Porter Freeman v. Robert Ring, County Executive, Jerry Sharber, Mayor, - Concurring ( 1998 )

PORTER FREEMAN, )
)
Plaintiff/Appellant, )
) Appeal No.
) 01-A-01--9705-CH-00237
VS. )
) Williamson Chancery
) No. 24424
ROBERT RING, COUNTY
EXECUTIVE, JERRY SHARBER,
MAYOR, and JAMES JOHNSON,
)
)
)
FILED
ADMINISTRATOR, ) January 9, 1998
)
Defendants/Appellees. )
Cecil W. Crowson
Appellate Court Clerk
COURT OF APPEALS OF TENNESSEE
MIDDLE SECTION AT NASHVILLE
APPEALED FROM THE CHANCERY COURT OF WILLIAMSON COUNTY
AT FRANKLIN, TENNESSEE
THE HONORABLE HENRY DENMARK BELL, CHANCELLOR
PORTER FREEMAN
7131 Nolensville Road
Nolensville, Tennessee 37135
Pro Se/Plaintiff/Appellant
RICHARD A. BUERGER
306 Public Square
Franklin, Tennessee 37064
Attorney for Defendant/Appellee Robert Ring
DOUGLAS BERRY
Suntrust Center
424 Church Street, Suite 2900
Nashville, Tennessee 37219
Attorney for Defendants/Appellees Jerry Sharber and James Johnson
AFFIRMED IN PART; REVERSED IN PART;
AND REMANDED
WALTER W. BUSSART, JUDGE
CONCUR:
TODD, P.J., M.S.
CANTRELL, J.
OPINION
The appellant sought to enjoin both city and county officials from the sale of
general obligation bonds. The Chancery Court of Franklin granted all defendants'
motions to dismiss pursuant to Rule 12.02(6) of the Tennessee Rules of Civil
Procedure. On appeal, we must determine whether the trial court erred in not
considering the petition for injunction on the merits as against either the city or the
county defendants.
I. Procedural Background
This case began when Porter Freeman filed a pro se "Petition for Injunction"
in the trial court naming as defendants Robert Ring, the county executive of
Williamson County, Jerry Sharber, the mayor of the city of Franklin in Williamson
County, and James Johnson, the city administrator for Franklin. As stated, the trial
court dismissed the petition against all defendants under Tennessee Rule of Civil
Procedure 12.02(6). The office of a rule 12.02(6) motion is to test the sufficiency of
the complaint. This rule encompasses the old common law pleading of "demurrer."
The movant is saying that assuming everything alleged is true, "so what?" With that
in mind, we turn to the petition. To say that it is inartfully drafted would be an
understatement; it does however state in part as follows:
The county commissioners of Williamson County and
the alderman [sic] of Franklin, Tn., have authorized these
officials to make arrangements and to sell bonds to loan or
give aid to special interest groups, namely: The Williamson
County soccor [sic] association, the city of Thompson Station
and Brentwood, Tn., the Williamson County conference
center, and possible building of stadium and practice center
of the now, Houston Oilers. All of these projects are in
violation of our Tennessee Constitution, namely: Article II
section 29 and Article [XI] Section 16.
Attached to the complaint is a letter written by the appellant to all three
defendants on November 18, 1996 which states as follows:
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Gentlemen:
I am writing to you regarding your actions to building
a socker [sic] stadium for the Williamson County Socker [sic]
Association, this applies to Robert Ring.
The proposed Oiler's deal practice field and whatever,
this applies to Mayor Sharber and James Johnson.
The proposed convention center for the motel, hotel
and resturant [sic] interest, all of these are special interest
and not in the best interest of all the people of Williamson
County.
Again, I want to point out to all of you, that these
actions are in violation of your oaths of office you all made by
each of you before taking office, to support the Constitution
of Tennessee and the U.S..
The Constitution of Tennessee, article 2, section 291
says that you must prepare your plans and intentions for
these projects, then present them to the people in an
election, with 75% of the people voting in the election to
approve, before you can continue on with these projects. It
also says that you cannot join together and with these special
interest groups without an election first being held, and with
like manor, 75% vote approval.
If you are going to continue with your plans in these
deals, I strongly request that you obey the constitutional
mandates before you go any further with your plans.
Why not let these special interest groups build their
own businesses and pay their taxes as all the other people of
the County have to do?
