### IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE August 2000 Session

R & D MARINA, INC., ET AL 

### . v. ROANE COUNTY, TENNESSEE, ET AL 

### .

Appeal from the Chancery Court for Roane County No. 1,082 Hon. Frank V. Williams, III, Chancellor

FILED SEPTEMBER 22, 2000

No. E1999-02687-COA-R3-CV

Plaintiffs, a marina and its owners, were holders of a 1996 lea se from Roane County to build and manage a marina. Plaintiffs received a permit from TVA

to operate

the marina in 1997. Plaintiffs filedsuit against Roane Co

unty and fou

r boathouse owne

rs, seeking a declaratory judgment that the marina was entitled to monthly rent from the individ ual Defendants from the date of the Roane County lease until their boathouses were removed from the

leased premises . The boathouse owners were holders of prior TVA permits to moor boathouses within the same area which became the marina pursuant to the 1996 lease and 1997 permit. The Trial Court ordered the boathouse owners to pay rent to the marina and to remove their boathouses. We affirm the judgment of the Trial Court insofar as it ordered theindividual Defendants to remove their boathouses. We hold the Trial Court erred in ordering theindividual Defendants to pay rent starting from the date of the lease rather than the date of Plaintiffs ’ TVA permit. Acc ordingly, we modify the

judgment of the T

rial Court to reflec t that Defenda nts owe rent to Plaintiffs from the date of Plaintiffs’ TVA permit until the boathouses were removed. The judgment of the Trial Court is affirmed, as modified, and the c ase is remanded.

Tenn. R. App. P. 3; Ju

dgment of the Chanc

ery Court Affirm

ed, as Modified, and Case Remanded

D. M ICHAEL S WINEY , J., delivered the op inion of the court,

in which H OUSTON M. G ODDARD , P.J. and C HARLES D. S USANO , J R ., J., joined.

Gerald Largen, K

ingston, Tenness

ee, and J. Scott McClu

en, Harriman, Te

nnessee, for App

ellants Sam Brow der, Rhe a Bro wde r and J. T . Da y.
Tom McFa rla nd, Kin gsto n, T enn ess ee, f or A ppe lle es R on Bi llb ury an d Di ane B ill bur y.1 Section 26a of T he Tenn essee Va lley Authority Ac t of 1933 , as Amend ed, p r ovides t hat noth ing can be constructed

and thereafter operated or maintained along the Tennessee River system without prior approval of the TVA Board . This app roval pro cess results in the issu ance of T VA pe rmits.

2 Mr. Robin Ferrell,

a TVA employee, testif ied that t his document became ef fec tiv e in 1978 and per mits f or existing boathouses, including thos e issued in 19 72, were tre ated differen tly under prior federal regulations, but t hat the only difference applicab le to this case wa s with regard to the type of flotatio n devices tha t could be u sed.
-2- OPINION Background

R & D Marina, Inc. and Ron and Diane Billbur

y (Plaintiff

s), brought this

declaratory action seeking the Trial Court’s assistance in removing boathouses owned by Sam Browder, Rhea Browder andJ. T. Day (Defendants), among others, from property Plaintiffs asserted they have the right to control under a lease from Roane County and a permit from TVA, and for rent from the time Plaintiffs obtained that

lease until

the boathouses are removed. Defendants base their defenses on TennesseeValley Authority (TVA) permit rig hts which the y cl aim as superior because they were prior to those of the Plaintiffs.

On September 14, 1960, TVA transferred title to the lakefr

ont property

at issue in this
case to Roane County

for use as a public park. That transfer document includeseasement rights for the County to construct and maintain floats, floating boathouses, piers and docks on any exposed andunsubmerged land

between the 750-foot contour boundaries of the fee and the waters of

Watts Bar Lake. Roane County was given the right to regulate the use of the shoreline, including but not limited to, the prohibition and prevention of the construction, installation, or mooring of all boats, boathouses,floats, piers, an d similar facil

iti es on any part of the shoreline. TVA reserved the paramountright to enter up on any and a

ll portions of the fe

e tract and any

and all portio

ns of th e easement areas at any and all times for any TVA activities. Roane County was prohibited from constructing any structures or facilities which require TVA approval until the TVA Board of Directors approved the pla ns. Roane County

was also required to reg

ulate the use of the shoreline
so as to preservepublic access to Watts Bar Lake. TVA retained the right to inspect the property and buildings, structures, impro vements, faciliti

es and operation

s t o insure compliance and to take possession “as if this convey ance had never

been made” if thi

s restriction were violated. The county
was given the right to execute and issue permits, licenses and l eases, so lo ng a s they would not materially affect the use of the land for the purposes for w hich the transfer was made.

