Joe v. Williams v. Dennis Epperson ( 2020 )

02/27/2020
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
October 17, 2019 Session
JOE V. WILLIAMS v. DENNIS EPPERSON ET AL.
Appeal from the Chancery Court for Bradley County
No. 2017-CV-306 Jerri S. Bryant, Chancellor
No. E2019-00319-COA-R3-CV
This case involves an appeal to the Bradley County Chancery Court (“trial court”) of an
administrative decision by the Building Board of Adjustment and Appeals for the City of
Cleveland (“the Board”) to uphold the City of Cleveland’s chief building official’s
decision to condemn and order the demolition of a commercial building. Upon a notice
of condemnation issued by the chief building official based on the allegedly dilapidated
and unsafe condition of the building, the building’s owner appealed to the Board.
Following a hearing, the Board upheld the condemnation and demolition order. The
owner then filed a petition for writ of certiorari with the trial court, requesting, inter alia,
that the demolition order be vacated. Following a hearing, the trial court found that the
Board’s decision had been supported by substantial and material evidence and
accordingly upheld the Board’s affirmance of the condemnation and demolition order.
The owner filed a motion to alter or amend the judgment, which the trial court denied.
The owner timely appealed to this Court. Discerning no reversible error, we affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed; Case Remanded
THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which D. MICHAEL
SWINEY, C.J., and JOHN W. MCCLARTY, J., joined.
James R. McKoon and McLean A. Stohler, Chattanooga, Tennessee, for the appellant,
Joe V. Williams.
Stacy Lynn Archer, Philip Aaron Wells, and Ronald D. Wells, Chattanooga, Tennessee,
for the appellees, Dennis Epperson, Donald Humes, Chris Lyles, Jim Williams, Dennis
Norman, Lisa Stanbery, Chad Dean, Dustin Hawkins, each in his or her official capacity
as a member of the Building Board of Adjustment and Appeals for the City of Cleveland,
Tennessee; Bryan Turner, in his capacity as Chief Building Official of the City of
Cleveland; and the City of Cleveland, Tennessee.
OPINION
I. Factual and Procedural Background
The petitioner, Joe V. Williams (“Petitioner”), is the owner of improved real
property located at 80 Church Street, Northeast, in Cleveland, Tennessee (“the
Property”). According to Petitioner, the building situated on the Property (“the
Building”) was constructed between 1900 and 1905 and had in the past, among other
uses, served as the Tennessee National Guard Armory and as an office building for the
State of Tennessee. This appeal arose from a “Notice of Condemnation No Repair
Possible” issued by Bryan Turner, as the City of Cleveland’s Chief Building Official
(“Official Turner”), on August 30, 2017.
In the notice, Official Turner stated that “the commercial building is so
dilapidated, and has become so out of repair as to be dangerous, unsafe, unsanitary or
otherwise unfit for human habitation or occupancy, to the extent that it is unreasonable to
repair the structure.” The notice included an order that “the structure must be demolished
and removed by the end of business day October 31, 2017.” It also included instructions
for exercising a right to appeal the notice with the Board. Petitioner timely appealed to
the Board.
The Board conducted a hearing on October 3, 2017, during which Petitioner
testified and presented, inter alia, a “Structural Report” that had been completed by a
structural engineer with A G Engineering, LLC, on September 25, 2017. The report
delineated “measures necessary for rehabilitation of the building” that needed to be
completed on the foundation, main floor, second floor, and roof. The structural engineer
concluded the report by stating: “The building will be structurally inhabitable when
decayed wood structural floor elements are removed and replaced and proper drainage is
established. Door and window openings must be functional and capable of being sealed.”
On October 12, 2017, the Board issued a ruling upholding Official Turner’s
decision to condemn the Building with no repair possible and order its demolition. As
criteria for the decision, both Official Turner in the notice of condemnation and the Board
in its ruling cited City of Cleveland Municipal Code (“Municipal Code”) § 13-305(2),
which provides in pertinent part that “[i]f the repair, alteration or improvement of the
structure cannot be made at a reasonable cost in relation to the value of the structure (not
to exceed fifty percent [50%] of the value of the premises),” an order may be issued
“requiring the owner, within the time specified in the order, to remove or demolish such
structure.”
2
In its ruling, the Board found the following with respect to the background of the
Property:
The property was initially inspected by Codes Enforcement Officer
Allen Johnson on 8/5/2015 who gave notice to [Petitioner] on 8/25/2015.
City of Cleveland Fire Inspector Mika Vaughn, during a routine annual fire
inspection, in or around 2/9/2016, established concerns for the structural
integrity and fire loading of the building and it was then submitted to
[Official Turner]. A case regarding the building was established by
[Official Turner] on 3/7/2016. The condition of the property was
documented through photographs.
Upon investigation, [Official Turner] reviewed the findings and
determined that the structural stability of the building was in question and
met with [Petitioner] on 3/15/2016, to discuss his plan of action. It was
determined, at this time, the building would be designated Condemned with
Repair Possible.
After a year of continued non-compliance with established goals in
regard to the adopted building code and procedures, Citation 00251 was
issued to Municipal Court on 3/2/2017, resulting in multiple court dates
through 9/21/2017.
On 8/16/2017, a pane of glass fell from the 2nd story of the building
onto the public sidewalk. This prompted [Official Turner] to close the
sidewalk in front of the building and re-examine the condemnation status.
At this time, it was [Official Turner’s] determination the building
constituted a threat to public safety, the status changed to Condemnation
with No Repair Possible, and [Petitioner] was given notice of 10 days to
begin work in earnest to stabilize the structure.
