Chuck's Package Store v. City of Morristown
| Decision Date | 06 February 2018 |
| Docket Number | No. E2015–01524–SC–R11–CV,E2015–01524–SC–R11–CV |
| Citation | 545 S.W.3d 398 |
| Parties | CHUCK'S PACKAGE STORE, et al. v. CITY OF MORRISTOWN |
| Court | Tennessee Supreme Court |
Daniel R. Pilkington and Brian R. Bibb, Knoxville, Tennessee, for the appellant, City of Morristown.
F. Braxton Terry, Morristown, Tennessee, and W. Lewis Jenkins, Jr., Dyersburg, Tennessee, for the appellees, Chuck's Package Store; The Cellar, Inc.; T & T Package Store, LLC; Morristown Beverage Associates, Inc., d/b/a Cork & Keg Package Store; The Package Store; and C & C Package, Inc.
Herbert H. Slatery III, Attorney General and Reporter; Andrée Sophia Blumstein, Solicitor General; Charles L. Lewis, Deputy Attorney General; and Mary Ellen Knack, Senior Counsel, for the Amicus Curiae, State of Tennessee.
Douglas Gordon, Knoxville, Tennessee, for the Amicus Curiae, Tennessee Municipal Attorneys Association.
OPINION
From 2011–2014, a municipality charged alcoholic beverage retailers higher inspection fees than was authorized by the municipality's ordinance. A group of alcoholic beverage retailers paid the excess fees, but not under protest. After the municipality denied the retailers' requests for refunds, they sued the municipality for recovery of the excess collections and other damages. The municipality moved to dismiss, arguing that Tennessee Code Annotated sections 67–1–901, et seq. , required the retailers to have paid under protest any disputed taxes before filing suit to recover the overpayments. The trial court disagreed and awarded the retailers a judgment for the overpayments, ruling that Tennessee Code Annotated sections 67–1–1801, et seq. , applied and payment under protest was not required. The Court of Appeals affirmed. We hold that Tennessee Code Annotated sections 67–1–901, et seq. , rather than sections 67–1–1801, et seq. , apply to a suit to recover municipal taxes. Under section 67–1–901(a), the retailers were required to have paid under protest the disputed taxes before filing suit. Because the retailers did not pay the taxes under protest, they are not entitled to refunds.
A municipality may impose by ordinance an inspection fee on licensed alcoholic beverage retailers located within the municipality. Tenn. Code Ann. § 57–3–501(a)(1) (Supp. 2017). The maximum amount of the fee is determined by the population of the county, according to the latest federal census, where the municipality is located. Counties with a population under 60,000 may not charge over eight percent of the wholesale price of the alcoholic beverages supplied by a wholesaler in the municipality. Id. § 57–3–501(b). Counties with a population over 60,000 may not charge more than five percent of the wholesale price. Id. § 57–3–501(c). Alcoholic beverage wholesalers are required to collect the fees from retailers and pay the fees each month to the municipality. Id. §§ 57–3–502, –503(a) (2013).
The city of Morristown in Hamblen County adopted an ordinance, under the authority of Tennessee Code Annotated section 57–3–501(a)(1), imposing an inspection fee on licensed alcoholic beverage retailers within its municipal boundaries. The city set the fee at eight percent of the wholesale price based on the county's population of less than 60,000. By January 2011, the county's population, according to the 2010 federal census, increased to over 60,000. Under the city's ordinance, the inspection fee should have decreased to a maximum fee of five percent of the wholesale price. However, from 2011–2014, the city of Morristown charged the retailers an eight percent inspection fee, which the wholesalers collected and remitted to the city.
In June 2014, one of the alcoholic beverage retailers, Chuck's Package Store, forwarded to the city a law firm advertisement letter advising that the city was overcharging inspection fees based on the population increase. The city's administrative services director acknowledged the error and pledged to refund the overpayments. However, in July 2014, after a meeting with other city officials, the administrative services director notified Chuck's Package Store that the city would not issue a refund.
On October 14, 2014, a group of alcoholic beverage retailers, Chuck's Package Store; The Cellar, Inc.; T & T Package Store, LLC; Morristown Beverage Associates, Inc., d/b/a Cork & Keg Package Store; The Package Store; and C & C Package, Inc., sued the city of Morristown in the Hamblen County Chancery Court to recover the overpaid taxes, damages, and other relief.
The city moved to dismiss, arguing in part that the retailers were not entitled to relief because they had failed to pay the disputed taxes under protest as required by Tennessee Code Annotated sections 67–1–901(a) and –911 (2013). The trial court denied the city's motion to dismiss, holding that Tennessee Code Annotated sections 67–1–1801, et seq. (2013 & 2017 Supp.), applied and the retailers were not required to have paid under protest the municipal taxes before seeking refunds. Following a bench trial in April 2015, the trial court awarded the retailers a judgment for the excess taxes paid from January 1, 2011, to June 30, 2014, in the amount of $452,120.51, prejudgment interest, and attorney's fees.