I now call your attention to article [XI], section 16,2
which says that the Constitution of this state of Tennessee,
shall never be violated on any pretense whatever, and shall
forever remain involate. [sic] This means you cannot go
around it's [sic] provisions ever. Copies of these sections
inclosed. [sic]
I am hop'ing [sic] that you will abide by your oaths to
obey the Constitution of Tennessee mandates and do the
right thing after a vote in the next election to be held, and not
special referendum.
1
The full text of this section is as follows:
The General Assembly shall have power to authorize the several counties and
incorporated towns in this State, to impose taxes for County and Corporation purposes
resp ective ly, in such manner as shall be prescribed by law; a nd all property shall be
taxed according to its value, upon the principles established in regard to State taxation.
But the credit of no County, City or Tow n sha ll be given or loaned to or in aid of any
person, company, association or corporation, except upon an elect ion to be firs t held
by the qualified voters of such county, city or town, and the assent of three-fourths of
the votes cast at sa id election.
Tenn . Const. a rt. II, § 29.
2
The declaration of rights hereto prefixed is declared to be a part of the Constitution
of this State, and shall never be violated on any pretence whatever. And to guard
against transgression of the high powers we have delegated, we declare that
everything in the bill of rights contained, is excepted out of the general powers of
government, and shall forever remain inviolate.
Tenn. Const. art. XI, § 16.
-3-
These are the only provisions in the complaint which could be construed as stating a
cause of action. With these in mind, we turn to a review of the trial court's dismissal
as pertains to each defendant.
II. City Defendants
In support of its dismissal of the action against the city defendants, the trial
court noted that Mr. Freeman did not allege that he is a taxpayer of the City of Franklin
but only of Williamson County. The court reasoned as follows:
The plaintiff could therefore suffer no injury in the form of an
increased tax burden from the City of Franklin. He therefore
has no standing to ask the Court to restrain the City of
Franklin or its officials from taking any action of any kind.
Lack of allegations that establish standing may support a motion to dismiss under
Rule 12.02(6). See Curve Elementary Sch. Parent and Teachers' Organiz. v.
Lauderdale County Sch. Bd., 608 S.W.2d 855, 857 (Tenn. Ct. App. 1980) (citing
Knierim v. Leatherwood, 542 S.W.2d 806 (Tenn.1976)). With regard to tax-payer
standing, case law has consistently required "that a taxpayer on his own behalf and
that of others could maintain an action to prevent the commission of an unlawful act
which would increase his tax burden or create a diversion of public funds from their
lawful purpose." Parks v. Alexander, 608 S.W.2d 881, 890 (Tenn. Ct. App. 1980),
cert. denied, 451 U.S. 939 (1981). The court in Parks summarized previous law in
stating that "[a]ll the cases require some special or private damage to the
complainants that separates their interest in the subject matter from that of the
citizenry at large. Some of the cases recognize that being a taxpayer and bearing
additional liability may constitute such special damage." Id.; see Cobb v. Shelby
County Bd. of Comm'rs, 771 S.W.2d 124, 126 (Tenn. 1989) (where taxpayers and
citizens of Shelby County, as such, brought action to declare invalid an ordinance
authorizing salaries for members of the county board of commissioners and the court
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found that the plaintiffs had alleged all the elements of taxpayer standing the first of
which was "taxpayer status"). Here, Mr. Freeman has not alleged that he is a Franklin
taxpayer nor that he has suffered special injury otherwise.
Mr. Freeman presents two other grounds in support of his standing against the
city defendants: first, his citizenship as a Tennessean and, second, his payment of
money to Franklin in other (non-property) taxes, presumably in sales tax. The first
of these grounds is directly contrary to the requirement that special injury is needed
to bring suit as a taxpayer. This court has stated that "[t]he purpose of the
requirement of standing is to assure that the matter before the court presents a
justiciable controversy. The issue is whether the party seeking relief has alleged 'such
a personal stake in the outcome of the controversy to assure that concrete
adverseness which sharpens the presentation of issues upon which the court so
largely depends for illumination of difficult constitutional questions.' " Huntsville Util.
Dist. v. General Trust Co., 839 S.W.2d 397, 401 (Tenn. Ct. App. 1992) (citing Baker
v. Carr, 369 U.S. 186, 204 (1962)).
Secondly, the law does not provide support for Mr. Freeman's allegation that
the payment of sales tax in Franklin confers on him standing to sue that city. Our
court has held that "'the legal incidence of the retail sales tax is upon the vendor of the
taxable services or property, and not upon the vendee or consumer.'" Beare Co. v.