On 08/30/2017, after non-compliance with the notice of 8/16/2016, a
Notice of Condemnation with No Repair Possible, requiring demolition,
was served on [Petitioner].
On 9/17/2017, [Official Turner] was alerted the side door to the
building was laying on the sidewalk and the building was unsecured.
[Official Turner], with assistance from Public Works, put the door back in
place and secured the door to the frame. [Official Turner] determined the
facades of the building were unstable and the condition of the building was
dangerous. [Petitioner] was given notice.
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On 9/21/2017, [City of Cleveland Municipal Court] Judge Barret
Painter was updated that the status of the building had changed to
Condemnation with No Repair Possible which would continue under a new
administrative process of which [Petitioner] could appeal through an
established procedure for that designation. Citation 00251 was closed and a
remedial fine for continued non-compliance was imposed of $4,850.00,
plus court costs.
(Internal citations to record omitted.)
The above facts, as summarized in the Board’s findings, are essentially undisputed
except that concerning the year of what the Board termed “continued non-compliance”
from March 2016 to March 2017, Petitioner maintained before the Board that he had
made several attempts to comply with established goals for repair of the Building.
During the Board hearing, Petitioner presented an invoice dated August 11, 2017, from
his contractor, Raines Brothers, Inc. (“Raines Brothers”), in the amount of $53,818.26 for
repairs purportedly completed to the Building. Petitioner acknowledged, however, that
he had retained Raines Brothers to work on other projects as well and that a delay in
another project had delayed work on the Building. Official Turner’s records, also
presented to the Board, reflected that when Petitioner appeared before the Cleveland
Municipal Court in July 2017, a representative from Raines Brothers also appeared and
stated that Raines Brothers would not complete work on the Building until it had been
paid by Petitioner for work already completed. During the Board hearing, Petitioner
stated that the delay in payment to Raines Brothers was due to a delay in obtaining a loan
and that he had since paid Raines Brothers in full. He acknowledged, however, that the
roofing repairs on the Building had not yet been completed.
In concluding that Official Turner’s decision should be upheld, the Board found in
its ruling:
Members of the board assert that the engineer’s report provided by
[Petitioner] during the meeting would indicate the building is structurally
unsound, and the costs to repair would exceed 50% of the value of the
structure. The applicant was given substantial time to repair the building
and failed to do so over the course of two years, as indicated by the case
notes.
(Internal citation to record omitted.)
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As to the Property’s value, it is undisputed that when Official Turner sent notice to
Petitioner on August 17, 2017, concerning the pane of glass that had fallen and ordered
that “work must begin in earnest to stabilize the structure of the building within 10 days,”
he attached an “Unofficial Property Report Card” for the Property that included a
“Current Property Assessment.” This property assessment reflected a Building value of
$60,900.00 and land value of $39,600.00, for a total valuation of the Property at
$101,000.00.1 It is undisputed that this property assessment was originally completed for
the purposes of determining property tax (“Tax Assessment”).
During the Board hearing, Petitioner testified that the Property should be valued at
approximately $400,000.00 based on his assertion that “[t]he market value in downtown
Cleveland [was] running between $30 and $40 dollars per [square foot].” The undisputed
square footage of the Building was 9,440. As the trial court noted in its final order, the
Property would have a reasonable market value of $377,600.00 at the upper end of
Petitioner’s estimate of $40.00 per square foot. Petitioner testified that he had been given
an estimate for the cost of needed structural repairs to the Building in the amount of
$200,000.00 but that he believed the cost of repairs could be as low as $150,000.00.
On October 3, 2017, Petitioner filed a petition for writ of certiorari in the trial
court, naming as respondents Official Turner; the City of Cleveland; and Dennis
Epperson, Donald Humes, Chris Lyles, Jim Williams, Dennis Norman, Lisa Stanbery,
Chad Dean, and Dustin Hawkins “each in their official capacity as members of [the
Board]” (collectively, “Respondents”). Petitioner requested, inter alia, that the trial court
vacate the Board’s ruling upholding Official Turner’s order to demolish the Building.2
Petitioner also sought a temporary restraining order or injunction to prevent the
demolition of the Building during the proceedings. The trial court entered two successive
temporary restraining orders and ultimately an “Extended Restraining Order,” entered on
April 16, 2018, restraining Respondents from “razing or demolishing the property at issue
in this matter, including any structures thereon, or attempting to enforce its prior
1
We note that the total value of the Property, as stated in the Tax Assessment, represents a rounding up to
$101,000.00 from $100,500.00.
2
In addition, Petitioner claimed violation of his due process rights and property rights under the United
States and Tennessee Constitutions. Pursuant to his federal constitutional claims, Petitioner requested a
jury trial and attorney’s fees pursuant to 42 United States Code § 1988. In an agreed order entered on
December 13, 2017, the trial court dismissed Petitioner’s federal constitutional claims without prejudice,
noting that the parties were at that time engaged in settlement negotiations and that the window of time
for Respondents to file a notice of removal to federal court was closing. Although in the agreed order the
trial court expressly gave Petitioner permission “[s]hould settlement negotiations between the parties
cease” to “amend his Petition to reassert his claim for violation of due process pursuant to the Fifth and
Fourteenth Amendments of the United States Constitution,” no amended petition appears in the record.
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condemnation order so as to require Petitioner to raze or demolish the property until
further Order of this Court.”
In response to the petition for writ of certiorari, Respondents filed a motion on
June 14, 2018, requesting that the trial court either set the matter for hearing or issue a
ruling based on the administrative record. Respondents attached to their motion a brief
and additional exhibits from the administrative record. In their brief, Respondents
asserted that the Board’s decision had not been “arbitrary, capricious or illegal” and that
“[t]he record contains substantial and material evidence that the cost of repairs was
disproportionate to the building’s value under [Municipal Code] Section 13-305.”
