Lamar Tennessee, LLC v. City of Hendersonville

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
AUGUST 3, 2004 Session

LAMAR TENNESSEE, LLC, d/b/a LAMAR ADVERTISING OF
NASHVILLE v. THE CITY OF HENDERSONVILLE

Direct Appeal from the Chancery Court for Sumner County
No. 2001C-128 Tom E. Gray, Chancellor

No. M2003-00415-COA-R3-CV - Filed January 11, 2005

In 1987, a billboard advertising company obtained a permit to construct a billboard, approximately
seventy-five (75) square feet in size, along a stretch of roadway in Hendersonville, Tennessee. At
the time of issuance, the applicable zoning ordinance stated the billboard could not exceed eighty
(80) square feet in size. Later that same year, the city passed a new zoning regulation providing that
billboards could no longer be erected in the area as a primary use. Instead, billboards could only be
erected as an accessory use to another primary use on the premises. The new zoning ordinance did
not change the maximum allowable size of a billboard, which remained at eighty (80) square feet.
Subsequent to the enactment of the new ordinance, the billboard company filed for a permit,
pursuant to section 13-7-208 of the Tennessee Code, seeking to demolish the existing billboard and
construct a new billboard, at 220 square feet in size, in its place. When the city denied the permit,
the billboard company filed an action in the chancery court seeking a declaratory judgment, writ of
mandamus, and permanent injunction. The billboard company also filed a motion for summary
judgment, which the chancery court granted. The city filed an appeal to this court. We reverse.

Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Chancery Court Reversed and
Remanded

ALAN E. HIGHERS, J., delivered the opinion of the court, in which DAVID R. FARMER , J., and HOLLY
M. KIRBY , J., joined.

John R. Bradley, Hendersonville, TN, for Appellant

Lawrence P. Leibowitz, Rebecca G. Bond, Knoxville, TN, for Appellee
 OPINION

Factual Background and Procedural History

This appeal involves the interpretation of section 13-7-208 of the Tennessee Code. The
underlying facts presented in the trial court are undisputed. On October 21, 1987, the City of
Hendersonville (“Appellant” or the “City”) issued a permit to Lamar Tennessee, LLC, d/b/a Lamar
Advertising of Nashville (“Appellee” or “Lamar Advertising”), allowing Lamar Advertising to
construct a billboard approximately seventy-five (75) square feet in size at the intersection of New
Shackle Island Road and Volunteer Drive. Lamar Advertising entered into a lease agreement with
the owner of the property on which the billboard is located. At the time the City issued the permit,
the applicable city ordinance allowed a maximum permissible size for billboards of eighty (80)
square feet. Later in 1987, the City amended the applicable ordinance to provide that billboards
could no longer be erected in the zone encompassing New Shackle Island Road and Volunteer Drive
as a primary use. Instead, signs had to be erected as an “accessory use” to another primary use.
However, the new ordinance did not change the maximum allowable size of billboards, which
remained eight (80) square feet.

On March 15, 2001, Lamar Advertising sought to demolish the previously constructed sign
and filed for a permit to erect a new 220 square foot sign in its place. The City refused to issue
Lamar Advertising a permit to expand the size of the existing billboard.1 As a result, Lamar
Advertising filed a complaint in the Chancery Court of Sumner County on April 11, 2001, seeking
the following: (1) a declaratory judgment that Lamar Advertising, pursuant to section 13-7-208 of
the Tennessee Code, could demolish the existing sign and rebuild the larger sign in its place, and the
City exceeded its legal authority by arbitrarily and capriciously denying the permit in violation of
section 13-7-208 of the Tennessee Code; (2) a writ of mandamus ordering the City to grant the
appropriate permit to erect the new sign; and (3) a permanent injunction restraining the City from
interfering with erection of the new sign and ordering the City to issue the necessary permits to
accomplish the task.

