Blaylock & Brown Construction Co. v. Collierville Board Of, Mayor & Aldermen , 1999 Tenn. App. LEXIS 863 ( 1999 )

IN THE COURT OF APPEALS OF TENNESSEE,
AT JACKSON
____________________________________________________________
)
BLAYLOCK & BROWN ) Shelby County Chancery Court
CONSTRUCTION COMPANY, INC. ) No. 98-0120-2
d/b/a THE FRANK ROAD LANDFILL, )
)
Plaintiff/Appellee, )
) C.A. No. W1998-00596-COA-R3-CV
VS. )
)
THE COLLIERVILLE BOARD OF ,
MAYOR AND ALDERMEN SITTING )
)
FILED
IN PLACE OF THE MEMPHIS AND )
SHELBY COUNTY AIR POLLUTION ) December 27, 1999
CONTROL BOARD and HALLE )
PLANTATION HOMEOWNERS ) Cecil Crowson, Jr.
ASSOCIATION OF COLLIERVILLE, ) Appellate Court Clerk
INC., )
)
Defendants/Appellants. )
)
______________________________________________________________________________
From the Chancery Court of Shelby County at Memphis
Honorable Floyd Peete, Chancellor
C. Thomas Cates,
Wendy C. Feild,
BURCH, PORTER & JOHNSON, PLLC, Memphis, Tennessee
Attorneys for Defendant/Appellant The Collierville Board of Mayor and Aldermen
Mimi Phillips,
PHILLIPS, HOWARD & GRUBB, Memphis, Tennessee
Attorney for Defendant/Appellant Halle Plantation Homeowners Association for Collierville,
Inc.
John Farris,
Dean White,
FARRIS, MATHEWS, BRANAN & HELLEN P.L.C., Memphis, Tennessee
Attorneys for Plaintiff/Appellee.
OPINION FILED:
REVERSED AND REMANDED
FARMER, J.
CRAWFORD, P.J., W.S.: (Concurs)
HIGHERS, J.: (Concurs)
Respondents Collierville Board of Mayor and Aldermen and Halle Plantation
Homeowners Association of Collierville, Inc., appeal the trial court’s judgment granting the petition
for writ of certiorari filed by Appellee Blaylock & Brown Construction Company, Inc., and
reinstating the decision of the Memphis and Shelby County Health Department to issue a
construction permit allowing Blaylock & Brown to operate an air curtain incinerator at its Frank
Road Landfill in the Town of Collierville. We reverse the trial court’s judgment based upon our
conclusion that the court erred in ruling that the Collierville Board of Mayor and Aldermen lacked
the authority to review the Health Department’s issuance of the permit.
Blaylock & Brown operates the Frank Road Landfill within the municipal limits of
the Town of Collierville. In September 1997, the Memphis and Shelby County Health Department
issued a construction permit allowing Blaylock & Brown to operate an air curtain incinerator at the
Frank Road Landfill.
The Frank Road Landfill adjoins several residential neighborhoods, including a
neighborhood known as Halle Plantation. In October 1997, an organization identifying itself as the
Halle Plantation Homeowners Association, Inc., appealed the Health Department’s issuance of the
construction permit to the Collierville Board of Mayor and Aldermen. After conducting a hearing
on the Homeowners Association’s appeal, the Board of Mayor and Aldermen reversed the Health
Department’s decision to issue the permit.
Blaylock & Brown timely filed a petition for writ of certiorari in the trial court. In
support of its petition, Blaylock & Brown asserted, inter alia, the following grounds: (1) that the
Collierville Board of Mayor and Aldermen lacked the authority to hear an appeal of the Health
Department’s decision and, alternatively, (2) that the Homeowners Association could not pursue an
appeal of the Health Department’s decision because the Association’s corporate status was revoked
in October 1990 by the Secretary of State. Blaylock & Brown later filed a motion for summary
judgment based upon both of these grounds.
