Maury Reg. Hosp. v. Tn State Bd. of Equal.
| Decision Date | 09 April 2003 |
| Docket Number | No. M2002-00501-COA-R3-CV.,M2002-00501-COA-R3-CV. |
| Citation | 117 S.W.3d 779 |
| Parties | MAURY COUNTY, Tennessee by and through MAURY REGIONAL HOSPITAL v. TENNESSEE STATE BOARD OF EQUALIZATION, et al. |
| Court | Tennessee Court of Appeals |
WILLIAM B. CAIN, J., delivered the opinion of the court, in which BEN H. CANTRELL, P.J., M.S. and VERNON NEAL, Sp. J., joined.
Following a de novo hearing pursuant to Tennessee Code Annotated section 67-5-1511(b), the Chancery Court of Davidson County upheld the final decision of the Assessment Appeals Commission of the Tennessee State Board of Equalization in a determination that property owned by Maury Regional Hospital and located in Marshall County, Tennessee was subject to ad valorem taxation by Marshall County. Maury Regional Hospital appeals the decision of the Chancellor. The decision of the trial court is reversed, and the Marshall County property known as Marshall Medical Center is held to be exempt from ad valorem taxation.
Maury Regional Hospital is a not for profit corporation owned by Maury County, Tennessee and operated under authority of Chapter 125 of the Private Acts of 1996. The counties composing the region are Giles, Lawrence, Wayne, Perry, Lewis, Hickman, Marshall and Maury counties.
Prior to the mid 1990's, Maury Regional Hospital was a primary care hospital with an expanding base of specialty care. The ability to sustain specialty care in areas like pediatrics, cardiology, oncology and radiation depends, in substantial measure, upon referrals from smaller primary care hospitals within the surrounding geographic area. During the mid 1990's, smaller hospitals within the region of Maury Regional Hospital and counties adjacent to the region were up for sale, and Nashville hospitals, primarily Baptist and Columbia-HCA, began to purchase them. The Board of Directors of Maury Regional Hospital determined that, if it was to remain competitive in specialty care and was to retain and expand its status as a specialty care hospital, it was necessary to join the competition for the purchase of smaller hospitals within the region. In furtherance of this purpose, Maury Regional purchased Marshall Medical Center in Lewisburg and Lewis Community Hospital in Hohenwald and entered into a long term lease to operate Wayne County Hospital in Waynesboro.
The acquisition of Marshall Medical Center occurred March 13, 1995, when Maury Regional purchased the hospital from Lewisburg Community Hospital, Inc. and OnNda Health Corp., both being for-profit corporations. Since both prior owners of Marshall Medical Center were for-profit corporations, the hospital was subject to ad valorem taxation by Marshall County, and Maury Regional Hospital paid the full amount of the 1995 ad valorem taxes assessed by Marshall County against Marshall Medical Center.
In 1996, Maury Regional Hospital applied for exemption of Marshall Medical Center from ad valorem taxation under Tennessee Code Annotated section 67-5-203. This application for exemption was denied by the Marshall County Board of Equalization, and, upon appeal to the State Board of Equalization, an Administrative Law Judge denied the exemption. Maury Regional appealed to the Assessment Appeals Commission of the State Board of Equalization, which upheld denial of the exemption. Maury Regional Hospital then appealed, pursuant to Tennessee Code Annotated section 67-5-1511, to the Chancery Court of Davidson County where the case was heard upon the administrative record and upon additional and supplemental evidence. Relying primarily on City of Knoxville v. Park City, 130 Tenn. 626, 172 S.W. 286 (1914), the Chancellor held that Marshall Medical Center was primarily a facility for the treatment of Marshall County patients and did not qualify for ad valorem tax exemption under the "incidental use" doctrine. Maury Regional Hospital timely appealed.
The hearing in the chancery court was pursuant to Tennessee Code Annotated section 67-5-1511(b)(1998), which provides, in part: "The judicial review provided in subsection (a) shall consist of a new hearing in the chancery court based upon the administrative record and any additional or supplemental evidence which either party wishes to adduce relevant to any issue." Our review of the decision of the chancellor is pursuant to Tennessee Rule of Appellate Procedure 13(d), which provides for a de novo review of the facts with a presumption of the correctness of the trial court finding unless the preponderance of the evidence is otherwise. As to review of questions of law, no such presumption attaches. See Richardson v. Assessment Appeals Comm'n, 828 S.W.2d 403 (Tenn.Ct.App.1991).
Appellant raises two issues on appeal which, paraphrased for the purposes of this opinion, assert:
(1) that the "incidental use" doctrine is inapplicable because the enabling statute, Chapter 125 of the Private Acts of 1996, authorizes Maury Regional Hospital to transend county boundaries and serve a multi-county region;
(2) that even if the "incidental use" doctrine applies, it provides no basis for defeating the exemption under the facts of the case.