Olsen, 711 S.W.2d 603, 605 (Tenn. 1986)(quoting South Cent. Bell Tele. Co. v.
Olsen, 669 S.W.2d 649, 651 (Tenn.1984)) ; see also Reimann v. Huddleston, 883
S.W.2d 135, 137 (Tenn. Ct. App. 1993), cert. denied, 513 U.S. 825 (1994). As such,
the consumer of the products being sold by the vendor of taxable retail items has no
standing to challenge the sales tax. Beare, 711 S.W.2d at 606. It follows that
payment of the sales tax does not give consumers standing to challenge the issuance
of general obligation bonds payable in part from tax levied on the taxable property in
-5-
the city. See Tenn. Code Ann. § 9-21-201, § 9-21-205(4)(A) (1991) (providing that the
bonds will be secured by ad valorem taxes on property within the local government).
As the defendants pointed out in their brief, under this theory of standing, any citizen
of the United States, indeed the world, could purchase a pack of gum in Franklin,
Tennessee and thereby acquire standing to sue city officials. We, therefore, agree
with the trial court and affirm the dismissal as to Defendants Jerry Sharber and James
Johnson.
III. COUNTY DEFENDANT
A. Complaint and Dismissal Regarding Defendant Ring
In dismissing the complaint against Defendant Ring, the court simply stated
that Ring's motion was well-taken. In his motion to dismiss, Ring had cited two
reasons for dismissal. First, he noted that the Williamson County Board of County
Commissioners has the exclusive authorization to issue general obligation bonds and,
second, that Appellant failed to file a petition signed by ten percent of the eligible
voters within the time period established by section 9-21-207 of the Tennessee Code.3
At oral argument, Mr. Ring's attorney emphasized that Mr. Freeman had just sued the
wrong defendant because the statute provides that the legislative body, here the
county commission, not the county executive, will issue the resolution which
authorizes obligation bonds.
B. Standing
3
In section 9-21-201, the Tennessee Code governs the procedure for issuing general obligation
bonds which are "those bonds in which the local governm ent incurs a definite and absolute obligation
by pledging th e full faith, credit and unlim ited ta xing pow er of the loc al gov ernm ent a s to a ll taxa ble
property in the local government or of a portion of the local government, if applicable, to the payment
of the p rincip al of a nd int eres t on s uch bond s." W hile th is statute does not automatically provide for a
referendum when general obligation bonds are issued, it does provide a procedure for the affected
taxpayers to obtain a referendum. If at least ten percent (10%) of the registered voters of the local
government file a petition protesting the issuance of the general obliga tion b ond s with in a ce rtain tim e
limit, th ey will no t be is sue d with out th e ass ent o f the m ajorit y.
-6-
At oral argument, Appellant was invited to request the trial court to furnish this
court information as to whose signature was necessary for the issuance and/or
distribution of bonds. Appellant did supplement the record with a copy of a "Certificate
of Award of $22,665,000 General Obligation Public Improvement Bonds, Series 1996,
and $530,000 Rural School Bonds, Series 1996." Robert Ring's signature is on this
document. Additionally, Appellant included the "Official Bond Bid Form" which was
sent to Mr. Ring in his capacity as county executive and bears his signature as having
been accepted on October 22, 1996.
It is the opinion of this court that these supplementary documents cannot be
considered here because they were not a part of the complaint. Appellant did not ask
the trial court to amend the complaint, rather he filed documents in this court for
consideration. The law is clear that "[a]n appellate court may not permit the
introduction of evidence in the first instance." State v. Smith, 893 S.W.2d 908, 917
(Tenn. 1994), cert. denied, 116 S. Ct. 99 (1995). The information submitted by Mr.
Freeman does not consist of facts that were alleged in the complaint.
Nevertheless, Appellant includes in his complaint the allegation that defendant
Ring is the county executive and prays that Ring be restrained from further action until
an election can be held in accordance with the constitution. The complaint further
alleges that Porter Freeman is "a citizen of the United States, Tennessee and
Williamson County." Therefore, he seems to have sufficiently alleged standing
against Defendant Ring.
