Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Anderson v. Metropolitan Government of Nashville and Davidson County

Court of Appeals of Tennessee, Nashville

January 23, 2018

RACHEL ANDERSON, ET AL.
v.
METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY, TN

          Session August 15, 2017

         Appeal from the Circuit Court for Davidson County No. 15C3212Kelvin D. Jones, Judge

         This case involves various issues related to an ordinance the Metropolitan Government of Nashville and Davidson County enacted to address short-term rental properties. Among other things, the enacted ordinance provided that no more than 3% of non-owner-occupied single-family or two-family residential units would be granted short-term rental permits in each census tract. The plaintiffs, who previously listed their home on Airbnb.com, filed suit against the Metropolitan Government challenging the enforceability of the ordinance on several fronts. In addition to asserting that the enacted ordinance was unconstitutionally vague, the plaintiffs contended that the 3% cap on certain short-term rentals was an unlawful monopoly. After competing motions for summary judgment were filed, the trial court held that the definition of a "short-term rental property" was unconstitutionally vague as-applied to the plaintiffs, but it also held that the 3% cap did not constitute a monopoly. Given the plaintiffs' success on their constitutional "vagueness" claim, the trial court found them to be prevailing parties under 42 U.S.C. § 1988 and awarded them certain attorney's fees. On appeal, both sides raise issues asserting error. Because several definitions contained within the governmental ordinance have been amended since the filing of this appeal, we conclude that the plaintiffs' constitutional "vagueness" claim is now moot. Concerning the propriety of the 3% cap on non-owner-occupied short-term rentals, we have determined that the cap is constitutionally permissible even assuming that it constitutes a monopoly. For reasons discussed herein, we vacate the award of attorney's fees and remand the issue for reconsideration.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed in Part, Vacated in Part and Remanded

          Lora Barkenbus Fox and Catherine J. Pham, Nashville, Tennessee, for the appellant, Metropolitan Government of Nashville & Davidson Co.

          Braden H. Boucek, Nashville, Tennessee, for the appellees, Rachel Anderson, and P. J. Anderson.

          Arnold B. Goldin, J., delivered the opinion of the Court, in which Brandon O. Gibson and Kenny Armstrong, JJ., joined.

          OPINION

          ARNOLD B. GOLDIN, JUDGE

         BACKGROUND AND PROCEDURAL HISTORY

         Rachel and P.J. Anderson ("the Andersons") moved from Chicago to Nashville in August 2013 due to Mr. Anderson's career as an aspiring musician. The couple bought a home in the Germantown neighborhood of Nashville and began listing their home on Airbnb.com in the fall of that year.

         In 2014, the Metropolitan Council, the legislative body for the Metropolitan Government of Nashville and Davidson County ("Metro"), began debating laws to address short-term rental properties. This process resulted in the passage of two ordinances in February 2015, Substitute Ordinance No. BL2014-909 and Ordinance No. BL2014-951. Under the ordinances, a "Short Term Rental Property, " or "STRP, " was defined to mean "a residential dwelling unit containing not more than four sleeping rooms that is used and/or advertised for rent for transient occupancy by guests as those terms are defined in Section 5.12.010 of the metropolitan code." Substitute Ordinance No. BL2014-909; Ordinance No. BL2014-951. The ordinances also specifically stated that "[r]esidential dwelling units rented to the same occupant for more than 30 continuous days, Bed and Breakfast establishments, boarding houses, hotels, and motels shall not be considered Short Term Rental Property." Substitute Ordinance No. BL2014-909; Ordinance No. BL2014-951. The primary ordinance implicated in this appeal, Ordinance No. BL2014-951, imposed a number of requirements and restrictions on homeowners seeking to operate a STRP. Among other things, it required operators of a STRP to obtain a permit, to obtain proof of liability insurance coverage, and to obey certain fire safety requirements. Ordinance No. BL2014-951. Advertising restrictions were also implemented. First, homeowners were prohibited from advertising their property for use as a STRP without having first obtained a permit. Id. However, even with a permit, homeowners were not allowed to display signs or other advertising on the property indicating that the dwelling unit was being utilized as a STRP. Id.

         As is of particular relevance to this appeal, Ordinance No. BL2014-951 also placed a limit on the number of non-owner-occupied STRPs allowed. Specifically, it provided that no more than 3% of the single-family or two-family residential units within each census tract shall be permitted as non-owner-occupied STRPs. Id. No limitation was implemented regarding the overall number of owner-occupied STRPs.

