IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
February 16, 2001 Session
ERNEST F. PHILLIPS v. COUNTY OF ANDERSON, ET AL.
Appeal from the Chancery Court for Anderson County
No. 99CH7630 William E. Lantrip, Chancellor
FILED APRIL 30, 2001
No. E2000-01204-COA-R3-CV
The defendants, Anderson County and the City of Clinton, entered into an agreement to jointly
finance the development of an industrial park to be owned and operated by the City. The plaintiff,
Ernest F. Phillips, brought this action for declaratory and injunctive relief, alleging that the County’s
financing of a portion of the industrial park is illegal and unconstitutional and that the defendants
violated various statutory requirements for the development of industrial parks. The trial court
granted the defendants summary judgment. The plaintiff appeals, arguing: (1) that the County’s use
of bond proceeds to finance its portion of the industrial park’s infrastructure costs constitutes a
lending or giving of credit to or in aid of a corporation within the meaning of Article II, Section 29
of the Tennessee Constitution; (2) that the agreement between the County and the City is not legally
sufficient under the Industrial Park Act; (3) that the County obtained a statutorily-required certificate
of public purpose and necessity by fraud and misrepresentation; and (4) that the County’s bond
resolutions are fatally defective and call for prohibited expenditures. The City argues (a) that the
plaintiff lacks standing to challenge the City’s actions and (b) that the plaintiff’s appeal is frivolous.
We affirm the grant of summary judgment to the defendants but do not find the plaintiff’s appeal to
be frivolous.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed; Case Remanded
CHARLES D. SUSANO, JR., J., delivered the opinion of the court, in which HOUSTON M. GODDARD,
P.J., and D. MICHAEL SWINEY , J., joined.
Ernest F. Phillips, Clinton, Tennessee, Pro Se.
David S. Clark, Oak Ridge, Tennessee, for the appellee, Anderson County, Tennessee.
Roger L. Ridenour, Clinton, Tennessee, and John T. Batson, Jr., Knoxville, Tennessee, for the
appellee, City of Clinton.
OPINION
I.
On July 21, 1997, the Anderson County Board of Commissioners (“the Board of
Commissioners”) authorized Anderson County (“the County”) to enter into an agreement with the
City of Clinton (“the City”) to jointly finance the development of a public works project known as
the I-75 Industrial Park (“the industrial park”). The County and the City entered into the authorized
agreement on July 24, 1997. The agreement provides that the City had already secured options to
purchase property on which it intended to develop the industrial park and that the County desired
to share in the cost of the park’s development “for the purpose of expanding the economy and tax
base of the county.” The agreement further provides that the property is to be owned by the City and
that the design and construction of the infrastructure are to be “under the exclusive control of the
City.” The cost of constructing the infrastructure is estimated in the agreement to be approximately
$2,500,000. Under the agreement, the County agreed to pay 75% of the cost of the design and
construction of the infrastructure, with a maximum liability of $1,875,000. The cost of the
infrastructure is to be paid in three phases. The agreement provides that the responsibility for and
control of the industrial park’s development, including the responsibility of procuring additional
funding and determining when each of the phases will be completed, are exclusively vested in the
City.
On December 21, 1998, the Board of Commissioners passed three resolutions authorizing
the County to finance its portion of the industrial park’s infrastructure. The first of these resolutions
(“the initial resolution”) authorized the County to incur an indebtedness up to $2,200,000 in order
to provide funding for the industrial park, as well as other expenditures, collectively referred to as
“certain public works projects,” and described specifically as follows:
infrastructure improvements within the County, including road
improvements, renovation, expansion, and improvement of the water,
sewer, and gas systems of the County, and landfill improvements
within the County, the acquisition of all property real and personal
appurtenant thereto and connected with such work, and to pay all
legal, fiscal, administrative, and engineering costs incident thereto,
and costs incident to incurring the Indebtedness....