Respondents also asserted that “the Board’s consideration of [Petitioner’s] lack of
diligence in undertaking structural repairs in the two years preceding the issuance of the
demolition order was proper, as the building poses a threat to public health and safety.”
Respondents requested that the trial court deny Petitioner’s request for a continued
injunction because “the building in its current state, and at the time of the hearing before
the Board, constitutes a threat to public health and safety.”
Following a hearing conducted on August 29, 2018, the trial court entered an order
on October 10, 2018, upholding the Board’s decision and denying Petitioner’s request for
an injunction. The trial court found the factual background preceding the issuance of the
notice of condemnation without possibility of repair to be essentially as the Board had
found. In dismissing the appeal, the trial court concluded in pertinent part:
After review of the transcript of the proceeding in this record, as well as the
pleadings and attachments, the Court finds there is material evidence to
support the [Board’s] decision. This Court finds the record contains
substantial and material evidence to support the Board’s decision to uphold
the notice of condemnation no repair possible by order of [Official] Turner
on or about August 30, 2017 (the demolition order). The Court does not
find the demolition order was arbitrary, capricious, or illegal and the
injunction requested by Petitioner is hereby DENIED.
***
According to the 2017 tax assessment for the property, the value of the
building was $60,900 which when added to the value of the land indicated a
total assessed value of $101,000. Petitioner admitted during the hearing the
cost to restore the structural integrity of the building would be between
$150,000 and $200,000. Based on the fact that Petitioner had been given
over two (2) years to remedy the defects in this building and Petitioner
remaining non-compliant, and upon the reliance of the engineer reports
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provided by Petitioner at the October 3, 2017 hearing and the estimated
costs of the repair would exceed 50% of the value of the structure, the
Board upheld the demolition order.
Petitioner filed a timely Tennessee Rule of Civil Procedure 59.04 motion to alter
or amend the judgment, arguing that the trial court had erred by (1) upholding the
Board’s consideration of delays in Petitioner’s repairs to the Property, (2) upholding the
Board’s consideration of the Tax Assessment as evidence of the Property’s value, (3)
declining to consider the Board’s unwillingness to accept Petitioner’s testimony as to the
value of the Property, and (4) declining to consider the Board’s purported willingness to
sell the Property to a third party. Respondents filed a response objecting to the motion to
alter or amend.
Following a hearing, the trial court entered an order on January 16, 2019,
confirming its affirmance of the Board’s decision but granting Petitioner’s motion to alter
or amend insofar as the trial court clarified some elements of what had occurred during
the Board hearing. Specifically, the trial court clarified, inter alia, that Respondents had
“concede[d] that Petitioner was not prosecuted under any ordinance other than the basis
of the cost to repair.” As to the evidence of the Property’s value, the trial court noted that
the Tax Assessment “was part of the notice given to Petitioner” and had “not [been]
objected to at the hearing” and that “Petitioner came in with his own opinion that the
value of the property was $377,600 and the cost of repair was up to $200,000.” The trial
court again concluded that there was “material evidence in the record to support the
decision of the [Board].” Petitioner timely appealed to this Court.
II. Issues Presented
Petitioner presents four evidentiary sub-issues within what we determine to be the
overarching, dispositive issue, which we have restated as follows:
Whether the trial court erred by determining that the Board’s decision to
uphold the demolition order was supported by substantial and material
evidence.
We restate and reorder the evidentiary sub-issues raised by Petitioner as follows:
A. Whether the trial court erred by considering evidence regarding
Petitioner’s delays in repairing the Building as a basis to authorize
demolition under Municipal Code § 13-305.
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B. Whether the trial court erred by declining to find that the Board had
erred by considering the Tax Assessment as evidence of the
Property’s value.
C. Whether the trial court erred by declining to find that that the Board
had failed to properly consider Petitioner’s testimony as to the value
of the Property.
D. Whether the trial court erred by declining to find that the Board’s
consideration of allowing a third-party successor owner to repair the
Building was evidence that the cost of repairing the Building did not
exceed fifty percent of the Property’s value, thereby rendering the
Board’s affirmance of the condemnation to be arbitrary and
capricious.
III. Standard of Review
Petitioner is appealing the trial court’s affirmance of the Board’s decision to
uphold Official Turner’s condemnation of and order to demolish the Building. The trial
court properly reviewed the Board’s decision according to the standard for common law
writ of certiorari. As this Court has explained:
Once a structure has been declared unfit for human occupation or
use, an owner may seek judicial review of the Board’s decision by filing a
petition for common law writ of certiorari. McCallen v. City of Memphis,
786 S.W.2d 633, 639 (Tenn. 1990). A common law writ of certiorari
provides quite limited judicial review. Willis v. Tennessee Dep’t of Corr.,
113 S.W.3d 706, 712 (Tenn. 2003). The scope of this review goes no
further than determining whether the administrative body “exceeded its
jurisdiction; followed an unlawful procedure; acted illegally, arbitrarily, or
fraudulently; or acted without material evidence to support its decision.”
Lafferty v. City of Winchester, 46 S.W.3d 752, 758-59 (Tenn. Ct. App.
2000) (citations omitted).
Levitt v. City of Oak Ridge, No. E2011-02732-COA-R3-CV, 2012 WL 5328248, at *2
(Tenn. Ct. App. Oct. 30, 2012).
An issue concerning the evidentiary foundation of an administrative board’s
decision presents a question of law. Gulley v. Robertson Cty. Planning & Zoning
Comm’n, No. M2015-00734-COA-R3-CV, 2016 WL 2898478, at *2 (Tenn. Ct. App.
