Robin v. Seaton

IN THE COURT OF APPEALS OF TENNESSEE, WESTERN SECTION
AT KNOXVILLE
FILED
_______________________________________________________
December 11, 1997
)
ROBIN MEDIA GROUP, INC., ) Sevier County Chancery Court
Cecil Crowson, Jr.
A Tennessee Corporation d/b/a East ) No. 95-9-312 Appellate C ourt Clerk
Tennessee Cablevision, )
)
Plaintiff/Appellant. )
)
VS. ) C.A. No. 03A01-9704-CH-00146
)
KENNETH M. SEATON, )
EAST COAST CABLEVISION, and )
THE CITY OF PIGEON FORGE, )
TENNESSEE, )
)
Defendants/Appellees. )
)
______________________________________________________________________________
From the Chancery Court of Sevier County at Sevierville.
Honorable Chester S. Rainwater, Jr., Chancellor
Hugh B. Bright, Jr.,
Norman G. Templeton,
WOOLF, McCLANE, BRIGHT, ALLEN & CARPENTER, Knoxville, Tennessee
Attorney for Plaintiff/Appellant.
C. Dan Scott,
Katherine M. Hamilton,
SCOTT & ASSOCIATES, Sevierville, Tennessee
Attorney for Defendant/Appellee Kenneth M. Seaton.
Douglas S. Yates, BRABSON, YATES & HAMILTON, Sevierville, Tennessee
Attorney for Defendant/Appellee East Coast Cablevision.
Norma McGee Ogle, OGLE, WYNN & RADER, Sevierville, Tennessee
Attorney for Defendant/Appellee City of Pigeon Forge, Tennessee.
OPINION FILED:
AFFIRMED IN PART, REVERSED IN PART AND REMANDED
FARMER, J.
HIGHERS, J.: (Concurs)
WILLIAMS, Sr. J.: (Concurs)
Plaintiff Robin Media Group, Inc., appeals the trial court’s judgment dismissing its
claims for declaratory and injunctive relief against Defendants/Appellees Kenneth M. Seaton, East
Coast Television, and the City of Pigeon Forge. We affirm in part and reverse in part the trial court’s
judgment based, inter alia, on East Coast’s concession that Robin Media had standing to maintain
this action.
I. Factual and Procedural History
Robin Media has a non-exclusive franchise to construct, operate, and maintain a cable
television system within the City of Pigeon Forge. Seaton also has a non-exclusive franchise to
construct, operate, and maintain a cable television system in Pigeon Forge; however, Seaton’s
franchise authorizes him to provide cable television services only to those properties in which Seaton
owns more than a fifty-one percent (51%) interest. Both franchises were granted by the City of
Pigeon Forge.1
After obtaining his franchise, Seaton contracted with East Coast to construct, operate,
and maintain a cable television system which would provide services to nine or ten hotels owned by
Seaton in Pigeon Forge. Under this arrangement, Seaton paid an annual programming fee to East
Coast. When East Coast built the cable system, it installed connection taps in front of every hotel
in Pigeon Forge, not just Seaton’s hotels. East Coast also ran drop lines to many non-Seaton hotels.
Randy Coley, the owner of East Coast, explained that he installed the additional taps and drop lines
for “future use” because he was hopeful that Seaton’s franchise would be expanded at some future
date. In that event, it would be a very simple matter for East Coast to expand the services being
provided by merely activating the tap at each hotel.
In May 1993, Earlene M. Teaster, the City’s manager, learned that East Coast was
offering cable television services to non-Seaton hotels in Pigeon Forge. Teaster called Randy Coley
of East Coast and asked him to cease using Seaton’s franchise to provide cable television services
to non-Seaton customers. According to Teaster, Coley informed her that he believed East Coast had
1
See T.C.A. § 7-59-102 (1992).
the right to provide cable television services to non-Seaton hotels under Seaton’s franchise. A few
days after this conversation, Seaton called Teaster and informed her that he also had asked Coley to
cease providing services to non-Seaton properties.