The caption of the initial resolution erroneously stated that the County was to enter into a loan
agreement with the Public Building Authority of Anderson County, when in fact the loan agreement
was to be between the County and the Public Building Authority of Montgomery County.1
On December 31, 1998, Anderson County Executive Rex Lynch vetoed the three resolutions.
On January 19, 1999, the Board of Commissioners convened for a regularly scheduled meeting. The
minutes of that meeting state that “Commissioner Cooper moved to over-ride [sic] Rex Lynch,
1
There is no explanation in the record as to the involvement of a public agency in Montgomery County.
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County Executive veto for 2,200,000 sewer resolution recognizing Montgomery County as being
correct,” presumably an indication that the Board realized that there was an erroneous reference to
the Anderson County Public Building Authority in the initial resolution passed on December 21,
1998. The resolution was corrected, and the Board voted to override the County Executive’s veto
of the three resolutions. After the resolutions were passed, the plaintiff brought this action raising
several challenges to the proposed joint venture.2
II.
We first address the propriety of the grant of summary judgment to the City. In deciding
whether a grant of summary judgment is appropriate, courts are to determine “if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.” Tenn. R. Civ. P. 56.04. Courts “must take the strongest legitimate
view of the evidence in favor of the nonmoving party, allow all reasonable inferences in favor of that
party, and discard all countervailing evidence.” Byrd v. Hall, 847 S.W.2d 208, 210-11 (Tenn. 1993).
The party seeking summary judgment has the burden of demonstrating that there is no
genuine issue of material fact and that it is entitled to a judgment as a matter of law. Id. at 215.
Generally, a defendant seeking summary judgment may meet this burden by: (1) affirmatively
negating an essential element of the plaintiff’s cause of action, or (2) conclusively establishing an
affirmative defense. Id. at 215 n. 5. “A conclusory assertion that the nonmoving party has no
evidence is clearly insufficient.” Id. at 215.
Once the moving party satisfies its burden of showing that there is no genuine issue of
material fact, the burden then shifts to the nonmoving party to show that there is a genuine issue of
material fact requiring submission to the trier of fact. Id. The nonmoving party cannot simply rely
upon its pleadings, but rather must set forth, by affidavits or discovery materials, specific facts
showing a genuine issue of material fact for trial. Tenn. R. Civ. P. 56.06; Byrd, 847 S.W.2d at 215.
The evidence offered by the nonmoving party must be admissible at trial but need not be in
admissible form. It must be taken as true. Byrd, 847 S.W.2d at 215-16.
The City argued in its motion for summary judgment (1) that the plaintiff lacks standing to
sue the City and (2) that the defendants’ expenditures on the development of an industrial park are
legal and constitutional. The trial court granted summary judgment to the defendants on the basis
that the proposed expenditures are proper and specifically declined to address the issue of standing.
The City argues on appeal that it is entitled to summary judgment on either or both grounds.
2
After this litigation commenced, the City filed a cross-claim against the County, alleging that the County had
failed to make the payments required under the agreement. That litigation is ongoing and is not a subje ct of this app eal.
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A citizen’s standing to sue a governmental entity is a threshold issue that should be resolved
before addressing the merits of the case. Because suits brought by citizens “burden the conduct of
public affairs, a defendant entity or officer should not be obliged to defend on the merits if he is
entitled to a dismissal for lack of standing.” Cobb v. Shelby County Bd. of Comm’rs, 771 S.W.2d
124, 125 (Tenn. 1989). The plaintiff argues that this Court should not address the issue of standing
because “the issue was specifically pretermitted below.” Our jurisdiction, however, extends not only
to those issues addressed by the court below, but also those issues that were raised but pretermitted.
