Fred H. Gillham v. City of Mt. Pleasant

Citation: Not availableDocket: M2010-02506-COA-R3-CV

Court: Court of Appeals of Tennessee; March 29, 2012; Tennessee; State Appellate Court

Original Court Document: View Document

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Fred H. Gillham, a residential property owner in Mt. Pleasant, Tennessee, contested the rezoning of 95.2 acres of land from agricultural to special impact industrial, which was sought by Tennessee Aluminum Processors, Inc. and Smelter Services Corporation to establish a landfill for salt cake, a byproduct of their smelting operations. Gillham argued that the planning and city commissions did not follow the proper procedures and claimed that two commissioners had conflicts of interest that invalidated the rezoning process.

The trial court dismissed Gillham's complaint, ruling that the planning and city commissions complied with the procedural requirements outlined in Tennessee Code Annotated sections 13-7-203(a) and 6-20-215. It also found no conflicts of interest as the two commissioners had no ownership interest in the rezoning applicants. Gillham appealed this dismissal.

The court affirmed the trial court's decision, maintaining that the rezoning process adhered to the necessary legal standards and that the alleged conflicts of interest were unfounded.

Richard Hendrix and Maury Colvett, the individual commissioners named as defendants, voted in favor of an ordinance related to the Mt. Pleasant Power System (MPPS). Derek Church, the MPPS general manager, authored a document on January 5, 2010, assessing the financial impact of losing electric sales to Tennessee Aluminum Processors (TAP) and Smelter Services Corporation. Church expressed concern over potential revenue loss from these major customers, stating it could lead to a 31% increase in electric rates for remaining customers unless new businesses were attracted to the area. He emphasized that the document was not an endorsement of any projects linked to these companies.

Hendrix, as Mayor and MPPS board member, along with Colvett, who works for MPPS and is also on the City Commission, faced allegations from Mr. Gillham. Gillham claimed Church's document was misleading and intended to manipulate public opinion to justify Hendrix and Colvett's votes in favor of a rezoning application. 

Additionally, Debbie McMullin, the City Manager and Chief Financial Officer, prepared a memorandum on January 20, 2010, addressing city officials regarding the landfill issue. She clarified her intent to provide factual information without influencing their votes, noting that while she did not predict TAP and Smelter Services would leave, their departure would result in a $30,000 loss in tax revenue, leading to a 5% tax increase for remaining taxpayers. Moreover, the loss of these companies would necessitate a 5% increase in water rates and a 2% increase in sewer rates to maintain the city's budget.

Ms. McMullin reported that TAP contributes $108,000 annually to the city’s gas revenue, and a 5% increase in gas rates for other customers would be necessary to offset this loss if TAP relocates from Mt. Pleasant. Mr. Gillham criticized Ms. McMullin's memorandum, claiming it served as a lobbying tool to instill fear regarding TAP and SS’s potential closure if the rezoning application was not approved, and suggested it was created at the behest of HENDRIX. He alleged conflicts of interest for HENDRIX and COLVETT, arguing that the City improperly aligned itself with the rezoning application benefitting private companies, despite public opposition. Gillham contended that Mr. Colvett’s position with the MPPS, under HENDRIX and Mr. Church, compromised the integrity of the rezoning advocacy. He claimed that the Planning and City Commissions violated procedural requirements by not reviewing the application according to the zoning ordinance and not holding a public hearing prior to the ordinance's first reading. Furthermore, Gillham asserted that there was no valid basis for the rezoning approval, citing unchanged scientific conditions since a similar application in 2007. The City of Mt. Pleasant, alongside the City and Planning Commissions, filed a joint motion to dismiss Mr. Gillham's complaint, arguing that he failed to state a claim for relief. Following a hearing, the trial court granted the motions and dismissed the complaint, affirming that the ordinance's adoption process adhered to legal requirements as per the City’s charter and state law.

An ordinance in Mt. Pleasant requires a majority vote for 'passage' on two separate dates, with at least a week's interval and 15 days' notice before a public hearing. The Plaintiff misinterprets 'passage' versus 'enactment' and challenges the ordinance's adoption process, which the court finds lacks merit. The Planning Commission’s vote against the rezoning application does not invalidate the City Commission's authority to approve it, as the final decision on zoning rests with the City Commission. The court concludes that the Plaintiff's legal arguments are incorrect, regardless of the truthfulness of the facts alleged. Furthermore, allegations regarding conflicts of interest involving Mayor Hendrix and Commissioner Colvett are deemed legally unfounded, as no direct interest in the property or the Property Owner Defendants is established. The power system, associated with both officials, does not constitute a conflict since it is owned by the City. The court emphasizes that it cannot question the City’s legislative decisions on zoning matters. The Plaintiff appeals the trial court's dismissal of his complaint, alleging errors in the court's rulings. The standards for reviewing motions to dismiss for legal sufficiency focus on the complaint itself, not the strength of the plaintiff’s case.

A complaint should not be dismissed under Rule 12.02(6) or Rule 12.03 unless it is clear that the plaintiff cannot prove any set of facts that would support their claim for relief. The moving party must accept the truth of the complaint's relevant factual allegations but argues that these do not constitute a valid cause of action. Courts are required to interpret the complaint liberally in favor of the plaintiff, treating all allegations as true and considering all reasonable inferences from the facts. On appeal, courts must also assume the truth of these allegations and review the lower court's legal conclusions regarding the complaint's adequacy without any presumption of correctness.

