Kevin Fowler D/B/A Med-State EMS v. Warren County ( 2007 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
December 13, 2007 Session
KEVIN FOWLER D/B/A MED-STAT EMS v. WARREN COUNTY,
TENNESSEE
Appeal from the Circuit Court for Warren County
No. 2644 Buddy Perry, Judge
No. M2007-01004-COA-R3-CV - Filed January 24, 2008
A private ambulance service provider challenged the fees established in the Warren County
ambulance regulations created pursuant to state law. The trial court found the fees were
constitutionally permissible. We affirm, finding that the fees were true fees, not taxes, and that the
fees were reasonable.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed
ANDY D. BENNETT, J., delivered the opinion of the court, in which PATRICIA J. COTTRELL, P.J., M.S.,
and FRANK G. CLEMENT, JR., J., joined.
Eric J. Burch, Manchester, Tennessee, for the appellant, Kevin Fowler d/b/a Med-Stat EMS.
Larry B. Stanley, Sr., Ricky L. Stacy, McMinnville, Tennessee, for the appellee, Warren County,
Tennessee.
OPINION
On January 29, 2007, Kevin Fowler, doing business as Med-Stat EMS, a private ambulance
service, filed suit challenging Warren County’s ambulance regulations. He alleged that the
regulations required all private ambulance services to pay an unconstitutional privilege tax of $5,000
a year even though medical services are not subject to a privilege tax. Fowler declined to pay the
alleged tax and was ordered by the county to cease doing business in Warren County effective
January 31, 2007. The trial court entered a temporary injunction allowing Fowler to continue
operating until a hearing on the merits. That hearing was held on March 23, 2007. The trial court
found that the application and permit fees “are placed in a fund segregated from Warren County’s
general fund,” and that these fees “are intended to be used solely for the enforcement of the
Regulations.” The trial court concluded that the regulations were valid and that the application and
permit fees were “constitutionally permissible fees.” The injunction was dissolved and Fowler
appealed.
Tax or Fee
Tenn. Code Ann. § 7-61-104 states, in pertinent part: “In order to protect the public health
and welfare, any county or city may adopt and enforce reasonable regulations to control the
provision of private or nonprofit ambulance service.” To this end, Warren County adopted a set of
regulations that went into effect on February 1, 2007. These regulations require an annual
nonrefundable application fee of five hundred dollars ($500.00) and an annual nonrefundable permit
fee of four thousand five hundred dollars ($4,500.00). In brief, the regulations require each service
provider to maintain a base of operation and business office in Warren County, to keep all records
available for inspection by the county, and to meet certain equipment and personnel standards.
Taxes and fees are distinguished primarily by the purpose for which they are imposed. A tax
is imposed for the purpose of raising revenue and a fee is imposed for the purpose of regulating some
activity. S & P Enterprises, Inc. v. City of Memphis, 672 S.W.2d 213, 215 (Tenn. Ct. App. 1983).
The record does not include any documents regarding the county’s use of the money; that is, it
contains no Warren County Commission resolution or audit regarding the use of the fees or where
the money generated by the fees is placed in the budget. The county executive testified that none
of the money went into the general fund and that all of it went to help defray the cost of monitoring
the ambulance services. As the trial court noted, this testimony is uncontroverted.1 Furthermore,
there is a presumption in favor of the validity of an ordinance. Id. at 217. The party questioning the
validity of an ordinance has the burden of proving its invalidity. Id. That has not been accomplished
in this case. Therefore, we affirm the trial court’s ruling that the application and permit fees were
“constitutionally permissible fees.”
Reasonableness of the fees
As a fallback argument, Fowler maintains that even if the fees are constitutional, they are not
reasonable. Specifically, he maintains that the amount of the fee is excessive, which in turn violates
the requirement in Tenn. Code Ann. § 7-61-103 that the regulations be “reasonable.” To establish
the reasonableness of fees, “it is only required that the fees bear some reasonable relation to the
expenses involved and it is no objection to a regulatory license that it produces more income than
is required for its administration and enforcement.” S & P Enterprises, Inc., 672 S.W.2d at 216.
Once again, it is important to remember that the party questioning the validity of an ordinance has
the burden of proving its invalidity. Id. at 217. Fowler attempts to satisfy his burden by showing
that the state’s fees are considerably less than Warren County’s. However, he fails to take into
account that Warren County intends to be much more active than the state. For example, the state
ambulance service license renewal fee is $250 and the annual vehicle (ambulance) permit fee is $100
per vehicle. Tenn. Comp. R. & Regs. 1200-12-1-.06 (5). Thus, an ambulance service with two
ambulances would pay $450 a year to the state for one or two inspections a year and an audit. It is
clear from the testimony of the county executive and the EMS director that the county envisions
monthly inspections, frequent investigations of complaints, and almost daily interaction with the
regulated ambulance services. The county executive thought there would be “tremendous expense”
1
While there was testimony that the fees went into the ambulance fund account and that expenses for the county
ambulances were paid out of that account, there was no testimony that any of the fees in question were used for purposes
other than the enforcement of the ambulance regulations.
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associated with enforcement of the regulations. Extrapolating the $450 paid to the state for one or
two inspections a year to the dozen or more inspections Warren County intends to perform2, one
could expect Warren County to have a fee as high as $5,400 ($450 an inspection x 12 inspections
per year). Fowler has failed to meet his burden. In light of the state’s fee for its activity, which
Fowler uses as a benchmark for reasonableness, we cannot say that the amount of the fee Warren
County charges is unreasonable based on the testimony about what Warren County intends to do.
The judgement of the trial court is affirmed. Costs of appeal are assessed against the
appellant, Kevin Fowler, for which execution may issue, if necessary.
_________________________
ANDY D. BENNETT, JUDGE
2
We would note that, at the time of the trial, the county had very little experience with the new regulations since
the regulations had been in effect for approximately fifty days.
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