New Construction, No Change in Lot Value

In 2007, Mr. Collins purchased an undeveloped lot with a taxable value of

$40,000 and constructed a house on it. He moved in to his new home in January 2008; he

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applied for, and was granted, a homestead exemption in April of that year. Records

from the Glynn County Tax Assessor indicate that when the property was assessed in

2008, the taxable value of Mr. Collins’ lot was still $40,000, and the taxable value of the

improvements – the house he had constructed the prior year – was $210,000. The total

2008 taxable value of Mr. Collins’ parcel was thus $250,000, and that amount was frozen

as his base value.

Subsection (b) of the Scarlett Williams Act provides that the exemption “shall not

apply to taxes assessed on improvements to the homestead or additional land that is

added to the homestead after January 1 of the base year.” In other words,

improvements added to the property after January 1 of the base year are taxed at their

full value. This is accomplished by adding the taxable value of any such improvements

to the frozen value, and setting the sum as the new frozen value. In the case of Mr.

Collins, the order of the Court of Appeals dictates that because his exemption was

granted in 2008, his base year should have been 2007 and his frozen value should have

been $40,000. But after January 1 of the base year – 2007 – Mr. Collins added

improvements to the property with a taxable value of $210,000. Pursuant to the Scarlett

Williams Act, that amount must be added in to Mr. Collins’ frozen value to obtain an

updated frozen value for the property. Adding the $210,000 for the improvements to

the $40,000 previously frozen produces a new frozen value of $250,000. Although the

order of the Court of Appeals indicates that the County should have arrived at this

value in a different manner – by freezing the 2007 value of $40,000 and then adding in

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$210,000 for improvements, rather than freezing the 2008 value of $250,000 – Mr. Collins

has been taxed on the correct frozen value all along, and is entitled to no refund.

Mr. Collins is a class member because his prior-to-base-year value is far less than

his base year value, but the discrepancy is wholly explained by the fact that the base

year value is for a house and a lot while the prior-year value is for only a vacant lot.

Where, as here, the difference between a class member’s prior-to-base-year value and

base-year value is attributable entirely to property improvements, the base value

recalculated pursuant to the Court of Appeals’ order will be equal to the base value that

has always been used, and liability on the part of the County cannot be established.

Numerous class members who purchased new-construction or renovated homes are in

the same situation as the hypothetical Mr. Collins, but there is no way to discern from

the County’s tax digest whether a large jump in a property’s value is attributable to

property improvements, market forces, or some combination of the two. Affidavit of

Andrea Lawson, ¶ 3. This information can be found only by pulling and parsing

records from the Tax Assessor’s Office for the individual property at issue, a process

which must be performed for every single class member in order to determine how much

of the difference in base-year values is attributable to property improvements that are

not subject to the exemption. Id. On the spreadsheet attached as Exhibit 1 to the

Affidavit of Andrea Lawson, taxpayers in Mr. Collins’ situation are those for whom a

zero appears in the “Inflation/Deflation Amount” column.

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B. New Construction, Change in Lot Value

On paper, Mr. Dalton’s situation looks identical to Mr. Collins’ – his base-year

value is $250,000 and his prior-to-base-year value is $40,000. Diving into his imaginary

records reveals further similarities, as Mr. Dalton also purchased a lot with a taxable

value of $40,000 in 2007, built a house on it, and moved in by January 2008. But

examination of the Tax Assessor’s 2008 records reveals a different breakdown for Mr.

Dalton’s 2008 total valuation of $250,000; his land had a 2008 taxable value of $80,000,

and the house he built the prior year had a 2008 taxable value of $170,000. The order of

the Court of Appeals gives Mr. Dalton, like Mr. Collins, a 2007 base year and a $40,000

frozen value. But pursuant to the Scarlett Williams Act, the value of improvements

added to the homestead after January 1 of the base year is not subject to the exemption

and must be added to the frozen value. Adding the $170,000 taxable value of the

improvements to the $40,000 frozen value gives Mr. Dalton a new frozen value of

$210,000. Again, this value is necessary to calculate any refunds to which Mr. Dalton is

entitled, and it can be obtained only by an individualized review of the assessment

history of Mr. Dalton’s property. Lawson Aff., ¶ 3. Although Mr. Collins and Mr.

