Case Title: Padgett v. CONECUH COUNTY COM'N

Citation: 901 So. 2d 678

Docket Number: 1021381, 1021465

State: alabama

Court: Alabama Supreme Court

Date: 2004-10-01T00:00:00Z

Document:
901 So. 2d 678 (2004)
James C. PADGETT et al.
v.
CONECUH COUNTY COMMISSION et al.
Conecuh County Commission et al.
v.
James C. Padgett et al.
1021381 and 1021465.

Supreme Court of Alabama.
October 1, 2004.
Rehearing Denied November 19, 2004.
*679 Alton B. Parker, Jr., and Samuel H. Frazier of Spain & Gillon, LLC, Birmingham, for appellants/cross-appellees James *680 C. Padgett and Alabama Preservation Alliance.
William H. Pryor, Jr., atty. gen., Nathan A. Forrester, deputy atty. gen., and William D. Little, asst. atty. gen., for appellants/cross-appellees the State and Alabama Historical Commission.
Max Cassady of Cassady & Cassady, P.C., Evergreen; and Kendrick E. Webb and Bart Harmon of Webb & Eley, P.C., Montgomery, for appellees/cross-appellants Conecuh County Commission et al.
HOUSTON, Justice.
James C. Padgett, the Alabama Historical Commission, the Alabama Preservation Alliance, and the State of Alabama (collectively "the appellants") appeal the Conecuh Circuit Court's judgment refusing to enjoin the Conecuh County Commission and others[1] (collectively "the County Commission") from using funds from revenue warrants issued by Conecuh County to demolish the existing Conecuh County courthouse and to construct a new courthouse in its place. The County Commission cross-appeals the court's judgment declaring that proceeds from a county lodging tax and a court fee may not be used for the demolition of the existing courthouse and the construction of a new courthouse and enjoining the County Commission from using those proceeds for that purpose. We affirm the trial court's judgment in part, reverse it in part, and remand.
The focus of this case is the Conecuh County courthouse, designed around 1900 by architect Frank Lockwood, a prominent Montgomery architect who designed the wings of the Alabama capitol as well as several other courthouses in Alabama.[2] The courthouse has fallen into a state of extreme disrepair, and it is the manner in which the County Commission chose to remedy that situation that is at issue here.[3]
The funds for renovating the existing courthouse are derived from three sources, each of which is discussed below.
In January 1999, Amendment No. 634 to the Alabama Constitution of 1901 was proclaimed ratified. That amendment provided for a fee ("the court fee") to be collected on each case filed in the courts in Conecuh County; the court fee was to be paid into the general fund of Conecuh County. Amendment No. 634 provides:
(Emphasis added.)
In 1998, the Alabama Legislature enacted Act No. 98-657, Ala. Acts 1998, which provided for the levy in Conecuh County of a privilege or license tax on the business of renting rooms, accommodations, or lodgings in Conecuh County ("the lodging tax"). Section 12 of that act provides:
(Emphasis added.)
On or about March 14, 2002, the Conecuh County Public Building Authority ("the Building Authority"), a public corporation organized by the Conecuh County Commission, issued an official statement (essentially, a prospectus) in connection with a public offering of a series of revenue warrants in the amount of $8,960,000 ("the Series 2002 Warrants"), supported, in part, by a pledge of the proceeds from the court fee and the lodging tax. The warrants were issued not only to address the deteriorating county courthouse, but also to "refund and retire" revenue warrants previously issued to construct a new county jail as mandated by a federal court order ("the Series 2000 Warrants"). The first two paragraphs of the official statement summarized much of the transaction:
(Emphasis added.)
The Building Authority and Regions Bank entered into the first supplemental indenture, pursuant to which the Building Authority issued the Series 2002 Warrants as described above. The first supplemental indenture, in addition to refunding and retiring the Series 2000 Warrants, authorized the demolition of the existing Conecuh County courthouse and the construction of a new county courthouse on the site of the existing courthouse. The recitals in the first supplemental indenture state:
Section 3.1 of the first supplemental indenture reads as follows:
(Emphasis added.)
In conjunction with the issuance of the Series 2002 Warrants, the Building Authority also entered into a first supplemental lease agreement with Conecuh County; the first supplemental lease agreement amended the original lease agreement executed in conjunction with the issuance of the Series 2000 Warrants. Under the first supplemental lease agreement, Conecuh County agreed to convey the existing courthouse to the Building Authority. Section 4.1 of the first supplemental lease agreement specifically provided that the Building Authority and Conecuh County would
(Emphasis added.)
Subsequent to the issuance of the Series 2002 Warrants, the Conecuh County Commission initiated plans for the demolition of the existing county courthouse and the construction of a new county courthouse on the site of the existing courthouse. In December 2002, the Conecuh County Commission solicited bids for the demolition of the existing courthouse and the construction of a new courthouse; those bids were to be submitted by January 9, 2003. The Conecuh County Commission postponed awarding a contract for the demolition and construction after this action was filed.