See Smith v. Harriman Util. Bd., 26 S.W.3d 879, 887 (Tenn. Ct. App. 2000). Thus, before we
address the propriety of summary judgment on the merits of the plaintiff’s case, we will address the
issue of the plaintiff’s standing to sue the City.3
“Standing is a judge-made doctrine which has no per se recognition in the rules. It is used
to refuse to determine the merits of a legal controversy irrespective of its correctness where the party
advancing it is not properly situated to prosecute the action.” Knierim v. Leatherwood, 542 S.W.2d
806, 808 (Tenn. 1976). In order for a plaintiff to have standing to challenge the legality of the
expenditure of public funds, the plaintiff must satisfy three requirements: (1) taxpayer status; (2) an
allegation of a specific illegality in the expenditure of public funds; and (3) prior demand. Cobb,
771 S.W.2d at 126. To satisfy the prerequisite of prior demand, a plaintiff must “have notified
appropriate officials of the illegality and given them an opportunity to take corrective action short
of litigation.” Id.; see also Badgett v. Rogers, 222 Tenn. 374, 381, 436 S.W.2d 292, 295 (1968)
(requiring “demand upon public authorities to rectify the alleged wrong prior to the initiation of such
action by the citizen and taxpayer”). Failure to make a prior demand is excused only if a demand
would have been a “vain formality,” i.e., a futile gesture. Badgett, 436 S.W.2d at 295.
We find that the plaintiff failed to make a prior demand on the City and that he has failed to
show that a demand upon City officials would have been futile. The City’s finance director, James
A. Cotton, Jr., stated in his affidavit as follows:
I am aware of the lawsuit Ernest Phillips filed against the City and the
County in July of 1999. That lawsuit was the first notice that any city
official received from Mr. Phillips complaining about the City’s
development of the I-75 Industrial Park. Prior to initiating the
lawsuit, Mr. Phillips gave no notification to me or any other city
official that he was concerned that the City had done anything illegal
or improper in the development of or funding for the development of
the I-75 Industrial Park.
(Emphasis added).
3
The County failed to raise the issue of standing below; th erefore, o ur analys is of this issue is co nfined so lely
to the plain tiff’s standing or lack the reof as to the City.
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The plaintiff argues that he satisfied the requirement of prior demand by sending a letter to
the City’s mayor, Frank Diggs. In an affidavit, Mayor Diggs acknowledges that he received a letter
from the plaintiff on December 10, 1998. The letter, however, is a request by the plaintiff for
assistance in locating and inspecting public records pertaining to the industrial park project. We find
and hold that the plaintiff’s letter to Mayor Diggs does not satisfy the prerequisite of prior demand.
The letter is merely a request to inspect public records pertaining to the development of the industrial
park; it does not serve to notify the appropriate City officials of the illegal acts of which the plaintiff
now complains. The plaintiff argues that, in any event, demand upon Mayor Diggs was a “vain
formality.” We disagree. The requirement of prior demand is waived only in “very exceptional
circumstances...and then only when it appears that one of the accused public officers would have had
to take the corrective action or would have been intimately involved in doing so, or would have been
seriously embarrassed by the action.” Metropolitan Gov’t of Nashville ex rel. Anderson v. Fulton,
701 S.W.2d 597, 601 (Tenn. 1985). The plaintiff made no such allegations in this case. Thus, we
do not find that the requirement of prior demand is excused in this case.
The plaintiff further argues that the requirement of prior demand was satisfied by a letter that
he hand delivered to the chairman of the State Building Finance Committee. The plaintiff further
alleges that County Executive Lynch “was present in Nashville, Tennessee, on this occasion, [and]
was cognizant of the letter and its contents....” This letter, which is included in an appendix to the
plaintiff’s brief, is not contained in the record. Thus, it should not be considered on this appeal. See
Hunt v. Shaw, 946 S.W.2d 306, 309 (Tenn. Ct. App. 1996). Even if we did consider the letter,
however, we do not find that a letter directed to a state official constitutes notification to City
officials of the plaintiff’s allegations of the City’s wrongdoing. The plaintiff’s argument is without
merit.
We find that the City successfully set forth facts which, left uncontradicted, establish that
there is no genuine issue of material fact and that the City is entitled to a judgment as a matter of
law. We further find that the plaintiff has failed to establish a genuine issue of material fact on the
issue of standing. Accordingly, we affirm the grant of summary judgment to the City on the basis
that the plaintiff lacks standing to challenge the City’s actions.