Dalton’s records appear to be identical at the class level, individualized review indicates

that the two men are completely differently situated – Mr. Collins cannot establish

liability and is not entitled to seek damages, while Mr. Dalton can establish liability and

may be entitled to refunds for multiple years of overpayment. Taxpayers in Mr.

Dalton’s situation are those for whom nonzero numbers appear in both the

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“Inflation/Deflation Amount” and “Growth +/-” columns on the spreadsheet attached

as Exhibit 1 to Andrea Lawson’s Affidavit.

C. Later Improvements

Mr. Elliott, like Mr. Dalton and Mr. Collins, purchased a lot with a taxable value

of $40,000 in 2007, built a house on the lot, and obtained a homestead exemption in

2008. Records from the Tax Assessor’s Office reveal 2008 taxable values of $60,000 for

the lot and $190,000 for the improvements. Adding the $190,000 for the improvements

to the frozen $40,000 from base year 2007 gives a frozen value of $230,000. But any

refund due to Mr. Elliott cannot be calculated by re-running his taxes for each eligible

year with a frozen value of $230,000, because Mr. Elliott wasn’t finished improving his

property when he moved in during 2008. The Tax Assessor’s records indicate that he

installed a swimming pool with a taxable value of $8,000 in 2010, a freestanding garage

and mother-in-law-suite with a taxable value of $20,000 in 2011, and an outbuilding

with a taxable value of $3,000 in 2014. This means that Mr. Elliott’s taxes must be

recalculated using a frozen value of $230,000 for 2008 and 2009, a frozen value of

$238,000 for 2010, a frozen value of $258,000 for 2011-2013, and a frozen value of

$261,000 for 2014 forward.

These frozen values cannot be determined except by analysis of an individual

property owner’s tax records, and in the case of the Mr. Elliotts who have made

numerous improvements to their property over time – and there are many –

determination of those values is only half the problem. Lawson Aff., ¶ 4, Ex. 2. With a

The County anticipates that Plaintiffs will seek certification of classes for 20155

to 2018 prior to the calculation of any damages.

A Scarlett Williams exemption holder is taxed based on the lower of his6

frozen value and the current taxable value of his property. Once frozen values arerecalculated pursuant to the order of the Court of Appeals, taxable values must be pulledfor each year in which a refund is potentially due to determine whether a payment in thatyear would have been based on the recalculated frozen value or that year’s taxable value.Only in years for which the recalculated frozen value is less than that year’s taxable valueis a homeowner entitled to a refund.

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base year of 2007, Mr. Elliott would be entitled to a refund for each of the years for

which class-wide relief has been deemed appropriate by the Court of Appeals – 2010

forward. If the County were to calculate potential refunds class-by-class, starting with

the 2010 class and ending with the 2018 class , it would have to retrieve and evaluate5

Mr. Elliott’s valuation history nine times. If the County were instead to calculate refunds

a single time for each eligible taxpayer, it would have to determine all of the above

frozen values, compare them to nine years worth of taxable values , and then plug any6

relevant frozen values into one of nine different sets of millage rates and other data.

Lawson Aff., ¶ 3; Chapman Aff., ¶ 6. Each of these methods would then have to be

repeated thousands upon thousands of times to arrive at class-wide damages

calculations.

D. Re-Applications

Glynn County has long allowed property owners to re-apply for the Scarlett

Williams exemption and lock in a new, lower value in the event that the taxable value

of their property falls below the frozen value. Many hundreds of taxpayers have taken

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advantage of this opportunity, adding yet another layer of complication requiring

individual analysis of taxpayers’ claims.

Parcel Owner Name Exemption

Effective Date

Base Year Base Taxable

Value

Prior to Base

Taxable

Value

01-99995 Fitzgerald 01/01/2014 2014 $350,000 $200,000

Mr. Fitzgerald demonstrates why damages would have to be calculated on a year-by-

year basis, resulting in numerous redundant reviews of most taxpayers’ records – it is

impossible to tell from earlier records what properties were later re-frozen at lower

values, so calculations of additional years of refunds cannot be made from an initial

frozen value.