8
May 12, 2016) (citing Lafferty v. City of Winchester, 46 S.W.3d 752, 759 (Tenn. Ct. App.
2000)). Concerning the applicable material evidence standard, this Court has explained:
“[M]aterial evidence” is relevant evidence that a reasonable person would
accept as adequate to support a rational conclusion. Hedgepath v. Norton,
839 S.W.2d 416, 421 (Tenn. Ct. App. 1992). The amount of material
evidence required to support an agency’s decision “must exceed a scintilla
of evidence but may be less than a preponderance of the evidence.”
Leonard Plating Co. [v. Metro. Gov’t of Nashville & Davidson Cty.], 213
S.W.3d [898,] 904 [(Tenn. Ct. App. 2006)]. Because the sufficiency of the
material evidence in a common law writ of certiorari proceeding is a
question of law, the courts must review the record de novo without
presuming that the findings are correct. Lafferty v. City of Winchester, 46
S.W.3d 752, 759 (Tenn. Ct. App. 2000).
Kaplow v. City of Gatlinburg Bd. of Adjustments & Appeals, No. E2014-00347-COA-R3-
CV, 2015 WL 3964212, at *4 (Tenn. Ct. App. June 30, 2015).
This case requires us to interpret the language of a municipal ordinance.
“Interpreting statutes, procedural rules, and local ordinances involves questions of law,
which appellate courts review de novo without a presumption of correctness.” City of
Jackson v. Walker, No. W2015-00621-COA-R3-CV, 2016 WL 384999, at *2 (Tenn. Ct.
App. Feb. 2, 2016) (citing Shore v. Maple Lane Farms, LLC, 411 S.W.3d 405, 414
(Tenn. 2013)). Our Supreme Court has summarized the principles involved in statutory
construction as follows:
When dealing with statutory interpretation, well-defined precepts apply.
Our primary objective is to carry out legislative intent without broadening
or restricting the statute beyond its intended scope. Houghton v. Aramark
Educ. Res., Inc., 90 S.W.3d 676, 678 (Tenn. 2002). In construing
legislative enactments, we presume that every word in a statute has
meaning and purpose and should be given full effect if the obvious
intention of the General Assembly is not violated by so doing. In re
C.K.G., 173 S.W.3d 714, 722 (Tenn. 2005). When a statute is clear, we
apply the plain meaning without complicating the task. Eastman Chem.
Co. v. Johnson, 151 S.W.3d 503, 507 (Tenn. 2004). Our obligation is
simply to enforce the written language. Abels ex rel. Hunt v. Genie Indus.,
Inc., 202 S.W.3d 99, 102 (Tenn. 2006). It is only when a statute is
ambiguous that we may reference the broader statutory scheme, the history
of the legislation, or other sources. Parks v. Tenn. Mun. League Risk
Mgmt. Pool, 974 S.W.2d 677, 679 (Tenn. 1998). Further, the language of a
9
statute cannot be considered in a vacuum, but “should be construed, if
practicable, so that its component parts are consistent and reasonable.”
Marsh v. Henderson, 221 Tenn. 42, 424 S.W.2d 193, 196 (1968). Any
interpretation of the statute that “would render one section of the act
repugnant to another” should be avoided. Tenn. Elec. Power Co. v. City of
Chattanooga, 172 Tenn. 505, 114 S.W.2d 441, 444 (1937). We also must
presume that the General Assembly was aware of any prior enactments at
the time the legislation passed. Owens v. State, 908 S.W.2d 923, 926
(Tenn. 1995).
In re Estate of Tanner, 295 S.W.3d 610, 613-14 (Tenn. 2009).
IV. Affirmance of Demolition Order
In amending its final order, the trial court noted the Board’s concession that it had
not sought the condemnation and demolition of the Building “under any ordinance other
than the basis of the cost to repair.” Petitioner asserts that in affirming Official Turner’s
decision concerning the Building, the Board, and in turn the trial court, erroneously
considered Petitioner’s delays in repairing the Building rather than confining the basis for
its ruling to the value of and the cost to repair the Building. Upon careful review, we
determine that regardless of whether the Board considered Petitioner’s delays in repairing
the Building, the totality of the evidence presented concerning value and cost of repair,
including the evidence presented by Petitioner, demonstrated that the cost of repairing the
Building would have been greater than 50% of the Property’s value. Therefore, pursuant
to Municipal Code § 13-305, the Board’s decision to uphold the Building’s condemnation
was not arbitrary or capricious because it was supported by substantial and material
evidence concerning value and cost of repair.
Municipal Code § 13-305, as it was quoted by Official Turner in notices to
Petitioner, in the Board’s ruling, and in Respondents’ pleadings before the trial court,
provides the following for the basis of a repair, alteration, improvement, or demolition
order:
(1) If the repair, alteration or improvement of the structure can be made
at a reasonable cost in relation to the value of the structure (not
exceeding fifty percent [50%] of the reasonable value), requiring the
owner, during the time specified in the order, to repair, alter, or
improve such structure to render it fit for human occupancy or use or
to vacate and close the structure as a place of human occupancy or
use; or
10
(2) If the repair, alteration or improvement of the structure cannot be
made at a reasonable cost in relation to the value of the structure (not
to exceed fifty percent [50%] of the value of the premises), requiring
the owner, within the time specified in the order, to remove or
demolish such structure.