As stated, the transferred property could not be used without TVA permits approving specific uses. 1 TVA’s regulations for “Approval of Construction in the Tennessee River System and Regulations of Structures,” dated February 15, 1978, 2 established standards by which TVA grants such permits. Those

regulations inc

lude the following

definitions:-3- Existing as applied to floating boathouses or other st ructures, . . .
means those which were moored, anchored, or otherwise installed on, along or in a TVA reservoir on or before July 1, 1972. * * * Floating boathouse

means a floating structure or facility, any portion of which is enclosed, capable of storing or mooring any houseboat or other vessel under cover. * * * New as applied to houseboats, floating boathouses, . . . mea ns a ll houseboats, floa

ting boathouses .

. . other than existin

g ones. Those regulations also provide: (b) All floating boathouses shall be moored:
(1) To m ooring facilities provided by a commercial dock operator within the designated harbor limits of his dock; or
(2) To the bank of the reservoir outside the designated ha rb or limits of commercial bo

at docks, if

the boathouse owner is the
owner or lessee of the a

butting property

at the moor ing location (or the licensee of suc h o wner or lessee) and has requested and obtained from TV A, pursuant to § 1304.207, written approval authorizing mooring at such location.
§ 1304.04(b), Tenn

essee Valley

Authority Ap

proval of Construc

tion in the TennesseeRiver System and Regulations of Structures, February 15, 1978.

TVA permits for the use of the property at issue by various entities date from January 1947, when Marina Plans were approve d forthe development of a marina. In April 1948, TVA permitted a fixed dock for Caney Creek

Marina, and in March 1954, TVA permitted a concession building. Harbor

limits were permitted for Caney Creek Marina in October 1972. On September 20, 1972, Sam Browder (Defendant) and Rhea Browder (Defendant) each filed applications, naming the applicant as Harriman Oil Company, for TVA approval of plans to moor two boathouses at CaneyCreek Boat Dock. TVA approved the applications. On June 24, 1988, James T. Da y (Defendant)

filed an applica

tion with TVA to move

his b o athouse from elsewhere to the Caney Creek Boat Dock, and that application was approved.

The record does not indicat e the da te when Roane Coun ty first lea

sed the property it held under the TV

A transfer to indi

viduals to operate a Caney Creek

Marina, although it appears that a marina existed on those premises as early as 1948. Nevertheless, at some point in 1996, Roane County sought bids fo r a new lessee t o operate the public facility for the County. Ron and D iane Billbury (Plaintiffs), operating as R & D Marina (Plaintiff), submitted a bid and were selected by the3 The Trial Court’s Narrat ive Stat ement of the Evidencealso states that M r. Ferrell “con ceded tha t the permit issuedto the Plaintiffs specifically recited that [it] was subjec t to any other o utstanding pe rmits issued by T VA . . . ,” but we are

unable t o find t hat speci fic prov ision i n the Permi

t its elf, w

hich is Exhibit 15 of the a

ppellat e record.
-4- County to lease the premises and operate the marina. They enter ed into a contract with Roane County on October

22, 1996. Although that con tract provided a

uthority fro

m the County to o

perate the marina, Plaintiff

s were still requir

ed by the ab

ove-cited TVA r

egulations to

obtain a permit from TVA for their operations. Plaintiffs took possession of the existing boat dock in October 1996, and immediately

began clean-up

of the property and

building of certain new facilities. Plaintiffs wanted several houseboats and boa thouses removed f

rom the premises so

that they co

uld proceed with t

heir plans. Defendants, among others, refused to remove their boathouses from the marina. Plaintiff Ron Billbury met with Defendants and explained to them that they

would have to

move their boathouses when h e got ready to pl ace new boat slips there in the futu re. He offere

d to rent Defenda

nts boathouse

space in the marina for up to two y ears, until he wa

s ready to e

xpand his docks. Defendants refused to sign lease forms that Plaintiffs had prepared.

On February 5, 1997, Plaintiffs obtained a permit from TVA to operate the marina

. That permit specifica

lly superse

ded certain pre

viously issue

d permit s to operate Caney Creek Marina, but also specifically recited that it was “subject to any existing rights of thirdp arties.” 3 TVA also approved new and expanded harbor l

imits for Caney

Creek Marina so th

at Plaintiffs could enlarge the facilities beyond those which the prior lessees had operated. Th

e expanded harbor

limits placed the boathouses be

longing to Defe

ndants within the ha

rbor limits subject t

o Plaintiffs’ contr

ol.