III.
We now review the grant of summary judgment to the County. In arguing that the grant of
summary judgment was in error, the plaintiff raises four issues, which we restate as follows:
1. Does the County’s use of up to $1,875,000 in general obligation
bond proceeds to fund its portion of certain infrastructure costs under
an agreement with the City to develop an industrial park constitute a
lending or giving of credit to or in aid of a corporation, within the
meaning of Article II, Section 29 of the Tennessee Constitution?
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2. Is the contract between the City and the County legally sufficient
under the Industrial Park Act, T.C.A. § 13-16-201 et seq.?
3. Did the County obtain a certificate of public purpose and
necessity, which is required under the Industrial Park Act, by fraud
and misrepresentation?
4. Is the resolution authorizing the County to incur indebtedness to
finance certain public works projects fatally defective on its face and
call for expenditures that are prohibited under the Local Government
Public Obligations Act of 1986, T.C.A. § 9-21-101, et seq.?4
A.
The plaintiff argues that the County’s use of the proceeds from general obligation bonds to
fund its portion of the industrial park’s infrastructure costs constitutes a lending of public credit to
the municipal corporation of the City of Clinton, in violation of Article II, Section 29 of the
Tennessee Constitution. Article II, Section 29 provides, in pertinent part, 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 respectively, in such manner as
shall be prescribed by law; and 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 Town shall be given or
loaned to or in aid of 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. Nor shall any county, city or town
become a stockholder with others in any company, association or
corporation except upon a like election, and the assent of a like
majority.
(Emphasis added).
The plaintiff’s argument rests on the assumption that the prohibition against the lending of
public credit to “any person, company, association or corporation” without a popular vote includes
the lending of public credit to a municipal corporation. For the reasons set forth below, we find no
merit in the plaintiff’s argument.
4
This issue, a s stated in the p laintiff’s brief, ca lls into questio n the valid ity of all three resolutions passed by
the Board of Commissioners. The plaintiff’s argument, however, focuses only on the initial resolution; thus, we w ill
confine our discussion to that resolution.
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In interpreting a constitutional provision, courts must give its terms their “ordinary and
inherent meaning.” Gaskin v. Collins, 661 S.W.2d 865, 867 (Tenn. 1983). The intent of the drafters
at the time of enactment must also be examined. Eye Clinic, P.C. v. Jackson-Madison County Gen.
Hosp., 986 S.W.2d 565, 571 (Tenn. Ct. App. 1998). As this Court has stated:
Since constitutions derive their power and authority from the people,
our articulation of constitutional principles must capture the
intentions of the persons who ratified the constitution. These
intentions are reflected in the words of the constitution itself, rather
than our own subjective notions of unexpressed constitutional intent.
Martin v. Beer Bd., 908 S.W.2d 941, 947 (Tenn. Ct. App. 1995) (citation omitted).
The Supreme Court recently examined Article II, Section 29 in Cleveland Surgery Center,
L.P. v. Bradley County Memorial Hospital, 30 S.W.3d 278 (Tenn. 2000). In that case, the Supreme
Court was faced with the issue of whether a quasi-governmental entity such as a county hospital is
a “County, City or Town” within the meaning of the subject constitutional provision. In concluding
that it was not, the Court construed the terms “County, City or Town” in the context of the
circumstances in which the provision was enacted:
During the early part of the nineteenth century, at the beginning of the
industrial revolution and increased westward expansion, railroads and
canals were viewed as critical modes of transportation. Because
private industry was unable to raise the capital necessary to complete
these projects, many states and cities borrowed heavily to finance
these improvement and transportation projects and issued bonds to
buy stock in private companies or guaranteed loans to private
companies. Unfortunately, many of these public-private ventures
failed causing the states and cities to lose the tax money they had
invested and leaving the states and cities with a burden of debt. As
a result of these failed ventures, between the years 1840 and 1855,
nineteen states enacted constitutional provisions which limited the
ability of state and local governments to incur debt and extend credit
to private businesses.