At the hearing on the motion for summary judgment, the trial court considered the
parties’ arguments made in open court and their legal memoranda submitted in support of and
opposition to the motion. As reflected in the trial court’s subsequent judgment, the court apparently
also considered several documents presented by the parties, including (1) the Homeowners
Association’s October 1997 letter of appeal to the Collierville Board of Mayor and Aldermen;
(2) Secretary of State records reflecting that the Homeowners Association’s corporate status was
administratively dissolved in October 1990; (3) the Homeowners Association’s November 1997
application for reinstatement of its corporate status; (4) the Secretary of State’s November 1997
reinstatement of the Homeowners Association’s corporate status; and (5) the Certificate of
Exemption granted by the Tennessee Air Pollution Control Board to Shelby County, Tennessee, and
several municipalities, including the cities of Memphis, Germantown, and Millington and the Town
of Collierville, which exempted these entities from the provisions of the Tennessee Air Quality Act.1
The trial court found both of Blaylock & Brown’s arguments to be well-taken and, in separate
judgments, granted Blaylock & Brown’s motion for summary judgment against both Respondents
and reinstated the Health Department’s issuance of the construction permit.
On appeal, the Collierville Board of Mayor and Aldermen contends that, contrary to
the trial court’s ruling, the Board of Mayor and Aldermen possessed the authority to hear the
Homeowners Association’s appeal of the Health Department’s decision to issue the construction
permit. The Homeowners Association also has appealed, contending that the trial court erred in
ruling that it could not pursue an appeal of the Health Department’s decision due to the Association’s
loss of its corporate status.
The General Assembly enacted the Tennessee Air Quality Act in 1967. See 1967
Tenn. Pub. Acts. 367. The Act’s purpose and intent is “to maintain purity of the air resources of the
state consistent with the protection of normal health, general welfare and physical property of the
people, maximum employment and the full industrial development of the state.” T.C.A.
§ 68-201-103 (1996).
The legislature has granted the Tennessee Department of Environment and
Conservation and the Tennessee Air Pollution Control Board the authority to administer and enforce
1
T.C.A. §§ 68-201-101 to -203 (1996).
the provisions of the Tennessee Air Quality Act. T.C.A. § 68-201-105 (1996). Specifically, the
legislature has granted the Tennessee Air Pollution Control Board the authority to “issue rules and
regulations defining ambient air quality standards, emission standards, general policies or plans and
a system of permits together with a schedule of fees for review of air plans and specifications,
issuance or renewal of permits or inspection of air contaminant sources.” Adams v. State ex rel.
Chattanooga Coke & Chems., 514 S.W.2d 424, 425 (Tenn. 1974); see also T.C.A. § 68-201-105(a)
(1996). In addition to these powers, the Tennessee Air Pollution Control Board has the authority to
hear appeals of decisions or actions of the state Board’s technical secretary. T.C.A. § 68-201–108(a)
(1996).
Any municipality or county in the state may be exempted from the requirements of
the Tennessee Air Quality Act if the local governmental entity (1) enacts air pollution control
regulations not less stringent than the standards adopted for the state pursuant to the Act and
(2) applies for and receives a certificate of exemption from the Tennessee Air Pollution Control
Board. T.C.A. §§ 68-201-115(a), (b) (1996). The Tennessee Air Pollution Control Board may grant
a certificate of exemption in whole or in part, and it may make a certificate of exemption conditional
or provisional. T.C.A. § 68-201-115(b)(4) (1996). When the Tennessee Air Pollution Control Board
grants a certificate of exemption, “the exemption is to be strictly construed as limited to the language
of the exemption,” and “[n]o power or authority which is not expressly stated in the certificate of
exemption may be implied.” T.C.A. § 68-201-115(b)(6) (1996).