In May 1994, representatives of Robin Media complained to Teaster that East Coast
was providing cable television services to at least six non-Seaton hotels in Pigeon Forge, and they
asked Teaster to investigate the matter. In response to Robin Media’s request, Teaster wrote a letter
to Coley again asking him to cease providing cable television services to non-Seaton hotels. Coley
did not response to Teaster’s letter.
In October 1994, Melvin L. Hill, an employee of the City’s Building and Planning
Department, met with Seaton. During this meeting, Seaton indicated that he was not aware that East
Coast had run drop lines into non-Seaton hotels. Seaton called Randy Coley from Hill’s office and
instructed Coley to disconnect any non-Seaton properties from the cable television system. Coley
agreed to disconnect the non-Seaton hotels from the system. Shortly after the meeting in Hill’s
office, Seaton wrote a letter to City Manager Teaster inquiring about expanding his franchise.
East Coast did not discontinue providing cable television services to the non-Seaton
hotels until August 1995. The following month, Robin Media filed this lawsuit against Seaton, East
Coast, and the City, seeking declaratory and injunctive relief and damages. Prior to trial, Robin
Media’s damages claims were dismissed. Accordingly, the only issues to be adjudicated at trial
involved Robin Media’s claims for declaratory and injunctive relief.2
At trial, it was undisputed that East Coast entered into contracts with various non-
Seaton hotels which purported to provide the hotels with cable television services. East Coast took
the position, however, that its provision of services neither required a cable franchise nor violated
Seaton’s existing cable franchise. East Coast’s owner, Randy Coley, testified that the programming
2
The trial court’s pre-trial order indicated that the City filed a cross-claim for injunctive
relief against East Coast and that this claim was bifurcated. See T.R.C.P. 21 (providing that
“[a]ny claim against a party may be severed and proceeded with separately”); T.R.C.P. 42.02
(providing that, in nonjury trials, the trial court may “order a separate trial of any one or more
claims, cross-claims, counterclaims, or third-party claims, or issues”).
services provided to the non-Seaton hotels were not transmitted by way of the cable television
system but, rather, were transmitted by an infrared laser system that Coley had installed in addition
to the cable system. Coley acknowledged that, in constructing the cable system, he installed taps in
front of every hotel in Pigeon Forge and ran drop lines to a majority of the hotels. Coley insisted,
however, that these taps and drop lines were never activated. According to Coley, East Coast
installed a terminator at each tap to terminate its cable signal. Coley denied telling City Manager
Teaster that he believed East Coast had the right to provide cable television services to non-Seaton
hotels under Seaton’s franchise.
Coley’s testimony was contradicted by two Robin Media employees, one of whom
testified that, when he reconnected the Robin Media cable system to the non-Seaton hotels in August
1995, he measured a signal being transmitted on the Seaton system at each tap or drop line. During
this process, the employee did not observe any terminators on the Seaton system. The other
employee testified that, when Robin Media employees disconnected the drop lines from the taps on
the Seaton system, the motel television screens “went blank.” When they reconnected the drop lines
to Robin Media’s cable system, the television pictures returned.
At the conclusion of Robin Media’s presentation of proof, the trial court dismissed
Robin Media’s claims against Kenneth Seaton based on the court’s finding that Robin Media failed
to carry its burden of proving that Seaton authorized, directed, participated in, or had direct
knowledge of East Coast’s alleged violations of Seaton’s franchise. The trial court further found
that, when the violations were called to Seaton’s attention, Seaton immediately instructed East Coast
to cease and desist any such violations.
