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Pinnacle Towers Acquisition LLC v. Penchion

Court of Appeals of Tennessee, Jackson

January 25, 2017

PINNACLE TOWERS ACQUISITION LLC ET AL.
v.
BORIS PENCHION ET AL.

          Session October 25, 2016

         Appeal from the Chancery Court for Shelby County No. CH-13-1744-2 Jim Kyle, Chancellor

         A landowner granted a perpetual easement over a portion of her real property to a telecommunications tower company. According to the contracting parties' agreement, the landowner agreed to have the property subject to the easement ("Easement Property") separately assessed for real property taxes so that the tax obligations could be paid by the company. After the landowner's real property was separately assessed as two tax parcels, the company timely paid all real property taxes due on the Easement Property, but the landowner failed to pay real property taxes on the remainder of the tract. As a result, the larger parcel was sold to the county at a tax sale and later transferred to a third-party purchaser. Said purchaser thereafter refused to allow the telecommunications company access to the Easement Property. The company filed the instant action, seeking to have its easement declared valid and requesting an injunction to prevent the third-party purchaser from interfering with the easement. The company subsequently filed a motion for summary judgment, which the trial court granted, determining that the easement was valid but declaring the third-party purchaser to be the owner of the Easement Property. The third-party purchaser timely appealed. Determining the underlying tax sale to be invalid, we vacate the trial court's grant of summary judgment to the company and remand this matter for further proceedings.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Vacated; Case Remanded

          Terry C. Cox, Collierville, Tennessee, for the appellant, Boris Penchion.

          James L. Murphy, Peter C. Sales, and Joshua J. Phillips, Nashville, Tennessee, for the appellee, Pinnacle Towers Acquisition LLC.

          John B. Turner, Jr., Memphis, Tennessee, for the appellee, Shelby County, Tennessee.

          Thomas R. Frierson, II, J., delivered the opinion of the court, in which J. Steven Stafford, P.J., W.S., and Brandon O. Gibson, J., joined.

          OPINION

          THOMAS R. FRIERSON, II, JUDGE.

         I. Factual and Procedural Background

         Shirley Kennedy acquired a 10.935-acre parcel of real property located at 1524 Texas Street in Memphis ("the Property") via an instrument of conveyance dated October 1, 1996. On December 21, 1998, Ms. Kennedy entered into a written lease agreement with Tower Ventures, LLC ("Tower"), whereby Tower agreed to lease a portion of the Property in order to place a telecommunications tower thereon. In 2000, Tower sold and assigned its interest in the lease agreement to Pinnacle Towers Inc.

         Ms. Kennedy subsequently entered into an Amended and Restated Easement Purchase Agreement ("Easement Agreement") on September 22, 2004, with Pinnacle Towers Acquisition LLC ("Pinnacle"), regarding the portion of the Property known as the "communications tower site." The Easement Agreement stated that Pinnacle would have an exclusive, perpetual easement in the Easement Property for all purposes, including "installing, leasing, operating, maintaining, repairing, replacing, rebuilding, altering, inspecting, improving and removing" communications towers and related equipment. The Easement Agreement described the Easement Property as follows:

         Easement Property

         Description of Easement Parcel being part of the Shirley S. Kennedy property recorded in Instrument No. GD-2986 in Memphis, Shelby County, Tennessee:

Commencing at a found chisel mark in the east line of Texas Street (50' R.O.W.), said point being the southwest corner of said property recorded in Instrument No. GD-2986; thence north 89 degrees 55 minutes 02 seconds east along the south line of said property recorded in Instrument No. GD-2986, 294.17 feet to a set ½" rebar with plastic cap, said point being the Point of Beginning; thence across said property recorded in Instrument No. GD-2986 the following calls; north 00 degrees 04 minutes 58 seconds west, 50.00 feet to a found cotton picker spindle; north 87 degrees 16 minutes 42 seconds east, 24.60 feet to a set ½" rebar with plastic cap; south 89 degrees 41 minutes 36 seconds east, 25.43 feet to a set ½" rebar with plastic cap; south 00 degrees 04 minutes 58 seconds east, 50.96 feet to a found ½" rebar with plastic cap in the south line of said property recorded in Instrument No. GD-2986; thence south 89 degrees 55 minutes 02 seconds west along the south line of said property recorded in Instrument No. GD-2986, 50.00 feet to the point of beginning and containing 2, 541 square feet or 0.058 acres of land.
20' Wide Access, Utility & Teleco Easement
Description of 20' Wide Access, Utility and Teleco Easement being part of the Shirley S. Kennedy property recorded in Instrument No. GD-2986 in Memphis, Shelby County, Tennessee:
Commencing at a found chisel mark in the east line of Texas Street (50' R.O.W.), said point being the southwest corner of said property recorded in Instrument No. GD-2986; thence north 00 degrees 00 minutes 00 seconds east along the east line of said Texas Street, 66.63 feet to the Point of Beginning; thence north 00 degrees 00 minutes 00 seconds east along the east line of said Texas Street, 20.00 feet to a point; thence across said property recorded in Instrument No. GD-2986 the following calls: north 89 degrees 55 minutes 02 seconds east, 166.92 feet to a point; south 68 degrees 16 minutes 41 seconds east, 136.93 feet to a point in the west line of the above described Easement Parcel; thence south 00 degrees 04 minutes 58 seconds east along the west line of said Easement Parcel, 21.54 feet to a point; thence continuing across said property recorded in Instrument No. GD-2986 the following calls: north 68 degrees 16 minutes 41 seconds west, 141.08 feet to a point; south 89 degrees 55 minutes 02 seconds west, 163.09 feet to the point of beginning and containing 6, 080 square feet or 0.140 acres of land.

         The Easement Agreement also provided that Pinnacle would pay all real and personal property taxes respecting the Easement Property once Ms. Kennedy had caused the Easement Property to receive a separate tax assessment. Ms. Kennedy also assigned her interest in the prior lease agreement to Pinnacle. An easement conveyance containing the same legal description was concomitantly executed, and the easement was recorded on October 13, 2004, in the Shelby County Register of Deeds office.[1]

         It is undisputed that following the recordation of the easement, the Shelby County Tax Assessor began treating the Property for taxation purposes as two tax parcels, referred to by the parties as the "C" parcel and the "L" parcel. According to a representative of the Shelby County property assessor, the C parcel constituted the original parcel of land owned by Ms. Kennedy, exclusive of the L parcel, while the L parcel contained the portion of the Property that was subject to the easement. The tax assessor concomitantly began sending two separate annual tax bills-one to "Kennedy Shirley S c/o PMB 353" at a Pennsylvania address for the L parcel, and ...


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