The hypothetical Mr. Fitzgerald was actually first granted a Scarlett Williams

exemption in 2006, with a frozen value of $400,000 and a prior-to-base-year value of

$375,000. The recession wiped out much of the value of his property, but Mr. Fitzgerald

did not realize until 2014 that he could re-apply and have his frozen value lowered to

his present taxable value, which was then $350,000. Records from 2006 to 2013 identify

Mr. Fitzgerald as a class member, but they give no indication that his frozen value

would later change. Records from 2014 to present likewise identify Mr. Fitzgerald as a

class member, though now based on a different set of values, and give no indication

that he was a class member prior to 2014. Re-applications cannot be identified on a

class-wide level; they are documented only within taxpayers’ individual files. Chapman

Aff., ¶ 4, Ex. 2. Because it cannot be determined from an individual year’s records

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which of the Scarlett Williams exemptions on that record would later be altered by re-

application, frozen values calculated for a given year can only be used to calculate

refunds for that specific year.

E. Large Parcels and Renovations

Finally, the thorniest and most complex issue is presented by properties for

which determination of a frozen value pursuant to the order of the Court of Appeals

may require new work by the Glynn County Tax Assessor. Two properties that fall into

this category are parcels larger than five acres, and properties with extensive

renovations.

Parcel Owner Name Exemption

Effective Date

Base Year Base Taxable

Value

Prior to Base

Taxable

Value

01-99996 Green 01/01/2012 2012 $350,000 $300,000

01-99997 Hopkins 01/01/2005 2005 $280,000 $160,000

Mr. Green purchased his twenty-acre property in rural Glynn County in 2011. The

previous owner used the property for hunting and had no homestead exemption on it,

but Mr. Green moved in full time and obtained the Scarlett Williams exemption in

January of 2012. His current frozen value is the 2012 taxable value of $350,000, but

according to the Court of Appeals, the 2011 taxable value – $300,000 – is the correct one.

The problem is that the Scarlett Williams exemption applies only to “the primary

residence and not more than five contiguous acres of land immediately surrounding

such residence.” While the tax assessor performed two separate assessments in 2012,

one for Mr. Green’s homestead and one for the additional fifteen acres of his property,

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only one assessment of the entire property was performed in 2011. The only way to

determine the 2011 taxable value of the five-acre sub-parcel designated as Mr. Green’s

homestead in 2012 is to have the Tax Assessor re-examine his records and perform new

fact finding. While this work is feasible, if cumbersome, it is highly individualized and

inappropriate in a class action. Lawson Aff., ¶ 4, Ex. 2.

The more common situation of extensive renovation is similar. Mr. Hopkins

purchased his property in the summer of 2004, at which point it was undergoing major

renovation work to the tune of more than $150,000. Records from the Tax Assessor

indicate that the $160,000 2004 taxable value broke down in to a $50,000 taxable value

for the land and a $110,000 taxable value for the improvements. Mr. Hopkins obtained a

Scarlett Williams exemption in 2005, and the finished renovation was re-assessed that

year with a taxable value of $60,000 for the land and $220,000 for the improvements,

totaling $280,000. Because extensive improvements were made to the property after

January 1 of the year the Court of Appeals has held should be the base year – 2004 – Mr.

Hopkins is not entitled to the $160,000 frozen value that predates those renovations.

The value of the improvements must be added to the frozen base value, but it

cannot be discerned from existing records. While the difference in the value of the

improvements on the parcel between the two years is $110,000, the real estate market

was booming in 2004 and 2005, and the taxable values of Mr. Hopkins’ neighbors who

were performing no work on their property went up significantly between the two

years. Only a re-evaluation by the Tax Assessor can determine how much of the

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$110,000 difference was due to the improvements, which must be accounted for in a

raised base value, and how much was due to market forces. Potential refunds for any

homeowner who has undertaken a major renovation during his ownership of his

property cannot be calculated without individualized research by the Tax Assessor’s

office to determine how much of the subsequent rise in property value was attributable

to the improvements. Lawson Aff., Ex. 1.

F. Conclusion

Each of the foregoing issues presents an insurmountable obstacle to calculating

adjusted frozen values without performing detailed analysis of individual class-

member records. Further complicating the calculations is the fact that many real

taxpayers face several of these individually complex issues intertwined – a house

purchased as new construction with multiple subsequent improvements, a house with

two major renovations and a re-application between them, a ten-acre parcel with new

construction. The spreadsheets and individual property record cards attached as

exhibits to the affidavit of the Deputy Chief Assessor, which contain random samples of

parcels from a single random year, make clear exactly how complex the available

information about the value of a specific property can be. Lawson Aff., Ex. 1, Ex. 2.