The Court of Appeals affirmed, holding that Tennessee Code Annotated sections 67–1–1807, et seq. , applied to relieve the taxpayers from the requirement of paying under protest disputed taxes before filing suit. See Chuck's Package Store v. City of Morristown , No. E2015-01524-COA-R3-CV, 2016 WL 3640063, at *7, *9 (Tenn. Ct. App. June 30, 2016). The Court of Appeals construed section 67–1–1807 to remove the requirement for payment under protest for all taxes paid after January 1, 1986, with that statute controlling and superseding all conflicting laws. See id. at *7 (quoting Tennessee Code Annotated section 67–1–1807(b)(1), (c) ). The Court of Appeals relied on its previous decisions in Admiralty Suites & Inns v. Shelby County , 138 S.W.3d 233 (Tenn. Ct. App. 2003), and Decatur County v. Vulcan Materials Co. , No. 2001-00858-COA-R3-CV, 2002 WL 31786985 (Tenn. Ct. App. Dec. 12, 2002), holding that payment under protest was not required. See id. at *6–7.
We granted the city of Morristown's application for permission to appeal to determine whether taxpayers must pay under protest disputed municipal taxes before seeking refunds.1 This issue requires us to decide whether Tennessee Code Annotated sections 67–1–901, et seq. , or Tennessee Code Annotated sections 67–1–1801, et seq. , apply to a suit seeking a refund of municipal taxes. Based on the conflicting decisions from the Court of Appeals, there is a need for uniformity in this area of the law.
We review issues of statutory interpretation de novo and afford no presumption of correctness to the trial court's conclusions of law. State v. Burgins , 464 S.W.3d 298, 305 (Tenn. 2015) (citing State v. Crank , 468 S.W.3d 15, 21 (Tenn. 2015) ); State v. Dycus , 456 S.W.3d 918, 924 (Tenn. 2015) (citing State v. Springer , 406 S.W.3d 526, 532–33 (Tenn. 2013) ). Our role is to "assign a statute the full effect of the legislative intent without restricting or expanding the intended scope of the statute." State v. Smith , 484 S.W.3d 393, 403 (Tenn. 2016) ; State v. Davis , 484 S.W.3d 138, 144 (Tenn. 2016). To determine legislative intent, we first look to the plain language of the statute, giving the statute's words their natural and ordinary meaning. Smith , 484 S.W.3d at 403 (citing State v. Jennings , 130 S.W.3d 43, 46 (Tenn. 2004) ); Davis , 484 S.W.3d at 145 (citing Jennings , 130 S.W.3d at 46 ). If the statutory language is clear and unambiguous, we will apply the plain meaning of its words in normal and accepted usage without a forced interpretation. Arden v. Kozawa , 466 S.W.3d 758, 764 (Tenn. 2015) (citing Baker v. State , 417 S.W.3d 428, 433 (Tenn. 2013) ). We enforce the statute as written and need not consider other sources of information. Frazier v. State , 495 S.W.3d 246, 249 (Tenn. 2016) (citing Shelby Cnty. Health Care Corp. v. Nationwide Mut. Ins. Co. , 325 S.W.3d 88, 92 (Tenn. 2010) ; U.S. Bank, N.A. v. Tenn. Farmers Mut. Ins. Co. , 277 S.W.3d 381, 386 (Tenn. 2009) ; Gleaves v. Checker Cab Transit Corp. , 15 S.W.3d 799, 803 (Tenn. 2000) ). We presume that "every word in the statute has meaning and purpose and should be given full effect" unless it violates the obvious intent of the General Assembly. Dycus , 456 S.W.3d at 924 ; State v. Marshall , 319 S.W.3d 558, 561 (Tenn. 2010). We do not substitute our policy judgment for that of the Legislature. Frazier , 495 S.W.3d at 249 (citing Gleaves , 15 S.W.3d at 803 ).
We begin with a review of the statutes at issue. Tennessee Code Annotated section 67–1–901 requires a taxpayer, before seeking a refund, to pay under protest any disputed state taxes:
(a) In all cases ... in which an officer, charged by law with the collection of revenue due the state, shall institute any proceeding, or take any steps for the collection of the sum alleged or claimed to be due ... the person against whom the proceeding or step is taken shall, if that person conceives the same to be unjust or illegal, or against any statute or clause of the constitution of the state, pay the revenue under protest .
Tenn. Code Ann. § 67–1–901(a) (emphasis added).2
In 1959, the General Assembly made the provisions of Tennessee Code Annotated section 67–1–901(a) and other statutes (sections 67–1–902 to 67–1–905 and 67–1–908 to 67–1–910) applicable to proceedings for refunds of disputed taxes collected by municipalities. Id. § 67–1–911 (1959 Tenn. Pub. Acts 1000–01). The stated purpose of section 67–1–911 was "to carry out the legislative intent that all of such sections, which now apply to the recovery of state taxes erroneously paid, be conformed to apply...
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