The record in the present case shows that Shelby County and several municipalities,
including the cities of Memphis, Germantown, and Millington and the Town of Collierville, applied
for and received an exemption from the requirements of the Tennessee Air Quality Act. The
application submitted by the Memphis and Shelby County Health Department indicated that the
Health Department would be responsible for administering the local air pollution control program
for Shelby County and the included municipalities. As pertinent to the present case, the application
indicated that, with one exception, the Town of Collierville had adopted by ordinance the Shelby
County Air Pollution Control Code. The exception was that, instead of authorizing the Memphis
and Shelby County Air Pollution Control Board to hear appeals from the Health Department’s
decisions, rulings, or determinations under the Code, the Town’s version of the Code authorized the
Collierville Board of Mayor and Aldermen to hear such appeals.
The Tennessee Air Pollution Control Board granted the application and issued a
certificate of exemption to Shelby County and the included municipalities in June 1996. In the
certificate of exemption, the Tennessee Air Pollution Control Board granted the Memphis and
Shelby County Health Department the authority and power to administer and enforce the provisions
of the Shelby County Air Pollution Control Code. The Health Department’s powers included, inter
alia, granting construction and operating permits, holding hearings, and issuing such orders and
determinations as may be necessary. Although the certificate of exemption granted the Health
Department these and other enforcement powers, the certificate did not address the appeals process,
nor did it mention the Memphis and Shelby County Air Pollution Control Board or the Collierville
Board of Mayor and Aldermen.
On appeal, the Collierville Board of Mayor and Aldermen contends that, when the
Tennessee Air Pollution Control Board granted the Health Department’s application and issued the
certificate of exemption, the state Board thereby authorized the Collierville Board of Mayor and
Aldermen to hear appeals of the Health Department’s decisions affecting sources within the
municipal limits of the Town of Collierville. We agree. The Health Department’s application for
exemption specified that the Collierville Board of Mayor and Aldermen would hear appeals of the
Health Department’s decisions for sources in that jurisdiction and that the Memphis and Shelby
County Air Pollution Control Board would hear appeals of decisions affecting Shelby County and
the other municipalities. In issuing the certificate of exemption, the Tennessee Air Pollution Control
Board apparently granted the Health Department’s application in whole. While the Tennessee Air
Pollution Control Board listed the Health Department’s various powers to enforce the local air
pollution control program, significantly, the state Board did not in any way make the certificate of
exemption conditional or provisional as it could have done under the Tennessee Air Quality Act.
T.C.A. § 68-201-115(b)(4) (1996).
In urging this court to affirm the trial court’s decision, Blaylock & Brown contends
that the Collierville Board of Mayor and Aldermen lacked the authority to hear the Homeowners
Association’s appeal because the certificate did not expressly authorize the Town Board to hear such
appeals. Citing the Tennessee Air Quality Act, Blaylock & Brown points out that the language of
the certificate of exemption must be strictly construed, and that no power or authority may be
implied unless it is expressly stated in the certificate. T.C.A. § 68-201-115(b)(6) (1996).
In our view, when the Tennessee Air Pollution Control Board issued the certificate
of exemption to Shelby County, the Town of Collierville, and the other included municipalities, the
state Board necessarily exempted these municipalities not only from the requirements of the
Tennessee Air Quality Act’s air pollution control standards, but also from the Act’s appeal
provisions. Any other construction of the certificate of exemption would deprive the parties of their
right to an administrative appeal of the Health Department’s decision. If Blaylock & Brown’s
argument is accepted, neither the Collierville Board of Mayor and Aldermen nor the Memphis and
Shelby County Air Pollution Control Board would have the authority to hear appeals of the Health
Department’s decisions because neither entity is mentioned in the certificate of exemption. The
Tennessee Air Pollution Control Board also would not have the authority to hear appeals of the
Health Department’s decisions because, while the Tennessee Air Quality Act authorizes the state
Board to hear appeals of decisions or actions of the state Board’s technical secretary, the Act does
not authorize the state Board to hear appeals of the decisions of municipalities that have been
exempted from the Act’s requirements. T.C.A. § 68-201–108(a) (1996).
