03/09/2018 IN THE COURT OF APPEALS OF TENNESSEE

AT JACKSON

February 1, 2018 Session

STATE OF TENNESSEE ON RELATION OF V. CALVIN HOWELL ET

AL. v. JIMMY FARRIS ET AL.

Appeal from the Chancery Court for Hardeman County

No. 17784 Martha Brasfield, Chancellor

___________________________________

No. W2017-00438-COA-R3-CV ___________________________________

This case arose as a result of a local building inspector’s refusal to issue building permits to the owner/developer of three commercial properties because the owner/developer did not have a licensed general contractor overseeing construction. Subsequently, without submitting completed applications for the building permits or paying the required permit fees, the owner/developer appeared before the Bolivar city council to appeal the denials of the building permits. Relying on the recommendation of the city attorney, the city council determined that because the owner/developer had not filed written building permit applications or paid building permit fees, an appeal was not appropriate and refused to take any action. The owner/developer then filed a complaint for a writ of certiorari and other relief in the Chancery Court. Following the filing of the lawsuit, the owner completed the applications, paid the permit fees, and the building permits were issued. The owner/developer was later granted permission to amend his complaint to allege an inverse condemnation claim based on a regulatory taking. The defendants subsequently moved for summary judgment. The Chancery Court ultimately granted defendants summary judgment on all of the owner/developer’s initial claims. The defendants later filed a motion to dismiss as to the owner/developer’s claim for inverse condemnation. The motion to dismiss was also granted by the Chancery Court. The owner/developer appeals. For the reasons stated herein, the decision of the Chancery Court is affirmed.

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

ARNOLD B. GOLDIN, J., delivered the opinion of the court, in which J. STEVEN STAFFORD, P.J., W.S., and BRANDON O. GIBSON, J., joined.

Charles M. Purcell and Christopher C. Hayden, Jackson, Tennessee, for the appellants, State of Tennessee - Civil, and Virgil Calvin Howell.

Michael R. Hill, Milan, Tennessee, for the appellee, Jimmy Farris.

John D. Burleson and Matthew R. Courtner, Jackson , Tennessee, for the appellees, Shelia Dellinger, City of Bolivar, Tennessee, Barrett Stevens, Tracy Byrum, James Futrell, Teresa Golden, Randy Hill, Todd Lowe, Larry Allen McKinnie, Willie McKinnie, and David Rhea.

OPINION

BACKGROUND AND PROCEDURAL HISTORY

V. Calvin Howell (“Appellant” or “Mr. Howell”), an owner/developer of real estate, appeals the dismissal of his claims which arose out of his attempts to obtain building permits for three of his commercial properties in Bolivar, Tennessee.

On March 13, 2013, Mr. Howell filed a verified “Complaint for Injunctive Relief, Writ of Certiorari, Declaratory Judgment, Restraint of Improper Alienation of Property and Damages” in the Chancery Court against Jimmy Farris, individually and in his capacity as building and code enforcement officer; Sheila Dellinger in her official capacity as city administrator (the “City Administrator”); the City of Bolivar, a municipal corporation of the State of Tennessee in its own capacity (the “City”), and by and through Barrett Stevens in his official capacity as mayor of Bolivar (the “Mayor”); and the following members of the City Council in their official capacity: Tracy Byrum, James Futrell, Teresa Golden, Randy Hill, Todd Lowe, Larry Allen McKinnie, Willie McKinnie, and David Rhea (the “City Council”).1

According to the complaint, the events giving rise to Mr. Howell’s suit began on or about June 6, 2011, when Mr. Howell approached Mr. Farris and verbally requested that Mr. Farris issue building permits for the improvement and renovation of structures located on property Mr. Howell owns at 105 (the “Hotel”) and 109 West Market Street (the “Restaurant”) in Bolivar, Tennessee. Mr. Howell alleged that Mr. Farris told him that he was denying the permits because Mr. Howell was not a licensed contractor pursuant to Tennessee Code Annotated § 62-6-101 et seq. (the “Contractor Licensing Act”), and Mr. Howell had not hired a licensed contractor to oversee the construction sites.^[2] It is undisputed that Mr. Howell is not a licensed contractor, and that he had already begun construction on these projects before he requested the building permits. Mr. Howell further alleged that on or about August 10, 2011, he requested a building permit for a third project located on Pecan Grove Drive (the “Apartment Building”) and that Mr. Farris also denied this request, again citing the Contractor Licensing Act. Mr. Howell averred that he “advised [Mr. Farris] that as owner of the three properties he had no factual or legal obligation under [the Contractor Licensing Act] to either obtain a contractor’s license or to hire a licensed contractor to oversee the construction projects.” Despite Mr. Howell’s statements, Mr. Farris continued to refuse to issue the permits.

