Kopsombut-Myint Buddhist Center v. State Bd. of Equalization
| Decision Date | 29 October 1986 |
| Docket Number | No. 85-317-II,KOPSOMBUT-MYINT,85-317-II |
| Citation | 728 S.W.2d 327 |
| Parties | BUDDHIST CENTER, a Joint Venture and the Buddhist Temple, a not-for-profit Tennessee Corporation, Petitioners/Appellants, v. STATE BOARD OF EQUALIZATION for the State of Tennessee and the Metropolitan Government of Nashville, Davidson County, Tennessee, Respondents/Appellees. 728 S.W.2d 327 |
| Court | Tennessee Court of Appeals |
Joseph H. Johnston, Nashville, for petitioners/appellants.
W.J. Michael Cody, William P. Sizer, Nashville, for respondents/appellees.
Nashville Association of Rabbis, Priests and Ministers, Mary V. Anderson, Nashville, amicus curiae.
This appeal stems from the efforts of a group of Asian immigrants to obtain a property tax exemption for their newly organized Buddhist temple and ecumenical center for Buddhist studies. The Davidson County tax assessor denied an exemption for 1982 and granted only a partial exemption for 1983. The property owners appealed those decisions to the Assessment Appeals Commission which reached the same result as the local assessor. The assessments became final when the State Board of Equalization declined to review the Commission's decision. The property owners filed a petition for review, and the Chancery Court for Davidson County likewise affirmed the Commission's decision.
The property owners have perfected this appeal. They challenge not only the substance of the taxing authorities' decisions but also the procedures used to reach them. We have determined that the adjudicatory procedures employed by the taxing authorities were proper. However, we vacate the Commission's decisions denying the requested exemptions because they are arbitrary and unsupported by substantial and material evidence.
An increasing number of immigrants and refugees from Southeast Asia have made their home in Nashville in recent years. 1 Most of these immigrants are Buddhist. They did not have a place to practice their religion until 1981 when a group of Burmese and Thai immigrants decided to establish a temple to serve the needs of the Buddhists living in the Nashville area.
In August, 1981, the temple organizers learned that an old church on Treutland Street in North Nashville was for sale. The church itself had been built by the North Nashville Baptist Church in 1892. A three story auxiliary building was added in 1964 but the upper two floors were never completed. The North Nashville Baptist Church sold this property to the House of Prayer and Praise, Inc. when it moved to a new location and changed its name to the Broadmoor Baptist Church. This property has always been exempted from ad valorem taxation because it has been owned and used continuously by religious institutions.
The temple organizers discovered that they could not borrow money in the name of the temple to finance the purchase of this property because the temple had no established credit of its own. However, both the Broadmoor Baptist Church and the House of Prayer and Praise, Inc. agreed that the transaction could proceed if two of the organizing group's members with established credit became personally involved in the transaction.
Mr. Win Myint, and Mr. Prayote Kopsombut agreed to purchase the church property on behalf of the temple. Mr. Myint, a naturalized American from Burma who has resided in Nashville since 1965, and Mr. Kopsombut, a resident alien from Thailand who has resided in Nashville since 1978, were members of the organizing group. While their initial understanding with the other temple organizers was not reduced to writing, it is undisputed that Mr. Myint and Mr. Kopsombut agreed to form a joint venture solely for the purpose of acquiring the Treutland Street property and then conveying it to the temple once it was organized as a not-for-profit corporation. They also agreed that they would receive no profits from this transaction.
Myint and Kopsombut formed the Kopsombut-Myint Buddhist Center as partners and joint venturers. On December 16, 1981, the Kopsombut-Myint Buddhist Center acquired the Treutland Street property from the House of Prayer and Praise, Inc. for $86,500. The joint venture assumed the House of Prayer and Praise, Inc.'s first mortgage held by the Broadmoor Baptist Church and gave a second mortgage and cash to the House of Prayer and Praise, Inc.
Religious activities commenced as soon as the sale was completed with the assistance of visiting monks from San Francisco and Laos. During 1982 and 1983, the temple obtained monks from Nepal, Burma, Sri Lanka, and Thailand. In May, 1982, the temple celebrated "Vesakhapuja" or Buddha's Day, and in December, 1982 the only two "Baddha Simas" 2 in the Southeastern United States were consecrated.
