### IN THE COURT OF APPEALS OF TENNESSEE AT JACKSON NOVEMBER 20,

2000 Session MYRON ZIMMERMAN, ET AL 

### . v. CITY OF MEMPHIS, ET AL 

### . Direct Appeal from the Chancery Court for Shelby County Nos. 110024-3 & 98-0795-2; The Honorable D. J. Alissandratos, Chancellor

No. W2000-01369-COA-R3-CV - Filed April 5, 2001

This appeal involves the determination of whether the Cit y o f Memphis properly levied a special assessment

upon the property

owners wit

hin the Central Business Improvement District in downtown Memphis. The affe cte d pr ope rty owners all ege that the levy in question was not a special
asse ssment. They allege that the levy was a tax in violation of section 7-84-501 e t seq. of th e Tennessee Code as well as Article 2, Section 29 of the Tennessee Constitution. For the following reasons, we aff

irm the decision of

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

A LAN E. H IGHERS , J., delivered the opinion of the court, in which W. F RANK C RAWFORD , P.J., W.S., and D AVID R. F ARMER , J., joined.
John McQuiston, II

, David Scruggs, An

drew Raines, for

Appellants Robert L. J. Spence, Jr., for Appellees

OPINION
Facts and Procedural History

Pursuant to section 7-84-501 et seq. of the Tennessee Code, the City of Memphis established
a Central Business Improvement District (“CBID”). The obje ct of the CBID was the

improvement and development of the

business environme

nt in do wntown Memphis. The City of Memphis has powers pursuant to section 7-84-501 et seq. of the Tennessee Code to levy special assessments on all of the property owners in the CBID for the costs and expenses for all improvements

within the CBID. These special as sessmen ts are enacted b y ordinanc

es passed by

the City Counc

il in cooperation with

the Center City Commission. Each of the Plaintiffs owns property in the CBID.1 Residen tial property and go vernm ent own ed prop erty within the distric t w ere completel y exempted from the levy.
-2- The Center City Commission was established by ordinance to “manage and coordinate the comprehensive and coordinated redevelopment of the center city area. . . .” Memphis Code § 7-13. The Center City Co

mmission is authorized

to pay its own

st aff and counsel and to

conduct all business necessary to manage and operate the busine ss within the CBID.

The Memphis Central Business Improvement District II (CB ID II) was cr eated by Ordinance 4468 enacted January 7, 1997, pursuant to the Central Business Improvement District Act of 1990 codified at section 7-84-501 et seq. of the Tennessee Code. A public he aring regardin g the passage of Ordinance 4468 w

as held on January

7, 1997, at the Memp

his City Counci

l meeting. Although notice was given to 6,295 property owners, only twelve members of the public appeared and spoke at the public hearing. None of the plaintiffs in this case appeared prior to or during the final hea ring to protest the CBID II cr ea tion, rate

of assessment, method of apportionment, the delegation of powers, or stated purposes of the Center City Commission as the district management corporation or the CBID II.

Ordinance 4468 levied an assessment of $.65 per $100.00 of ass

essed value, with

the first $25, 000.00 of value being e xempt from the speci

al assessment. 1 The city treasurer annua ll y collected such costs and expenses upon the properties located within the CBID II in tax years 1997, 1998, 1999, for fiscal years 1998, 1999 and 2000, r espectively . The Center City Commission annually determinedthe total costs and expenses to be paid

from the special a

ssessments. The City Council annually

approved the proposed budget of the Center City Commission. Ordinance 4468 provided that the special assessmen t b urden should be borne in proportion to the gross assessed value of the properties in

the District, so tha

t as each parce

l appreciate s, its spec ial assessment levy increases according to the benefit received.

The special assessment rate of .65/$100.00 has remained uncha nged since it

was adopted in January 1997. The treasurer levied and collected the following speci al ass essme nts un der CB ID II for the tax ye

ars as follows:

Tax Year For FY Levied Collected 1997 FY98 $1,292,628.89 $1,257,662,42 1998 FY99 $2,047,613.65 $1,938,525.13 1999 FY00 $2,109,692.63 $1,786,546.23

Each month, the City

remits the specia

l assessment colle

ctions to the Center

City Commission by bank wire. Pursuant

to section 7-84-51 9 of the Tennesse e Code and section

7-91 of the Memphis Code, the Center City Commission is the district mana

gement corpor

ation for the Centr

al Business Improvement D istrict II . Accordingly , as District Mana

ger Corporatio

n, th e Center City Commissio n has authority under the CBID Act of 1990.-3-

The co urt below grant

ed summary j udgment to the City of Memphis, finding

that the City of Memphis had “substantially complied” with the requirements of section 7-84-501 et seq. of the Tennessee Code. Furthermore, the court below ordered the Memphis City Council to “review and approve the Central Busin ess Improveme

nt District apporti

onment on an annua

l basis t o ensur e compliance with the statutory requirements of T.C.A. § 7-84-501, et. seq.”