Pl aintiffs sought assistanc e from Roane County

in securing the r

emoval of th e offending boathouses, but to no avail. Plaintiffs t

hen brought this s

uit on May 19,

1997, against Roane County and

the boathouse

owners, alleging that Roane County was responsible for enfor cing their right to possessio

n of the leased pr

emises under the t

erms of their lea

se, and askin

g that the boathouse

owners be requir

ed to remove the boathouses. Trial was held on July 7, 1998. After trial on the merits, the Trial Court found:

The aforementio

ned g rants of authority by the Tennessee Valley Authority to Roane County, Tennessee and the Plaintiffs override or supers ede th ose permits which may be held by the individual Defendants

in that the D efend ants’ permits are simply grants of authority to

have such structu

res within the mar

ina grounds.

The Trial Court further found:

The Plaintiffs have the legal right and authority to

assess reasonable rents upon the boathouse owners from the beginning of the lease on the 22nd day

of October, 1996 and continuing each month thereafter until said boathouses are removed by the Defendants . . . .-5-

The Trial Court granted Roane County’s Motion for Directed Ve

rdict. Plaintiffs have not appealed thi s ve rdi ct i n fav or o f Ro ane C oun ty.

Defendants

appeal and raise

issues which we re

state, for clari

ty, as: ( 1) wheth er a complaint for declaratory judgment permits the Trial Court to award a judgment

for rent when rent
was not specifically prayed for in that complaint; (2) whether TVA gave Roane County the rig

ht to control the property

at issue; (3) whether Roan e County’s le

ase to Plaintiffs a

nd the TVA permit to Plaintiffs revoked or superseded Defendants’ permits or author iz ed Plaintiffs to cut

off access to their boathouse s, charge rent, and require Defendants to remove their boathouses; and (4) whether the rents demanded a

re reasonable a

nd the date from w

hich rents were ordered t

o be paid is correc

t.
Discussion

Our review is de novo upon the record, accompanied by a presumption of the correctness

of the findings of fact of the Trial Court, unless the preponde ranc e of the evidenc

e is otherwise. Tenn. R. App. P 13(d); Alexander v. Inman, 974 S.W.2d 689, 692 (Tenn. 1998). The Trial Court's conclusions of law are subject to a de novo review with no pre sumption of corre

ctness. Ganzevoort v. Rus

sell , 949 S.W.2d 293, 296 (Tenn. 1997).

Defendants

first r aise the issue that the Trial Court could not properly award a judgment for rent because the Complaint was one for declaratory relief and rent was not spec

ifically prayed for. They concede that Tenn. Code Ann. § 29-14-110(a) pr ovides that “[f]urther relief based
on a declaratory

judgment or decree

may be granted whenever nece ssary or proper.” In Paduch v. Cityof Johnson City, 896 S.W.2d 767 (Tenn. 1995), the Paduchs brought suit against the city of Johnson City, seeking damages for their cost in paving a por tion of a road abutting their property and for loss of rent due t o a delay in obt aining buil ding permit s pending th e paving. They also sought
an order requiring the city to pave the remainder of the road. Our Supreme Court held that the Complaint was an action for declaratory judgment, althoug h the issue cont ested was whether the Paduchs were entitled to d amages for the

ir paving cost

and the lost rent claimed

. The Court held:

The Uniform Declaratory Judgment Act, codified as Chapter 14 of Title 29 of Tenn. Code Ann., authorizes the Court to gran t relief in additio

n to the declaration

of rights. Tenn. Code Ann. § 29

-14-110(a) (19 80) provides:

Further relief based on a declaratory judgment or decree ma y be granted whenever necessary or proper.
The further relief authorized by statute may includ e the award of damages. 22A Am.Jur.2d Declaratory Judg ments § 251, p. 890 (1988).

Paduch v. City of Johnson City, 896 S.W.2d 767, 771 (Tenn. 1995). In this case, the Complaint was
one for declarator

y relief, b ut, as in Paduch, further relief may be granted as nec essary or proper. Even without the instruction of Paduch, we agree with Plaintiffs that Defendants, by addressing the4 TV A Regulati on s require bo athouses to b e moore d only within co mmercial d ocks or ad jacent to pr operty owned b y the boatho use owner s. -6- claim for rents

in their Answer, put the question at issue. See Bedford County Hosp ital v. County of Bedford, 3 04 S.W.2d 697, 701 (Te nn. Ct. App. 1957). A

ccordingly

, we find Defend

ants’ first issue to be without merit.