Following Mr. Farris’ denials, Mr. Howell alleged that he approached the Mayor to discuss the situation. According to Mr. Howell’s complaint, the Mayor agreed with Mr. Howell that as the owner of the properties he was exempt from the Contractor Licensing Act and that Mr. Farris should issue the permits to Mr. Howell. Despite whatever discussions the Mayor may have had with Mr. Farris, Mr. Farris continued to refuse to issue the permits.

Although Mr. Howell did not have the requisite building permits, he continued working on the three projects. On December 6, 2011, the District Attorney General contacted Mr. Howell ordering him to cease all construction until Mr. Howell was in compliance with the Contractor Licensing Act and other applicable regulations. Evidently, despite the warning, Mr. Howell continued construction, and on May 7, 2012, the Hardeman County Grand Jury returned an indictment charging Mr. Howell with three counts of “contracting” without a license in violation of the Contractor Licensing Act.^[3] On May 28, 2012, the judge presiding over Mr. Howell’s criminal case enjoined Mr. Howell from continuing construction. However, on November 15, 2012, the judge in the criminal case granted Mr. Howell’s motion to dismiss the indictments, lifted the injunction, and concluded that the Contractor Licensing Act did not apply to Mr. Howell because he was not engaged in “contracting.”4 The State appealed, and on February 13, 2014, the Court of Criminal Appeals reversed the circuit court’s dismissal of the indictments stating, “the plain language of the Contractor Licensing Act provides that the activities undertaken by Appellant must be done by a licensed contractor.” State v. Howell, No. W2012-0285-CCA-R3-CD, 2014 WL 586003, at *6 (Tenn. Crim. App. Feb. ^[13], 2014).

While the appeal of the dismissal of the indictments against Mr. Howell was pending, on January 8, 2013, Mr. Howell appeared with his attorney before the Bolivar City Council because Mr. Farris continued to refuse to issue the building permits.^[5] Because of the ongoing criminal proceedings, the City Council resolved to consult with the City Attorney before proceeding. At the following City Council meeting on February 12, 2013, Mr. Howell once again appeared with his attorney. The minutes from the meeting indicate that Mr. Howell was directed to file three building permit applications, pay the requisite permitting fees, and be formally denied before the City Council would proceed.

On March 12, 2013, the City Council held its monthly session, but Mr. Howell and his attorney did not appear. The minutes from the meeting again indicate that Mr. Howell had continued to fail to submit the permit applications or pay the permitting fees.

Mr. Howell initiated this litigation on March 13, 2013 with a properly verified petition. Among other relief,6 Mr. Howell sought the issuance of a statutory writ of certiorari to review the actions of the City Council. In the alternative, Mr. Howell sought review through the issuance of a common law writ of certiorari. Mr. Howell also sought liquidated damages based upon the delays allegedly caused by the City’s actions. However, for reasons unknown, the Chancery Court did not order the City to send up the record for review until nearly two years later.^[7]

On April 30, 2013, Mr. Farris answered, and averred that he was not required to issue the building permits to Mr. Howell because Mr. Howell was not in compliance with the Contractor Licensing Act. Mr. Farris also denied that Mr. Howell ever approached him requesting the permits, submitted permit applications, paid the permitting fees, or informed the City of the cost of the projects so that permitting fees could be calculated. On May 28, 2013, the City Council, City Administrator, and Mayor answered Mr. Howell’s complaint, averring that Mr. Howell had failed to state a claim under Tennessee Rule of Civil Procedure 12.02(6).