* * *
Adoption of constitutional provisions restricting the extension of
public credit did not become prevalent in the South until after the
Civil War. As a result of the Civil War, most infrastructure in the
South had been destroyed including railroads, roadways, canals, and
bridges. To rebuild the infrastructure, southern states borrowed
money and authorized large bond issues. In addition, Reconstruction
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governments in the South were said to have incurred debt and
authorized bond issues for personal gain. When the period of
Reconstruction ended, many southern states adopted constitutional
provisions limiting the extension of public credit. Tennessee is a
clear example of this trend. Prior to 1870, Article II, § 29 consisted
of only one sentence, which is currently the first sentence of the
section. The second and third sentences of the provision...were
adopted as part of the Constitution of 1870 at the end of the
Reconstruction government in Tennessee and were aimed at ending
the abuses that occurred during Reconstruction.
Id. at 282-83 (citations omitted).
Although the issue in the instant case is the meaning of the term “corporation,” we
nevertheless find the Supreme Court’s analysis in Cleveland Surgery Center instructive. It is
evident from the historical context of Article II, Section 29, that the purpose of this provision was
to place limitations upon the power of local governments to extend credit to or otherwise become
financially involved in private enterprises. This conclusion is further supported by the Supreme
Court’s decision in Dodd v. Roane County, 174 Tenn. 267, 124 S.W.2d 953 (1939). In that case,
Roane County issued bonds to aid the City of Harriman in building a city hospital. Id. at 954. The
plaintiffs challenged the constitutionality of the County’s actions under Article II, Section 29. Id.
at 955. In so doing, the plaintiffs cited Berry v. Shelby County, 139 Tenn. 532, 201 S.W. 748
(1918), in which the Supreme Court held that the lending of public aid to a private college was
unconstitutional. Id. The Supreme Court rejected the plaintiffs’ argument, holding that the joint
enterprise undertaken by the city and the county was constitutional. Id. In so holding, the Court
distinguished cases such as Berry on the basis that those cases involved the giving of public credit
of a county or city to private corporations; the Court noted that “[n]o such question is presented
here.” Id.
Based upon the foregoing, we find and hold that a municipal corporation such as the City of
Clinton is not a “corporation” within the meaning of Article II, Section 29. Accordingly, the
County’s actions do not constitute a giving of public credit to a corporation within the meaning of
that provision. The plaintiff’s argument as to this issue is without merit.
B.
The plaintiff next contends that the agreement executed by the County and the City is not
legally sufficient under the Industrial Park Act, T.C.A. § 13-16-201, et seq. (1999), which provides,
in pertinent part, as follows:
The powers conferred upon municipalities under [the Industrial Park
Act] may be exercised by two (2) or more municipalities acting
jointly, in which event the governing bodies of the municipalities
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acting jointly shall provide by contract the manner of development,
operation and maintenance of industrial parks, or the powers may be
delegated by resolution to a joint commission or board, the
composition, terms of office, appointment, and compensation of same
to be fixed by agreement of the governing bodies of such
municipalities acting jointly.
T.C.A. § 13-16-206 (Emphasis added). The plaintiff argues that the agreement is insufficient in that
it fails to “provide...the manner of development, operation and maintenance” of the industrial park.
We disagree.
The agreement executed by the County and the City explicitly provides that the City shall
own the property and shall have “exclusive control” of the design and construction of the park’s
infrastructure. The agreement further provides that the City shall be “exclusively vested” with the
responsibility for the development of the park. It is clear from this agreement the parties intend that
the City is to be solely responsible for the “development, operation and maintenance” of the
industrial park. We therefore find that the agreement sufficiently provides for “the manner of
development, operation and maintenance” of the industrial park at issue. The plaintiff’s argument
to the contrary is without merit.
C.