Defendants

next raise the issues of whether Roane County had the right, under the 1960 conveyanc

e from TVA, to con

trol the property

on which Defenda

nts’ boathouses werelocated,
a nd whether that 1960 conveyance and the Februa ry 1997 TVA permit revoked or superseded Defendants’ permits. Mr. Robert Ferrell, Project Leader in the Land

Management Office of TVA, testified that, ac

cording to

TVA policy,

the two permits issue

d to Harriman Oil Company in 1972 may not be transferred

to S am Br owd er an d Rh ea Br owd er i ndi vid ual ly. Assuming this is true, and there is no evidence in

the record to thecontrary, the Browder permits may not be valid as Harriman Oil Company and not the Browders hold the pe rmits, regard less of the later- issued permit to Plaintiffs. Sam Browder countered that he had been the long-term own er of Harr ima n Oi l Co mpa ny, butthat “a

few days before the trial he had sold his stock in the company to his son, John Browder.” In short, neither of the Browders holds a TVA permit for his boathouse. The holder of the permits is Harr ima n Oi l Co mpa ny and not the Brow ders. This by itself would be sufficient to defeat the Browders’ claim that they have a right to keep the ir boathouses at the location in dispute.

The Trial Court’s Narrative Statement of the Evidence recited that Sam Browder argued in his testimony “that he had, in eff ect, aperpetual permit from TVA to occupy that space in the water pursuant to his 1972 permit and that he had no intention of every pa ying rent to the marina.” 4 Rhea Browder’s testimony was to the same effect. We find thi s argument u nconvinci ng. Even if the Browders were the permit

holders, nothing in the record indicates an intention by TVA to issue a permit to Defendants which could not be supersedi ng by any lat er circu mstances . We cannot imagine such an intention by TVA, and we find n

o language in

any of the p

roperty tr ansfers, leases, permits or regu

lations in the reco

rd that limits TVA’s

right to issue a later per

mit which, by its issuance, necessarily supersedes an earlier permit. This is what TVA did her e.
Defendants

further argued that their b oatho uses were moored to the bottom of the lake, not to the water’s edge, and thus were out sid e th e pro pert y TVA had lea sed to R oan e Co unt y. The Trial Court did not f ind this argume

nt persu asive, and neither do we. As stated, the 1960 do cum ent transferring the property from TVA to Roane County provided that Roane County was giventhe right to reg

ulate the use of the shoreline, including but not limited to, the prohibition and prevention of the constructi on, insta llation, or mooring of all boats, boathouses, floats, piers, and similarfacilities on any

part of the shoreline. The TVA Regulations implementing such transfers require that boathouses mus t b e moored in commerc

ial docks unless the

y are moore

d adjacent to land which is ownedby the boathouse owners (TVA Approval Regulations, § 1303.204(b)). This regulation seems plainly

designed to pre

vent the scenari

o in this case: priva

te boathouses b

ein g mooredto the bottom of the lake, not adjace nt to property

owned by the

boathouse owner

s, and not under the control and sup

ervision of any

marina. Further

more, Mr. Ferre

ll o f TVA testif

ied that,5 From the Trial Court’ s Narrative St atement of th

e Evidence.

6 TVA is n

ot a p art y to thi s su it, and n o one h as ar gued tha t TVA did not hav e authority to grant the pe rmit to the Plaintiffs.

7 The parties

advised at

oral arg ument th at all of the boat

houses i n questi on had been re

moved.
-7- “under TVA’s rules and r

egulations,

a permit for wate

r use facilities [e.g., boathouses] can only be issued to the owner of land abutting this retained strip of land, so that permits issued as this site have to be to the County, to be used by a licensee of the County. The Plaintiff is the County’s licensee.” 5 The Defendants have not alleged that they now or ever owned the land adjacent to the sites where their boathouses were

moored. Mr. Fer

rellalso stated, on cross-examinat ion, that to the best

of his knowledge, the permits to Harrima n Oil Company a

nd J. T. Day we

re “still in full

force and effect.” However, applying the TVA Approval Regulations and the terms of the TVA tra nsfer to Roane Cou nty, we find that, while the per mits issued to Harriman Oil Company and Mr. Day were not formally rescinded by TVA, they we re necessarily superseded when TVA g ranted a c onflicting permit to Plaintiffs to operate the commercial dock on the premises which extended the harbor limits to i nclude the property on which the Defendants’ boathouses were moored. 6 To find otherwis e would defy common sense. If Defenda nts’ bo at houses can be moored only within a commercial marina since the

Defendants do no

t own the adjacen

t land, and the comm

ercial marina is

properly leasedby Roane Coun

ty to Plaintiff

s a nd permitted by

TVA to Plaintiffs, th

en Defendants’ boathouses can be moored within that marina only by the acquiesce nce of and under the control of Plaintiffs.