The intention of Maury Regional Hospital in the 1995 acquisition of Marshall Medical Center is clear and undisputed in the record. Mr. Walter and other hospital board members observed the trend in the health care industry whereby large hospitals acquired smaller hospitals in surrounding counties. Both the large hospital and its smaller hospitals provided primary health care services, but, if patients needed specialty care such as cardiology or oncology services, the smaller hospitals referred their patients back to the large parent hospital where specialty care services were centralized. When smaller hospitals in the region served by Maury Regional became available for purchase, competing Nashville hospitals began acquiring the smaller hospitals. Unless Maury Regional did likewise, it would be relegated to a "stand alone" hospital and essentially limited to primary care. By acquiring smaller hospitals in Lewis, Wayne and Marshall Counties, Maury Regional protected and stabilized its standing as a referral hospital and correspondingly increased and improved its specialty care facilities. However, it is not the intention of Maury Regional Hospital in making these acquisitions that is determinative of this case. It is, rather, the intention of the General Assembly in changing the name and the mission of Maury Regional Hospital from a county orientated medical facility to a regional medical facility on which the case turns.
Maury County Hospital was born pursuant to the enactment of Chapter 448 of the Private Acts of 1949. Section one of this private act provided:
SECTION 1. Be it enacted by the General Assembly of the State of Tennessee, That Maury County, Tennessee, is hereby authorized and empowered to build, purchase, lease, own, operate, equip and maintain a general hospital in said County, acting by and through its Quarterly County Court with authority to either accept the legal title to such hospital to be operated by some non-profit corporation, either organized for such purpose or heretofore existing, or to own such hospital and turn over the maintenance and operation thereof to non-profit corporation, or to own, maintain, and operate such hospital under the supervision of said Quarterly County Court.
Following the construction phase of the hospital, Chapter 448 of the Private Acts of 1949 was amended by Chapter 373 of the Private Acts of 1953. This latter Act provided, in part: "Be it further enacted, That said Hospital shall be known and designated as the Maury County Hospital and that the Health Center shall be known and designated as the Maury County Health Center." The Act then specifically defined the real estate comprising Maury County Hospital as being a 43.3 acre tract located in the 9th Civil District of Maury County. The Act further provided:
SECTION 3. Be it further enacted, That said Hospital and Health Center shall be controlled by a Board of Trustees, seven (7) in number, one of whom shall be a woman and all shall be citizens and residents of Maury County, over the age of 21 years who shall serve without compensation (Said Office being honorary and not constituting a county office), the manner and for the terms hereinafter provided; and provided that no member of said Board of Trustees shall be a physician or surgeon licensed to practice in this County and State; nor a member of the Maury County Quarterly Court; and provided further that no member of the Board of Trustees and/or no member of the County Quarterly Court shall profit financially by reason of the operation of this Hospital and Health Center; and further that no property belonging to said Hospital and Health Center shall be loaned.
Chapter 199 of the Private Acts of 1971 increased the membership of the hospital committee of the quarterly court from three to five members, this committee serving in an advisory capacity.1 Chapter 43 of the Private Acts of 1973 provided for certain housekeeping amendments that are not material to the mission of the hospital.
By Chapter 162 of the Private Acts of 1988, the General Assembly...
To continue reading
Request your trial
-
Reid v. Lee
... ... William LEE, Governor of the State of Tennessee, in his official capacity; David Rausch, ... existence except as "emanation[s] from the state." Maury Cty. ex rel. Maury Reg'l Hosp. v. Tenn. State Bd. of ... ...
-
Bd. of Educ. of Shelby Cnty. v. Memphis City Bd. of Educ.
... ... 204-7.) In 1869, the State of Tennessee granted the Memphis City Board of Education a ... of schoolchildren in Memphis to due process and equal protection under the Fourteenth Amendment to the United ... Sw. Ohio Reg'l Transit Auth. , 163 F.3d 341, 358-59 (6th Cir. 1998))); ... Hosp. Auth. v. City of Chattanooga , 580 S.W.2d 322, 326 (Tenn ... " Maury Cnty. ex rel. Maury Reg'l Hosp. v. Tenn. State Bd. of ... ...
-
Nashville Cmty. Bail Fund v. Gentry
... ... State and Federal Requirements. The State of Tennessee, like the ... something else"is but an emanation from the state." Maury Cty. ex rel. Maury Reg'l Hosp. v. Tenn. State Bd. of ... ...
-
HOME BUILDERS ASS'N v. Williamson County
... ... for the building permit required the builder to state the square footage of each part of the planned residence ... Chattanooga-Hamilton County Hosp. Auth. v. Bradley County, 249 ... 304 SW 3d 817 ... 181, 47 S.W. 136 (1898)); see also Maury County ex rel. Maury Reg'l Hosp. v. Tenn. State Bd. of ... ...