These issues affecting value calculation cannot even be identified from data compiled at

the class level, and there is consequently no other option than to examine the individual

history of each subject parcel in the records of the Tax Assessor to determine each year’s

proper frozen value pursuant to the order of the Court of Appeals. Lawson Aff., ¶ 3.

Of course, such homeowners can still only be identified by thorough analysis7

of their individual records to rule out the presence of complicating factors.

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Class-wide determination of the frozen values necessary to determine liability and

calculate refunds is not only impracticable in this case; it is impossible.

III. The existence of other exemptions diminishes or eliminates the amount of manypotential refunds, but cannot be evaluated on a class-wide basis.

The third and final obstacle to class-wide calculations in this case is less complex,

but no less problematic. Because the vast majority of Scarlett Williams recipients are

entitled to one or more of a matrix of other exemptions, calculation of potential refunds

must still be performed on a case-by-case basis even after Scarlett Williams entitlement

is determined and proper frozen values for all refund years are calculated.

Parcel Owner Name Exemption

Effective Date

Base Year Base Taxable

Value

Prior to Base

Taxable

Value

01-99998 Ingram 01/01/2007 2007 $200,000 $150,000

01-99999 Jones 01/01/2002 2002 $30,000 $25,000

Mr. Ingram and Mr. Jones are the rare homeowners whose records do not reveal any

issues with regard to either their eligibility for the Scarlett Williams exemption or the

calculation of the base year values for their refunds. Instead, it appears that each of7

them is entitled to a refund based on an annual discrepancy between the frozen value

that was used for his property and the frozen value that should have been used.

But of course, it is not as simple as multiplying the difference between the two

frozen values by the applicable millage rates for each year. This is because Mr. Ingram

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and Mr. Jones, like almost all Scarlett Williams recipients, also receive additional tax

exemptions from the state. Some of those exemptions are straightforward, such as the

one both men receive that exempts the first $2,000 of a property’s taxable value from

state, county, and county school taxes. O.C.G.A. §48-5-44. Others are not, like the one

that provides an exemption based on a frozen amount to persons age 62 or older whose

income in the preceding year is $30,000 or less and thus requires an annual review of

income data and re-determination of eligibility. O.C.G.A. §48-5-47.1.

Mr. Ingram is currently 70 years old; he has met both the age and income

requirements of O.C.G.A. §48-5-47.1 in six of the past eight years, he has met the

separate age and income requirements of the exemption in O.C.G.A. §48-5-47 in three of

the past five years, and he has met the age requirement of the exemption in O.C.G.A.

§48-5-48.3 in each of the past five years. The effect of all of these exemptions is that Mr.

Ingram has paid significantly less in taxes during the past decade than a younger

person with an identically valued property. Mr. Jones, who is 85 years old and has very

little household income, has paid nothing or almost nothing in taxes for each of the past

ten years. He has qualified for O.C.G.A. §48-5-47.1 in each of those years, and because

that statute was enacted well prior to the Scarlett Williams Act, Mr. Jones’s frozen value

under the statute is lower than either his current or recalculated Scarlett Williams

frozen value. Due to his other exemptions, Mr. Jones’s tax bills are unaffected by a

reduction in his Scarlett Williams frozen value, and he cannot establish liability.

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Fortunately, the County maintains records indicating which homeowners were

entitled to which exemptions in each taxable year. Chapman Aff., Ex. 3. Unfortunately,

the simplest way to calculate a property owner’s tax obligation pursuant to a revised

frozen value, in light of those exemptions, is to manually plug the new frozen value for

a given year into the County’s tax software and generate an updated tax bill for that

year. Chapman Aff., ¶ 6. This process – which can only be performed after Scarlett

Williams eligibility has been determined and the correct frozen value for the year in

question calculated – provides a number that can be subtracted from the amount

actually paid by the taxpayer during the year in question, yielding an accurate refund

amount for one taxpayer for one year. If Plaintiffs’ estimates of the size of each class are

accurate, this action would have to be performed over fifty thousand times to arrive at

final refund calculations. Even if exemption eligibility and frozen values for each year at

issue could be determined on a class-wide basis, which they cannot, calculation of

actual refund amounts would have to be performed individually – and would lead to

the identification of additional persons who cannot establish liability. For a third reason,

then, this case should not be permitted to proceed as a class action.