On November 1, 2001, Lamar Advertising filed a Motion for Summary Judgment with the
trial court. The chancellor conducted a hearing on the motion on December 6, 2002, and he granted
Lamar Advertising’s motion. On January 14, 2003, the chancery court entered a Final Judgment in
favor of Lamar Advertising, providing, in relevant part, as follows:

It is, therefore, ORDERED, ADJUDGED, and DECREED that
Plaintiff have the following relief:
1) That the Plaintiff shall be entitled to demolish and

1
Around the same time Lamar Advertising applied for the permit to expand the size of the sign located at New
Shackle Island Road and Volunteer Drive, it also filed for a permit to demolish and rebuild another 220 square foot sign
located in another part of the city. This second sign, already 220 square feet in size, was also erected prior to the new
ordinance taking effect. Therefore, the City granted this permit because Lamar Advertising was not enlarging the sign
beyond its original size.

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 rebuild the outdoor advertising display at issue, same being a pre-
existing, although presently nonconforming use of said property and
such rights are therefore protected under the provisions of Tennessee
Code Annotated § 13-7-208;
2) That the Defendant City of Hendersonville is hereby
ORDERED to grant to the Plaintiff all appropriate building permits
or similar permission with regard to the outdoor advertising structure
located on this parcel of land; [and]
3) That a Writ of Mandamus issue, if necessary, ordering
the Defendant City of Hendersonville to grant to the Plaintiff the
appropriate permits for which is [sic] has applied. . . .

The City filed a timely notice of appeal to this Court presenting the following issue for our review:
Whether the chancery court erred in holding that section 13-7-208 of the Tennessee Code permits
the Appellee to demolish, rebuild, and expand the billboard at issue. For the reasons set forth herein,
we reverse.

Standard of Review

Since this case involves a trial court’s grant of summary judgment to one of the parties in the
instant litigation, we apply the following standard of review:

The standards governing an appellate court’s review of a
motion for summary judgment are well settled. Since our inquiry
involves purely a question of law, no presumption of correctness
attaches to the lower court’s judgment, and our task is confined to
reviewing the record to determine whether the requirements of Tenn.
R. Civ. P. 56 have been met. Cowden v. Sovran Bank/Central South,
816 S.W.2d 741, 744 (Tenn. 1991). Tenn. R. Civ. P. 56.03 provides
that summary judgment is appropriate where: (1) there is no genuine
issue with regard to the material facts relevant to the claim or defense
contained in the motion, Byrd v. Hall, 847 S.W.2d 208, 210 (Tenn.
1993); and (2) the moving party is entitled to a judgment as a matter
of law on the undisputed facts. Anderson v. Standard Register Co.,
857 S.W.2d 555, 559 (Tenn. 1993). The moving party has the burden
of proving that its motion satisfies these requirements. Downen v.
Allstate Ins. Co., 811 S.W.2d 523, 524 (Tenn. 1991). When the party
seeking summary judgment makes a properly supported motion, the
burden shifts to the nonmoving party to set forth specific facts
establishing the existence of disputed, material facts which must be
resolved by the trier of fact. Byrd, 847 S.W.2d at 215.

Bain v. Wells, 936 S.W.2d 618, 622 (Tenn. 1997).

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 The Grant of Summary Judgment

Both parties are in agreement that, subsequent to the City’s enactment of the new ordinance
in 1987, the billboard at issue became a legal pre-existing non-conforming use entitled to protection
under section 13-7-208 of the Tennessee Code. The City concedes that the applicable statute gives
Lamar Advertising the right to maintain, and even replace, the structure. The area of contention
between the parties concerns whether the applicable statute permits Lamar Advertising to enlarge
the billboard beyond the eighty (80) square feet maximum limitation which the City carried over
from the old ordinance and incorporated into the current ordinance.