The appellants filed this action seeking a declaratory ruling (1) that the proceeds from the court fee and the lodging tax were dedicated by law for use in renovating the existing county courthouse and the maintenance of the courthouse after it was renovated, and that those proceeds could not be used to demolish the existing county courthouse and construct a new courthouse on the same site, and (2) that the proceeds of the Series 2002 Warrants could not be used to demolish the existing courthouse and to construct a new courthouse. In addition, the appellants sought injunctive relief (1) prohibiting the Conecuh *684 County Commission from using the proceeds from the court fee and the lodging tax for any purpose other than to finance the construction of the new jail and the renovation of the existing county courthouse; (2) forcing the County Commission to renovate the existing county courthouse, and (3) prohibiting the County Commission from using the proceeds from the sale of the Series 2002 Warrants for any purpose other than to finance the construction of the new jail and the renovation of the existing county courthouse.
The trial court issued an order, on the joint stipulation of the parties, temporarily restraining the awarding of any contract for the demolition of the existing county courthouse that was to be funded by the court fee, the lodging tax, or the Series 2002 Warrants, and from spending any proceeds generated from those sources for such demolition. The trial court set a hearing on a preliminary injunction for January 14, 2003. This hearing, however, was restricted to the appellants' requests for injunctive relief.
Following that hearing, the trial court entered an order granting some of the appellants' requests for injunctive relief and denying others. Specifically, the order enjoined the County Commission:
However, the trial court denied the appellants' other requests for injunctive relief.
The trial court subsequently made this order final pursuant to Rule 54(b), Ala. R. Civ. P. The appellants appeal the trial court's denial of their request for injunctive relief prohibiting the County Commission from using the proceeds from the sale of the Series 2002 Warrants for any purpose other than to finance the construction of the new jail and the renovation of the existing county courthouse and forcing the County Commission to renovate the existing county courthouse; the County Commission cross-appeals, raising various issues discussed below.[4]
Where the trial court's findings are based on ore tenus evidence, we apply the following standard in reviewing its ruling:
Alabama Highway Dep't v. Stuckey's/DQ of Grand Bay, Inc., 613 So. 2d 333, 335 (Ala.1993). However, as to issues of law, or "where there are no disputed facts and where the judgment is based entirely upon documentary evidence, no such presumption of correctness applies; our review is de novo." Alfa Mut. Ins. Co. v. Small, 829 So. 2d 743, 745 (Ala.2002). Because this appeal concerns primarily issues of law, our review is de novo.
The parties raise several issues: (1) whether the trial court erred in interpreting the language of Amendment No. 634 and Act No. 98-657 as forbidding the use of the proceeds from the court fee and the lodging tax to pay for demolition of the existing, and construction of a new, county courthouse; (2) whether the trial court erred in interpreting that same language as not allowing those proceeds to be used for only one of the two purposes for the funding, i.e., a jail or the renovation of the courthouse; and (3) whether the trial court erred in refusing to enjoin the County Commission from using the proceeds from the Series 2002 Warrants to demolish the existing county courthouse and to construct a new county courthouse.
The relevant substance of the trial court's order is as follows:
(Emphasis in original.)
We agree with the trial court that the language of Amendment No. 634 and of Act No. 98-657 forbids the use of the proceeds collected from the court fee and the lodging tax to demolish the existing county courthouse and to construct a new courthouse. We adopt its reasoning in support of that holding. As the trial court noted, there is simply no rational way to interpret the words of Amendment No. 634 and Act No. 98-657 to allow such a use; both the Amendment and the Act clearly indicate that the proceeds are to be used for the renovation of the known, existing, historic county courthouse, along with the construction of a new county jail. This is made clear beyond doubt by the comparison of the words used, in close proximity to each other, to describe the two entities being discussed: a jail and the courthouse. See Amend. No. 634, Ala. Const. 1901 ("to be used by the county commission for the planning, designing, construction, financing, and operation of a new county jail and the planning, design, repair, renovation, financing, and operation of the existing county courthouse"); § 12, Act No. 98-657 ("used exclusively for the purposes of ... paying costs of constructing and equipping a new County jail in the County and of renovating and rehabilitating the historic Conecuh County Courthouse").