Argument and Citation of Authority

Class certification orders are “inherently tentative,” and the trial court “retains

jurisdiction to modify or even vacate them as may be warranted by subsequent events

in the litigation.” J.M.I.C. Life Ins. Co. v. Toole, 280 Ga. App. 372, 378, 634 S.E.2d 123, 129

(2006) (citing Gen. Telephone Co. of the Southwest v. Falcon, 457 U.S. 147, 160, 102 S.Ct.

24

2364, 72 L.Ed.2d 740 (1982)). If “significant manageability problems arise” after a class

has been certified, a court may revisit the issue of certification and, if warranted,

de-certify the class. Toole, 280 Ga. App. at 378. Accord Vill. Auto Ins. Co. v. Rush, 286 Ga.

App. 688, 692, 649 S.E.2d 862, 867 (2007) (“if it later appears that certain types of claims

or relief are not appropriate for class treatment, the trial court can alter the course of the

litigation or even decertify the class.”).

Class certification is proper only where, inter alia, “questions of fact and law

common to the class members predominate over any individual questions[, ]the named

plaintiff's claims are typical of those of the class members,[ and] a class action better

serves the interests of achieving a fair and efficient adjudication of the controversy.” Life

Ins. Co. of Georgia v. Meeks, 274 Ga. App. 212, 215, 617 S.E.2d 179, 183 (2005). Class

actions are the exception to the rule that individual plaintiffs must assert and prove

their own claims, and should be permitted to proceed only after “rigorous analysis” to

determine whether the foregoing requirements are satisfied. Wal-Mart Stores, Inc. v.

Dukes, 131 S. Ct. 2541, 2251 (2011). In Comcast Corp. v. Behrend, an antitrust case, the U.S.

Supreme Court decertified a class after finding that the plaintiffs had not shown “that

damages [were] capable of measurement on a classwide basis,” thereby failing to meet

the requirement that issues common to the class members predominate over any

individual questions. 569 U.S. 27, 34, 133 S. Ct. 1426, 1433, 185 L. Ed. 2d 515 (2013).

Although the plaintiffs presented an expert who offered a possible methodology for

computing damages, the Court determined that the proposed method failed to take into

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account numerous factors not susceptible to classwide proof or calculation, which could

result in widely varied findings of liability and damages for different class members. Id.

Because the plaintiffs had failed to establish that damages could be assessed on a class-

wide basis without requiring “labyrinthe individual calculations,” class certification

was revoked. Id.

Closer to home, and directly on point, the Georgia Court of Appeals has held

that class certification is improper in a suit seeking to recover overpayments where a

defendant's liability “can be determined only by first ascertaining the status of each

individual [class member’s] account and, if an overpayment is found, by then

determining the amount of overpayment and the persons or entities [] to whom a

refund is owing.” Winfrey v. Sw. Cmty. Hosp., Inc., 184 Ga. App. 383, 383, 361 S.E.2d 522,

523 (1987). In such a situation, “the resolution of individual questions plays such an

integral part in the determination of liability [that] a class action suit is inappropriate.”

Id. Class certification is equally improper whether there are “individual questions” with

respect to liability, “individual damages which would have to be assessed in each of the

myriad cases,” or both. Id.

Similarly, in Life Ins. Co. of Georgia v. Meeks, the trial court certified a class of

patients who were seeking compensation for underpayment of their medical bills from

their insurer. 274 Ga. App. 212, 217, 617 S.E.2d 179, 184 (2005) The Court of Appeals

noted that because individual class members had different medical conditions and

different histories regarding claims and benefits, it would be “necessary to apply the

26

particular policy's terms to each individual class member.” Id. The plaintiffs argued that

common questions regarding the proper interpretation of their policies predominated

over these individual issues, but the court disagreed. Id. “Resolution of the common

questions,” which centered on interpretation of the policies, “would not resolve the

ultimate issues of whether [the insurer] underpaid the claims of each class member and,

if so, what compensation is due each class member.” Id. The Court of Appeals held that

the trial court abused its discretion by certifying a class under these circumstances, and

entered an order decertifying the class. Id.

