Court Opinion

ID: 1045323
Source: CourtListenerOpinion
Date Created: 2013-10-08 02:25:25.529222+00
Date Added: 2024-06-11T12:50:56.206793
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                             AT JACKSON
                               February 20, 2013 Session

     GENE B. COCHRAN, ET AL. v. CITY OF MEMPHIS, TENNESSEE

              Direct Appeal from the Chancery Court for Shelby County
                  No. CH-11-1123-1     Walter L. Evans, Chancellor

                No. W2012-01346-COA-R3-CV - Filed March 19, 2013

The South Cordova Area was annexed in November 2001. In December 2001, Plaintiffs
timely filed a complaint challenging the South Cordova Area annexation. In 2011, however,
the complaint was dismissed “without prejudice” for failure to prosecute. Thereafter,
Plaintiffs filed a second complaint challenging annexation, but the trial court dismissed the
complaint for failure to state a claim. We affirm.

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

A LAN E. H IGHERS, P.J., W.S., delivered the opinion of the Court, in which D AVID R. F ARMER,
J., and H OLLY M. K IRBY, J., joined.

Richard L. Winchester, Jr., Memphis, Tennessee, for the appellants, Gene B. Cochran, Don
S. Jamison, William L. Kegler, Roger B. Rice, Barry L. Knight and Dr. E. Sidney Birdsong

Allan J. Wade, Brandy S. Parrish, Memphis, Tennessee, for the appellee, City of Memphis
                                             OPINION

                              I.   F ACTS & P ROCEDURAL H ISTORY

       On November 20, 2001, the Memphis City Council passed Ordinance No. 4907
annexing the “South Cordova Annexation Area” (“South Cordova Area”). That same day,
the City Council also passed Ordinance No. 4908 annexing the “Southeast Industrial Corridor
Annexation Area” (“Southeast Area”).

        On December 18, 2001, alleged landowners within the South Cordova Area–Gene B.
Cochran, Don S. Jamison, William L. Kegler, Roger B. Rice, Barry L. Knight, and Dr. E.
Sidney Birdsong (collectively, “Plaintiffs”)–filed a “Complaint for Declaratory Judgment in
the Nature of a Quo Warranto Proceeding Per T.C.A. § 6-51-103, and T.C.A. § 6-58-111”
(“First Complaint”) challenging the annexation of the South Cordova Area.1 However, on
April 20, 2011, the First Complaint was dismissed “without prejudice” for lack of
prosecution. Plaintiffs moved to set aside the dismissal, but their motion was denied. No
appeal was taken from the dismissal of the First Complaint.

        On July 5, 2011, Plaintiffs filed a “Complaint in the Nature of a Quo Warranto
Proceeding Per T.C.A. § 6-51-102(b)(5), and for a Declaratory Judgment, Per T.C.A. § 6-58-
111” (“Second Complaint”) again challenging the annexation of the South Cordova Area.2
As the basis of their quo warranto action, Plaintiffs essentially claimed that annexation was
unreasonable and/or unnecessary. Additionally, Plaintiffs sought a declaratory judgment that
(1) the City Council had exceeded its authority in annexing the South Cordova Area; and (2)
the annexation was “prohibited by law” because the City was in default on a prior plan of
services for the Southeast Area at the time it annexed the South Cordova Area.

       The defendant City of Memphis (“City”) filed a Motion to Dismiss pursuant to
Tennessee Rule of Civil Procedure 12.02(6), claiming that both Plaintiffs’ quo warranto
action and their declaratory judgment action were time-barred. The City further argued that
the declaratory judgment action failed to state a claim for relief because: (1) Plaintiffs’
Second Complaint failed to allege facts to support their contention that the City exceeded its
authority in annexing the South Cordova Area; (2) a declaratory judgment action is available
only when no quo warranto proceeding was available; (3) the City could not have been in

       1
       The First Complaint named as defendants the City of Memphis, the Mayor of Memphis, and specific
Memphis City Council Members.
       2
           The Second Complaint named only the City of Memphis as a defendant.

