Little v. City of Chattanooga

• Decision Date: 25 January 2022
• Docket Number: E2020-01414-COA-R3-CV
• Citation: 650 S.W.3d 326
• Parties: James P. LITTLE, M.D. et al. v. CITY OF CHATTANOOGA, Tennessee
• Court: Tennessee Court of Appeals

650 S.W.3d 326

James P. LITTLE, M.D. et al.
v.
CITY OF CHATTANOOGA, Tennessee

No. E2020-01414-COA-R3-CV

Court of Appeals of Tennessee, Eastern Section, AT KNOXVILLE.

August 18, 2021 Session
FILED January 25, 2022

Rebecca Mary Little, Chattanooga, Tennessee, for the appellants, Little Company of Tennessee, LLC, and James P. Little.

Phillip Alden Noblett, Joseph Allen Kelly, and Keith J. Reisman, Chattanooga, Tennessee, for the appellee, City of Chattanooga.

Frank G. Clement Jr., P.J., M.S., delivered the opinion of the Court, in which D. Michael Swiney, C.J., and John W. McClarty, J., joined.

Frank G. Clement Jr., P.J.

This is a mandamus action in which the plaintiffs seek to compel the City of Chattanooga ("the City"), pursuant to Tennessee Code Annotated § 6-51-108(e), to complete the plans of services arising from a 1972 annexation and to publish annual reports of its progress pursuant to Tennessee Code Annotated § 6-51-108(c). Two areas of the 1972 annexation are at issue: (1) an area known as "Tiftonia" or "Area 4" and (2) an area known as "Wauhatchee–Williams Island" or "Area 12." The plaintiffs also seek a declaration that all annexations by the City since 1981 were void due to the City's violation of Tennessee Code Annotated § 6-51-102(b)(5), which prohibits a municipality from annexing additional territory while in default on a prior plan of services. After three years of trial preparation, but prior to trial, the court imposed monetary sanctions against the City under Tennessee Rule of Civil Procedure 37.03 in the amount of $263,273.08 for attorneys’ fees, costs, and expenses caused by the City's failure to supplement discovery responses. Thereafter, the case was tried in three phases. Following the first phase of the trial in 2017, the court found the City complied with its obligations as to Area 4; however, it found the City "materially and substantially failed to comply" with its obligations to provide street paving, street construction, and sanitary sewers in Area 12. Following the second phase of the trial in 2019, the court found the City's failure to comply with its obligations as to Area 12 was not excused in that it was not caused by "unforeseen circumstances." As a consequence, the court ordered the City to submit a proposed scope of services to be provided, which would, inter alia , be the subject of the Phase 3 trial. After the third and final phase of the trial in 2020, the court found the City's proposed scope of services was insufficient and issued a writ of mandamus ordering the City to bring all streets up to current standards and install,

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inter alia , a gravity-fed sewer system for Area 12 within 48 months. The court also ordered the City to publish annual reports of its progress and enjoined the City from further annexations until the services were provided. Finally, the court found the plaintiffs were not entitled to additional relief for the City's past violations of §§ 6-51-102(b)(5) and -108(c). Both parties appealed. The plaintiffs contend, inter alia , that the trial court erred by finding the City complied with the plan of services for Area 4 and by denying their request for additional relief under §§ 6-51-102(b)(5) and -108(c). The City contends that § 6-51-102(b)(5) and § 6-51-108(c) and (e) do not apply to the annexations of Area 4 and Area 12 because the statutes were enacted after the annexation ordinances were passed. The City also contends that the plaintiffs lack standing, and that their claims are barred by the doctrine of laches and the applicable statute of limitations. In the alternative, the City asserts that the trial court erred by finding it failed to materially and substantially comply with the plan of services for Area 12. The City also appeals the trial court's award of sanctions for noncompliance with discovery under Rule of Civil Procedure 37.03. Following a thorough review, we reverse and modify the trial court's judgment regarding the standards that apply to the City's provision of street paving and construction in Area 12; vacate its judgment regarding the City's provision of sanitary and storm sewers in Areas 4 and 12; and remand for further proceedings consistent with this opinion. We affirm the court's judgment in all other respects.

FACTS AND PROCEDURAL BACKGROUND

In 1972, the City of Chattanooga passed ordinances to annex several adjacent territories into its corporate limits, including an area known as "Tiftonia" or "Area 4" and an area known as "Wauhatchee–Williams Island" or "Area 12." Before the annexations, the City adopted plans of services for each territory that identified the municipal services the City would extend into each territory and projected a timeline for each service ("the Plans of Services"). The validity of the annexations was challenged and upheld in two quo warranto actions. See State ex rel. Hicks v. City of Chattanooga , 513 S.W.2d 780 (Tenn. 1974) ; State ex rel. Hudson v. City of Chattanooga , 512 S.W.2d 555 (Tenn. 1974), superseded by statute on other grounds , Act of Mar. 28, 1974, 1974 Tenn. Public Acts 1115, as recognized in City of Kingsport v. State ex rel. Crown Enterprises, Inc. , 562 S.W.2d 808 (Tenn. 1978).