The power of a municipality to enact zoning regulations derives from the General Assembly’s
enactment of zoning legislation codified at section 13-7-101 et seq. of the Tennessee Code. See
Lafferty v. City of Winchester, 46 S.W.3d 752, 757–58 (Tenn. Ct. App. 2000). In enabling
municipalities to enact zoning regulations, the legislature also placed a limitation on the power of
municipalities, which this Court has noted by stating:

The General Assembly recognized that empowering local
governments to enact zoning ordinances could result in hardship to
existing property owners whose property was not previously covered
by land use restrictions. These property owners could find
themselves in violation of a newly enacted zoning ordinance simply
because the existing use of their property was inconsistent with the
new restrictions. Rather than leaving the resolution of this problem
entirely to the local governments, the General Assembly decided, as
a matter of policy, that certain property owners should always be
permitted to continue to use their property as they had been using it
before the local land use restrictions took effect.

421 Corp. v. Metro. Gov’t of Nashville & Davidson County, 36 S.W.3d 469, 476 (Tenn. Ct. App.
2000).; see also Lafferty, 46 S.W.3d at 758. Thus, section 13-7-208(b) of the Tennessee Code
provides that:

In the event that a zoning change occurs in any land area . . . and such
zoning restrictions differ from zoning restrictions imposed after the
zoning change, then any . . . business establishment2 in operation,
permitted under the zoning regulations or exceptions thereto prior to
the zoning change shall be allowed to continue in operation and be

2
Lamar Advertising qualifies as a “business establishment” under the applicable statute. See Outdoor W. of
Tenn. v. City of Johnson City, 39 S.W .3d 131, 137–38 (Tenn. Ct. App. 2000). The fact that Lamar Advertising leased
the premises on which its sign is located does not change this result. See Creative Displays, Inc. of Knoxville v. City of
Pigeon Forge, 576 S.W .2d 356, 358 (Tenn. Ct. App. 1978) (stating that a business does not have to be a fee owner of
the subject land, but it may be a lessee and still qualify for protection under Tenn. Code Ann. § 13-7-208).

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 permitted; provided, that no change in the use of land is undertaken
by such industry or business.

Tenn. Code Ann. § 13-7-208(b)(1) (2003); see also Simmons v. City of Lexington, 11 S.W.3d 136,
141 (Tenn. Ct. App. 1999). Subsection (d) of the statute permits a business establishment to
“destroy present facilities and reconstruct new facilities necessary to the conduct of such industry
or business subsequent to the zoning change.” Tenn. Code Ann. § 13-7-208(d) (2003); see also 421
Corp., 36 S.W.3d at 476.

The expansion of a business establishment, which the parties argue is the focus of this appeal,
is governed by subsection (c), which provides:

[B]usiness establishments in operation and permitted to operate under
zoning regulations or exceptions thereto in effect immediately
preceding a change in zoning shall be allowed to expand operations
and construct additional facilities which involve an actual
continuance and expansion of the activities of the industry or business
which were permitted and being conducted prior to the change in
zoning; provided, that there is a reasonable amount of space for such
expansion on the property owned by such industry or business
situated within the area which is affected by the change in zoning, so
as to avoid nuisances to adjoining landowners. No building permit
or like permission for construction or landscaping shall be denied to
an industry or business seeking to expand and continue activities
conducted by that industry or business which were permitted prior to
the change in zoning; provided, that there is a reasonable amount of
space for such expansion on the property owned by such industry or
business situated within the area which is affected by the change in
zoning, so as to avoid nuisances to adjoining landowners.

Tenn. Code Ann. § 13-7-208(c) (2003); see also 421 Corp., 36 S.W.3d at 476. Our review of the
complaint filed by Lamar Advertising in the chancery court, as well as the arguments it puts forth
on appeal, leads us to conclude that Lamar Advertising takes the position that, when the City
changed the zoning ordinance, their use of the billboard became a non-conforming use, therefore,
they were automatically entitled, pursuant to section 13-7-208 of the Tennessee Code, to destroy the
present billboard and erect in its place a larger structure.