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default of a prior plan of services for the Southeast Area when it annexed the South Cordova
Area, because both areas were annexed at the same time; and (4) the South Cordova Area
property owner Plaintiffs had no right to enforce a plan of services for the Southeast Area
after its annexation.

        Plaintiffs did not respond to the City’s Motion to Dismiss,3 and, following a hearing,
the trial court granted the City’s motion finding that Plaintiffs’ Second Complaint “fails to
state a relief for which relief may be granted[.]” Plaintiffs timely appealed to this Court.

                         II.   I SSUE P RESENTED & S TANDARD OF R EVIEW

       On appeal, we are asked to determine whether the trial court erred in granting the
City’s Motion to Dismiss Plaintiffs’ Second Complaint for failure to state a claim.

        The City attached as exhibits to its Motion to Dismiss: (1) Ordinance No. 4907,
annexing the South Cordova Area; (2) Plaintiffs’ First Complaint filed December 18, 2001;
(3) the April 20, 2011 “Order Dismissing Cause for Lack of Prosecution”; (4) the June 28,
2011 “Order Denying Motion to Set Aside Order of Dismissal; and (5) Ordinance No. 4908,
annexing the Southeast Area. In Indiana State Dist. Council of Laborers v. Brukardt, No.
M2007-02271-COA-R3-CV, 2009 WL 426237, at *8-9 (Tenn. Ct. App. Feb. 19, 2009)
discretionary review denied (Tenn. Aug. 24, 2009), the middle section of this Court, in
allowing consideration of a proxy statement and a certificate of incorporation in resolving
a motion to dismiss, cited with approval the following:

        Numerous cases . . . have allowed consideration of matters incorporated by
        reference or integral to the claim, items subject to judicial notice, matters of
        public record, orders, items appearing in the record of the case, and exhibits
        attached to the complaint whose authenticity is unquestioned; these items may
        be considered . . . without converting the motion [to dismiss] into one for
        summary judgment.

(quoting Wright and Miller, Federal Practice and Procedure, Civil § 1357, p. 376 (3d ed.
2004)). We find the motion to dismiss in this case was not converted into a motion for
summary judgment.

        3
          In its “Order Granting Motion to Dismiss and Dismissing Complaint,” the trial court stated that it
had considered “Plaintiffs’ Response to the Motion to Dismiss[.]” However, no such response is included
in the record before this Court, the City’s brief states that “Plaintiffs/Appellants did not file a response to the
City’s motion to dismiss,” and Plaintiffs’ brief contains no indication that a response was, in fact, filed.

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        “A Rule 12.02(6) motion to dismiss seeks only to determine whether the pleadings
state a claim upon which relief can be granted.” Edwards v. Allen, 216 S.W.3d 278, 284
(Tenn. 2007). The motion challenges the legal sufficiency of the complaint, admitting the
truth of all relevant and material averments contained therein, but asserting that such facts
do not constitute a cause of action. Id. “It is well-settled that a complaint should not be
dismissed for failure to state a claim unless it appears that the plaintiff can prove no set of
facts in support of his or her claim that would warrant relief.” Trau-Med of Am., Inc. v.
Allstate Ins. Co., 71 S.W.3d 691, 696 (Tenn. 2002). We are required to take the relevant and
material factual allegations in the complaint as true and to liberally construe all allegations
in favor of the plaintiff. Edwards, 216 S.W.3d at 284. We are not, however, “required to
accept as true assertions that are merely legal arguments or ‘legal conclusions’ couched as
facts.” Webb v. Nashville Area Habitat for Humanity, Inc., 346 S.W.3d 422, 427 (Tenn.
2011) (citing Riggs v. Burson, 941 S.W.2d 44, 47 (Tenn. 1997)). We review a trial court’s
conclusions of law, including its ruling on a Rule 12.02(6) motion to dismiss, de novo with
no presumption of correctness. Edwards, 216 S.W.3d at 284; see also Doe v. Catholic
Bishop for Diocese of Memphis, 306 S.W.3d 712, 717 (Tenn. Ct. App. 2008) (citing Stein v.
Davidson Hotel Co., 945 S.W.2d 714, 716 (Tenn. 1997); Farris v. Todd, No. E1999-01574-
COA-R3-CV, 2000 WL 528408, at *2 (Tenn. Ct. App. May 3, 2000)).

