Cox Oil v. Lexington Beer Bd.

IN THE COURT OF APPEALS OF TENNESSEE

AT JACKSON

February 14, 2002 Session

COX OIL COMPANY, INC. v. CITY OF LEXINGTON BEER BOARD

An Appeal from the Chancery Court for Henderson County

No. 14565 Joe C. Morris, Chancellor

No. W2001-01489-COA-R3-CV - Filed October 10, 2002

This is an action challenging the denial of a beer permit. The plaintiff business applied for a beer

permit with the defendant beer board. The board denied the permit because plaintiff’s location was

within 500 feet of a church. This proximity to a church was in violation of a city ordinance. The

plaintiff filed a writ of certiorari in the trial court, seeking a reversal of the board’s decision because

the 500-feet ordinance had been applied in a discriminatory manner. The trial court found that the

board had allowed another establishment that was within 500 feet of a church to maintain its beer

permit, and concluded that the board had therefore applied the ordinance in a discriminatory manner.

Consequently, the denial of the plaintiff’s beer permit was reversed. The board now appeals that

order. We affirm, finding that the board had applied the ordinance in a discriminatory manner, and

that the trial court did not err in reversing the denial of the plaintiff’s beer permit.

Tenn. R. App. P. 3; Judgment of the Chancery Court is Affirmed

HOLLY KIRBY LILLARD, J., delivered the opinion of the court, in which W. FRANK CRAWFORD , P.J.,

W.S., AND ALAN E. HIGHERS, J., joined.

Kenneth L. Walker, Lexington, Tennessee, for the appellant, City of Lexington Beer Board.

Stephen M. Milam, Lexington, Tennessee, for the appellee, Cox Oil Company, Inc.

OPINION

On October 30, 2000, Plaintiff/Appellee Cox Oil Co., Inc. (“Cox Oil”), applied to the

Defendant/Appellant City of Lexington Beer Board (“the Board”) for a permit to sell and store

package beer. In July 1998, the City had adopted a new ordinance, Section 8-210, which states that

a beer permit may not be issued to an applicant located “within five hundred (500) feet of any

hospital, school, church or other place of public gathering.” The ordinance contains a “grandfather

clause,” which states that “[n]o permit shall be suspended, revoked or denied on the basis of

proximity of the establishment to a school, church or other place of public gathering if a valid permit

had been issued to any business on that same location as of January 1, 1993 . . . .” Cox Oil’s

application for a permit reflects on its face that it is located within 60 feet of a church.1

On November 7, 2000, the Board of County Commissioners, acting as the City of Lexington

Beer Board, heard Cox Oil’s application. Cox Oil’s application for a beer permit was denied, based

on the 500-feet rule. On December 20, 2000, Cox Oil filed a writ of certiorari in the trial court,

seeking a reversal of the Board’s decision because the Board had applied the 500-feet rule in a

discriminatory manner. Cox Oil alleged that, on December 3, 1993, a beer permit was issued to

Lexington Amoco, located adjacent to Cox Oil and also within 500 feet of a church. Cox Oil’s

lawsuit noted that, Lexington Amoco’s beer permit had not been revoked or suspended since the

enactment of the City ordinance, Section 8-210. The trial court found that the Board had allowed

Lexington Amoco to keep its beer permit, and that Lexington Amoco was located within 500 feet

of a church, in violation of the City ordinance. From this, the trial court concluded that the 500-feet

rule was being applied in a discriminatory manner. If the ordinance is applied in a discriminatory

manner, the trial court held, the “ordinance is completely removed as a valid ground for denial of

a beer permit and invalidates the ordinance.” On this basis, the trial court ordered the Board to issue

a beer permit to Cox Oil. The Board now appeals that order.

On appeal, the Board argues that the trial court erred in relying on the permit issued to

Lexington Amoco as evidence of discriminatory application of the ordinance. The Board notes that

the permit was issued to Lexington Amoco in compliance with a decree of the Chancery Court of

Henderson County because of past discriminatory issuance of permits in violation of the City’s prior

distance ordinance. Because of this, the Board maintains, there was in effect no distance ordinance

in the City of Lexington at the time the permit was issued to the Lexington Amoco. In the

alternative, the Board asserts that the Lexington Amoco beer permit was covered by the grandfather

clause in the new distance ordinance. Finally, the Board claims that the new distance ordinance

promulgated in July 1998 constituted a “new” ordinance that was adopted along with an entirely new

city charter and city code. Therefore, the Board maintains, the new ordinance is not a “post facto”

amendment with which all existing permits must comply.

We review the decision of the trial court de novo upon the record with a presumption of

correctness of the findings of fact by the trial court. See Tenn. R. App. P. 13(d). We afford the trial

court’s conclusions of law no such presumption. See State v. Levandowski, 955 S.W.2d 603, 604

(Tenn. 1997). The issue in this case is whether the evidence preponderates against the trial court’s

finding that the Board applied its distance ordinance in a discriminatory manner.