This Court has classified section 13-7-208 of the Tennessee Code as a “grandfather clause,”
which we have described as follows:

A grandfather clause is defined as “an exception to a
restriction that allows all those already doing something to continue
doing it, even if they would be stopped by the new restriction.”

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 Black’s Law Dictionary 629 (5th ed. 1979). A grandfather clause
exception in a statute must be construed strictly against the party who
seeks to come within the exception. Teague v. Campbell County, 920
S.W.2d 219, 221 (Tenn. Ct. App. 1995), perm. app. denied (Tenn.
1996).

Coe v. City of Sevierville, 21 S.W.3d 237, 243 (Tenn. Ct. App. 2000); see also Outdoor W. of Tenn.,
Inc. v. City of Johnson City, 39 S.W.3d 131, 135 (Tenn. Ct. App. 2000). Since Lamar Advertising
is the party seeking protection of the applicable statute, it has the burden of proving the sign is a pre-
existing non-conforming use qualifying for protection. Lamar Adver. of Tenn., Inc. v. City of
Knoxville, 905 S.W.2d 175, 176 (Tenn. Ct. App. 1995) (citation omitted); see also Outdoor W. of
Tenn., 39 S.W.3d at 135; Coe, 21 S.W.3d at 243. In satisfying this burden, Lamar Advertising must
show (1) a change in zoning restrictions, and (2) permissive operation of the business prior to the
change. Rives v. City of Clarksville, 618 S.W.2d 502, 505 (Tenn. Ct. App. 1981).

The chancellor, in granting summary judgment to Lamar Advertising, relied on the holding
in Lamar Advertising of Tennessee, Inc. v. City of Knoxville, No. 03A01-9407-CH-00252, 1995
Tenn. App. LEXIS 184 (Tenn. Ct. App. Mar. 23, 1995), perm. app. denied 1995 Tenn. LEXIS 495
(Tenn. Aug. 28, 1995), an unreported decision rendered by the Eastern Section of this Court, to find
that section 13-7-208 of the Tennessee Code allowed Lamar Advertising to expand its sign. That
case involved a dispute concerning three separate parcels of land which contained signs operated by
Lamar Advertising. Lamar Advertising of Tenn., Inc., 1995 Tenn. App. LEXIS 184, at *1. On one
of the parcels, Lamar Advertising had maintained a billboard since 1971 in an area where the city
permitted billboards. Id. at *2. Subsequently, the city enacted a new zoning ordinance prohibiting
the erection of a billboard within 750 feet of another billboard along the same section of roadway.
Id. at *7. In 1989, Lamar Advertising applied for a permit from the city to tear down the sign in
question and build an updated version in its place. Id. However, the new sign was to be moved
some twenty-four (24) feet toward the roadway and closer to another sign in violation of the new
ordinance. Id. When the city denied the permit, Lamar Advertising filed an action in chancery court
which resulted in a finding in favor of Lamar Advertising. Id. at *8. The city appealed the decision,
arguing that “allowing Lamar to rebuild its sign in a manner that increases its non-conformity gives
Lamar greater rights in its sign than the owner of a conforming sign has.” Id. In rejecting the City’s
argument and affirming the ruling of the chancery court, the Court stated:

In any event, we need not speculate regarding the extent to
which the Legislature wished to protect non-conforming uses because
the limits of the protection are set out in the Statute. Subsection (d)
of T.C.A. 13-7-208 applies only where the construction and
rebuilding does not “change the use classification of the land.” The
reconstruction Lamar proposed certainly does not change its use of
the land at all.
Furthermore, the Statute allows reconstruction only when
“there is a reasonable amount of space for such expansion on the

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 property owned by such industry or business situated within the area
which is affected by the change in zoning, so as to avoid nuisances to
adjoining landowners.”

Id. at *8–9. The chancellor held that, since Lamar Advertising was not changing the use of the land
and did not require additional space, Lamar Advertising was entitled to expand the sign in question.