                                            III.   D ISCUSSION

       On appeal, Plaintiffs argue that the trial court erred in dismissing their Second
Complaint because their First Complaint was dismissed “without prejudice.” They
essentially contend that this “without prejudice” language conveyed an automatic right to “re-
instate the pending litigation[,]” notwithstanding any issues related to the Second
Complaint’s sufficiency or timeliness.4

                                A. Dismissal of Quo Warranto Action

       Prior to 1955, “the primary method in Tennessee for annexation of new territory to
the borders of a municipality was by private act of the General Assembly.” Highwoods
Props., Inc. v. City of Memphis, 297 S.W.3d 695, 703 (Tenn. 2009) (citations omitted).
However, in 1955, to facilitate a municipality’s need to “‘plan for its orderly growth and
development[,]’” id. (quoting City of Kingsport v. State ex rel. Crown Enters., Inc., 562
S.W.2d 808, 814 (Tenn. 1978)), and “to increase the power of municipalities to deal with
developments on their peripheries[,]” our legislature “establish[ed] a general law governing
the annexation of land to the borders of existing municipalities” via, among other
mechanisms, ordinance of the annexing municipality. Id. at 704 (citing Tenn. Code Ann. §

       4
           Plaintiffs provide little demarcation between their quo warranto and declaratory judgment claims.

                                                     -4-
6-51-102).

        A municipality’s decision to annex, however, does not go into effect immediately
upon passage of an ordinance. Town of Huntsville v. Scott County, 269 S.W.3d 57, 61 n.5
(Tenn. Ct. App. 2008) (citing City of Knoxville v. Knox County, No. M2006-00916-COA-R3-
CV, 2008 WL 465265, at *3 (Tenn. Ct. App. Feb. 20, 2008) perm. app. denied (Tenn. Aug.
25, 2008)). The ordinance becomes operative thirty days after final passage, as aggrieved
property owners may contest annexation during this thirty-day period. Id. (citing City of
Knoxville, 2008 WL 465265, at *3). Specifically, the 1955 Act granted “‘[a]ny aggrieved
owner of property lying within the territory5 which is the subject of an annexation ordinance’
a right to challenge the ordinance via a timely filed quo warranto action alleging that the
annexation ‘reasonably may not be deemed necessary for the welfare of the residents and
property owners of the affected territory and the municipality as a whole and so constitute[s]
an exercise of power not conferred by law.’” Id. (quoting Act of Mar. 1, 1955, § 2(b))
(footnote omitted). However, “[t]he right to challenge an annexation is [] a ‘statutory right’
that ‘in its very origin is limited.’” Id. (citing Brent v. Town of Greeneville, 309 S.W.2d 121,
123 (Tenn. 1957)); see also Southwest Tenn. Elec. Membership Corp. v. City of Jackson, 359
S.W.3d 590, 604 (Tenn. Ct. App. 2010) (“[O]ur Courts have consistently held that the
statutory right to challenge an annexation is very limited.”) (citing Highwoods, 297 S.W.3d
at 707-08).