At the outset, we note that no copy of the Municipal Code is included in the record
and that we must therefore confine our application of the Municipal Code to § 13-305 as
it appears in the record. See Tenn. R. Evid. 202(b) (providing that optional judicial
notice of law may be taken of municipal ordinances only upon a party’s request and
reasonable notice to adverse parties); 411 P’ship v. Knox Cty., 372 S.W.3d 582, 587-88
(Tenn. Ct. App. 2011). We also note that the substantive language of Municipal Code §
13-305 mirrors that of Tennessee Code Annotated § 13-21-103(3) (2019), codified as part
of Tennessee’s Slum Clearance and Redevelopment Act (“SCRA”). See Tenn. Code
Ann. § 13-21-101 (2019) et seq. Regarding the SCRA, this Court has recently explained:
As this Court has noted in the past, Tennessee’s Slum Clearance and
Redevelopment Act
confers upon municipalities the power “to exercise its police
powers to repair, close or demolish” structures that are unfit
for human occupation or use. Tenn. Code Ann. § 13-21-
102(a). It authorizes municipalities to adopt ordinances
relating to the structures within the municipality that are unfit
for human occupation or use. Tenn. Code Ann. § 13-21-103.
The municipality is directed to designate or appoint a public
officer to exercise the powers prescribed by the ordinances.
Tenn. Code Ann. § 13-21-103(1). The Act provides that the
designated public officer can serve complaints, hold hearings,
and determine structures to be unfit for human occupation and
use . . . . Tenn. Code Ann. § 13-21-103(2), (3).
By passing the Slum Clearance and Redevelopment
Act, “the legislature provided a method for municipalities to
order the demolition of a building found unfit for human
habitation.” Manning v. City of Lebanon, 124 S.W.3d 562,
565 (Tenn. Ct. App. 2003) (citing Winters v. Sawyer, 225
Tenn. 113, 463 S.W.2d 705 (1971)).
City of Jackson v. Walker, No. W2015-00621-COA-R3-CV, 2016 WL
384999, at *3 (Tenn. Ct. App. Feb. 2, 2016).
11
Under the pertinent statutory scheme, once a structure is determined
to be unfit for human occupation or use, its potential fate is dependent on
the cost required to repair, alter, or improve it. Indeed, Tennessee Code
Annotated section 13-21-103(3) specifically provides as follows:
(3) If, after such notice and hearing, the public officer
determines that the structure under consideration is
unfit for human occupation or use, the public officer
shall state in writing the public officer’s findings of
fact in support of such determination and shall issue
and cause to be served upon the owner thereof an
order:
(A) If the repair, alteration or improvement of the
structure can be made at a reasonable cost in
relation to the value of the structure (the
ordinance of the municipality may fix a certain
percentage of such cost as being reasonable for
such purpose), requiring the owner, within the
time specified in the order, to repair, alter or
improve such structure to render it fit for human
occupation or use or to vacate and close the
structure as a place of human occupation or use;
or
(B) If the repair, alteration or improvement of the
structure cannot be made at a reasonable cost in
relation to the value of the structure (the
ordinance of the municipality may fix a certain
percentage of such cost as being reasonable for
such purpose), requiring the owner, within the
time specified in the order, to remove or
demolish such structure[.]
Tenn. Code Ann. § 13-21-103(3).
PMFS H-View I, LLC v. Metro. Gov’t of Nashville & Davidson Cty., No. M2018-01806-
COA-R3-CV, 2019 WL 4727302, at *2-3 (Tenn. Ct. App. Sept. 26, 2019) (emphasis
added). As the analog to Tennessee Code Annotated § 13-21-103(3)(B), Municipal Code
§ 13-305(2) fixes the relevant percentage as “not to exceed fifty percent [50%] of the
12
value of the premises.” See, e.g., PMFS H-View I, 2019 WL 4727302, at *3 (noting that
in a case involving the “municipal analog adopted by Metro [Government of Nashville
and Davidson County], the relevant percentage fixed pursuant to this [statutory] provision
is 50%” of the structure’s value).
Petitioner takes issue with Respondents’ partial reliance on appeal on the SCRA as
an explanation of the “police power” employed by the City of Cleveland, through Official
Turner and the Board, in condemning and ordering the demolition of the Building.
Tennessee Code Annotated § 13-21-102(a) (2019) provides in full:
Whenever any municipality of this state finds that there exists in such
municipality structures which are unfit for human occupation or use due to
dilapidation, defects increasing the hazards of fire, accident or other
calamities, lack of ventilation, light or sanitary facilities, or due to other
conditions rendering such structures unsafe or unsanitary, or dangerous or
detrimental to the health, safety or morals, or otherwise inimical to the
welfare of the residents of such municipality, power is hereby conferred
upon such municipality to exercise its police powers to repair, close or
demolish the aforementioned structure in the manner herein provided.
In contrast to municipal ordinances, we take mandatory judicial notice of the SCRA as
the state statutory scheme enabling municipalities to enact ordinances exercising their
“police powers to repair, close or demolish” structures that are “unfit for human
occupation or use.” See id.; see also Tenn. R. Evid. 202(a) (providing that courts shall
take mandatory judicial notice of, inter alia, “the constitutions and statutes of the United
States and of every state, territory, and other jurisdiction of the United States”). Contrary
to Petitioner’s assertion, we do not find that by citing to this enabling statute as the
General Assembly’s authorization for Municipal Code § 13-305, Respondents have
improperly raised an argument not raised before the trial court.
In its written ruling upholding Official Turner’s decision, the Board concluded:
Members of the board assert that the engineer’s report provided by
[Petitioner] during the meeting would indicate the building is structurally
unsound, and the costs to repair would exceed 50% of the value of the
structure. The applicant was given substantial time to repair the building
and failed to do so over the course of two years, as indicated by the case
notes.