Nearly 40 years later, in May 2011, Dr. James Little and the Little Company of Tennessee, LLC¹ (collectively, "Plaintiffs"), commenced this action by filing a complaint against the City in the Hamilton County Chancery Court. Plaintiffs’ claims were based on three statutes: Tennessee Code Annotated §§ 6-51-108(c), -108(e), and -102(b)(5). Section 6-51-108(c) requires municipalities to publish annual updates regarding the extension of services for each annexed territory and permits property owners to enforce the reporting requirement in a mandamus action. Section 6-51-108(e) permits property owners to enforce the plan of services in a mandamus action. Section 6-51-102(b)(5) prohibits municipalities from annexing any additional territory if they are "in default" on a prior

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plan of services.²

In the initial Complaint, filed in 2011, Plaintiffs contended that the City failed to complete the plan of services for Area 12 ("the Area 12 Plan of Services") and never published any progress reports. More specifically, Plaintiffs alleged that the City failed to provide Area 12 with adequate streets, street lighting, storm sewers, and sanitary sewers. Plaintiffs sought writs of mandamus to compel the City to prepare the progress reports and complete the Area 12 Plan of Services. Plaintiffs also requested an injunction to prohibit the City from annexing any other territory until the services were provided. In its Answer, the City asserted the reporting requirement in § 108(c) was inapplicable to the Area 12 because § 108(c) was enacted two years after the annexation ordinances were passed. Regardless, the City asserted that the Area 12 Plan of Services was complete.

Over the next two years, the parties engaged in discovery, and Plaintiffs amended their Complaint several times. Then, in September 2013, both parties moved for summary judgment on all claims. The trial court denied those motions,³ and the parties proceeded to a trial in February 2014. On the second day of trial, however, the City announced that it had discovered a discrepancy between the map of Area 12 attached to the Area 12 Plan of Services and the descriptions of Area 12 attached to the Area 12 Plan of Services and annexation ordinance. The discovery revealed that a portion of Plaintiffs’ property was in Area 4. The parties agreed to continue the trial to allow Plaintiffs to amend their Complaint and conduct discovery regarding the services provided to Area 4.

In their Fifth Amended Complaint, Plaintiffs alleged that the City failed to complete the Area 12 Plan of Services and the plan of services for Area 4 ("the Area 4 Plan of Services") (collectively, "the Plans of Services") and never published any progress reports for Area 12 or Area 4. As before, Plaintiffs alleged that the City failed to provide adequate streets, street lighting, storm sewers, and sanitary sewers, and sought writs of mandamus to compel the City to prepare the progress reports and complete the Plans of Services. Plaintiffs also sought an injunction against further annexations until the services were provided.

On February 26, 2014, Plaintiffs filed a Motion for Default Judgment and/or Other Appropriate Sanctions "pursuant to T.C.A. § 6-51-108 and Rules 34A.02, 37.04, and 37.02 of the Tennessee Rules of Civil Procedure." At issue was the discrepancy between the depiction of the boundary lines for Area 12 in the map attached to the Area 12 Plan of Services—Chattanooga City Resolution 9166, approved and adopted on January 25, 1972—and the depiction of the boundary lines for Area 12 in the map attached to the annexation ordinance—Chattanooga City Ordinance 6393, approved and adopted on third and final reading on February 2, 1972. Plaintiffs alleged that the City should have known about and disclosed the discrepancy at an

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earlier date. After a hearing, the trial court found that the City failed to timely supplement its discovery responses and imposed, pursuant to Tennessee Rule of Civil Procedure 37.03, monetary sanctions of $263,273.08 for attorneys’ fees, costs, and expenses Plaintiffs had incurred.

In October 2015, both parties moved for summary judgment on Plaintiffs’ claims related to Area 4. The City argued, inter alia , that Plaintiffs were not entitled to relief under §§ 6-51-102(b)(5), -108(c), and -108(e) because those provisions were not enacted until after the 1972 annexations were complete. The City also asserted that Plaintiffs’ claims were barred by the applicable statute of limitations. The trial court denied the motions.⁴

In February 2017, Plaintiffs filed a "renewed" Motion for Summary Judgment on the City's failure to comply with the reporting requirement in § 108(c). Plaintiffs asked the court for a writ of mandamus compelling the City to...