       Our Supreme Court has stated that “‘[w]ithin the four corners of [the quo warranto]
statute lies the entire jurisdiction and authority of the Courts to review the actions of
municipalities in enacting annexation ordinances.’” Id. (quoting City of Oak Ridge v. Roane
County, 563 S.W.2d 895, 897 (Tenn. 1978)). Accordingly, “‘the courts have no power to
vacate an annexation ordinance for purely procedural defects,’ because no such authority has
been granted by statute.’” Id. (quoting City of Watauga v. City of Johnson City, 589 S.W.2d
901, 906 (Tenn. 1979)). Instead, “the general rule is that defects in an annexation ordinance
must be presented in the context of a challenge to its reasonableness or necessity by way of
a timely quo warranto challenge.” Id. (citing City of Oak Ridge, 563 S.W.2d at 898; City of
Knoxville v. State ex rel. Graves, 341 S.W.2d 718, 721 (Tenn. 1960)). A quo warranto
challenge must be made within “thirty days after the operative date of the ordinance,”
because thereafter, “the courts have no jurisdiction of such suits.” City of Oak Ridge, 563
S.W.2d at 898.

        As stated above, the City of Memphis moved to dismiss Plaintiffs’ Second Complaint,

        5
          The Act has since been extended to allow “[a]n aggrieved owner of property that borders . . .
territory that is the subject of an annexation ordinance” to bring a quo warranto action. Tenn. Code Ann.
§ 6-51-103(a)(1)(A) (emphasis added).

                                                  -5-
filed in July 2011, claiming, among other things, that their quo warranto action was untimely
because it was filed approximately ten years–rather than thirty days–after the November 2001
annexation of the South Cordova Area which it sought to challenge. The trial court
dismissed the Second Complaint for failure to state a claim.

        On appeal, Plaintiffs suggest that the timeliness of their Second Complaint could not
properly be considered via a motion to dismiss. However, our Supreme Court has expressly
stated that “[a] Tenn. R. Civ. P. 12.02(6) motion is an appropriate way to seek to invoke the
statute of limitations as grounds for dismissing a complaint.” Redwing v. Catholic Bishop
Diocese of Memphis, 363 S.W.3d 436, 456 n.11, (Tenn. 2012) (citations omitted); see also
Givens v. Mullikin ex rel. Estate of McElwaney, 75 S.W.3d 383, 404 (Tenn. 2002) (“A
‘complaint is subject to dismissal under [R]ule 12.02(6) for failure to state a claim if an
affirmative defense clearly and affirmatively appears on the face of the complaint.’”)
(quoting Anthony v. Tidwell, 560 S.W.2d 908, 909 (Tenn. 1977)).

        Alternatively, Plaintiffs contend that by dismissing their First Complaint “without
prejudice,” the trial court intended to “specifically authorize” the “re-filing” of their quo
warranto action outside of the 30-day limitations period. It appears that this argument was
not raised in the trial court,6 and in any event, this contention finds no support in Tennessee
law. As noted by the City, “A court derives subject matter jurisdiction from the Tennessee
Constitution or legislative act.” Word v. Metro Air Servs., Inc., 377 S.W.3d 671 (Tenn.
2012) (citing Meighan v. U.S. Spring Commc’ns Co., 924 S.W.2d 632, 639 (Tenn. 1996)).
We have found no Constitutional or legislative authority, nor any applicable judicially-
recognized exception,7 permitting a court to exercise jurisdiction over a quo warranto action
filed outside of the 30-day limitations period. Instead, we find the existence of an affirmative
defense–the 30-day statute of limitations for filing a quo warranto action–“clearly and
affirmatively appears” on the face of the Second Complaint. See Givens, 75 S.W.3d at 404
(citing Anthony, 560 S.W.2d at 909). Accordingly, we conclude that the Second Complaint
fails to sufficiently raise a quo warranto action claim, and we affirm the trial court’s