At the trial’s conclusion, the trial court also entered an order dismissing Robin
Media’s claims against East Coast and the City. In support of its dismissal, the trial court ruled that,
because Robin Media’s cable franchise was non-exclusive, Robin Media lacked standing to maintain
this action against East Coast and the City. In support of its dismissal as to the City, the trial court
additionally ruled that there was “no allegation here for the Court to find that the City of Pigeon
Forge has done anything or failed to do anything that the Plaintiff has sought from them; and
therefore, there’s no justiciable issue for the Court to determine as against the City of Pigeon Forge.”
Finding no just reason for delay, the trial court directed the entry of a final judgment with respect to
Robin Media’s claims against the Defendants. See T.R.C.P. 54.02.
On appeal, Robin Media contends that the trial court erred (1) in dismissing Robin
Media’s claims based on the court’s ruling that Robin Media lacked standing to bring this action,
and (2) in dismissing Robin Media’s claims against Seaton based on the court’s finding that Seaton
did not authorize, direct, or participate in any alleged violations of Seaton’s franchise.
II. Robin Media’s Claims Against East Coast Television
On appeal, East Coast properly concedes that Robin Media had standing to bring this
action. Contrary to the trial court’s ruling, the non-exclusive nature of Robin Media’s cable
franchise did not preclude it from maintaining a suit for injunctive relief against Defendants who
allegedly were providing cable television services without the authority of a franchise. See
Tennessee Pub. Serv. Co. v. City of Knoxville, 91 S.W.2d 566, 568 (Tenn. 1936) (holding that
electric company with non-exclusive franchise was entitled to maintain suit for injunctive relief
against threatened or actual injury to property right through illegal competition); Memphis St. Ry.
Co. v. Rapid Transit Co., 179 S.W. 635, 638-39 (Tenn. 1915) (holding that jitney operator with non-
exclusive franchise had property right which entitled it to maintain suit to enjoin activities of other
businesses which were operating jitneys without authority of city franchise); see also Frost v.
Corporation Comm’n, 278 U.S. 515, 521 (1929) (holding that business with non-exclusive franchise
to operate cotton gin had standing to seek to enjoin activities of entity which operated gin without
obtaining franchise). Our conclusion that Robin Media had standing to bring this action compels
this court to reverse the trial court’s judgment in favor of East Coast and to remand for the trial court
to determine the central issues in this case, i.e. the legality of East Coast’s activities and the propriety
of Robin Media’s request for injunctive relief against East Coast.
Although East Coast concedes that Robin Media had standing to bring this action,
East Coast contends that this court should decline to review Robin Media’s appeal on grounds of
mootness. Specifically, East Coast contends that this appeal is moot because, even if East Coast was
providing cable television services in violation of Seaton’s franchise or without the authority of a
franchise, East Coast voluntarily discontinued these activities in August 1995.
The mere voluntary cessation of allegedly illegal conduct will not moot a controversy
such as to prevent courts from determining the legality of the practice. City of Mesquite v. Aladdin’s
Castle, Inc., 455 U.S. 283, 289 (1982); United States v. Concentrated Phosphate Export Ass’n, 393
U.S. 199, 203 (1968); United States v. W.T. Grant Co., 345 U.S. 629, 632 (1953); Ragsdale v.
Turnock, 841 F.2d 1358, 1364 (7th Cir. 1988), appeal dismissed, 503 U.S. 916 (1992); Donovan v.
Cunningham, 716 F.2d 1455, 1461 (5th Cir. 1983), cert. denied, 467 U.S. 1251 (1984). As the
United States Supreme Court has explained,
The test for mootness in cases such as this is a stringent one.
Mere voluntary cessation of allegedly illegal conduct does not moot
a case; if it did, the courts would be compelled to leave “[t]he
defendant . . . free to return to his old ways.”
United States v. Concentrated Phosphate Export Ass’n, 393 U.S. at 203-04 (quoting United
States v. W.T. Grant Co., 345 U.S. at 632). In such cases, the defendant bears a “heavy burden” of
persuading the court that a controversy is moot by showing that “there is no reasonable expectation
that the putatively illegal conduct will be repeated, and [that] there are no remaining effects of the
alleged violation.” Ragsdale v. Turnock, 841 F.2d at 1365; see also Donovan v. Cunningham, 716
F.2d at 1461.