The County Commission argues that terms like "renovation" and "repair" are broad enough to encompass the construction of a new courthouse. If those words are viewed in a vacuum, such an interpretation may have merit. However, those words cannot be so viewed in the contexts in which they appear in Amendment No. 634 and Act No. 98-657. The drafters of the texts of the Amendment and the Act demonstrated that they knew the difference between the creation of something new and the renovation of something old, and they assigned those words in light of this knowledge. Amendment No. 634 and Act No. 98-657 are now law, and they are not ambiguous; therefore we may not go beyond the clear meaning of the words used therein in interpreting them. See DeKalb County LP Gas Co. v. Suburban Gas, Inc., 729 So. 2d 270, 275-277 (Ala. 1998).
The County Commission also contends that the trial court erred in holding that the proceeds from the court fee and the lodging tax had to be used for both *689 projects (the jail and the courthouse) simultaneously and in equal amounts; i.e., that the funds could not be solely, or at least initially, dedicated by the County Commission to fund the construction of a new county jail. The County Commission argues that the trial court erred in interpreting the word "and" as it is used in Amendment No. 634 ("to be used by the county commission for the planning, designing, construction, financing, and operation of a new county jail and the planning, design, repair, renovation, financing, and operation of the existing county courthouse"), and in Act No. 98-657 ("used exclusively for the purposes of ... paying costs of constructing and equipping a new County jail in the County and of renovating and rehabilitating the historic Conecuh County Courthouse") to require such a result. We agree.
No specific direction is given in either Amendment No. 634 or in Act No. 98-657 as to exactly how the proceeds of the court fee and the lodging tax are to be spent; for example, there is no direction regarding the appropriate timing, amount, or percentage of disbursements of funds to each project. While the appellants' position that the County Commission must fund the projects simultaneously and in equal amountsis one possible interpretation, it is not the only possible interpretation. In such a situation, the issue of the disbursement of those funds becomes a political, "quasi-legislative" issue, see Board of Revenue of Etowah County v. Hutchins, 250 Ala. 173, 176, 33 So. 2d 737, 738 (1948); the County Commission has full discretion to direct the disbursement of the proceeds from the court fee and the lodging tax in the manner that in its judgment seems best and most efficient. This discretion is limited only in that the County Commission cannot use those proceeds for anything other than a new jail or the renovation of the existing county courthouse, and the County Commission must avoid "fraud, corruption, or unfair dealings." Hutchins, 250 Ala. at 176, 33 So. 2d  at 738. To the extent that the trial court's order conflicts with this conclusion, that order is reversed.
However, the appellants contend that, given the trial court's ruling that the proceeds from the court fee and the lodging tax cannot be used to construct a new courthousea ruling that we now affirm the trial court erred in not enjoining the County Commission from using the proceeds from the Series 2002 Warrants for that purpose. The appellants give two reasons for this contention. First, the issuing documents pledge the proceeds from the court fee and the lodging tax to repay the Series 2002 Warrants. Second, the language of the official statement should bind the County Commission's actions with regard to the Series 2002 Warrants, especially in light of the trial court's finding that the official statement apparently contained "misstatements" or "misrepresentations" concerning the County Commission's intentions regarding the existing county courthouse. The appellants argue that for these reasons the trial court erred in holding that the proceeds from the Series 2002 Warrants could be used for a purpose other than the demolition of the existing county courthouse and the construction of a new courthouse.
As to the appellants' first argument, while the proceeds from the court fee and the lodging tax were pledged for the repayment of the Series 2002 Warrants, it is apparently undisputed that the proceeds from those sources were not necessary to fund the Series 2002 Warrants. The Series 2002 Warrants were backed primarily by a pledge of certain ad valorem and sales taxes that made the pledge of the *690 proceeds from the court fee and the lodging tax superfluous. Although we agree with the appellants that the proceeds from the court fee and the lodging tax cannot be pledged to repay warrants issued to fund the demolition of the existing county courthouse and the construction of a new courthouse and that the court fee and the lodging tax therefore must be excised from the list of pledged funds, we cannot hold that the fact that those proceeds were initially pledged to repay warrants issued for that purpose bars the County Commission from using the proceeds of the Series 2002 Warrants to build a new courthouse.