(Internal citation to record omitted.) In upholding the Board’s decision, the trial court
initially concluded in its October 18, 2018 order:
13
According to the 2017 tax assessment for the property, the value of the
building was $60,900 which when added to the value of the land indicated a
total assessed value of $101.000. Petitioner admitted during the hearing the
cost to restore the structural integrity of the building would be between
$150,000 and $200,000. Based on the fact that Petitioner had been given
over two (2) years to remedy the defects in this building and Petitioner
remaining non-compliant, and upon the reliance of the engineer reports
provided by Petitioner at the October 3, 2017 hearing and the estimated
costs of the repair would exceed 50% of the value of the structure, the
Board upheld the demolition order.
In subsequently confirming its affirmance of the Board’s decision upon
Petitioner’s motion to alter or amend, the trial court clarified in its final order:
[Respondents] concede[] that Petitioner was not prosecuted under any
ordinance other than the basis of the cost to repair. They further concede
that Exhibit 12, the tax assessment, was part of the notice given to
Petitioner. It was not objected to at the hearing. Petitioner came in with his
own opinion that the value of the property was $377,600 and the cost of
repair was up to $200,000. Additionally, the Board relied on photos
presented by [Respondents] to come to its own conclusion. This is
information that supports the Board’s decision that the cost to repair is
more than 50% of the value of the structure. This is material evidence in
the record to support the decision of the [Board].
We determine that although the trial court noted the Board’s findings that
Petitioner had delayed in repairing the Building, the trial court ultimately concluded that
the Board’s finding that the cost to repair the Building was more than 50% of its value
was aligned with the Board’s prosecution of the action under Municipal Code § 13-305.
We therefore determine Petitioner’s argument that the Board and the trial court
impermissibly considered Petitioner’s delays in repairing the Building to be unavailing.
The dispositive issue before this Court is whether the trial court properly determined that
the Board’s finding as to the cost of repair versus value was supported by substantial and
material evidence.
We begin our analysis of the evidence concerning cost of repair versus value by
noting some confusion in the record regarding whether Municipal Code § 13-305(2)
requires that the building code official’s decision to condemn and order demolition of a
structure be based on the cost of repair not exceeding 50% of the reasonable value of the
structure (here, the Building) or of the “premises.” In his pleadings before the trial court
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and in his appellate brief, Petitioner has cited the relevant parenthetical explanation in §
13-305(2) as stating, “not exceeding fifty percent [50%] of the reasonable value” of the
structure, rather than “not to exceed fifty percent [50%] of the value of the premises” as
the subsection is quoted by Respondents in their pleadings. Again, we have not been
provided with the original text of the Municipal Code. However, upon noting that
Official Turner’s original notices to Petitioner and the Board’s ruling quoted the
subsection as stating, “not to exceed fifty percent [50%] of the value of the premises,” we
will treat this as the official language of Municipal Code § 13-305(2) for purposes of this
analysis.
Throughout their arguments on appeal, the parties have intermixed discussion of
the Building’s value with discussion of the Property’s value. The SCRA defines a
“structure” as “any dwelling or place of public accommodation or vacant building or
structure suitable as a dwelling or place of public accommodation.” Tenn. Code Ann. §
13-21-101(9). It is undisputed in this case that the “structure” at issue is the Building.
However, the term, “premises,” is not defined in the SCRA, and its definition has not
been addressed by either party. As relevant to this situation, Black’s Law Dictionary
defines “premises” as “[a] house or building, along with its grounds.” BLACK’S LAW
DICTIONARY 1219 (8th ed. 2004). As a contrasting example, the comparable municipal
code section at issue in Harless v. City of Kingsport, No. 03A01-9707-CH-00289, 1998
WL 131519, at *3 (Tenn. Ct. App. Mar. 25, 1998), expressly stated: “The building
official shall determine the value of the structure in question existing on the land and the
value of the land itself shall not be considered . . . .” (emphasis added). Applying the
plain language of Municipal Code § 13-305(2) in this case, we determine that the value to
be measured against the cost of repair of the Building is the value of the premises, or the
Property as a whole. See In re Estate of Tanner, 295 S.W.3d at 614 (“When a statute is
clear, we apply the plain meaning without complicating the task.” (citing Eastman Chem.
Co. v. Johnson, 151 S.W.3d 503, 507 (Tenn. 2004))).
The Board in its ruling found that “the costs to repair [the Building] would exceed
50% of the value of the structure.” However, the trial court, in both its October 18, 2018
order and amended final judgment, evaluated the evidence of valuation for the entire
premises (the Property), as well as the Building, and determined that substantial and
material evidence supported a finding that the cost to repair the Building would be more
than 50% of the reasonable value of the Property. Although not raised by Petitioner as an
issue on appeal, we find this discrepancy important to address in order to accurately
analyze whether the Board, and in turn the trial court, properly applied Municipal Code §
13-305(2). As more fully explained below, because we determine that substantial and
material evidence presented to the Board supported a finding that the cost to repair the
Building would be more than 50% of the reasonable value of the premises, we determine
the Board’s statement in its ruling that the cost of repair would exceed 50% of the
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Building’s value, rather than the premises’ value, to be harmless error. We further
determine that the trial court properly applied Municipal Code § 13-305(2) to examine
the evidence presented to the Board regarding the value of the premises.
Petitioner testified before the Board that he had been given an estimate by his
contractor that the repairs needed to restore the structural integrity of the Building would
cost approximately $200,000.00, although he also stated that he believed the actual
amount needed could be closer to $150,000.00. In the structural report presented by
Petitioner, the structural engineer stated the following:
This report is to certify that I undertook first-hand visual inspection of the
structure with the contractor to determine measures necessary for
rehabilitation of the building.
FOUNDATION / MAIN FLOOR
The building is constructed over a crawl space. Decayed floor joists are
evident. Damaged joists must be replaced to ensure long term satisfactory
performance and safe occupancy. Installation of stud wall framing for
support of floors will require placement of a footing alongside the inner
building perimeter, as needed.