In turn, the City is, in essence, attacking the chancery court’s decision on two fronts. First,
the City makes the policy argument that the legislature intended section 13-7-208 of the Tennessee
Code to protect businesses from zoning changes business owners did not anticipate when
commencing their business. According to the City, since the size restriction in effect when Lamar
Advertising originally built the sign is the same size restriction in the new zoning ordinance, it
strains the statutory language to hold that Lamar Advertising may invoke the statute’s protection by
merely relying on an unrelated change in the zoning law.

Second, the City asserts that Lamar Advertising failed to satisfy the two threshold
requirements announced by this Court in Rives. In support of this position, the City relies on two
decisions rendered by this Court interpreting section 13-7-208 of the Tennessee Code. Regarding
the first prong in Rives, the City relies on the decision in Lamar Advertising of Tennessee, Inc. v.
City of Knoxville, 905 S.W.2d 175 (Tenn. Ct. App. 1995), where it was stated:

As for the first prong of the Rives test, the Chancellor found
that the City’s annexation of the land supplied the necessary change
in zoning prior to which Lamar’s use was permitted. This
determination was in error. The Rives Court required more than a
change in enforcement. The Court stated that the zoning change must
be significant “insofar as the plaintiff is concerned”; it required a
change in the uses allowed under the zoning code, which change
affects the plaintiff’s use of his land.
The record below shows that in 1972 the area in question was
in an Agricultural Zone where billboards were prohibited. The record
further shows that the area was rezoned in 1979 from Agricultural to
Planned Commercial, which also prohibits billboards. The Planned
Commercial zoning is still in effect. The record clearly indicates that
there has been no change in the Zoning Code affecting Lamar’s use
of its land since before T.C.A. 13-7-208 went into effect in 1973.
Lamar is unable to meet its burden of showing a change in the Zoning
Code which affects its use of the land in question. Consequently,
Lamar cannot invoke the protection of T.C.A. 13-7-208.

Lamar Advertising of Tenn., Inc., 905 S.W.2d at 177 (emphasis added). Applying this rationale, the
City argues that the change to the zoning ordinance at issue in this case did not affect Lamar
Advertising’s use of the property since Lamar Advertising may still maintain the current sign. Next,

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the City points to our decision in Coe v. City of Sevierville, 21 S.W.3d 237 (Tenn. Ct. App. 2000),
where it was stated “[i]t would be a ‘strained and illogical conclusion’ to say the Legislature intended
to grandfather a use which would put Plaintiff in a better position than she was in before the zoning
became effective.” Coe, 21 S.W.3d at 243 (citing Teague v. Campbell County, 920 S.W.2d 219, 221
(Tenn. Ct. App. 1995)).

We find that the chancery court erred in relying solely on our decision in Lamar Advertising
of Tennessee, Inc. v. City of Knoxville, No. 03A01-9407-CH-00252, 1995 Tenn. App. LEXIS 184
(Tenn. Ct. App. Mar. 23, 1995), to support a grant of summary judgment in favor of Lamar
Advertising. We note, as does Lamar Advertising, that before Lamar Advertising can rebuild an
expanded version of the billboard at issue, it must first destroy the present structure. In order to do
so, reference must be made to section 13-7-208(d) of the Tennessee Code, which provides that a
business establishment “shall be allowed to destroy present facilities and reconstruct new facilities
necessary to the conduct of such industry or business subsequent to the zoning change.” Tenn. Code
Ann. § 13-7-208(d) (2003) (emphasis added). We need not determine whether Lamar Advertising
satisfied its burden by proving the existence of the two threshold requirements set forth in Rives.
Assuming arguendo that Lamar Advertising did in fact satisfy the threshold requirements announced
in Rives, in order to comply with section 13-7-208(d) of the Tennessee Code, Lamar Advertising
needed to go further and prove that destroying the present structure was “necessary to the conduct
of such industry or business subsequent to the zoning change.” Tenn. Code Ann. § 13-7-208(d)
(2003); see also Outdoor W. of Tenn., Inc. v. City of Johnson City, 39 S.W.3d 131, 136 (Tenn. Ct.
App. 2000).