In the certificate of exemption, the Tennessee Air Pollution Control Board specifically
empowered the Health Department to, inter alia, grant construction and operating permits, hold
hearings, and issue orders and determinations as may be necessary. These powers encompass the
decision challenged here – the decision to issue a construction permit allowing Blaylock & Brown
to operate an air curtain incinerator. We believe that, in granting these powers to the Health
Department, the Tennessee Air Pollution Control Board also delegated to local authorities the power
to hear appeals of the Health Department’s decisions. This power was specifically set forth in the
Health Department’s application for exemption, and the application was granted in whole, without
condition, by the Tennessee Air Pollution Control Board. Moreover, this construction does not
enlarge the powers granted in the certificate of exemption. Rather, it merely acknowledges the
existence of an additional step in the permitting process, the right to appeal the Health Department’s
decision to the Memphis and Shelby County Air Pollution Control Board or, if applicable, the
Collierville Board of Mayor and Aldermen.
Blaylock & Brown complains that the composition of the Collierville Board of Mayor
and Aldermen does not meet the requirements of the Tennessee Air Quality Act. Blaylock & Brown
points out that the Tennessee Air Pollution Control Board, which hears administrative appeals of the
Board’s technical secretary, must consist of persons engaged in specified professions, including a
registered professional engineer, a physician, a person engaged in a field directly related to
agriculture or conservation, a manager of a private manufacturing concern, a county executive or
chief executive officer, a person engaged in municipal government, two persons from industry
having technical training and experience in air pollution abatement, an educator, a small generator
of air pollution, and others. See T.C.A. § 68-201-104(b)(1) (1996). In contrast, the Collierville
Board of Mayor and Aldermen apparently consists of elected officials who may or may not be
engaged in any of the listed professions and who may or may not possess any expertise in the area
of air pollution abatement. The Memphis and Shelby County Air Pollution Control Board consists
of seven members to be appointed jointly by the mayors of the City of Memphis and Shelby County,
including a professional engineer knowledgeable in the field of air pollution control, a physician, an
attorney, an industry representative, and three other citizens. See Shelby County Air Pollution
Control Code § 3-35 (1995). Blaylock & Brown concedes that the composition of the Memphis and
Shelby County Air Pollution Control Board represents at least an effort to comply with the
requirements of the Tennessee Air Quality Act, but it insists that the statutory requirements are not
met by the appointment of a legislative body, such as the Collierville Board of Mayor and Aldermen,
to hear appeals of the Health Department’s decisions.
As we previously indicated, the Tennessee Department of Environment and
Conservation and the Tennessee Air Pollution Control Board have been granted the authority to
administer and enforce the provisions of the Tennessee Air Quality Act. T.C.A. § 68-201-105
(1996). As an administrative agency, the Tennessee Air Pollution Control Board has the discretion,
within legal and reasonable bounds, to determine the methods for administering and enforcing the
Tennessee Air Quality Act. See McConnell v. Tennessee Water Quality Control Bd., 1988 WL
54982, at *4 (Tenn. Ct. App. June 2, 1988) (no perm. app. filed). Pursuant to this grant of authority,
the Tennessee Air Pollution Control Board has the power to exempt any municipality or county in
the state from the requirements of the Tennessee Air Quality Act if the state Board determines that
the local governmental entity has enacted air pollution control regulations not less stringent than the
standards adopted for the state pursuant to the Act and if the state Board determines that such
enactments will be adequately enforced. T.C.A. § 68-201-115(b)(3) (1996). The “less stringent”
requirement, however, pertains to the Tennessee Air Quality Act’s standards and not to the Act’s
enforcement methods. General Portland, Inc. v. Chattanooga-Hamilton County Air Pollution
Control Bd., 560 S.W.2d 910, 914 (Tenn. Ct. App. 1976).
