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Zumstein v. Roane County Executive/Mayor

Court of Appeals of Tennessee, Knoxville

August 21, 2017


          Session: June 20, 2017

         Appeal from the Chancery Court for Roane County No. 2014-131 Frank V. Williams, III, Chancellor

         This appeal arises from a taxpayer's successful challenge of the appraisal value assigned to his real property by the Roane County Property Assessor. The taxpayer filed a petition for judicial review challenging an administrative decision that affirmed the assessor's valuation. The trial court ruled in favor of the taxpayer, overturning the administrative decision and ordering Roane County to pay the taxpayer's attorney's fees. On appeal, Roane County argues that the trial court had no authority to assess attorney's fees against it. We agree and reverse the trial court's award of attorney's fees.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court is Reversed and Remanded.

          Greg Leffew, Rockwood, Tennessee, for the appellants, Roane County Executive Mayor, Roane County Assessor of Property, and Roane County Trustee.

          Jimmy G. Carter and Stephanie L. Prager, Knoxville, Tennessee, for the appellee, Roy Zumstein.

          Herbert H. Slatery III, Attorney General and Reporter, Andrée Sophia Blumstein, Solicitor General, and James P. Urban, Assistant Attorney General, Nashville, Tennessee, for the appellee, Tennessee State Board of Equalization.

          Arnold B. Goldin, J., delivered the opinion of the court, in which Charles D. Susano, Jr., and Thomas R. Frierson, II, JJ., joined.



         Background and Procedural History

         Roy Zumstein owned three adjacent, separate tax parcels in Roane County. At the request of Mr. Zumstein, in an effort to reduce the land value appraisal, the Roane County Property Assessor combined the three parcels into one tax parcel. Mr. Zumstein initiated these proceedings to challenge his 2013 county real property tax assessment on the combined parcel. Specifically, Mr. Zumstein argued that the appraisal value of $444, 500 assigned to the land and improvements by the Roane County Property Assessor was too high. Following a series of administrative appeals, the Tennessee State Board of Equalization Assessment Appeals Commission issued a decision certifying the property's appraisal value as $338, 700. Mr. Zumstein filed a petition for judicial review of that decision in the Roane County Chancery Court. The trial court conducted an evidentiary hearing and determined that the property's appraisal value should be reduced to $270, 200. Shortly thereafter, Mr. Zumstein filed a motion requesting an award of his attorney's fees. Mr. Zumstein asserted that Tennessee Code Annotated section 67-1-1803(d) mandates that attorney's fees be awarded to prevailing parties in tax litigation. While the trial court did not rule on the applicability of the statute, it concluded that requiring Mr. Zumstein to incur attorney's fees in the case "would be inequitable." As such, the trial court entered an order directing Roane County to pay Mr. Zumstein's attorney's fees in the amount of $12, 325. Roane County appealed.


         The sole issue Roane County raises on appeal is whether the trial court erred in granting Mr. Zumstein's request for attorney's fees. That issue involves a question of law. We review trial court decisions on questions of law de novo with no presumption of correctness. Knox Cnty. ex rel. Envtl. Termite & Pest Control, Inc. v. ArrowExterminators, Inc., 350 S.W.3d 511, 518 (Tenn. 2011).

         The Tennessee Supreme Court recently reaffirmed its long-standing adherence to the "American Rule" in assessing attorney's fees. Eberbach v. Eberbach, No. M2014-01811-SC-R11-CV, ___ S.W.3d ___, 2017 WL 2255582, at *3 (Tenn. May 23, 2017). The American Rule provides that, absent a specific contractual or statutory provision that creates a right to recover attorney's fees, litigants are generally responsible for their own attorney's fees. Cracker Barrel Old Country Store, Inc. v. Epperson, 284 S.W.3d 303, 308 (Tenn. 2009). Tennessee's adherence to the American Rule is based on public policy considerations suggesting that society is best served by litigants bearing their own legal fees regardless of the outcome of a case.[1]Id. As is often the case with common law rules, however, courts have recognized that equitable exceptions to the American Rule should apply in certain circumstances. See, e.g., House v. Estate of Edmonson, 245 S.W.3d 372, 377 (Tenn. 2008) (explaining and applying ...

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