The plaintiff’s next issue concerns the requirement under the Industrial Park Act that a
municipality must obtain a certificate of public purpose and necessity before borrowing funds in
order to develop an industrial park. See T.C.A. § 13-16-207(a)(1)(A). It is undisputed that the
County obtained a certificate as required by the Act. The plaintiff contends, however, that the
County obtained its certificate“by submitting an application that contained patent illegalities and
fraudulent omissions.” In making this argument, the plaintiff relies on several documents, most
notably the allegedly fraudulent application submitted by the County. The plaintiff, however, has
failed to include these documents in the record. Because these documents are not before us, there
is nothing in the record to establish the correctness of the plaintiff’s position.
D.
Finally, the plaintiff argues that the initial resolution passed by the County Board of
Commissioners is fatally defective on its face and calls for expenditures with bond proceeds that are
prohibited under the Industrial Park Act. First, the plaintiff complains that the initial resolution was
altered “by some unknown party” and that “there is no entry in the records or minutes of [the
meetings of the Board of Commissioners] to evidence the correction of the document to read ‘The
Building Authority of the County of Montgomery.’” Second, the plaintiff argues that the initial
resolution is improper because it provides for the use of the bond proceeds for “landfill expenses and
related expenses,” including attorney’s fees, expenditures which the plaintiff contends are prohibited
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under the Local Government Public Obligations Act of 1986, T.C.A. § 9-21-101, et seq. We will
address each of these arguments in turn.
There is no dispute that when the initial resolution was passed on December 21, 1998, the
caption erroneously referred to a loan agreement between the County and the Public Building
Authority of Anderson County. That resolution was vetoed by County Executive Rex Lynch.
Before the resolution was passed again on January 19, 1999, it was corrected to refer to the Public
Building Authority of Montgomery County. We do not find that the correction of this error prior to
the resolution’s passage is fatally defective to the resolution before us. As it was ultimately adopted,
the resolution was accurate. However the resolution read prior to its adoption on January 19, 1999,
is of no consequence in this case.
The plaintiff also argues that the initial resolution calls for expenditures not permitted by the
Local Government Public Obligations Act of 1986. Specifically, he complains that the resolution
calls for the use of bond proceeds for “landfill improvements within the County, the acquisition of
all property real and personal appurtenant thereto and connected with such work, and to pay for such
legal, fiscal, administrative, and engineering costs incident thereto....”
The Local Government Public Obligations Act of 1986 (“the Act”) provides a statutory
framework to allow local governments to issue general obligation bonds and revenue bonds to
finance the costs of public works projects. See T.C.A. §§ 9-21-102 (Supp. 2000). The Act defines
“costs” as including “[e]ngineering, architectural, art design services, inspection, legal and
accounting expenses, and relocation expenses in connection with construction of a public works
project....” T.C.A. § 9-21-109(1) (1999) (Emphasis added). “Construction” is defined in the Act
as “building, reconstruction, erection, replacement, extension, repairing, betterment, equipment,
development, embellishment, improvement, acquisition by gift, lease, purchase or the exercise of
the right of eminent domain, or any one (1) or more or all of the foregoing, including the acquisition
of land and of rights in land....” T.C.A. § 9-21-105(4) (1999) (Emphasis added).
The County candidly admits that it initially intended to use part of the bond proceeds to pay
for attorney’s fees and fines arising from earlier litigation concerning an abandoned County landfill.
Gail Cook, director of accounts and budgets for the County, states by way of affidavit, however, that
the County, on the advice of its counsel, no longer intends to use any of the funds to pay for these
fees and fines. According to Cook, the County had already paid for these expenses out of its
“regular budget.” Cook asserts that the County intends to use the bond proceeds only for the
industrial park. In granting summary judgment to the County, the trial court noted that the County
had stipulated that the bond proceeds would not be used to pay the attorney’s fees and fines resulting
from the landfill dispute and further admonished that the County “should not use any of the money
to be borrowed for any expenses of the old Anderson County landfill or attorneys fees for the
landfill....” The plaintiff counters that neither Cook’s affidavit nor the trial court’s “curative
language” changes the language of the resolution.