It is well settled in Tennessee that, once discriminatory enforcement of a distance ordinance

has been established, the ordinance is invalid and is completely removed as a proper ground for

denial of a beer permit. See City of Murfreesboro v. Davis, 569 S.W.2d 805, 808 (Tenn. 1978); see

also Reagor v. Dyer County, 651 S.W.2d 700, 701 (Tenn. 1983); Seay v. Knox County Quarterly

Court, 541 S.W.2d 946, 947 (Tenn. 1976); Serv-U-Mart, Inc. v. Sullivan County, 527 S.W.2d 121,

1

The record reflects that Cox Oil’s property is adjacent to the United Method ist Church.

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123 (Tenn. 1975). When a permit is granted to one or more businesses in violation of the

ordinance’s distance parameters, while such a permit is denied to others similarly situated, this is

discriminatory application of the distance ordinance. “Any discriminatory application violates the

rule.” Reagor, 651 S.W.2d at 701. Once the ordinance has been applied in a discriminatory manner

and is thereby invalidated, the invalidity of the ordinance cannot be rectified by a post facto

amendment to the ordinance. Rather, the validity of the ordinance can be restored only “by

revocation or other elimination, such as attrition, of the discriminatorily-issued permits and licenses.”

City of Murfreesboro, 569 S.W.2d at 808. Thus, if a beer permit is valid at the time it is issued, but

later becomes violative of an amended ordinance, the Board must revoke or suspend the permit that

is in violation in order to maintain the validity of the amended ordinance. See id.

The Board argues that the Lexington Amoco permit should not be the basis for a finding of

discriminatory application because it was ordered in compliance with a court order. The Board,

however, cites no case law in support of this position. Indeed, it was made clear in City of

Murfreesboro that, if a board allows any permit or license that violates the city’s distance ordinance

to remain in effect, then the ordinance becomes invalid and cannot be relied upon to deny a permit

or license to other applicants. See City of Murfreesboro, 569 S.W.2d at 808. Regardless of the

reason for the issuance of Lexington Amoco’s permit, the Board did not revoke or suspend

Lexington Amoco’s permit after the new distance ordinance went into effect. Thus, Lexington

Amoco was allowed to retain its permit in violation of the distance ordinance, while Cox Oil was

denied a permit based on the same ordinance. Such action constitutes discriminatory application,

and the ordinance, therefore, is invalid. See Serv-U-Mart, 527 S.W.2d at 123 (stating that “there can

be no discriminatory application of a [distance] rule before or after adoption of a resolution

embracing the rule. . . . After adoption, a finding of discretionary application will invalidate the

rule.”).

The Board also argues that Lexington Amoco’s permit falls within the grandfather clause of

the new distance ordinance, and therefore cannot be the basis of a finding of discriminatory

application. Assuming arguendo that this argument is valid, the record in this cause does not support

the Board’s assertion that Lexington Oil’s beer permit falls within the grandfather clause of the

ordinance. The ordinance provides that “[n]o permit shall be suspended, revoked or denied on the

basis of proximity . . . if a valid permit had been issued to any business on that same location as of

January 1, 1993.”2 The parties agree that Lexington Amoco received a valid permit on December

3, 1993, pursuant to a chancery court order. This fact shows that the Lexington permit falls outside

the parameters of the grandfather clause at issue. There is no evidence to the contrary in the record.

The Board has the burden of bringing before this Court all of the information needed to support its

position on appeal. See Reagor, 651 S.W.2d at 701. Because the record does not include evidence

to support the Board’s assertion, we find this argument to be without merit.

2

In a memorandum filed in the trial court, the Boa rd alleges that “[i]t is believed that January 1, 1993 is a

typographical error and sh ould be 1994 , due to the fact that it was meant to ‘grandfather’ the Amoco permit.” However,

the Board d oes not raise this issue on appeal, and there is no evidence in the record indicating that such a typographical

error was m ade. The refore, that argument is not considered in this appeal.

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Apparently to distinguish this case from City of Murfreesboro, the Board notes that the City

of Lexington enacted a new distance ordinance rather than adopting a “post facto amendment” of

an existing ordinance. See City of Murfreesboro, 569 S.W.2d at 808 (“Discriminatory enforcement

of a beer permit distance ordinance cannot be rectified by post facto amendments.”). However, the

Board acknowledges that the new distance ordinance was adopted because the prior distance

ordinance was rendered invalid by discriminatory application. The Board cites no case law

supporting its argument that the enactment of a new distance ordinance should be considered

distinguishable from the adoption of a post facto amendment under these circumstances. Indeed,

City of Murfreesboro made it clear that “[r]estoration of the validity of a distance ordinance can only

be achieved by revocation or other elimination, such as attrition, of the discriminatorily-issued

permits and licenses.” Id. Thus, this argument must be rejected as well.

The decision of the trial court is affirmed. Costs are to be assessed to the appellant, City of

Lexington Beer Board, and its surety, for which execution may issue, if necessary.

___________________________________

HOLLY KIRBY LILLARD, JUDGE

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