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Trails End Campground, LLC v. Brimstone Recreation, LLC

Court of Appeals of Tennessee, Knoxville

January 29, 2015

TRAILS END CAMPGROUND, LLC
v.
BRIMSTONE RECREATION, LLC ET AL.

Session October 2, 2014.

Appeal from the Chancery Court for Scott County No. 10, 481 Jon Kerry Blackwood, Judge[1]

David A. Stuart, Clinton, Tennessee, for the appellant, Trails End Campground, LLC.

Vic Pryor, Jacksboro, Tennessee, for the appellee, Brimstone Recreation, LLC.

Nathan D. Rowell and Brian R. Bibb, Knoxville, Tennessee, for the appellee, Town of Huntsville, Tennessee.

Charles D. Susano, Jr., C.J., delivered the opinion of the Court, in which D. Michael Swiney and Thomas R. Frierson, II, JJ., joined.

OPINION

CHARLES D. SUSANO, JR., CHIEF JUDGE.

I.

Shortly after Trails End filed its complaint, both sides moved for summary judgment. Trails End states in its brief that "[t]he parties in this action are in agreement that the material facts are not in dispute and that judgment as a matter of law is appropriate." In its statement of undisputed material facts, Trails End described its business, and that of its competitor, Brimstone, as follows:

Both [Trails End and Brimstone] provide trail access to recreational riders, ATV rentals, cabin and camping rentals, recreational activities, musical events and other entertainment, and other goods and services to the recreational users of off-road trails located in and near the Town of Huntsville.
Both plaintiff and defendant, Brimstone, are in competition with each other to attract the same customers in the same market. The market in question consists of the users of the recreational off-road trail networks in and near the Town of Huntsville in Scott County, Tennessee, and the similar entertainment and recreational facilities offered by these competitors. In addition to the land leased by defendant, Brimstone, for recreational trail use, plaintiff owns and/or has access to lands with recreational trails, and there is a large tract of property accessible to the general public administered by [Tennessee Wildlife Resources Agency] which is used for recreational trail riding and other outdoor purposes.
Plaintiff and defendant, Brimstone, are the only significant competitors in this market in terms of the magnitude, scope and similarity of products and services offered to the users participating therein, and they each have no other major competitors in the market offering the same comprehensive package of products, goods and services. Tangible goods and products offered for sale in this market by these competitors include but are not limited to food, toiletries, clothing, camping supplies, fuel, firewood, water, non-alcoholic beverages, beer, recreational equipment, hardware, accessories, artwork, souvenirs and other goods and products obtained and provided to customers as requested when possible.
Beginning in approximately 2006, the Town of Huntsville permitted the property variously known as the Town Mall, Town Square and/or Courthouse Mall to be utilized by [Brimstone] and others to promote and facilitate Memorial Day and Labor Day weekend events which attract thousands of recreational users and others to the area. Until 2012, these events were open to the public and no one was prohibited from participating therein, whether as a vendor, purchaser or both, and at least since 2006, at all times, the Courthouse Mall has always been freely accessible to the public. To the best of the knowledge, information and belief of plaintiff, the exclusive use of that property has never been afforded to any person or entity at any time until the actions leading to the lease agreement giving rise to this complaint.
The Courthouse Mall has been utilized from time to time by numerous vendors who have leased, rented or been permitted to use space on the mall by defendant, Town of Huntsville, and it was not until 2013 that the exclusive use, possession and control was perpetually leased to defendant, Brimstone, for the weeks of the Memorial Day and Labor Day Holidays, to the exclusion of all others. Ordinarily, the Courthouse Mall or Town Square is freely accessible to the public for any lawful activities, and its exclusive use is not ordinarily granted to any single person or entity, or to any exclusive group, but rather, the space is customarily and traditionally open to all on an equal basis.

(Paragraph numbering in original omitted.)

The Town's Board of Mayor and Aldermen met on September 27, 2012. The minutes reflect a "[m]otion by Paul Lay, second by Kris Lewallen to authorize Mayor Potter to contract with Brimstone Recreation, LLC for exclusive use of the Huntsville Mall for their Memorial Day and Labor Day weekend events for a fee of $1, 000." The motion passed on a 4-0 vote, with Vice Mayor Mark Love not voting "due to appearance of a conflict of interest" resulting from Love's position as managing member of Brimstone. On December 21, 2012, Mayor George Potter executed the lease at issue on behalf of the Town. It provides, in pertinent part, as follows:

Huntsville is the owner of what is known as the "Town Square" . . . together with the parking spaces surrounding and in the area of said Town Square, . . . all of which is collectively referred to hereafter as the "Premises"; and . . . Brimstone wishes to lease the Premises area for use with special events conducted or sponsored by Brimstone twice annually . . .
Huntsville hereby leases to Brimstone the exclusive use, control and enjoyment of Premises . . . for the intended purposes of conducting the respective event to include but not limited to event advertising and promotion, erection of temporary tents or other nonpermanent facilities, display and sale of merchandise and products, sale of event access passes, booking of accommodations, distribution of brochures and any other activity related to the events conducted by Brimstone that do not conflict with the Town's mission or quality of life and is not morally objectionable to a reasonable person. The approximate times of such special events to which this Lease Agreement is applicable are as follow[s]:
– The week prior and including the weekend of Memorial Day for each year starting in the year 2013 and thereafter every subsequent year during the lease term and renewal lease terms.
– The week prior and including the weekend of Labor Day for each year starting in the year 2013 and thereafter every subsequent year during the lease term and renewal lease terms.
The initial term of this Lease Agreement shall be ten (10) years and shall be renewable at the option of Brimstone for successive terms of 10 years each upon giving of thirty (30) days notice.

(Paragraph numbering in original omitted.) In the lease, Brimstone agreed to pay the Town $1, 000 per year.

Brimstone filed the affidavit of its managing member, Love, which states, in pertinent part, as follows:

Brimstone is an entity that leases nineteen thousand (19, 000) acres adjacent to the Town of Huntsville. Brimstone provides permitted trail access to recreational riders, ATV rentals, cabin rentals, camping rentals and sundries to recreational users.
Brimstone also has events with live entertainment for its patrons and the community at large on a stage constructed on it[]s premises. These events occur two times a year – Memorial Day weekend and Labor Day weekend.
The events have major musical acts performing and attract a large number of patrons to Huntsville and the surrounding area.
Brimstone began hosting these musical events in 2006.
The Brimstone property is very near the Huntsville town square, which is a large grassy area in front of the old Scott County Courthouse.
The Huntsville town square is the site of various events. The Town of Huntsville hosts a large Fourth of July event where numerous vendors rent space to set up their booths around the perimeter and inside the square area.
The Huntsville town square is available for rent to the public or businesses at times when it is not otherwise reserved.
Trails End, LLC (Trails End) is a campground and competitor of Brimstone located outside the city limits of Huntsville, Tennessee.
Trails End, LLC began hosting musical events on its premises in May 2013 at the same time as Brimstone's May 2013 event.
Brimstone entered the long term lease on December 26, 2012 . . . in order to assure the use of the town square for Brimstone's use on the two weekends each year that it traditionally uses the square.
The town square area is used for registration and information distribution for patrons that attend the Memorial Day and Labor ...

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