T hese tw o consolidated suits were filed by the property owners for themselves and for a proposed class o f all property owners in the CBI

D II who w

ere subjected to

the levy. Ap

pellants herein seek a refund of the sp

ecial assessmen

ts as well as intere

st and attorney ’s fees. Spe cif ica lly, Appellants present the following issues, as we perceive them, for our review: 1) Whether

the levy by the Memphis City Council was a valid special assessment or an unlawful tax in violation of § 7-84-501 et seq. of the Ten nessee Code and/o

r Article 2, Section 29 of the Tennessee Constitution. 2) Whether

the property owners in the Memphis CBID wer e deprivedof due process of law under the Fourteenth Amendment of the United States Constitution. 3) Whether t he property owners in the Memphis CBID wer e subjected to unlawful action under color of state law in violation of section 42 U.S. Code § 1983. 4) Whether

the City of M emphis’ failure to reduce the tax rate following a general reappraisal of property was a violation of section 67-5-1701 of the Tennessee Code. 5) If the case is reve

rsed, whether th

e case should be r

emanded with dire

ctions to certify the class and awa

rd interest and a

ttorney’s f

ees.
We will address each issue in turn.
Standard of Review

We measure the prop

riety of the

trial court’s gr

ant of summary

judgment agai

nst the standard of Rule 56.04 of the Tennessee Rules of Civil Procedure, which provides that summary judgment is appropriate where

the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

When reviewing a grant

of summ ary judgme

nt, an appellate c

ourt must decide a

new if judgment in summary fashion is appropriate. See Cowden v. S ovran Bank/Cent ral South , 816 S.W.2d 741, 744 (Tenn . 1991); Gonzales v. Alman Constr. Co. , 857 S.W.2d 42, 44-45 (Tenn. Ct. App. 1993). Since this determination involves a question of law, there is no presumption of correctness as to the trial court’s judgment. See id. Analysis
First, the Appellants allege that the levy by the Memphis City Council was not a valid special assessment,but an unlawful tax in violation of section 7-84-501 et seq. of the Tennessee Code and-4-

Article 2, Section 29 of the

Tennessee Constit

ution. First, it is imp

ortant to note the d

isti nctio n between a tax and a special assessment. In Obion County v . Massengill , 151 S.W.2d 156 (Tenn. 1941), our suprem

e court explained t

he difference

as follows:

There is a clear and manifest distinction between a tax and a special assessment. A tax is imposed for a general or pub

lic purpose. I

t is levied for the purpose of carr ying on the

government. I

t is a charge
on lands an d o ther property which lessens its value, and in the proportion in which the owner is required t o pay is his pecuniary ability dimi nished. . . On the other hand, a special assessment contai ns none of the distinctive features of a tax. It is asses sed o r levied for a special purpose, and not for a general purpose. It is not
a charge on prop

erty which

reduces its value . The assessment is made i n the ratio of adva ntages accru

ing to the proper

ty in consequence of the improvement. . . .

Id. At 159 (quo ting De Clercq v. Barber Asphalt Paving Co., 47 N.E. 367 (Ill. 1897)). In order to resolve the case before us, our task is one of statutory construction. There are a number of principles of statutory construction, among which is the most bas

ic rule: “to

ascertain and give effect to the intention and purpose of the legislature.” Gleaves v. Checker Cab Transit Corp., Inc., 15 S.W.3d 799, 802 (T enn. 2000) ( quoting Carson Creek Vacation Resorts, Inc. v. State Dep’t of Revenue , 865 S.W.2d 1, 2 (Tenn. 1993)). However

, the court must

ascertain the intent “without unduly restricting or expanding the statute’s coverage beyond its intended scope.” Statev. Sliger , 846 S.W.2d 262, 263 (Tenn. 1993). See also Gleaves , 15 S.W.3d at 802; Worley v. Weigels, Inc., 919 S.W.2d 589, 593 (Tenn. 1996) ; Owens v. Stat e , 908 S.W.2d 923, 926 (Tenn. 1995). “The legislative intent and purpose are to be ascertained primarily from the natural and ordinary meaning of the sta tutory language, without a forced or subtle interpre tation that would limit or extend the statute’s application.” State v. Blackstock , 19 S.W.3d 200, 210 (Tenn. 2000) (citing State v. Pettus , 986 S.W.2d 540, 544 (Tenn. 1999)). When statutory provisions are, as in this case, enacted as part of a larger Act, “we examine the entire Act with a view to arrive at the true intention of each section and the effect to be

given, if possible

, to the entire Act and every section thereof.” Bible & Godwin Constr. Co. v. Faener Corp. , 504 S.W.2d 370, 371 (Tenn. 1974).

