# FILED Oct. 4, 1995 Cecil Crowson, Jr . Appellate Court Clerk IN THE COURT OF AP PEALS OF

TENNESSEE, WESTE RN SECTION AT NASHVILL E

_______________________________________________________ ) THE METROPOLITAN ) Davidson County Chancery Court GOVERNM

ENT OF NA SHVILLE ) Ru le N o. 9 2-3 809 -III AND DAVIDSON COUN TY , ) ) Plaintiff/Appellee. ) ) VS. ) App. No. 01A01-9504-CH-00142 ) NASHVILLE PARK HOSPITALITY, ) INC., et al ) ) Defend ants/Appe

llants. )

)

______________________________________________________________________________ From the Chancery

Court of Davidson County at Nashville. Honorable Robert S. Brandt, Chancellor
Joel H. Moseley , MOSELEY & MOSEL

EY, Nashville, Tennessee Attorney for Def endants/ Appellan ts.
John L. Murphy , III , Nashville, Tennessee John L. Kennedy , Nashville, Tennessee Attorney for Plaintiff/Appe llee.

OPINI ON FIL

ED: REVERSED IN

PART, A FFIR

MED IN P

ART AND R

EMANDED FARMER, J.
CRAWFORD, J. : (Concur s) KOCH, J. : (Concur s)1 Allege d violation s include d sewag e in gue st rooms, in sect infe station, unlabele d toxic

chemicals and missing fire extinguishers and smoke detector s.

2 The par ties s tipu lated that t he 200 Build ing is subj ect to insp ectio n unde r the A ct's provision s and ag

reed tha t the non- comporting units in that building would

be broug ht into compliance by

dates specified. The par

ties' " Stipulation

and Agr eement" was inco

rporate d into the fina l judgme nt. Appellan t, Nashville Park Hospitality, I nc. ("Nas hville Par k"), is the owner of the Budget Lodge, a m otel i n Nash vill e cons isti ng of th ree sep arate b uild ings identified as the 100, 200 and 300 Building s. Ninety -six suites c ompose

the 100 and 300 Buildings, with 92 available to the public and rented

on a weekly

basis. The 200 Building consists of standard motel rooms which are rentednightly. Appellee , the Metropolitan Government of Nashv ille and Davi dson County ("MetropolitanGovernment"), filed suit seeking to enjoin Nashville Park from operating the Budget Lodge in violation of the Hotel, Food, Service Establishment and Public Swimming Pool Inspection Ac t of 198 5, T.C.A. § 68-14-301 et. seq. ("Act"). 1 After a hearing, the trial cour t granted Metropolitan Government's application for a permane nt injunction, enjoining Nashville Park from operating Budge

t Lodge in viola

tion of the

Act. The court, however, refused

to entertain the issue of whether the Act applied to the su it es re nt ed we ek ly, 2 citing Nashville Park's failure to first e xhaust its administr

ative re medies. N ashville P ark has a ppealed, c hallenging that determination by the chancellor. For reasons to be discussed, we rever se that portion o f the judg ment holding the trial court without jur

isdic tion t

o dec ide th

e issu e pri or to a

n exh austion of the ad

ministrative proce ss.
This lawsuit was filed after various inspections by the Metropolitan Board

of Healt h revealed Budge t Lodg e's fa

ilure to c omply

with cer tain minimu

m standar ds imposed

under the Act. The inspections were condu cted purs uant to Metropolitan Government's contract with the Tennessee Department

of Health authorizing theformer t o inspect hotels/mot

els to ens ure comp liance with the Act and the regulations promulgated there und er the Ac t. Metropolitan Government did not issue
an operating permit to Budget L odge for the y

ear beginning July

1, 1992 and notifiedNashville Park to cease o peratio ns initially

in Augus t and th en in December of 1992. Metropolitan Government alleged that as of the date suit was filed, December 22, 1992, Nashville Park was ope rating without a valid pe rmit.

In granting the injunction, the trial court found Na shville Pa

rk in nonc omplianc e withthe Act. The chance llor, howev er, fel t the issue

regar ding the Act's a pplicabi lity

to the wee

kly rentedsuites "best decided by the entity to which the Gene ral Assembly has given the inspecting and permitting res pon si bi li ty. It is . . . the Health Department of the Metropolitan Government, that has the expertise to decide this issue."

The sole issue on app eal is whether the trial court erred in ref using to consider the Act's applicability to the 100 and 300 Building s. It is Nashville Park's position t hat th e issue was properl y before the trial court. Metropolitan Government asser ts that it is best addressed by the administrative agencies responsible for promulg ating health and safety regulat ions. B oth parties agree that a resolution of the issue requires an interpretation of the lang uage in T.C .A. § 68-14- 302(5), w hich state s:

"Hotel" means any building or establishment kept, used, or maintained as, or advertised as, or offered to thepublic to be, a place where sleeping

accommo dations a

re furn ished for pay to transients or travele

rs , whether or

not meals a

re serv ed there

in to transients or travele rs ; (emphasis added).