The facts underlying this motion are complex, but the legal analysis is

straightforward. Indeed, it is because the facts are so complex – a dizzying array of

individualized problems that prevent any class-wide determinations of liability or

damages – that the correct legal outcome is so evident.

There are at least three different sets of class members in this case who will be

unable to establish liability: those who were not actually entitled to the Scarlett

Williams exemption in years where they allegedly overpaid taxes, those for whom the

difference between their base-year value and prior-to-base-year value is attributable

entirely to improvements, and those who already pay a lower amount than they would

with a corrected Scarlett Williams frozen value as a result of other exemptions. These

persons can be identified only through evaluation of each individual class member’s

records; there is no way to resolve these liability issues on a class-wide basis. “When the

resolution of individual questions such as those involved here plays such an integral

27

and prominent role in determining liability, a class action is not appropriate.” Life Ins.

Co. of Georgia v. Meeks, 274 Ga. App. 212, 218, 617 S.E.2d 179, 185 (2005).

While individual questions dominate the liability analysis to be performed, they

utterly monopolize the damages analysis. The amount of taxes overpaid by any specific

class member “can be determined only by first ascertaining the status of each individual

[class member’s] account and, if an overpayment is found, by then determining the

amount of overpayment and the persons or entities [] to whom a refund is owing.”

Winfrey v. Sw. Cmty. Hosp., Inc., 184 Ga. App. 383, 383, 361 S.E.2d 522, 523 (1987). And

“ascertaining the status” is too light and easy a term to use for the actions that must be

performed with each class member’s records to calculate damages. The foregoing

explanation of the information that must be evaluated by the County to determine each

class member’s damages clocks in at more than twenty pages. There are additional

logistical and substantive issues to the ones discussed above; some are currently known

and more are sure to be discovered. The County can “ascertain the status” of a class

member’s assessment and payment history only by undertaking a detailed records

analysis, performing “labyrinthe individual calculations,” and in some cases generating

entirely new data. This process must be repeated for each class member, leaving no

question that damages in this case are not “capable of measurement on a classwide

basis.” Comcast Corp. v. Behrend, 569 U.S. 27, 34, 133 S. Ct. 1426, 1433, 185 L. Ed. 2d 515

(2013). Under these circumstances, continued class certification is untenable. Id.

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“Resolution of the common questions” in this case – the proper interpretation of

the Scarlett Williams Act and the contours of the County’s immunity – “[has] not

resolve[d] the ultimate issues of whether [the County overtaxed] each class member

and, if so, what compensation is due each class member.” Life Ins. Co. of Georgia v. Meeks,

274 Ga. App. 212, 217, 617 S.E.2d 179, 184 (2005). The foregoing cases make clear that,

where complex individualized determinations will be required to address either of the

“ultimate issues” of liability and damages, class action is not appropriate. Here, where

each issue will require a separate and extensive set of claimant-by-claimant research and

calculations, decertification is warranted twice over. Id.

Conclusion

For the foregoing reasons, Defendant respectfully requests that the Court vacate

its January 7, 2015 class-certification order, deny Plaintiffs’ motion to amend the class-

certification order, and require the named Plaintiffs to proceed only on their own

behalf.

Respectfully submitted, this sixteenth day of November, 2018.

29

BROWN, READDICK, BUMGARTNERCARTER, STRICKLAND & WATKINS, LLP

/s/ Emily R. Hancock G. Todd CarterGeorgia Bar No.113601tcarter@brbcsw.com Richard K. StricklandGeorgia Bar No. 687830rstrickland@brbcsw.com Emily R. HancockGeorgia Bar No. 115145

5 Glynn Avenue ehancock@brbcsw.com Post Office Box 220Brunswick, GA 31521(912) 264-8544(912) 264-9667 FAX

ATTORNEYS FOR DEFENDANT

30

CERTIFICATE OF SERVICE

This is to certify that I have this day served all parties with a copy of the

foregoing pleading by hand delivering same to:

James L. Roberts IV, EsquireJason M. Tate, EsquireLaura E. Roberts, EsquireRoberts Tate, LLCPost Office Box 21828St. Simons Island, GA 31522

This sixteenth day of November, 2018.

BROWN, READDICK, BUMGARTNERCARTER, STRICKLAND & WATKINS, LLP

/s/ Emily R. Hancock Emily R. HancockGeorgia Bar No. 115145