On March 10, 1982 the Davidson County tax assessor sent the Kopsombut-Myint Buddhist Center an application for a tax exemption for the Treutland Street property. In addition to completing the application form, the assessor requested "a copy of your Charter of Incorporation, a copy of your By-Laws, and a copy of your latest financial statement which should disclose therein the source from which you receive all moneys and how same is disbursed." The Kopsombut-Myint Buddhist Center had none of these documents because its formation was based upon the oral agreements of Mr. Myint, Mr. Kopsombut, and the remaining temple organizers. Thus, it did not return the application for an exemption until November 15, 1982. In the months following the tax assessor's letter, the temple organizers began to take the steps necessary to establish the temple as a not-for-profit corporation and to vest the title to the temple property in the corporation.
The Buddhist Temple, Inc. filed its articles of incorporation as a not-for-profit corporation on March 18, 1982. Mr. Myint and Mr. Kopsombut were among the original incorporators and were elected to the corporation's first board of directors. Mr. Myint was designated as the corporation's agent for service of process.
The corporation finally retained counsel in July, 1982. On November 12, 1982, Mr. Myint and Mr. Kopsombut executed a written agreement embodying their original agreements when they formed the joint venture to enable the temple organizers to acquire the Treutland Street property. This agreement provided, in part:
WHEREAS, Kopsombut and Myint desire to promote the establishment of an Ecumenical Buddhist Temple and an International Buddhist Study Center in Nashville, Tennessee, for the benefit of themselves and others interested in Buddhism; and
WHEREAS, Kopsombut and Myint formed a joint venture by the name of Kopsombut-Myint Buddhist Center for the sole purpose of carrying out this project; and
WHEREAS, on December 16, 1981, Kopsombut and Myint purchased certain real property at 230 Treutland Street, Nashville, Tennessee, in the name of the Kopsombut-Myint Buddhist Center, a joint venture, for the sole purpose of holding it and subsequently conveying it to a non-profit corporation (hereinafter "The Buddhist Temple") which was to be later established to own and operate the physical facilities of said temple and study center; and
WHEREAS, Kopsombut and Myint do not desire, and have never desired, to obtain any personal profit for themselves or the joint venture in pursuing their goal of establishing the aforesaid temple and study center; and
WHEREAS, Kopsombut and Myint desire to have a written agreement that accurately describes the nature of their joint venture and the purpose for which it was created; and NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the Joint Venturers do agree as follows:
1. Purpose and name. In December, 1981, the Joint Venturers formed this joint venture to acquire and hold real property for the purpose of providing physical facilities for the establishment of a temple and study center. The name of this joint venture is "Kopsombut-Myint Buddhist Center."
2. Real Property. The Joint Venturers have purchased real property known as 230 Treutland Street, Nashville, Davidson County, Tennessee more fully described as Exhibit A attached hereto and incorporated by references herein (hereinafter "Property").
* * *
11. Profit or Loss. Any losses attributable to this joint venture shall be divided equally between the parties ... Under no circumstances shall Kopsombut or Myint, individually, or as Joint Venturers, receive any profit from the joint venture or the sale of the Property.
12. Binding Effect. This Agreement contains the entire understanding of the parties and may not be changed or modified except by written agreement of the parties. This agreement may not be assignable by either party.
On the same day they executed this agreement, Mr. Myint and Mr. Kopsombut also signed the application for a tax exemption the assessor had mailed to them eight months earlier.
The Kopsombut-Myint Buddhist Center conveyed the Treutland Street property to The Buddhist Temple, Inc. on December 31, 1982. This transaction was for nominal consideration, and The Buddhist Temple, Inc. expressly agreed to assume the mortgages held by the Broadmoor Baptist Church and the House of Prayer and Praise, Inc.
Davidson County's tax assessor denied Kopsombut-Myint Buddhist Center's request for a 1982 property tax exemption. Its decision was based upon two findings: (1) the Kopsombut-Myint Buddhist Center was not a religious institution and (2) the application for exemption was not filed prior to the deadline for filing applications for 1982 tax exemptions. Later, on March 23, 1983, the tax assessor granted a partial exemption for 1983 because The Buddhist Temple, Inc. had failed to demonstrate that it was actually using the top two floors of the church's auxiliary building.
The Buddhist Temple, Inc. appealed both of...
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