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

• Court: Court of Appeals of Tennessee
• Decided: January 9, 1998
• Docket: 01-A-01-9705-CH-00237
• Status: Published

Opinion

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:

-2- 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

-4- 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