Brookhaven to appeal $6.7M verdict over failed mixed-use project

Brookhaven City Hall

Credit: City of Brookhaven

Combined ShapeCaption
Brookhaven City Hall

Credit: City of Brookhaven

A jury ordered the city’s mayor and city manager to pay extra money as punishment for their involvement

Brookhaven will continue to challenge a jury’s verdict that could cost the city and two city officials millions of dollars.

On Tuesday, the City Council authorized its attorneys to appeal the $6.7-million verdict in a lawsuit revolving around a townhome project that never got off the ground. The DeKalb Superior Court jury sided with real estate developer The Ardent Companies and two homeowners, Jon and Courtney Wheeler, after they determined city officials purposefully stalled and eventually killed the plan.

In a potentially unprecedented move, the jury’s verdict included punitive fines against Mayor John Ernst and City Manager Christian Sigman. The jury ordered both to pay $200,000 personally. The jury did not find councilmembers’ actions warranted punitive damages.

Explore$6.7M ruling against Brookhaven could have ‘chilling effect,’ mayor says

Mayor Pro Tem Linley Jones presided over a Tuesday meeting in lieu of Ernst and read a statement on behalf of the council, announcing the city’s intent to appeal the ruling.

“The city believes that the actions taken by the city in the Ardent development matter were proper and in the city’s best interest, thus the city disagrees with the verdict and supports its officials and employees,” she said.

In addition, the council unanimously adopted a “Brookhaven Indemnity Policy,” which would have the city provide legal defense and protection for legal damages against elected officials, appointed officials and city employees. The city’s policy applies if the person being sued “was performing work for and on behalf of the city, was acting within established policies, procedures, or guidelines or was acting pursuant to express authority from the City Council, and was not acting for their own personal advantage or advancement.”

»Read the full indemnity policy at the bottom of this story.

The legal dispute began in 2017 when Ardent struck a deal with more than 20 homeowners to purchase roughly 17 acres along Bramblewood Drive, a dead-end street off Buford Highway. The sale hinged on Ardent rezoning the properties and buying Bramblewood Drive from the city.

Ardent’s lawsuit argued city officials obstructed the rezoning efforts and refused to sell the 0.2-mile stretch of road for less than $3 million — despite never having the road’s value appraised. The company said their own appraisal valued the road at $250,000, a twelfth of Brookhaven’s asking price.

While the rezoning application was pending, Ardent alleged city leaders tried to strongarm the company into selling six parcels that span about three acres to the city. The city was considering using the property for a public safety center, a project that’s now under construction at a different location along the Peachtree Creek Greenway. In addition, the city was allegedly trying to leverage the same property to the DeKalb County School Board in a failed effort to keep Cross Keys High School in Brookhaven.

In 2018, the council voted against abandoning the road, voiding the developer’s deals to purchase the homeowner properties and prompting the lawsuit. Simon Bloom, Ardent’s attorney, previously called the sale tactic extortion. City officials maintain they did nothing wrong.

“Ardent did not and does not have the right to make any city sell it a street,” Jones said Tuesday during her statement. “...During this time, please understand that comments and statements on pending litigation from Brookhaven officials and staff are limited by legal counsel.”

ExploreOPINION: Lawsuit hits home hard for Brookhaven mayor

Ernst and Sigman both said they were following instructions and advice from the council and city staff throughout the Ardent negotiations, and they maintain that they did nothing illegal or unethical. During his March 7 testimony, Ernst argued the ruling and punitive fines could affect how city officials pursue large development projects.

“I’m very concerned about how I and other elected officials across the state can function, how we can have conversations with anyone in the future,” he said. “I think it could be a chilling effect.”

Who pays the bill?
The City of Brookhaven, its mayor and city manager were ordered to pay fines totaling more than $6.6 million.
SOURCE: Simon Bloom's legal team

Bloom argued the mayor and city manager abused their positions of power and ignored multiple conflicts of interest, warranting the harsh ruling from the jury. His law firm issued a statement Wednesday, saying they’re “confident that the Court of Appeals will uphold the verdict.”

“Judge (Tangela) Barrie was thoughtful and deliberate in all of her rulings throughout the trial, and the jury’s verdict is well-supported by the overwhelming evidence of the city’s wrongdoing, orchestrated and assisted by Mr. Sigman and Mr. Ernst,” the statement said.