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First and foremost, we must determine whether the resolution at issue in fact calls for
prohibited expenditures. In construing municipal ordinances and resolutions, courts should follow
the principles of statutory construction. Loggins v. Lightner, 897 S.W.2d 698, 702 (Tenn. Ct. App.
1994). The Supreme Court recently reiterated the primary principles of statutory construction as
follows:
[T]here are a number of principles of statutory construction, among
which is the most basic rule of statutory construction: to ascertain and
give effect to the intention and purpose of the legislature. However,
the court must ascertain the intent without unduly restricting or
expanding the statute’s coverage beyond its intended scope. The
legislative intent and purpose are to be ascertained primarily from the
natural and ordinary meaning of the statutory language, without a
forced or subtle interpretation that would limit or extend the statute’s
application.
Courts are not authorized to alter or amend a statute. The
reasonableness of a statute may not be questioned by a court, and a
court may not substitute its own policy judgments for those of the
legislature. Courts must presume that the legislature says in a statute
what it means and means in a statute what it says there.
Mooney v. Sneed, 30 S.W.3d 304, 306-07 (Tenn. 2000) (citations and internal quotation marks
omitted).
The resolution states that a portion of the bond proceeds are to be used for “landfill
improvements within the County, the acquisition of all property real and personal appurtenant
thereto and connected with such work, and to pay for such legal, fiscal, administrative, and
engineering costs incident thereto....” All of these are permitted uses under the Act. Improvements
to a landfill may be considered the construction of a public works project. See T.C.A. § 9-21-
105(21)(A) (1999) (defining “public works project” to include, among other things, “garbage
collection and disposal systems”). The acquisition of land and the payment of legal and accounting
expenses related to such improvements would also be permissible under the Act. See T.C.A. §§ 9-
21-105(4), 9-21-109(1). We therefore find no merit in the plaintiff’s argument that the resolution
calls for prohibited expenditures.5
5
While the resolution is facially in compliance with the Act, it is evident that the County, at least initially,
planned to use part of these funds for expenses clearly not permitted by the Act, namely, the payment of fines and
attorney’s fees resulting from litigation. There is nothing in the record, however, to suggest that the County has in fact
made these expenditures. On the contrary, the testimony is that these expenditures will not be made out of the funds
involved in the curre nt project. T he plaintiff, th erefore, h as failed to d emon strate a justiciable controversy from which
he may be gran ted declar atory relief. See State v. Brown & W illiamson Toba cco Co rp., 18 S.W.3d 186, 193 (Tenn.
(continu ed...)
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IV.
Finally, the City raises the issue of whether the plaintiff should be liable for sanctions for
bringing a frivolous appeal. T.C.A. § 27-1-122 (2000) provides as follows:
When it appears to any reviewing court that the appeal from any court
of record was frivolous or taken solely for delay, the court may, either
upon motion of a party or of its own motion, award just damages
against the appellant, which may include, but need not be limited to,
costs, interest on the judgment, and expenses incurred by the appellee
as a result of the appeal.
This statute “must be interpreted and applied strictly so as not to discourage legitimate appeals.”
Davis v. Gulf Ins. Group, 546 S.W.2d 583, 586 (Tenn. 1977) (discussing the predecessor of T.C.A.
§ 27-1-122). An appeal is deemed frivolous if it is devoid of merit or if it has no reasonable chance
of success. Bursack v. Wilson, 982 S.W.2d 341, 345 (Tenn. Ct. App. 1998); Industrial Dev. Bd.
v. Hancock, 901 S.W.2d 382, 385 (Tenn. Ct. App. 1995).
We do not find that this appeal is so devoid of merit as to warrant the characterization of it
as frivolous. Accordingly, we decline to award damages for such an appeal.
V.
The judgment of the trial court is affirmed. This case is remanded for collection of costs
assessed below, pursuant to applicable law. Costs on appeal are taxed to the appellant, Ernest F.
Phillips.
___________________________________
CHARLES D. SUSANO, JR., JUDGE
5
(...continued)
2000).
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