We reject Blaylock & Brown’s contention that the composition of the local board
hearing appeals of the Health Department’s decisions should follow the requirements of the
Tennessee Air Quality Act because, by their terms, the cited statutory requirements govern only the
composition of the Tennessee Air Pollution Control Board. The Tennessee Air Quality Act does not
purport to establish the composition of any local governmental boards that may be established to hear
appeals when a municipality or county is exempted from the Act’s requirements. Moreover, the
Tennessee Air Quality Act does not require the Tennessee Air Pollution Control Board, in granting
a certificate of exemption to a county or municipality, to ensure that the local board’s composition
meets the requirements of the Act. The state Board merely is required to determine that the local
governmental entity has enacted air pollution control regulations not less stringent than the Act’s
standards and that the entity will adequately enforce its enactments. Inasmuch as the “less stringent”
requirement pertains to the Act’s standards and not to the Act’s enforcement methods, we do not
agree that the Tennessee Air Quality Act establishes minimum requirements for the local board’s
composition.
The Tennessee Air Pollution Control Board, in its discretion, apparently determined
that the Town of Collierville had enacted air pollution control regulations not less stringent than the
standards under the Tennessee Air Quality Act and that the Town had adequately provided for
enforcement of these regulations by the Memphis and Shelby County Health Department and the
Collierville Board of Mayor and Aldermen. Although the Tennessee Air Pollution Control Board
could have objected to the composition of the local board which would hear appeals in the Town of
Collierville, the state Board did not make such an objection, and it approved the exemption for the
Town without making the exemption conditional or provisional. Under these circumstances, we
decline to second-guess the decision of the Tennessee Air Pollution Control Board to grant an
exemption which would permit the Collierville Board of Mayor and Aldermen to hear appeals of
Health Department decisions affecting the Town of Collierville. Accordingly, we conclude that the
trial court erred in granting summary judgment to Blaylock & Brown on the ground that the
Collierville Board of Mayor and Aldermen lacked authority to hear the appeal of the Health
Department’s decision.
We also conclude that the trial court erred in ruling that the Homeowners Association
could not pursue its appeal to the Collierville Board of Mayor and Aldermen due to the loss of the
Association’s corporate status. Blaylock & Brown does not dispute that, consistent with the
Tennessee Air Quality Act and the related rules and regulations of the Tennessee Department of
Environment and Conservation, the Shelby County Air Pollution Control Code defines a “person”
who may appeal a permitting decision as “any individual, partnership, copartnership, firm, company,
corporation, association, joint stock company, trust, estate, political subdivision, an agency,
authority, Commission, or Department of the United States Government, or of the State of Tennessee
Government; or any other legal entity or their legal representative, agent, or assigns.” Shelby County
Air Pollution Control Code § 3-1A (1995) (emphasis added); see also T.C.A. § 68-201-102(7)
(1996); Tenn. Comp. R. & Regs. 1200-3-2-.01(1)(ll) (as revised in 1993). Although the Code does
not define “association,” that term generally has been defined as
[t]he act of a number of persons in uniting together for some
special purpose or business. . . . [A] term of vague meaning used to
indicate a collection or organization of persons who have joined
together for a certain or common object. . . .
An unincorporated society; a body of persons united and
acting together without a charter, but upon the methods and forms
used by incorporated bodies for the prosecution of some common
enterprise.
Black’s Law Dictionary 111 (5th ed. 1979). We conclude that, even if the Homeowners Association
lost its corporate status due to an administrative revocation or dissolution, by definition, the
Association still qualified as an “association” entitled to appeal the Health Department’s decision.
On appeal, Blaylock & Brown concedes that the Homeowners Association could have
pursued its appeal as an association. Nevertheless, Blaylock & Brown insists that the Homeowners
Association was not entitled to pursue its appeal to the Collierville Board of Mayor and Aldermen
because the Homeowners Association erroneously identified itself as a corporation in its letter of
appeal. We believe that this argument elevates form over substance. Regardless of its status as a
corporation or an association, the Homeowners Association fell within the list of persons entitled
to appeal the Health Department’s decision.
