Assigned on Briefs April 14, 2015
Appeal from the Circuit Court for Shelby County No. CT00625202, CT00639802 John R. McCarroll, Jr., Judge
William H. Fisher, III, Collierville, Tennessee, for the appellants, Donald Bruce Anderson and Frances Anderson McDaniel.
Herbert H. Slatery, III, Attorney General and Reporter, Andree Sophia Blumstein, Solictor General, and George G. Boyte, Jr., Senior Counsel, Jackson, Tennessee, for the appellee, State of Tennessee.
Arnold B. GOLDIN, J., delivered the opinion of the Court, in which Brandon O. Gibson, J., and Kenny Armstrong, J., joined.
ARNOLD B. GOLDIN, JUDGE
This appeal arises from an eminent domain proceeding in which the jury returned a verdict in favor of Defendants/Appellants Donald Bruce Anderson and Frances Anderson McDaniel ("Defendants") with respect to the valuation of real property condemned by the State for construction of Highway 385. The real property at issue was jointly owned by Defendants and was contained within two contiguous tracts that totaled approximately 40.2 acres at the intersection of U.S. Highway 64 and Collierville-Arlington Road in Shelby County. In 2002, the State of Tennessee, on relation of the Commissioner of the Department of Transportation ("the State"), filed two petitions in the Circuit Court for Shelby County to condemn approximately 16.4 acres of Defendants' property pursuant to Tennessee Code Annotated §§ 29-17-801, et seq., and 54-5-104. The State deposited a total of $987, 300.00 as compensation for the condemned parcels. Defendants ultimately admitted the State's authority to condemn the property, but asserted that the amounts deposited by the State did not represent "just compensation." In October 2005, the trial court entered a consent order of condemnation nunc pro tunc to January 6, 2003. The matters were consolidated for trial with respect to the question of just compensation.
After considerable discovery and contentious proceedings concerning the scope of evidence admissible to demonstrate the value of the parcels in light of Memphis and Shelby County development plans for the area, the matter was heard by a jury in October 2012. On November 28, 2012, the trial court entered a judgment and final decree incorporating the jury's verdict awarding Defendants compensation in the amount of $3, 366, 050.00.
In December 2012, Defendants filed a motion for discretionary costs under Tennessee Rule of Civil Procedure 54.04 ("the Rule" or "Rule 54.04"). Defendants also filed the affidavit of their lead counsel, William H. Fisher, III ("Mr. Fisher"), who stated that Defendants spent $143, 658.42 to prepare and try the matter and that Defendants were entitled to discretionary costs under Rule 54.04 in the minimum amount of $43, 833.69. The State objected to Defendants' motion on the ground of sovereign immunity. In its objection, the State asserted that Tennessee Code Annotated § 29-17-912 specifies the costs that may be assessed against the State in an eminent domain proceeding and that the section does not authorize the discretionary costs sought by Defendants.
By order entered June 19, 2014, the trial court denied Defendants' motion upon determining that, under State on Relation of the Commissioner of the Department of Transportation v. Richardson Lumber Company, No. M2012–02092–COA–R3–CV, 2014 WL 1516478 (Tenn. Ct. App. April 16, 2014), it was "bound to deny" Defendants' motion for discretionary costs. Defendants filed a motion to alter or amend in July 2014. In their motion, Defendants asserted that the trial court's ruling was contrary to the controlling law. They submitted that, because neither Richardson Lumber nor The State of Tennessee v. Wallace, No. M2004-00846-COA-R3-CV (Tenn. Ct. App. Dec. 20, 2005), on which the State also relied in its objection to Defendants' motion, are reported cases, they "have no precedential value and [the court] is not
'bound' to follow them." Defendants additionally contended that Richardson Lumber and Wallace are contrary to Tennessee Code Annotated § 29-17-912 and Rule 54.04(2) and that the legislative history of § 29-17-812, the precursor to § 29-17-912, indicated legislative intent to permit an award of discretionary costs against the State.
Defendants also asserted that the trial court failed to make findings of fact and conclusions of law with respect to the reasonableness and necessity of the discretionary costs requested and regarding whether the doctrine of sovereign immunity precludes an assessment of those costs against the State. They asserted that an award of discretionary costs in the amount $43, 833.69 was supported by Mr. Fisher's affidavit and that the State did not challenge the reasonableness or necessity of this amount. Defendants submitted that the trial court was the "sole arbiter of whether the discretionary costs requested . . . [were] reasonable and necessary as required under Rule 54.04(2)[, ]" that the trial court failed to make the findings required by the Rule, and that the trial court did not expressly conclude that the State is immune from the assessment of discretionary costs in eminent domain cases. Defendants prayed the court to reverse its ruling and for an award of discretionary costs in the amount of $43, 833.69.
In its response to Defendants' motion, the State asserted that the trial court correctly denied Defendants' request for discretionary costs under the persuasive authority of Richardson Lumber. The State asserted:
• Waiver of the State's immunity to money claims requires express statutory authority to make such claims;
•Authority to assess costs against the State cannot be implied from general statutes ...