Mr. Gillham asserts that Section 8.400A of Mt. Pleasant’s zoning ordinance mandates a detailed review by the Planning Commission of TAP and Smelter Services’ rezoning application before any recommendation to the City Commission, whether favorable or unfavorable. He contends that the Commission's failure to conduct this review invalidates the City Commission’s adoption of Ordinance 2010-906. Section 8.400A requires an evaluation of the proposed use against site location criteria, but does not specify who should conduct the review, leading to the conclusion that the Planning Commission is typically responsible. Tennessee Code Annotated §13-7-204 stipulates that zoning applications must be submitted to the local planning commission prior to consideration by the City Commission. Additionally, several cases cited support the necessity of submitting zoning applications to a planning commission before they are adopted by a legislative body.

Mr. Gillham argues that the Planning Commission should have conducted a detailed review of the rezoning application before the City Commission could act. However, the cases cited do not specify the required review process. While Mr. Gillham’s complaint indicates that the Planning Commission considered the application and forwarded it with an unfavorable recommendation, it does not clarify the review procedure utilized. The court agrees with the trial court's finding that this procedural issue is irrelevant, as the Planning Commission’s negative recommendation does not prevent the City Commission from acting on the application per Tenn. Code Ann. §13-7-204, which allows the legislative body to override the Planning Commission's decision. The City Commission is authorized to enact zoning amendments, and accepting Mr. Gillham's argument would improperly empower the Planning Commission to obstruct the City Commission’s ability to consider zoning changes. 

Regarding the public hearing, Mr. Gillham acknowledges a public hearing was held on February 16, 2010, prior to the ordinance's enactment but claims a hearing was also required before the first reading on January 19. Tennessee Code Ann. §13-7-203(a) mandates a public hearing with 15 days' notice before a zoning amendment is enacted. The hearing conducted by the City Commission satisfies this requirement. Additionally, Tennessee Code Ann. §6-20-215 outlines specific ordinance procedures for local governments, applicable to Mt. Pleasant, which are consistent with §13-7-203(a) and establish that ordinances must be read on two separate days with a minimum of one week's interval between readings to be valid.

A city incorporated under chapters 18-22 may adopt an ordinance to allow reading only the caption of an ordinance during both readings, with copies available at the city recorder's office during business hours and at the second reading. An ordinance takes effect 15 days after its first passage unless designated as an emergency ordinance, which can take effect immediately if it specifies the emergency's nature and reasons. The City Commission's adherence to statutes regarding the adoption of a rezoning ordinance is affirmed, rejecting Mr. Gillham's claim that a public hearing is required before the first reading. The trial court confirmed that the procedures followed were adequate, clarifying that "passage" and "enactment" are distinct under the law. 

Mr. Gillham also alleges conflicts of interest involving Mayor Hendrix and Commissioner Colvett, asserting they should not have voted on the ordinance due to their public roles in the power system. However, he does not claim any personal or private interest in the rezoning outcomes for either official, nor do allegations suggest they would gain personally from it. The Tennessee Attorney General defines a conflict of interest as using public office for private gain at the public's expense. Mr. Gillham's allegations do not align with this definition, as they do not indicate personal gains or interests that would impair the officials' ability to serve the public effectively.

Mr. Gillham's objections pertain to potential conflicts of interest involving Mayor Hendrix and Commissioner Colvett related to the Mount Pleasant Power System (MPPS), a city entity. He points out that Mayor Hendrix serves on the MPPS board, while Commissioner Colvett is employed by MPPS. However, the analysis concludes there is no inherent conflict because elected officials are expected to prioritize the city's overall welfare. The Tennessee General Assembly acknowledges that city officials' personal interests, like municipal employment, could pose a conflict, particularly in voting on salary matters. Tennessee Code Annotated §6-20-205(b)(1) allows affected officials to vote after disclosing their conflict, which both Mayor Hendrix and Mr. Colvett did before voting on the ordinance in question.

Mr. Gillham particularly criticizes position papers prepared by MPPS General Manager Mr. Church and City Manager Debbie McMullin, claiming they improperly advocated for the TAP and Smelter Services rezoning application. The document refutes this assertion, noting that the memoranda do not support his claims and that Mayor Hendrix and Mr. Colvett were simply gathering necessary information for their decision-making responsibilities. It emphasizes that municipal officials taking positions on public interest issues is not inherently wrong or illegal. 

Ultimately, the trial court upheld the validity of the votes cast by Mayor Hendrix and Mr. Colvett in favor of Ordinance 2010-906, asserting that their actions did not compromise the legislative process. Additionally, the court rejected Mr. Gillham's argument that there was no rational basis for the City Commission's decision, stating that such legislative determinations fall outside judicial review.

When a municipal governing body enacts or amends a zoning ordinance under its police powers, it operates in a legislative capacity with limited judicial review. The case Fallin v. Knox County Bd. of Comm’rs establishes that zoning actions should not face judicial interference unless clearly warranted. Local authorities have significant discretion, and if the validity of an ordinance is debatable, courts cannot replace legislative judgment. A zoning enactment is only deemed invalid if shown to be arbitrary, capricious, or unreasonable, lacking a substantial relation to public health, safety, or welfare.

In this case, the court affirms that it cannot question the City Commission's decision to grant a rezoning application as long as it is not clearly arbitrary or unreasonable. Mr. Gillham's complaint failed to provide sufficient facts to demonstrate that the rezoning of 95.2 acres to M-3 Special Industrial was unjustifiable. The trial court's ruling is upheld, with costs of the appeal charged to Mr. Gillham.