In any event, the reinstatement of the Homeowners Association’s corporate status
effectively restored its capacity to pursue its appeal before the Collierville Board of Mayor and
Aldermen. Both the Tennessee Business Corporation Act and the Tennessee Nonprofit Corporation
Act provide that, when a corporation is reinstated following an administrative dissolution, the
reinstatement “relates back to and takes effect as of the effective date of the administrative
dissolution, and the corporation resumes carrying on its [business or activities] as if the
administrative dissolution had never occurred.” T.C.A. §§ 48-24-203(c), 48-64-203(c) (1995 &
Supp. 1999).
In Grand Valley Lakes Property Owners Association, Inc. v. Cary, 897 S.W.2d 262,
268 (Tenn. Ct. App. 1994), the defendant contended that a property owners association lacked legal
capacity to bring its suit because the association’s corporate charter was revoked by the state in
March 1985. The property owners association filed the lawsuit in May 1987, more than two years
after its corporate charter had been revoked. The association’s corporate charter was not reinstated
until thirteen days after it filed the suit.
On appeal, this court rejected the defendant’s contention and held that the property
owners association possessed the legal capacity to bring its suit. We reasoned that
the sole purpose of . . . the statute authorizing revocation and
reinstatement of a corporate charter is to raise revenue for the state.
Kerney v. Cobb, 658 S.W.2d 128, 131 (Tenn. App. 1983). The
statute does not stand for the proposition that once a corporation’s
charter is revoked that corporation no longer exists and therefore any
acts by the “corporation” are invalid. This is evident by the fact that
reinstatement of the charter validates the corporation’s existence and
privileges from the date of revocation. Id.Grand Valley Lakes Property Owners Ass’n, Inc. v. Cary, 897 S.W.2d 262, 269 (Tenn. Ct. App.
1994) (quoting Loveday v. Cate, 854 S.W.2d 877, 880 (Tenn. Ct. App. 1992)).
In the present case, the evidence was undisputed that the Homeowners Association’s
corporate status was administratively dissolved in October 1990 because the Association failed to
file its annual report,2 that the Homeowners Association filed its appeal of the Health Department’s
decision in October 1997, and that the Homeowners Association’s corporate status was reinstated
in November 1997. Inasmuch as the reinstatement of the Homeowners Association’s corporate
status validated the Association’s corporate existence and privileges from the 1990 revocation date,
we conclude that the Homeowners Association possessed the legal capacity to pursue its appeal.
Accordingly, we hold that the trial court also erred when it granted summary judgment to Blaylock &
Brown on this basis.
In addition to the foregoing issues, Blaylock & Brown argued in its petition for writ
of certiorari that the decision of the Collierville Board of Mayor and Aldermen should be reversed
because the Town Board’s decision was arbitrary and capricious and was not supported by material
and substantial evidence. The trial court did not reach this issue because the court ruled that the
Town Board lacked the authority to review the Health Department’s decision and, further, that the
Homeowners Association was not entitled to pursue an appeal of the Health Department’s decision.
Having concluded that both of these rulings were in error, we reverse the trial court’s judgment and
2
See T.C.A. §§ 48-24-201(1), 48-64-201(1) (1995) (authorizing Secretary of State to
administratively dissolve corporations which fail to file annual reports). In the language quoted
from Loveday v. Cate, 854 S.W.2d 877, 880 (Tenn. Ct. App. 1992), this court referred to section
67-4-917 of Tennessee’s revenue code, which authorized the Secretary of State to revoke the
charter of any corporation that failed to pay state taxes. See T.C.A. § 67-4-917 (1998). The
current version of the statute is codified at Tennessee Code Annotated section 67-4-2116 (Supp.
1999). We believe that the principle set forth in Loveday v. Cate applies regardless of whether a
corporation is administratively dissolved due to its failure to pay taxes or due to its failure to file
an annual report.
remand this cause for the court to consider the merits of Blaylock & Brown’s petition.
The trial court’s judgment is reversed, and this cause is remanded for further
proceedings consistent with this opinion. Costs of this appeal are taxed to Blaylock & Brown, for
which execution may issue if necessary.
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FARMER, J.
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CRAWFORD, P.J., W.S.
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HIGHERS, J.