Whilenot necessarily di spositive, there is another reason that Plaintiffs must have authority to control the boat

house s on their le ased and permitted premises. The 1960 transfer document to Roan e Count y requires the County to insure that the boathouses moored on the transferred

premises are mai

ntained in good r

epair and up to

TVA standards. The thirty- year leas e from Roane County to the Plaintiffs also requiresthat Plaintiffs meet all TVA standards

for health andsafety and that Plaintiffs “shall have the primary responsibility for

ensuring that

any sublessees

. . . operate and ma

intain the premise

s in such a manner.” Plaint iffs are also re

quired under the

lease to make sure that all boats moored at the fa cility meet “all applicable federal, state or local regulations.” At trial, Mr. Ferrell testified that he had inspected the boathouses and fo

und that, in their dilapidated condition, they did not comply with C.F.R.§ 18, Section 1304.05 and 1304.204 and others. He opined that his office had taken no action against them as of the time of trial, “be

cause they were part of the

site leased to

Roane County and then subleased for commercial operations.” Plaintiffs cannot meet their contractual or regulatory oblig ations unless they can control the boathouses moore

d at their marina,

including the boa

thouses owned by

these Defendan

ts. Having determined that Plaintiffs had the right to require the offending boathouses be removed from their leas ed and per mitted premises, we next address the issues raised by Defendants

related to the rents charged by Plaintiffs for mooring f e es before th

e boathouses were removed. 7 Defendants

raise the issues of whether the rents demanded b

y Plaintiffs a

re reasonable
a nd whether the Tria

l Court properly

determined the da

te from which ren

ts were due. As to

th e-8-

reasonableness of the rents, the testimony shows that Plaintiff Ron Billbu

ry testifie d that the rents he charged were “customary, re asonable and within acceptable standards of prices charged

by other marina operators in the area.” The monthly rent charged for these Defenda nts’ boathouses appears to be the same as charged for other boathouses moored within the marina. There was other evidence that Plaintiffs had never operated a marina until they obtained

this lease from Roane County, and that Plaintiff Ron Billbury simply set the monthly r ent at $81.50 based on his opinion of the rental value of the marina spa

ce. When a Trial Co

urt has seen and h

eard witnesses,

especially where

issues of credibility and

weight of oral testimony are involved, considerable defer ence must be accorded to the Trial Court’s factual findings. Seals v. England/Corsair Upholstery Mfg. Co., Inc., 984 S.W.2d 912, 915 (Tenn. 1999). The Trial Court found the rents to be reasonable, and the evidence does not preponderate against this finding.

The Trial Court ordere d Defendants to pay rent for their mooring spaces from October 22, 1996, when Plaintif

fs entered into th

eir lease with Roa

ne County. De

fendants argue that, if any rent is due, such rent cannot

be assessed for mooring fees prior to February 5, 1997, when Plaintiffs obtainedthe required permit from TVA to operate the marina. We agree. The property transferred from TVA to Roane County

could not be used w

ithout TVA permits a

pproving the spe

cific uses. Nor could that same property, when leased to Plaintiffs, be used by Plain

tiffs without TVA pe

rmits certifying that those specific uses met the standards set forth in “Approval of Construction in the T enne ssee River System a nd Regulations of

Structures.” The

refore, Plaintif

fs had no right to o

perate the marina, or

to collect rents, until the TVA permit was issued to them. Accordingly, we modify the Judgment of the Trial Court to award rents to Plaintiffs from Sam Browder, Rhea Browder and J. T. Day, beginning on February 5, 1997, until the date each of those Defend ants remove d his boathouse from Plaintiffs’ marina.
Conclusion

The Judgment of the Trial Court is affirmed, as modified, and the case is remanded to the Trial Court for fu rther proceedi

ngs to determine

the amount of rent

due Plaintiffs fro m Defendants,

and for such further proceedings as may be required, i f any, cons

is tent with this Opinion. Costs on appeal are taxed 50% to the Plaintiffs (R & D Marina, Inc., et al.) , and 50% to the Defendants (

Sam Browder, Rhe

a Browder and J. T. Day) and t heir sureties.

___________________________________ D. MICHAEL SWINEY, JUDGE