While the case was pending, in July 2013, Mr. Howell filed the required permit applications, paid the requisite fees, and the three building permits were approved.^[8] On May 1, 2014, Mr. Farris, in his official capacity, the City Administrator, the City Council, and the Mayor filed a motion for summary judgment, a statement of undisputed material facts, and a supporting memorandum that averred, inter alia, that Mr. Howell’s claims were moot because the permits were approved in July 2013. Also in support of the motion for summary judgment, the Appellees submitted a portion of Mr. Howell’s deposition testimony, during which Mr. Howell admitted that he did not pay the permit fees or submit formal permit applications until July of 2013, and that when he eventually did so, the permits were approved. However, Mr. Howell continued to oppose Appellees’ motion for summary judgment, and both sides submitted additional pleadings in support of their positions. On October 17, 2014, Mr. Howell sought permission from the Chancery Court to amend his complaint to assert a claim for inverse condemnation based on a regulatory taking.^[9] On December 10, 2014, the Chancery Court held a hearing on Appellee’s motion for summary judgment and entered an order granting Mr. Howell’s motion to amend his complaint to add an additional claim for inverse condemnation.^[10]

On February 25, 2015, the Chancery Court granted Appellees partial summary judgment. The court’s initial summary judgment order stated that Mr. Howell was entitled to review under both a common law writ of certiorari and a statutory writ of certiorari, and for the first time ordered the City Council to prepare the record. Furthermore, the order stated that Mr. Howell could seek compensatory damages in this proceeding because “[t]he attorneys have agreed that these damages would be appropriate under the statutory writ of certiorari under Tenn. Code Ann. § 27-8-102(2).” However, in this same order, the Chancery Court dismissed Mr. Howell’s claims as moot stating, “[t]he motion for summary judgment is affirmed to the extent that it is no longer necessary for this Court to order the City to issue the building permits or to remove [Mr. Farris] from office because the building permits have been issued and [Mr. Farris] is no longer in office.”

On March 3, 2015, Mr. Howell filed motions to reconsider and to strike. As a basis for the motions, Mr. Howell asserted that Appellees’ attorney had contacted his attorney on February 25, 2015, to inform him that although both parties believed the permits had been issued in July 2013, the permits had only recently been issued due to a clerical error. However, the attorneys agreed at oral argument that the parties proceeded as if the permits had previously been formally issued since they were approved in July 2013.

On March 16, 2015, Appellees responded in opposition to Mr. Howell’s motion to strike, and on March 27, 2015, Appellees filed a motion to revise the court’s order granting Appellees partial summary judgment. In the motion to revise, Appellees urged the Chancery Court to amend its previous ruling by holding that the common law writ was the exclusive and appropriate mechanism through which Mr. Howell could seek review of the City Council’s actions. Moreover, Appellees argued that Mr. Howell’s suit should be dismissed as moot because the permits had been issued. Appellees’ attorney also averred that he never agreed that compensatory damages would be an available remedy to Mr. Howell in this proceeding even if the Chancery Court concluded that the statutory writ was the appropriate vehicle for review of the City Council’s actions.^[11]

Also on March 27, 2015, Mr. Howell filed his “First Amended Complaint for Injunctive Relief, Writ of Certiorari, Declaratory Judgment, Restraint of Improper Alienations of Property, Inverse Condemnation, and Damages,” adding a regulatory taking claim pursuant to Article 1, Section 21 of the Tennessee Constitution. On December 3, 2015, Appellees moved to dismiss Mr. Howell’s regulatory taking claim. On July 7, 2016, Mr. Howell filed a memorandum of law in opposition to Appellees’ motion to dismiss.

On January 11, 2017, the Chancery Court entered two orders. First, it entered an order revising its earlier order on Appellees’ motion for summary judgment. In this order, the court dismissed all of Mr. Howell’s claims, except for his regulatory taking claim. The court found that the common law writ was the appropriate vehicle for review of the City Council’s actions, compensatory damages were not an available remedy, and that the issuance of the permits rendered Mr. Howell’s claims moot. The court also entered a second order granting Appellees’ motion to dismiss Mr. Howell’s regulatory taking claim, concluding that Mr. Farris’ refusal to issue the permits “was legally appropriate in light of the [Tennessee Court of Criminal Appeals’] ruling in State v. Howell, 2014 WL 586003, at *5 (Tenn. Ct. Crim. App. Feb. ^[13], 2014).”

On January 26, 2017, the parties filed a joint motion to correct inadvertent clerical errors contained in both orders of January 11, 2017. On February 6, 2017, the Chancery Court entered two revised orders correcting the clerical errors.^[12] Mr. Howell timely appealed.^[13]

ISSUES PRESENTED

Mr. Howell presents the following issues for our review:

(1) Whether the trial court erred in granting the Defendants’ motion to revise the trial court’s denial of the defendants’ motion for summary judgment on the appropriate method of judicial review as to the Defendants’ denial of the plaintiff’s requested building permits.