SECOND FLOOR
Significant structural decay and water damage is evident, particularly in the
corners. New joists may be installed and supported by stud wall framing.
ROOF
An engineered truss system maintains the necessary pitch for adequate
drainage. Structural re-decking and resurfacing in TPO has recently been
undertaken.
The building will be structurally inhabitable when decayed wood structural
floor elements are removed and replaced and proper drainage is established.
Door and window openings must be functional and capable of being sealed.
Petitioner also presented a structural evaluation of the Building’s roof that had been
completed by a consultant in February 2016, purportedly to establish the repairs that
Petitioner had undertaken on the roof prior to the Board hearing. However, at the time of
the Board hearing, Petitioner acknowledged that the repairs to the roof were not
complete.
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Along with the case history of the actions taken regarding the Building, Official
Turner also presented photographs of the Building to the Board. While acknowledging
that he was not a structural engineer, Official Turner testified as follows concerning the
photographs and his observations of the Building:
[A]s I look at it, there appears to be a lot of bowing in the structure. When
you’re looking at some of the front, there are some piers and everything
that appears to bow out and I don’t know if any of the pictures show it but,
actually that back corner, uh yes, on page 18, that is that picture of that
back corner where that door fell off. . . . [T]hat whole section is black due
to water infiltration and this is after the roof has been replaced. It is just
that it has not been completed. There was water dripping out in that metal
header over the glass there on the day it rained and the door fell out in
September, so obviously water intrusion is still a major issue. There’s
cracks in the stucco that go through the stucco into the actual brick wall
itself, which is the structure, so there is obvious concern with the exterior
wall stability.
The trial court found that in addition to Petitioner’s testimony that the repairs
needed to the Building would cost between $150,000.00 and $200,000.00, including the
contractor’s estimate of $200,000.00, the Board members had been able “to come to
[their] own conclusion[s]” regarding the repairs needed based on the photographs
presented by Official Turner. We determine that substantial and material evidence
supported a finding that the cost of repairs to the Building would be in the upper end of
the range acknowledged by Petitioner, or $200,000.00. See, e.g., Hoover v. Metro. Bd. of
Hous. Appeals of Metro. Gov’t of Nashville & Davidson Cty., 936 S.W.2d 950, 954
(Tenn. Ct. App. 1996) (“The lists of necessary repairs and comprehensive pictorial
illustrations are sufficient to satisfy a reasonable person of the cost of repairs in relation
to the value of the property.”).
The evidence before the Board regarding the value of the Property was twofold.
First, during the Board hearing, Petitioner testified that “[t]he market value in downtown
Cleveland [was] running between $30 and $40 dollars per [square foot]” and that some
examples reflected a higher value. He asserted that estimating a value of $40.00 per
square foot would yield a value of $400,000.00 for the Property. However, as the trial
court ultimately found, considering the 9,440 square footage of the Building, the market
value for the Property at Petitioner’s estimate of $40.00 per square foot would have been
$377,600.00. Petitioner did not differentiate in his estimate between the value of the
Building and that of the Property, but given that he was referring to market value, he
appeared to be referring to the potential market value of the Property as a whole.
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Second, Official Turner’s August 17, 2017 notice to Petitioner included the
attached Tax Assessment. As the trial court noted, the August 17, 2017 notice, complete
with the Tax Assessment, was before the Board as part of Official Turner’s
documentation of the Property’s background. The Tax Assessment reflected a Building
value of $60,900.00 and land value of $39,600.00, for a total assessed value of the
Property at $101,000.00.
Petitioner contends that in weighing value against the cost of repair, the Board and
the trial court erroneously considered the Tax Assessment as evidence of the Property’s
value while not crediting Petitioner’s estimate of the Property’s value. He argues that the
Tax Assessment was not admissible as evidence of the Property’s value. As a threshold
matter, Respondents contend that Petitioner has waived this issue on appeal because he
did not object to the Tax Assessment’s admissibility during the Board hearing. In this
situation, we disagree.
As Petitioner points out, although the Tax Assessment was before the Board as
part of a set of documents presented by Official Turner and was undisputedly attached to
the August 17, 2017 notice issued to Petitioner, the Tax Assessment was not referred to
during the Board hearing by either Official Turner or any Board member. Moreover, as
Respondents note, “[t]he strict rules of evidence applied by the courts are not necessarily
applicable in hearings before administrative agencies.” Hoover, 936 S.W.2d at 954
(citing 73-A C.J.S. Pub. Admin. Law & Procedure § 125 p. 28.). Although an
evidentiary rule that is not invoked in an administrative proceeding may be regarded as
waived, see Hoover, 936 S.W.2d at 954 (citing 73-A C.J.S. Pub. Admin. Law &
Procedure § 125 p. 29 n.3), we do not find that Petitioner’s failure to object to the Tax
Assessment’s inclusion in a set of documents not referred to during the hearing rises to
the level of waiver of his issue concerning the Tax Assessment on appeal.
In support of his argument that the Tax Assessment was inadmissible as evidence
of the Property’s value, Petitioner relies on four state appellate decisions that involved
eminent domain for the principle that tax assessments are not to be considered as
evidence of property value in condemnation cases. See Wray v. Knoxville, L.F. & J.R.