Based on the record before us, we are not persuaded that East Coast has met the heavy
burden of demonstrating that the present controversy is moot. In any event, because the likelihood
of further violations by East Coast is inextricably linked to the issue of the propriety of granting
injunctive relief against East Coast, we conclude that these arguments are more appropriately
addressed to the trial court on remand. See City of Mesquite v. Aladdin’s Castle, Inc., 455 U.S. at
289 (indicating that abandonment of illegal activity “is an important factor bearing on the question
whether a court should exercise its power to enjoin the defendant from renewing the practice, but
that is a matter relating to the exercise rather than the existence of judicial power”); United States v.
Concentrated Phosphate Export Ass’n, 393 U.S. at 203-04 (holding that case was not moot but
noting that “it is still open to appellees to show, on remand, that the likelihood of further violations
is sufficiently remote to make injunctive relief unnecessary”); United States v. W.T. Grant Co., 345
U.S. at 633 (indicating that prerequisite for granting injunctive relief is determination “that there
exists some cognizable danger of recurrent violation, something more than the mere possibility”);
see also State ex rel. Baird v. Wilson County, 371 S.W.2d 434, 439 (Tenn. 1963) (indicating that
injunction will not be granted unless “injury is threatened or imminent and, in all probability, about
to be inflicted”).
III. Robin Media’s Claims Against Kenneth Seaton and the City of Pigeon Forge
As for Robin Media’s claims for injunctive relief against Seaton and the City, the trial
court made specific findings in support of its rulings that Robin Media was not entitled to injunctive
relief against either Seaton or the City. Inasmuch as this case was tried by the court below sitting
without a jury, we review the case de novo upon the record with a presumption of correctness of the
findings of fact by the trial court. Unless the evidence preponderates against these findings, we must
affirm, absent an error of law. Dailey v. Bateman, 937 S.W.2d 927, 930 (Tenn. App. 1996);
T.R.A.P. 13(d).
Applying the foregoing standard, we conclude that the evidence does not
preponderate against the trial court’s finding that Robin Media failed to carry its burden of proving
that Seaton directed or participated in East Coast’s alleged violations of Seaton’s franchise. In order
to be entitled to injunctive relief against Seaton, Robin Media was required to prove that Seaton
participated in the challenged activities. Padgett v. Verner, 366 S.W.2d 545, 550-51 (Tenn. App.
1963). At trial, no evidence was introduced to show that Seaton directed or participated in East
Coast’s allegedly illegal activities of providing cable television services to non-Seaton hotels in
Pigeon Forge. Randy Coley of East Coast testified that Seaton did not ask him to provide cable
television services to the non-Seaton hotels and that Coley installed the additional taps and drop lines
on his own initiative. Randy Coley, or his representative, offered the cable services for sale and, on
behalf of East Coast, entered into contracts for such services with the various hotels. The evidence
showed that, when informed of East Coast’s possible franchise violations, Seaton instructed East
Coast to cease providing such services to non-Seaton hotels. The evidence also showed that Seaton
did not receive any profits or fees relative to East Coast’s provision of services to non-Seaton hotels.
Based on the foregoing evidence, we also conclude that the evidence supports the trial
court’s finding that Seaton did not authorize East Coast to engage in illegal activities. In this regard,
the burden of proving an agency relationship was on the party alleging its existence, Robin Media,
and the scope and extent of the authority of the alleged agent, East Coast, was a question to be
determined by the trial court from all of the facts and circumstances in evidence. Sloan v. Hall, 673
S.W.2d 548, 551 (Tenn. App. 1984). Under the circumstances of this case, we affirm the trial
court’s decision to deny Robin Media’s claim for injunctive relief against Seaton based on the
court’s finding that Seaton did not authorize East Coast to provide cable television services to non-
Seaton hotels. In affirming the trial court on this issue, we reject Robin Media’s argument that the
provisions of Seaton’s franchise and/or the federal Cable Communications Policy Act3 mandate the
conclusion that Seaton was vicariously responsible for Coley’s actions.