        6
          Plaintiffs’ Second Complaint fails to make any assertion that it was timely filed despite the passage
of approximately ten years between the annexation challenged and its filing. Additionally, Plaintiffs did not
file a transcript or a statement of the evidence.
        7
         At oral argument before this Court, Plaintiffs seemed to indicate that they were not relying upon
the Savings Statute, Tenn. Code Ann. § 28-1-105. In any event, the Savings Statute does not apply to section
6-51-103 (formerly § 6-310) annexation challenges dismissed without prejudice. See City of Oak Ridge v.
Roane County, 563 S.W.2d 895, 898 (Tenn. 1978) (citing Brent v. Town of Greenville, 203 Tenn. 60, 309
S.W.2d 121 (1957) (finding that the Savings Statute did not save a voluntarily non-suited annexation
ordinance challenge from operation of the 30-day challenge period set forth in Tennessee Code Annotated
section 6-51-102 (formerly § 6-309)).

                                                     -6-
dismissal of such.

                         B. Dismissal of Declaratory Judgment Action

       As stated above, Plaintiffs’ Second Complaint sought a declaratory judgment that (1)
the City Council had exceeded its authority in annexing the South Cordova Area; and (2) the
annexation was “prohibited by law” because the City was in default on a prior plan of
services for the Southeast Area at the time it annexed the South Cordova Area.

       On appeal, the City argues that Plaintiffs’ declaratory judgment action was properly
dismissed because (1) Plaintiffs’ Second Complaint alleged no facts to support its claim that
the City exceeded the authority granted to it; (2) a declaratory judgment action is available
only when no quo warranto proceeding was available; (3) it is factually and legally
impossible for the City to have been in default of a prior plan of services for the Southeast
Area at the time it annexed the South Cordova Area because both areas were annexed on the
same day; and (4) Plaintiffs–as South Cordova Area property owners–have no right to
enforce a plan of services for the Southeast Area.

       Challenges related to the reasonableness or necessity of an annexation must be
brought via a timely quo warranto action; however, where an annexation ordinance is alleged
to be void or to exceed the authority delegated by the legislature, a declaratory judgment
action may be permissible. State ex rel. Earhart v. City of Bristol, 970 S.W.2d 948, 954
(Tenn. 1998); Blount v. City of Memphis, No. W2006-01191-COA-R3-CV, 2007 WL
1094155, at *4 (Tenn. Ct. App. Apr. 13, 2007). To challenge an annexation ordinance via
a complaint for declaratory judgment, however, two requirements must be met: (1) the
challenge must relate to an ultra vires act; and (2) a quo warranto proceeding must not be
available. Highwoods Props., Inc., 297 S.W.3d at 708-09 (“‘Subject to some exceptions,
a declaratory judgment actions should not be considered where special statutory proceedings
provide an adequate remedy.’”) (quoting Colonial Pipeline Co. v. Morgan, 263 S.W.3d 827,
838 (Tenn. 2008)).

                    1. Plaintiffs’ Claim that the City Exceeded its Authority

        In this case, Plaintiffs cannot claim that they were unable to bring a quo warranto to
allege that the City Council had exceeded its authority in annexing the South Cordova Area
because this claim was expressly raised in their First Complaint filed on December 18, 2001.8
That the action was ultimately dismissed due to their failure to prosecute is of no

        8
        As stated above, we find the trial court could properly consider the First Complaint in ruling on the
City’s Motion to Dismiss.

                                                    -7-
consequence. Because Plaintiffs do not meet the requirements for bringing a declaratory
judgment action with regard to this claim, we find that the claim was properly dismissed. See
McMillan v. Town of Signal Mtn. Planning Comm’n, No. E2009-01254-COA-R3-CV,
2009 WL 4041660, at *3-4 (Tenn. Ct. App. Nov. 23, 2009) (granting the defendants’ motion
to dismiss, finding that because the plaintiffs had filed a quo warranto action, they could not
also maintain a declaratory judgment action).