As to their second argumentthat the official statement binds the use of the proceeds of the Series 2002 Warrantsthe appellants claim that, in light of our decision in Orange v. Bailey, 548 So. 2d 424 (Ala.1989), the trial court erred in not barring the use of the warrant proceeds to demolish the existing county courthouse and to construct a new one. In Orange, we held that, under Ala.Code 1975, § 11-28-2,[5] proceeds from warrants issued by the Jefferson County Commission that were, according to the Commission's resolution authorizing the issuance of the warrants, dedicated to be used for certain delineated projects, could not be used for a project not delineated in the resolution. 548 So. 2d  at 427-28. However, while this case is governed by a statutory provision similar to the one that governed in Orange, Ala.Code 1975, § 11-15-13 (providing that "[t]he proceeds derived from the sale of any warrants (other than refunding warrants) may be used only to pay the cost of acquiring, constructing, improving, enlarging and equipping a project or any part thereof as may be specified in the proceedings in which the warrants are authorized to be issued")(emphasis added), we do not believe that Orange compels the conclusion argued by the appellants.
In Orange, the prospectus and the warrant resolution were not in conflict, and it was clear that the resolution, and not the prospectus, contained the provisions that controlled the warrants. 548 So. 2d  at 427-28 (noting that the prospectus made reference to the warrant resolution "for the exact terms of the warrants," and that the warrant resolution, not the prospectus, was a binding contract with the holders of the warrants). Here, the official statement (a prospectus) and the first supplemental indenture (through which the warrants were officially issued) do appear to conflict, but the official statement makes it clear that the terms of the indenture control, just as the prospectus indicated that the terms of the warrant resolution controlled in Orange. The official statement provides, in part:
(Emphasis added.)
As shown above, the indenture clearly states that the Series 2002 Warrants were being issued to fund the demolition of the existing county courthouse and the construction of a new courthouse. Therefore, because the indenture controls, it appears that, unlike Orange, the use of the warrant proceeds in this case to demolish the existing county courthouse and to construct a new courthouse is proper. Accordingly, we affirm the trial court's refusal to enjoin the County Commission from using the proceeds from the Series 2002 Warrants in accordance with the purposes specified in the indenture.
Based on the above, we affirm the trial court's order insofar as it bars the County Commission from using the proceeds from the court fee and the lodging tax (1) to directly fund the demolition of the existing county courthouse and the construction of a new courthouse, or (2) as a pledge for the Series 2002 Warrants, if the proceeds from those warrants are used for such purposes. We reverse the trial court's order to the extent that it binds the County Commission's discretion regarding the use of the court-fee and lodging-tax proceeds to pay for the new county jail, as discussed above. We affirm the trial court's denial of the appellants' request that the County Commission be enjoined from using the proceeds of the Series 2002 Warrants in the manner stated in the indenture.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
SEE, LYONS, BROWN, HARWOOD, WOODALL, and STUART, JJ., concur.
[1]  The other defendants are County Commissioners Hugh Barrow, Jerold Dean, D.K. Bodiford, Wendell Byrd, and Leonard Millender; the Conecuh County Building Authority and its members Billy G. Mims, Sr., W.J. Reed, and Alice Ann Baldwin; and Harry Still, the Conecuh County Administrator.
[2]  The courthouse is a contributing structure to the designation of downtown Evergreen as a historic district on the National Register of Historic Places and is itself eligible for listing on the National Register as a separate structure.
[3]  While the County Commission elaborates on the extent of the disrepair, it is sufficient to say that there was substantial, apparently uncontradicted, evidence indicating that the courthouse had deteriorated to such a degree that it would be almost impossible, or at least financially prohibitive, to safely restore the courthouse.
[4]  Our resolution of this appeal pretermits the need to address all of the issues raised by the County Commission.
[5]  Ala.Code 1975, § 11-28-2, provides, in pertinent part:

"In addition to all other warrants which any county shall have the power to issue pursuant to laws other than this chapter, such county shall have the power from time to time to sell and issue warrants of such county for the purpose of paying costs of public facilities.... The proceeds derived from the sale of any such warrants shall be used solely for the purpose for which they are authorized to be issued."