We likewise conclude that the preponderance of the evidence supports the trial court’s
decision to deny Robin Media’s claim for injunctive relief against the City of Pigeon Forge based
on the court’s finding that the City already had performed the acts sought by Robin Media. In
response to complaints by Robin Media and others, the City promptly instructed East Coast to cease
and desist offering cable television services to non-Seaton customers. Moreover, there was evidence
that the City was instrumental in convincing Randy Coley of East Coast to quit providing services
to the non-Seaton hotels. Coley testified that he made the decision to discontinue the services, in
part, because it “just wasn’t worth fighting the City.” Finally, we note that the City has filed a cross-
claim for injunctive relief against East Coast which has been severed from this proceeding.4 Under
these circumstances, we conclude that the trial court properly ruled that Robin Media was not
entitled to injunctive relief against the City.
Although we affirm the trial court’s rulings that Robin Media was not entitled to
injunctive relief against Kenneth Seaton or the City, we conclude that it was premature for the trial
court to dismiss these Defendants from the lawsuit. In the event that the trial court determines on
3
See 47 U.S.C.A. §§ 521--561 (West 1991 & Supp. 1997).
4
See supra note 2.
remand that some form of declaratory relief is appropriate, both Seaton and the City would be
necessary parties to such a proceeding. In seeking declaratory relief, Robin Media was required to
name as parties “all persons . . . who have or claim any interest which would be affected by the
declaration.” T.C.A. § 29-14-107(a) (1980). Thus, Robin Media properly named Seaton as a party
to this action because Seaton owns the cable franchise which was the subject of this lawsuit and
which would be affected by any declaratory judgment issued by the trial court. Robin Media also
properly named the City as a party to this action because the franchise at issue was granted by the
City and, by definition, the City has an interest which would be affected by a declaratory judgment.5
See, e.g., Harrill v. American Home Mortgage Co., 32 S.W.2d 1023 (Tenn. 1930) (holding that
trustee, who held title to property, and bank, which held notes under pledge to secure obligations of
mortgage company, were necessary parties to suit seeking declaration as to validity of mortgage
contracts); Baker v. Hancock County Election Comm’n, 1987 WL 7717, at *3 (Tenn. App. Mar. 12,
1987) (holding that, in action against county election commission in which determinative issue was
whether plaintiffs lived in Hancock County or Hawkins County, plaintiffs were required to join as
indispensable parties both counties).
IV. Conclusion
We affirm those portions of the trial court’s judgment denying Robin Media’s claims
for injunctive relief against Seaton and the City of Pigeon Forge; however, we reverse those portions
of the trial court’s judgment dismissing the Defendants from this proceeding and remand this cause
for the trial court to adjudicate (1) Robin Media’s claim for injunctive relief against East Coast and
(2) Robin Media’s claims for declaratory relief as to all three Defendants. Costs of this appeal are
taxed to East Coast, for which execution may issue if necessary.
____________________________________
5
Alternatively, in seeking declaratory relief, Robin Media was required to name the City
as a party to this action if the proceeding involved the validity of a City ordinance or franchise.
See T.C.A. § 29-14-107(b) (1980). In this regard, Robin Media’s complaint did not challenge
the validity of the cable franchise under which East Coast and Seaton were providing cable
television services. Rather, Robin Media’s complaint alleged that, in providing such services,
East Coast and Seaton were exceeding the scope of Seaton’s franchise. We note, however, that
at trial Seaton raised an issue as to the validity of the cable franchise under which Robin Media
was operating.
FARMER, J.
______________________________
HIGHERS, J. (Concurs)
______________________________
WILLIAMS, Sr. J. (Concurs)