C. Sufficiency of the Pleadings
-7-
Next we turn to the pleadings as presented below to review the motion to
dismiss Defendant Ring. It has been murmured by older members of the bar of this
state that, under the "new" rules of civil procedure (particularly Rules 8 and 9), all that
is necessary to get into court is for the party to write "help" on a piece of paper, fold
it like a paper airplane and sail it through the window of the clerk's office. While this
is an exaggeration, the rules do contemplate notice pleading and only a "short and
plain statement of the claim showing that the pleader is entitled to relief" is required.
Tenn. R. Civ. P. 8.01. As this court has stated, "[p]leadings give notice to the parties
and the trial court of the issues to be tried." Castelli v. Lien, 910 S.W.2d 420, 429
(Tenn. Ct. App. 1995); see also Prince v. Coffee County, No.
01A01-9508-CV-00342, 1996 WL 221863 at *3 (Tenn Ct. App. 1996) (stating that
"Tennessee's notice pleading requires a complaint to contain only minimum general
facts that would support potential cause of action under Tennessee substantive law").
The petition below is clear in its allegation that Williamson County has given
aid to private interest groups in violation of the Tennessee Constitution by selling
bonds to finance the construction of certain projects. The pertinent portion of Article
II, Section 29, upon which Mr. Freeman relies, provides as follows:
But the credit of no County, City or Town shall be given or
loaned to or in aid or any person, company, association or
corporation, except upon an election to be first held by the
qualified voters of such county, city or town, and the assent
of three-fourths of the votes cast at said election.
The gist of Appellant's claim is that this constitutional provision prohibits the issuance
of general obligation bonds without an election.
The question then becomes whether or not the issuance of general obligation
bonds absent an election as provided in Article II, Section 29, violates the constitution.
More specifically the question is, under the complaint as filed, is there any set of facts
which could be proven which would impose some new financial liability upon the
-8-
county and result in the creation of public debt for the benefit of private enterprises.
See Copley v. Fentress County, 490 S.W.2d 164, 169 (Tenn. Ct. App. 1972).
In Copley, the court dealt with a county's authority to construct an industrial
building to be used by a private industry which would employ local citizens. Id. at 165.
The money to build the building had accrued in the county's budget over the past
years, and, as it was not necessary for the county to borrow any money, no bonds
were issued. Id. The court articulated the main questions as follows:
(1) Does Fentress County have the authority to construct an
industrial building to be used by a private industry which will
employ local citizens?
(2) Is it necessary for an election to be held for the purpose
of obtaining approval of three-fourths of the qualified voters
voting in such election before such industrial building can be
constructed with the use of County funds?
Id. at 166. The court first concluded that the building was for a public purpose. Id.
at 168. With regard to the second question, it found that it did "not agree that the
challenged action of the County Court constitutes giving or lending of credit of said
County for any illegal purpose in view of the uncontroverted fact that the County is not
borrowing any money for such purpose." Id. The court held "that the word 'credit', as
used in Article II Section 29 of the Tennessee Constitution implies the imposition of
some new financial liability upon a county, city or town which in effect results in
creation of a public debt for the benefit of private enterprises and this was the evil
intended to be prevented by said constitutional provision." Id. at 169.
In Mayor of Fayetteville v. Wilson, 367 S.W.2d 772 (Tenn. 1963), the
constitutionality of Tennessee's Industrial Park Act was in question. That Act "[gave]
the cities and counties authority to acquire and develop industrial parks in order to be
more successful in attracting industry." Id. at 774. In order to do this, the act provided
that "the counties and incorporated cities and towns are authorized to issue bonds in
financing industrial parks and to pledge their full faith and credit by either of three
-9-
methods." Id. The court upheld as constitutional only that method which required a
thee-fourths vote in accord with Article II, Section 29.
In holding as it did, the Wilson court cited an earlier case involving the
constitutionality of the Industrial Building Bond Act of 1955, a very similar law
previously enacted to accomplish the same purposes as the act at issue in Wilson.
See Wilson, 367 S.W.2d at 774 (citing McConnell v. City of Lebanon, 314 S.W.2d
12 (Tenn. 1958)). The Industrial Building Bond Act of 1955 at issue in McConnell
had "authorized the various cities and counties of the State to issue bonds pledging
their full faith and credit with the proceeds of said bonds to be used to improve or
construct industrial buildings to be leased to private firms, which will thereby give
employment to the people of the State." Wilson, 367 S.W .2d at 774. Significantly,
the Wilson court stated that "[s]ince such amounts to lending the credit of a city or
county to a person, company, association or corporation to accomplish a public
purpose the Act provides for an election as demanded by Article 2, Section 29 of our
Constitution." Id.