(2) Whether the trial court erred in granting the defendants’ motion to dismiss the plaintiffs’ regulatory taking claim in reliance upon the Tennessee Court of Criminal Appeals’ ruling in State v. Howell, 2014 WL 586003, at *5 (Tenn. Crim. App. Feb. ^[13], 2014).

Appellees present the following issues for our review:

(3) Whether the trial court correctly dismissed [Mr.] Howell’s writ of certiorari claim for monetary damages.

(4) Whether the trial court correctly dismissed Howell’s inverse condemnation claim because he failed to state a claim.

Mr. Farris, in his individual capacity, presents the following issue for our review:

(5) Whether the Plaintiff has any claims pending against the Defendant, Jimmy Farris, in his individual capacity.^[14]

STANDARD OF REVIEW

Mr. Howell appeals the Chancery Court’s decisions to grant Appellees’ motion for summary judgment on all claims in his original complaint as moot and to grant Appellees’ motion to dismiss Mr. Howell’s regulatory taking claim. The Tennessee Supreme Court has described the standard of review applicable in an appeal from a grant of summary judgment as follows: We review a grant of summary judgment de novo, with no presumption of correctness in the trial court’s decision. Rye v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015). Summary judgment is appropriate only when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Tenn. R. Civ. P. 56.04. On appeal, we must “make a fresh determination of whether the requirements of Rule 56 of the Tennessee Rules of Civil Procedure have been satisfied.” Rye, 477 S.W.3d at 250.

McFarland v. Pemberton, 530 S.W.3d 76, 85–86 (Tenn. 2017).

A motion to dismiss requires a court to determine if the pleadings state a claim upon which relief may be granted. Tenn. R. Civ. P. 12.02(6); See Phillips v. Montgomery Cty., 442 S.W.3d 233, 237 (Tenn. Ct. App. 2014). A motion based upon Tennessee Rule of Civil Procedure 12.02(6) challenges “only the legal sufficiency of the complaint, not the strength of the plaintiff’s proof or evidence.” Webb v. Nashville Area Habitat for Humanity, Inc., 346 S.W.3d 422, 426 (Tenn. 2011). “A defendant filing a motion to dismiss ‘admits the truth of all the relevant and material allegations contained in the complaint, but . . . asserts that the allegations fail to establish a cause of action.” Phillips, 442 S.W.3d at 237 (quoting Webb, 346 S.W.3d at 426)).

When adjudicating such motions, courts “must construe the complaint liberally, presuming all factual allegations to be true and giving the plaintiff the benefit of all reasonable inferences.” Id. (citation omitted). A Rule 12.02(6) motion may only be granted when it appears that “the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief.” Webb, 346 S.W.3d at 426 (quoting Crews v. Buckman Labs. Int’l Inc., 78 S.W.3d 852, 857 (Tenn. 2002)). We review a lower court’s decision on a motion to dismiss de novo without any presumption of correctness. Id.

DISCUSSION

Mr. Howell contends that the Chancery Court erred in concluding that the statutory writ of certiorari was not available to him, and in granting summary judgment on his claims, with the exception of his regulatory taking claim, as moot. Mr. Howell also avers that the Chancery Court erred in granting Appellees’ motion to dismiss his remaining regulatory taking claim. Although we have not arrived at our decision based upon the same reasoning as the Chancery Court, we affirm its judgment in its entirety. See In re Conservatorship of Stratton, No. E2012-01655-COA-R3-CV, 2013 WL 3961175, at *5 (Tenn. Ct. App. July 31, 2013) (“An appellate court can affirm the judgment of the Chancery Court even though the appellate tribunal’s rationale for doing so is different from that of the Chancery Court.”).

I. COMMON LAW WRIT OF CERTIORARI VS. STATUTORY WRIT OF CERTIORARI

At the outset, we address Mr. Howell’s contention that the Chancery Court erred in concluding that the common law writ of certiorari was the proper method of judicial review in this case. Mr. Howell contends that he was entitled to review under the preferential standard afforded by the statutory writ of certiorari because the City Council performed an essentially judicial function, and he contends that the City Council “in its inaction of providing [Mr. Howell] with a decision from which he could appeal, finally determined his rights by in effect denying the issuance of the permits to [Mr. Howell] along with his ability to appeal the refusal of the same.” Appellees defend the Chancery Court’s decision, contending that the City’s actions were administrative, and Mr. Howell did have a mechanism to seek review of the City Council’s actions by seeking a common law writ of certiorari.