In Outdoor West, Lamar Advertising sought eleven permits from the city in order to enlarge
and/or change the billboards to double-faced structures to provide more advertising space. Outdoor
W. of Tenn., Inc., 39 S.W.3d at 133. In 1988, the city passed a zoning ordinance prohibiting the
construction of new billboards. Id. The city manager testified at trial that from 1981 until 1988, the
zoning ordinance in effect at the time permitted billboards as long as they were no larger than 672
square feet in size. Id. at 134. Since the billboards at issue were constructed prior to 1988, Lamar
Advertising argued that section 13-7-208 of the Tennessee Code applied, and, therefore, they could
upgrade the billboards. Id. at 133. After the trial court deemed the billboards a non-conforming use,
it applied section 13-7-208 of the Tennessee Code by ordering the city to grant the requested permits
to Lamar Advertising, and the city filed an appeal to this Court. Id. at 134–35.

After finding that the threshold requirements announced in Rive were met in Outdoor West,
we stated:

The City argues that subsection (d) applies, that Lamar has failed to
prove that the destruction and reconstruction is “necessary to the
conduct of such industry or business,” and, therefore, the judgment of
the Trial Court must be reversed. We agree with the City that
subsection (d) appears to require a higher standard of proof by Lamar,

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 since under that section, Lamar must show that the reconstruction is
“necessary to the conduct of [the] industry or business.”

Id. at 136. In Outdoor West, we affirmed the trial court’s finding due to the abundant testimony
offered by a representative of Lamar Advertising illustrating the need for the expansions. Id. at
136–37. A review of the record presently before the Court commands us to reach a different result
in this case.

“Summary judgment should be awarded when the moving party can demonstrate that there
are no genuine issues regarding material facts of the cause of action and that it is entitled to a
judgment as a matter of law.” Keltner v. Open Lake Sporting Club, No. W2002-00449-COA-R3-
CV, 2003 Tenn. App. LEXIS 128, at *8 (Tenn. Ct. App. Feb. 12, 2003) (citing Tenn. R. Civ. P.
56.04; Byrd v. Hall, 847 S.W.2d 1208, 214 (Tenn. 1993); McCarley v. W. Quality Food Serv., 960
S.W.2d 585, 588 (Tenn. 1998)). We find that the chancery court erred in awarding summary
judgment to Lamar Advertising because, under the plain language of section 13-7-208 of the
Tennessee Code and our interpretation of this language in Outdoor West, an issue of fact remains
regarding whether destruction of the existing structure to facilitate the rebuilding of a new billboard
is necessary to the conduct of Lamar Advertising’s business. The record reveals that Lamar
Advertising made merely a perfunctory statement in its motion for summary judgment to the effect
that “Lamar desires to demolish and construct a more modern structure at the location.” At the
hearing, counsel for Lamar Advertising reiterated this same sentiment by stating “Lamar wishes to
tear the sign down and put up a more modern structure.” These statements do not explain why
rebuilding a larger sign is “necessary” to Lamar Advertising’s business. See Outdoor W. of Tenn.,
Inc., 39 S.W.3d at 136. When a genuine issue of fact remains to be resolved by the fact-finder,
summary judgment is inappropriate. See Buddy Lee Attractions, Inc. v. William Morris Agency, Inc.,
13 S.W.3d 343, 347 (Tenn. Ct. App. 1999); City State Bank v. Dean Whitter Reynolds, Inc., 948
S.W.2d 729, 738–39 (Tenn. Ct. App. 1996).

Conclusion

Based on the reasons set forth herein, we find that the chancery court erred in awarding
summary judgment to the Appellee in this case. Accordingly, we reverse the chancellor’s decision
and remand this case to the chancery court for further proceedings consistent with this opinion.
Costs of this appeal are assessed against the Appellee, Lamar Tennessee, LLC, for which execution
may issue if necessary.

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