Atlanta Development Authority v. Clark Atlanta University, Inc.Annotate this Case
Defendant Atlanta Development Authority d/b/a Invest Atlanta petitioned the Georgia Supreme Court for interlocutory review of the superior court’s denial of its motion to dismiss plaintiff Clark Atlanta University, Inc.’s (“CAU”) complaint for declaratory judgment. CAU sought a declaration regarding CAU’s rights to three adjoining parcels of real property in southwest Atlanta that it donated to Morris Brown College (“MBC”) in 1940. In 1988, Atlanta University and Clark College consolidated to form Clark Atlanta University, and Clark Atlanta University was the successor-in-interest to Atlanta University, the entity that donated the property to MBC. MBC filed for Chapter 11 bankruptcy relief in an attempt to prevent the foreclosure and sale at auction of its campus. As a result of the Bankruptcy, MBC requested that the bankruptcy court approve the sale of a large portion of its campus, including the property at issue here, to Invest Atlanta. The bankruptcy court held a hearing in the matter at which it noted that it was “clear that [MBC] can only sell whatever interest in [the] property it has” and that it was “not making any findings regarding the extent of [MBC’s] interest in the reversionary property.” The sale to Invest Atlanta was approved, and the order approving the sale expressly provided that Invest Atlanta was "accepting title subject to any alleged and recorded interest held by CAU." CAU filed this complaint seeking, inter alia, a declaration and judgment that the Deed transferred the Property in the form of a fee simple determinable estate or a fee simple estate subject to a limitation, that CAU therefore had a valid automatic reversionary interest in the Property, and that such reversionary interest was triggered when MBC stopped using the Property for educational purposes and sold it to Invest Atlanta; alternatively, CAU asked for a declaration and judgment that with respect to any portions of the Property that were then being used for educational purposes by MBC, if at any time MBC ceased to so use such portions of the Property, title to such property would immediately and automatically revert to CAU. Invest Atlanta unsuccessfully moved to dismiss the complaint. Finding no reversible error, the Supreme Court affirmed the superior court's judgment.