In McConnell, the propriety of holding a referendum was not even at issue.
The statute under scrutiny required an election and, indeed, the city defendant had
held an election "by which much more than three-fourths of the qualified voters, as
required by the statute, ha[d] voted in favor of the execution of the purposes permitted
by said statute by the City of Lebanon." McConnell, 314 S.W.2d at 14. At issue was
whether or not these bonds were issued for a public purpose and also, even if they
were for a purely private purpose, would they "nevertheless be valid because they
were approved . . . by a vote of three-fourths of the qualified voters[?]" Id. at 15. In
other words, the appellees were contending that the second sentence of Article 2,
Section 29 "authorizes the lending of aid or credit for a private purpose of a private
individual or corporation on a mere vote of the qualified number of voters." Id.
- 10 -
In concluding "that the requirement that the purpose be corporate [or public]
pervades the entire provision," the court cited case law defining the purpose of that
second sentence referring to an election:
If the purpose be direct, and be accomplished by direct action
of the county or city, as in building, or employing others to
build for it, the county's bridge, . . . or the city's waterworks,
to be owned by the county or the city, the matter falls under
the first part of section 29, no election is required.
Id. at 16 (citing Berry v. Shelby County, 201 S.W. 748, 750 (Tenn. 1918)). The court
continued as follows:
Immediately following that, it is stated that even if a direct, as
well as an indirect, purpose is to be accomplished by a
county or city lending its credit to some other and separate
entity, or by subscribing to stock therein, then the facts fall
within the second provision which requires an election, etc.
Id; see also City of Chattanooga v. Harris, 442 S.W.2d 602, 607 (Tenn. 1969) (also
citing Berry v. Shelby County and "recogniz[ing] that some expenditures, even
though made for a direct public purpose, may because of the manner of carrying out
the purpose actually encompass a giving of credit to some outside interest" but
holding that in its particular situation, "[t]he city does not work through a grant of credit
to some outside instrumentality, and, thus, the plan falls into the class of expenditures
which are constitutionally valid without an election being necessary").
The petition in this case is poorly drawn. However, we are not to grade it but
rather to decide if it gives minimal notice of the issues raised. We believe it does
because we cannot say that in view of this complaint, with attachments, and the
substantive law, there is no set of facts which could be introduced into evidence which
would constitute a violation of the constitution as against the county official defendant.
Therefore, the judgment of the trial court with regard to Defendant Robert Ring is
reversed and the case remanded for further proceedings in that court as to that
defendant. Tax the costs against Defendant Robert Ring.
- 11 -
__________________________________
WALTER W. BUSSART, JUDGE
CONCUR:
_______________________________
HENRY F. TODD, PRESIDING JUDGE
MIDDLE SECTION
_______________________________
BEN H. CANTRELL, JUDGE
- 12 -
IN THE COURT OF APPEALS OF TENNESSEE
MIDDLE SECTION AT NASHVILLE
PORTER FREEMAN, )
)
Plaintiff/Appellant, )
) Appeal No.
) 01-A-01--9705-CH-00237
VS. )
) Williamson Chancery
) No. 24424
ROBERT RING, COUNTY )
EXECUTIVE, JERRY SHARBER, ) Affirmed in Part;
MAYOR, and JAMES JOHNSON, ) Reversed in Part;
ADMINISTRATOR, ) and Remanded
)
Defendants/Appellees. )
JUDGMENT
This cause came on to be heard upon the record on appeal from the
Chancery Court of Williamson County, briefs and argument of counsel; upon
consideration whereof, this Court is of the opinion that the dismissal order as to
Defendant Robert Ring should be reversed. In all other respects we affirm.
In accordance with the opinion of the Court filed herein, it is, therefore,
ordered and decreed by this Court that the order of Chancellor be affirmed in part and
reversed in part. The cause is remanded to the Chancery Court of Williamson County
for further proceedings in accordance with this opinion and for the collection of the
costs accrued below.
Costs of this appeal are taxed against Defendant Robert Ring, for which
execution may issue if necessary.
ENTER _______________________.
_________________________________
HENRY F. TODD, PRESIDING JUDGE
MIDDLE SECTION
_________________________________
BEN H. CANTRELL, JUDGE
_________________________________
WALTER W. BUSSART, JUDGE