The Appellants argue

that the statutes at issue here providing for sp ecial assessmen

ts are to be strictly construed

and strictly applied in favor of the owners of the property assessed. See e.g., West Tennessee Floo

d Control & Soil Conse

rvation Dist. v. Wy

att , 247 S.W.2d 56, 62 (Tenn. 1952). In contrast, section 7-84-508 of the Tenne ssee Code stat es that “[t]his part. . . shall be liberall

y construedto effectuate its purposes.” T ENN

. C ODE A NN

. § 7-84-508 (1998). The purpose of the act is stated in section 7-84-502 as follows: “elimination of urban blig ht and decay and the modernization and general improvement of such central business districts by governmental action is considered necessary to promote the public health, safety , and welfare of such communities. . . .” T ENN

. C ODE A NN

. § 7-84-502 (1998). Moreover, section 7- 84-509 pr ovides tha

t “[i]n the event of
a conflict between the provisions of this part and any other laws or par

ts of laws gover

ning the state-5-

of Tennessee, the provisions of this part shall govern.” T ENN

. C ODE A NN

. § 7-84-509 (1998). Based
on the foregoing, we find that, due to the plain langu

age of the afo

rementioned se

ctions of t he Tennessee Code, the statutes in question must be liberally construed to effectuate their purpose

. The main thrust of Appellants argument concerns section 7-84-522(a) of the Tennesse e Code. Section 7-84-522(a) states that “[t]he governing body of the municipality

shall determine a

nnually the total costs and expenses to be paid from the special asses sments, a nd annually apportion such costs and expenses upon the various properties located within the district in accor dance with the benefitsconferred upon the various properties.” T ENN

. C ODE A N N

. § 7- 84-522(a) (1998). “Governing body” is defined in section 7-8 4-503 of the Tenne ssee Code as “the

council, commission, board or other body exercising general legislative power in the municipality.” T ENN

. C ODE A NN

. § 7-84-503(5). Appellants

argue that the M

emphis City Cou

ncil, as the gove

rning body, did not comply with
se c tion 7-84-522(a). F

irst, Appellants a

rgue that the Me

mphis City Counc

il did not annually determine “the total costs and expenses to be paid from the s pecial a ssessments.” Instead, Appellants

argue, the city

council simply passed a rate of $.65 per $100.00 of value. We disagree. The city council approves the proposed budget of the Center City Co

mmission on an annua

l basis. The budget of the Cen

ter City Commiss

ion represents th

e total costs

and expenses to be p

aid from the special assessments. We find that, by its annual review and approval of the proposed budget of the Center City Commission, the Memphis City Council determine

d the total costs an

d expenses to be paid by the special assessments and thereby complied with section 7-84-522(a) of the Tennessee Code. Next, the Appellants argue that the Memphis City Council did not review and approve the apportionments

as required by 7-84-522(a) to determine if the assessments were apportioned among the various properties in proportion to the benefits conferred upon them. Instead, Appellants argue, this was done by the city treasure r. We disagree. Upon review of the record, it is clear to us that the city treasurer does not fix the rate of the special assessment. The city treasurer merely collects the assessment

after the Memphis City Council annually apportions the costs and e xpenses upon the various properties in ac

cordance with th

e benefits conferred

upon them. Section 7-84-522(b) provides that “[i]n determining the benefits to each lot or parcel of property within the district, the governing body may consider any of the following factors: square footage, front footage, assessed value , type of use, business classification, property loc ation, zones of benefit, or a combination of such factors.” T ENN

. C ODE A NN

. § 7-84-522(b) (1998) (emphasis added). As emphasized above, section 7-84-522(b) specifically lists “assessed value” as an appropria te factor to deter

mine the benefit to each parcel of property within the district. The Memphis City Council complied with 7- 84-522(a) by

using “assessed value” to determine the benefits conferred upon each property in the district when it set a rate of $.65 per $100.00 of assessed value. Appellants

also point to section

7-84-522(c) of

th e T ennessee Code to argue that the Memphis City Council did not properly apportion the special assessment. Section 7-84-522(c) states that “[t]he fact that assessments may be spread uniformly ove r a large area w

ithin the district sha

ll-6-

notbe c onclusive that such assessment was arbitrarily made.” T ENN

. C ODE A NN

. § 7-84-522(c) (1998). Appellants argue that a unifo rm assessment ove r an entire distri

ct such as the distr

ict in question is conclusive evidence that such assessment was arbitrarily made. We do not agree w ith Appel lants’ interpretation of the statute. The overall purpose and tenor of the Central Busines s Improvement

District Act of 199

0 is to improve local business climates. The Act itself grants broad discretion to municipalities to e stablish progra

ms most consistent wit

h their local needs. See T ENN

. C ODE A NN

. § 7-84-502(2) (1998). Moreover, as previously stated, section 7-84-508 emphasizes that the statutes in the A ct shall be liberally construed to effectuate their purposes. We find that the uniformassessments over the p roperties i n the district wer

e not arbitrarily

made by the M

emphis City Council. Assessed v

alu e is a n authorized method for determining

the benefits to pr

operty in
a district. See T ENN

. C ODE A NN

. § 7-54-522(b) (1998). Furthermore, we do not int erpret the language of 7-84-522(c) for the proposit

ion that a uniform a

ssessment over a d

istrict is per se conclusive that such assessment was arbitrarily made.