Before addressing Mr. Howell’s contentions, we first turn to explain the mechanics and applicability of the common law writ of certiorari versus that of the statutory writ of certiorari. “A [w]rit of [c]ertiorari is an order from a superior court to an inferior [tribunal] to send up the record for review.” Utley v. Rose, 55 S.W.3d 559, 563 (Tenn. Ct. App. 2001). “In Tennessee, there are two types of writs of certiorari: (1) the common law writ, codified at [Tennessee Code Annotated Section] 27-8-101, and (2) the statutory writ, codified at [Tennessee Code Annotated Section 27-8-102].” See Admin. Res., Inc., v. Tenn. Dep’t of Commerce, No. M2010-01199-COA-R3-CV, 2011 WL 2176387, at *5 (Tenn. Ct. App. June 2, 2011).

“The basic purpose of the common law writ of certiorari is to curb ‘illegal’ actions by the inferior tribunal, while the basic purpose of the statutory writ is to correct mistakes and errors of inferior tribunals.” See Lawrence A. Pivnick, Tenn. Cir. Ct. Prac. §3:13 (2017). The common law writ of certiorari is available “where an inferior tribunal, board, or officer, exercising judicial functions has exceeded the jurisdiction conferred, or is acting illegally, when, in the judgment of the court, there is no other plain, speedy, or adequate remedy.” Tenn. Code Ann. § 27-8-101. A common law writ of certiorari is not available as a matter of right, and the petition for a writ is addressed to the Chancery Court’s discretion. Heyne v. Metro. Nashville Bd. of Public Educ., 380 S.W.3d 715, 729– 30 (Tenn. 2012) (citations omitted). When a court issues a common law writ of certiorari, the record of the inferior tribunal is brought before the court to determine whether the inferior tribunal proceeded according to the applicable law. See Gore v. Tenn. Dep’t of Corr., 132 S.W.3d 369, 375 (Tenn. Ct. App. 2003). We have described the mechanics of the common law writ of certiorari as follows:

The issuance by the trial court of a writ of certiorari is not an adjudication of anything. It is neither a victory nor a defeat for the competing parties. It is simply a command by the trial court to the inferior tribunal or administrative agency to send the record made before the agency in the proceeding to the court for review of that record. Then the trial court upon review of the record made before the administrative tribunal will enter a judgment of either quashal or affirmance.

Id. (citing Conners v. City of Knoxville, 136 Tenn. 428, 189 S.W. 870, 872 (1916)). “The primary consequence of a determination that a party must seek judicial review through the common law writ of certiorari procedure is that the Chancery Court must apply a limited standard of review to decisions already made by administrative officials, rather than address the issue de novo as the initial decision maker.” State ex rel. Moore & Assoc’s, Inc. v. West, 246 S.W.3d 569, 574 (Tenn. Ct. App. 2005). The common law writ of certiorari does not allow a reviewing court to evaluate the intrinsic correctness of the lower tribunal’s decision. Id. at 377 (citing Yokley v. State, 632 S.W.2d 123, 126 (Tenn. Ct. App. 1981)).

On the other hand, “[t]he statutory writ of certiorari is authorized, in lieu of appeal, to correct errors of fact and law committed by an inferior tribunal,” and the Chancery Court may conduct a trial de novo. See Boyce v. Williams, 389 S.W.2d 272, 276 (Tenn. 1965). Tennessee Code Annotated Section 27-8-102 provides that the statutory writ of certiorari is available in five instances: “(1) [o]n suggestion of diminution; (2) [w]here no appeal is given; (3) [a]s a substitute for appeal;15 (4) [i]nstead of audita querela;16 or (5) [i]instead of a writ of error.” In the absence of a statute expressly granting review under Tennessee Code Annotated Section 27-8-102,17 the statutory writ is only available to review a lower tribunal’s decision when the following three requirements are met: “(1) the order of the administrative body of which review is sought is one for which no judicial review is provided; (2) the function performed by the lower tribunal is essentially judicial in nature; and (3) the order for which review is