             2. Plaintiffs’ Claim that Annexation was Prohibited by Law

        Tennessee Code Annotated section 6-51-102(b)(5) provides that “[a] municipality may
not annex any other territory if the municipality is in default on any prior plan of services.”
(emphasis added). On appeal, Plaintiffs claim that their declaratory judgment action was a
proper vehicle for raising their claim that the City was in default of its plan of services for
the Southeast Area at the time it annexed the South Cordova Area, and therefore, that the
annexation of the South Cordova Area was “prohibited by law[.]” Plaintiffs point out that
this claim was not raised in the First Complaint, and they insist that was so because the claim
had not yet “ripened[.]”

         At the outset, the City argues that Plaintiffs’ Second Complaint fails to allege any
facts to support its allegation that the City defaulted upon its obligations pursuant to the
Southeast Area plan of services. Alternatively, it maintains that any failure to comply with
its plan of services for the Southeast Area cannot operate to invalidate the annexation of the
South Cordova Area. First, it points out that both areas were annexed on the same day, and
therefore, it argues that no default of the Southeast Area plan of services could have existed
at the time the South Cordova Area was annexed. Second, it claims that Plaintiffs, who own
property in the South Cordova Area, lack standing to enforce a plan of services for the
Southeast Area. Third, it contends that the exclusive remedy for failure to comply with a
plan of services is mandamus–not annexation invalidation.

       “To be sufficient and survive a motion to dismiss, a complaint must not be entirely
devoid of factual allegations.” Webb, 346 S.W.3d at 427. “Tennessee courts have long
interpreted Tennessee Rule of Civil Procedure 8.01 to require a plaintiff to state ‘‘the facts
upon which a claim for relief is founded.’’” Id. (quoting Smith v. Lincoln Brass Works, Inc.,
712 S.W.2d 470, 471 (Tenn. 1986) (quoting W & O Contr. Co. v. City of Smithville, 557
S.W.2d 920, 922 (Tenn. 1977))). A complaint is not required to “‘contain detailed
allegations of all the facts giving rise to the claim,’ but it must ‘contain sufficient factual
allegations to articulate a claim for relief.’” Id. (quoting Abshure v. Methodist Healthcare-
Memphis Hosps., 325 S.W.3d 98, 103-04 (Tenn. 2010)). “‘The facts pleaded, and the
inferences reasonably drawn from these facts, must raise the pleader’s right to relief beyond
the speculative level.’” Id. (quoting Abshure, 325 S.W.3d at 104). This Court is simply not

                                              -8-
required to “accept as true assertions that are merely legal arguments or ‘legal conclusions’
couched as facts.” Id. (citing Riggs, 941 S.W.2d at 47-48).

         Our review of Plaintiffs’ Second Complaint reveals no factual allegations to support
its conclusory legal allegation that the City “is in default in its plan of services adopted for
the Southeast Annexation and, accordingly, is prohibited by law from proceeding with the
annexation of the South Cordova Area.” For example, the Second Complaint contains no
allegations concerning the nature of the alleged default, that the default existed at the time
the South Cordova Area was annexed, that residents of the Southeast Area had filed suit to
compel the City to perform the plan of services, or that a court had determined that the City
had failed to comply with the plan of services without cause. This “bare bones” allegation
wholly fails to raise Plaintiffs’ right to relief beyond speculation, and therefore, we find that
it is insufficient to survive a motion to dismiss for failure to state a claim.

        In sum, we affirm the trial court’s dismissal of Plaintiff’s Second Complaint–both its
quo warranto and declaratory judgment claims–in toto for failure to state a claim upon which
relief can be granted.

                                     IV.    C ONCLUSION

        For the aforementioned reasons, we affirm the decision of the chancery court. Costs
of this appeal are taxed to Appellants, Gene B. Cochran, Don S. Jamison, William L. Kegler,
Roger B. Rice, Barry L. Knight, and Dr. E. Sidney Birdsong, and their surety, for which
execution may issue if necessary.

                                                     _________________________________
                                                     ALAN E. HIGHERS, P.J., W.S.

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