Co., 82 S.W. 471, 475 (Tenn. 1904) (“It is said in Lewis on Eminent Domain, § 448, that
the assessment of property for taxation being made for other purposes, and not at the
instance of either party, and not usually at the market value of the property, is not
admissible as evidence of value in condemnation proceedings.”); W. Tenn. Power &
Light Co. v. Hughes, 15 Tenn. App. 37, 40-41 (Tenn. Ct. App. 1932) (quoting Wray, 82
S.W. at 475); Branham v. Metro. Gov’t of Nashville-Davidson Cty., No. M2015-00455-
COA-R3-CV, 2016 WL 4566095 (Tenn. Ct. App. Aug. 30, 2016) (“The reason tax
assessments are excluded from evidence in condemnation cases is because such
assessments are conducted for a purpose that is entirely different from establishing just
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compensation for public acquisition of private property and because the tax appraiser
uses a very different appraisal process for that purpose.” (quoting Knoxville Cmty. Dev.
Corp. v. Bailey, No. E2004-01659-COA-R3-CV, 2005 WL 1457750, at *4 (Tenn. Ct.
App. June 21, 2005)) (in turn quoting Wray, 82 S.W. at 475))); Knoxville Cmty. Dev.
Corp. v. Bailey, No. E2004-01659-COA-R3-CV, 2005 WL 1457750, at *1 (Tenn. Ct.
App. June 21, 2005) (determining in an eminent domain case that the trial court had erred
by instructing the jury members that “they could consider the tax assessment figures in
their valuation of the property”).
Respondents contend that this principle does not apply to cases such as the one at
bar that involve a municipality’s enforcement of its police power to condemn a building
as uninhabitable rather than a taking of private property by eminent domain. Upon
careful review, we agree with Respondents on this point. See generally, Winters v.
Sawyer, 463 S.W.2d 705, 707 (Tenn. 1971) (holding that an “ordinance enacted pursuant
to [the SCRA] falls squarely within the legitimate use of the police power.”).
Pursuant to the section of the SCRA corresponding to Municipal Code 13-305(2),
“the ordinance of the municipality may fix a certain percentage of such cost as being
reasonable for such purpose” of determining that “the repair, alteration or improvement
of the structure cannot be made at a reasonable cost in relation to the value of the
structure.” See Tenn. Code Ann. § 13-21-103(3)(B). In authorizing municipalities to
enact an ordinance fixing the percentage of the repair cost in relation to the value when
determining whether a structure should be demolished, the SCRA does not preclude
municipalities from considering property tax assessments as evidence of property values.
For example, in PMFS H-View I, this Court quoted the comparable ordinance enacted by
the Metropolitan Government of Nashville and Davidson County as follows:
If the repair, alteration, or improvement of such dwelling, structure, or
accessory dwelling or structure cannot be made at a cost not to exceed fifty
percent of the value of the dwelling or structure, requiring the owner within
the time specified in the order to remove or demolish such dwelling or
structure. For the purposes of this article, the value of the dwelling or
structure shall be assumed to be that established by the tax assessor’s
office.
PMFS H-View I, 2019 WL 4727302, at *3 (quoting Metro Code § 16.24.590(2))
(emphasis added; emphasis in PMFS H-View I omitted).
We emphasize, however, that in the instant action, Municipal Code § 13-305 does
not specify how the value of the premises is to be determined. Therefore, it was proper
for the Board and the trial court to consider the totality of the evidence presented to it,
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including Petitioner’s testimony and the Tax Assessment, in determining the Property’s
value. In its written findings, the Board summarized Petitioner’s testimony “that the cost
of repairs, in relation to the market value of the building, would not exceed 50%” and
also stated that the “tax assessor’s information for the property [was] included” as part of
an exhibit. The Board did not specify how it weighed the evidence in ultimately
determining that “the costs to repair would exceed 50% of the value of the structure.”
The trial court in its amended final order determined that the Board’s ruling had been
supported by material evidence because according to the totality of the evidence,
including Petitioner’s testimony concerning the cost of repairs and the value of the
Property, Official Turner’s testimony and photographs reflecting the condition of the
Building, and the Tax Assessment, the cost of repairs would have exceeded 50% of the
Property’s value.
We agree with the trial court. According to the tax assessment, even Petitioner’s
lowest estimate for the cost of repairs, $150,000.00, would have been nearly 150% of the
assessed value of the Property at $101,000.00. As noted above, however, we have
determined that substantial and material evidence supported a finding by the Board that
the cost of repairs would have been at least as high as the highest amount of Petitioner’s
estimate at $200,00.00, meaning that the cost to repair the Building would have been
nearly 200% of the Property’s value. Assuming, arguendo, that Petitioner’s testimony
concerning the Property’s value was the more accurate estimate, even at his highest
estimate of $377,600.00, the $200,000.00 cost of repairs would have represented more
than 50% of the Property’s value. The trial court did not err in determining that the
Board’s decision to condemn and order the demolition of the Building, pursuant to
Municipal Code § 13-305, was supported by substantial and material evidence.
V. Remaining Issue
Petitioner also contends that the trial court erred by declining to find that a
discussion during the end of the Board hearing indicated that because some Board
members appeared willing to consider allowing a third-party successor owner to repair
the Building, the Board’s affirmance of the demolition order was not supported by
substantial and material evidence of the repair cost-value ratio and was therefore arbitrary
and capricious. Having determined that the trial court properly upheld the Board’s ruling
based on substantial and material evidence supporting a finding that the cost of necessary
repairs to the Building would have exceeded 50% of the Property’s value, pursuant to the
criteria set forth in Municipal Code § 13-305, we further determine this issue concerning
an ancillary discussion among Board members to be pretermitted as moot.
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VI. Conclusion
For the foregoing reasons, we affirm the trial court’s judgment upholding the
Board’s affirmance of the demolition order. We remand to the trial court for enforcement
of the judgment and collection of costs below. Costs on appeal are taxed to the appellant,
Joe V. Williams.
_________________________________
THOMAS R. FRIERSON, II, JUDGE
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