The Appellants rely on West Tennessee F lood Control &

Soil Conservation Di

st. v. Wyatt

, 247 S.W.2d 56 (Tenn. 1952) to support their argument. In Wya tt , the Board of Commissioners und ert ook to l evy a special assessment of fifty cents per acre upon the lands of prope

rty owners

in
a certain flood control district in Lake County, Tennessee. See id. at 57. The court struck down the attempted special assessme nt as violative of A

rticle 2, Section 29 of the Tennessee Constitution. See id. at 62. Wyatt , however, is distin guishable from the case at bar. In Wyatt , the caption of the Act expressly stated t ha t the levy is “to provide revenue for the operation of said District.” Id. at 59 (emphasis

added). The Act did not provide that the assessment be levied for any particular purpose. The cour t stated that, “if the money collected . . . is used for some purpose other than a s a direc t benefit to the land assessed, it is a tax.” Id. at 58. Furthermore, th e court stated tha

t “there is a general provision as to

the purposes for which the funds may be used. The Act does not provide that the assessment to be levied for any particular

purpose.” Id. at 58. The court also stated that “the Act itself did not defi ne t he i mpr ove men ts t o be mad e, n or d oes it p rov ide for

. . . any p rocedure specifying

in detail any planned improvements.” Id. at 59. As a result, th e Act was held to be unconstitutional because

the assessment could have been used for gener

al purposes or for

a purpose which bore no relation to projects designated to benefit property within the district. In the instant case, however, the constitutionality of the statutory scheme is not at issue. It is also clear to us up

on the record tha

t the money c

ollected from the

sp ecial assess ments is being used solely to ben

efit the properti

es in the CB ID II. The “1999 Strategic Plan for the Continued Redevelopment

of the Memphis Central Business Improvement District” lists eight

redevelopment goals and 13 projects that are currently being driven by the Center City Commission. The special assessment

funds are not paid

in to the general public treasury, and they ar e in no way used for general public expenses. All of these goals and p r ojects specifically benefit the downtown properties within the CBID. As a result, for all of the aforementioned reasons, we find that the levy in question
was a lawful special assessment in compliance with section 7-84-522 of the Tennessee Code as well as Article 2, Section 29 of the Tennessee Constitution.-7-

Next, Appellants al so contend that they were deprived of due process of law unde r the Fourteenth

Amendment to the United States Constitution. Appellants posit that they never had the opportunity

to be heard regarding the assessment and the be

nefits co nferred upon the pr

operties . We disagree. Befo re t he as ses sme nt w as i mpl eme nte d, t he M emp his Cit y Co uncil sent notice to all property owners in the district and a hearing was held regarding the propo sed assessment . The property owners within the district could ha ve appeared and protested anything reg arding the proposed district or assessment at the January 7, 1997 hearing. However, none of th e Appellants appeared at the hearing to protest the proposed district or the proposed assessment. As a result, we find that Appellants due process rights were not violated.

Fin all y, Appellants alternatively argue that the failure of the City of

Memphis to reduce the tax rat e fol low ing a gene ral reap prai sal of p rop ert y v iolat ed section 67-5-1701 et seq. of the Tennessee Code. Appellants point to section 67-5-1701(3) of the Tennessee Code, which states in relevant part that “in the event of a genera l reappr aisal as determined by the state board, [the governing body] shall determine and certify a tax rate which wi ll provide the same ad valorem
revenue for that jurisdi ction as was levied during the previous year.” T ENN

. C ODE A NN

. § 67-5- 1701(3) (1999) (emphasis added). Section 67-5-1701 et seq. pertains to taxes and is who ll y inapplicable

to special assess

ments. Since the City

of Memphis levied a special assessment and not a tax upon the prope

rty owners

within the district,

we find that this issu

e is without merit.

We decline to address Appellant’s remaining issues as they are inapplicable since we have determined that th

e levy in que

stion was a valid spe

cial assessment.
Conclusion

For the aforementioned reasons, the judgment of the trial court granting summary judgment to the City of Memphis is affirmed. C osts o n appeal are taxed against the Appellants, Myron Zimm erm an, et a l an d J. F. C anep ari Cor p., et a l, f or w hic h ex ecut ion may i ssu e if nece ssa ry.

___________________________________ ALAN E. HIGHERS, JUDGE