Nashville Park asserts that the suites in th e 100 and 300 Buildings do not
accommo date

"transients or travelers," but the " working poor," thus they are not subject

to regulation under the Act. Indeed, the tria

l court found that these two buildings were rented on a weekly basis to the work

ing poor - "peop le who do not have funds to pay a month's rent on an apartment." The trial court also found that these individuals typica lly stay in the su it es fo r a pp ro xi ma te ly 6 months.

It is undisputed that Nashville Park has not exhausted the administrative process. In Reeves v. Olsen , 691 S.W.2d 527 (Tenn. 1985), the Tennessee Supreme Court held that "[e]xcept when required

by statute, exhaustion of administrative remedies is not an inexorable command, but is a matter of so und judici al discreti on." Reeves , 691 S.W.2d at 530 (quot ing Cerro Meta l Products v. Marshall , 620 F.2d 964, 970 (3dCir. 1980)). The pertinent statute here is T.C.A. § 68-14-310, which pr ovides asfollows:

(a) The hea

rings pr ovided fo r inthis part s hall be conducted by the commissioner in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.3 Duties of commissioner. -- The commissioner is authorized to: . . . .

(7) Enter into an agreement or c ontract with county hea lth departments whereby

the departments would implement the provisions of this part or its equivalent in their respective areas of jurisdiction if the commissioner deems it to be appropriate;

(b) Appeals fr om any final decision after a hearing shall be pursued in accor

dance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. (c) Su bs ec ti on s ( a) an d ( b) do no t a pp ly i n a co un ty w h ose health department is operating a progr am under § 68-14-303(7) 3 which meets the minimum requirements of due process; provided, that appeals from

final de cisions ma

de under such prog

rams may be made to the com

missioner , for th e limit ed purpose of determining whether a material error of law was mad e at the c ounty level. (Emphasis added.)
Metropolitan Government contends that Nashville Park is obligat e d to pursue

its administrative remedies before seeking judicial intervention. We note the use of the word "ma

y" in subsection (c ). "[T]he word 'may ' in a statute ordinarily connotes discretion or permission." Johnson v. Alcohol

ic Bever age Comm'n , 844 S.W.2d 182, 185 (Tenn. App. 1992). We conclude that the foregoing lang

uage does not

evidence a

legislative intent to proscribe one's pursuit of judicial relief until exhaustion of the administrative process.

Absent a direct statutory

mandate, we find exhaustion of the ad ministrative proce ss
un de r t he se fa ct s u nn ec es sa ry.

The rule tha

t admi nistrative remedies must be exhausted before resort isha d to the courts is not absolute and without exceptions. . . .

. . . . A failure t o exh aust administrative remedies may be justified when the only or controlling question is one of l aw, at le ast where th er e i s n o i ss ue es se nt ia ll y admini strative, involving agency expert ise and discreti on, which is in its nat

ure peculiarly administrative, where theissue is one of the validity or construction or interp retation of rulesand reg

ulations.

. . . . A litigant

need not p

roceed withoptional administrative process before seeking judicial re lief.

73 C.J.S. Public Administr ative Law and Proce

dure § 40 (1983).

In this matter, Nashville Park challenges the application for injunction base d upo nits pos ition that the Act does not seek to regulate cer tain suites within the Budget Lodg e. Proper resolution depends solely upon interpr etation of the pertine nt provisi ons of the Act. This is not something within the

confine s of age

ncy expertise and a deferral thereto is not warranted. We adhere to the rea soning e

xpressed b y the Kentuc

ky C ourt of Ap peals in Harrison's Sanitarium , Inc. v. Commonwealth, 417 S.W.2d 137 (Ky. 1967), in recognizing that "a party may have

direct judicial relief withoutexhaustion of administrative remedies when there are no disputed f actual questions to be resolved and the issue is confined to the validity or applicabi

lity of a st

atu te or ordi nance." Harrison's Sanitarium , 417 S.W.2d at 138 (emphasis added).

Ac co rd in gl y, this cause is remanded to the trial court with instructions to determine the Act's applicability

to t he suites enc ompassing the 100 and 300 Buildings. To this extent, the judgment is rever sed; it is, in all o ther respects, affirmed. Costs are taxed one-half to the Metropolitan Government of Nashville a nd Davidson County and one-ha lf to Nashville Park Ho sp it al it y, In c. , f or wh ic h e xe cu ti on ma y is su e i f n ec es sa ry.

________________________________ FAR MER , J.

______________________________ CRAWFORD, J. (Concurs )

______________________________ KOCH, J. (Co ncurs)