         The Andersons obtained an owner-occupied permit in June 2015, and the following month, enforcement of the ordinances began. At the time they obtained their owner-occupied permit, the Andersons had no intention of moving from Nashville. However, things soon changed. After the Andersons obtained their permit, Mrs. Anderson's employer proposed promoting her to an executive level position. The opportunity was appealing and offered several benefits, but in order to take the position, the Andersons would have to move back to Chicago.

         For various reasons, the Andersons decided that they would like to move but still keep their home in Nashville. Because they also desired to continue offering short-term rentals of their Nashville home, they intended to convert their STRP permit from an owner-occupied permit to a non-owner-occupied permit. Although Mr. Anderson attempted to get a non-owner-occupied permit on August 19, 2015, his efforts proved unsuccessful. Because the 3% cap on non-owner-occupied permits had already been reached in the Andersons' census tract, the request for a permit was denied.

         The present litigation commenced shortly thereafter on August 26, 2015, when the Andersons filed suit against Metro in the Davidson County Circuit Court. The suit was brought in part under 42 U.S.C. § 1983 and asserted several claims, nearly all of which alleged constitutional infirmities with portions of the Metro Code. Most of the raised concerns related to alleged invalidity of Ordinance No. BL2014-951 (the "STRP ordinance"). First, the Andersons contended that there was an overlap between the definitions for hotels, bed and breakfast establishments, and boardinghouses, which were exempt from the STRP ordinance, and the definition for STRPs. Assuming they were not determined to be exempt from Metro's new STRP ordinance, the Andersons alleged that the ordinance must be deemed unconstitutionally vague when measured against the due process clause of the Fourteenth Amendment to the federal Constitution and Article 1, Section 8 of the Tennessee Constitution. The Andersons also raised state and federal constitutional claims with respect to the advertising restrictions contained in the STRP ordinance. According to the Andersons, the advertising restrictions unlawfully abridged their free speech rights.

         The Andersons' attack on the new STRP ordinance was not limited to advertising and definitional concerns but also included challenges to the 3% cap. According to the Andersons, the 3% cap on non-owner-occupied STRPs violated equal protection, was a substantive due process violation, and was an unlawful monopoly in violation of Article 1, Section 22 of the Tennessee Constitution.[1] In specific regards to their anti-monopoly claim, the Andersons contended that the cap had "no legitimate relation to any valid public purpose."

         In addition to contesting the validity of the new STRP ordinance, the Andersons took issue with another Metro ordinance codified at Metro Code § 6.28.010, which required every person "engaged in the business of lodging transients" to keep a register of its guests and to show such register to the police upon written request. According to the Andersons, this requirement ran afoul of Article 1, Section 7 of the Tennessee Constitution and the Fourth Amendment to the federal Constitution. In requesting relief stemming from the aforementioned claims, the complaint sought declaratory relief, injunctive relief, and the recovery of attorney's fees pursuant to 42 U.S.C. § 1988.

         In September 2015, the Andersons filed a motion for a preliminary injunction concerning a minority of the claims they had asserted in their complaint, and in October 2015, Metro filed a motion to dismiss the lawsuit. Both motions were heard by the trial court on October 30, 2015, and later resolved in a series of orders entered on November 12, 2015. The trial court's November 12 orders granted partial relief to both sides. In finding that the Andersons were likely to succeed on the merits of their free speech and search and seizure claims, the trial court entered an injunction "prohibiting enforcement of either the prohibition on STRP signage or the obligation to keep and surrender guest records." The Andersons' substantive due process claim, however, was dismissed.

         The parties' dispute over the Andersons' free speech and search and seizure claims hinged, in part, on the applicability of the United States Supreme Court's decisions in Reed v. Town of Gilbert, ___ U.S. ___, 135 S.Ct. 2218, 192 L.Ed.2d 236 (2015), and City of Los Angeles v. Patel, ___ U.S. ___, 135 S.Ct. 2443, 192 L.Ed.2d 435 (2015). Whereas the Andersons suggested that these decisions strongly casted doubt on the constitutionality of the prohibition on signage included in the STRP ordinance and the requirement to surrender guest records codified at Metro Code § 6.28.010, Metro initially disclaimed this notion. In 2016, however, Metro took steps to amend the ordinances related to the Andersons' free speech and search and seizure claims, citing both Reed and Patel as a basis for its action.

         The first change that occurred was in relation to the requirements contained in Metro Code § 6.28.010. As previously noted, that section mandated that those "engaged in the business of lodging transients" must show a register of its guests to the police upon written request. As amended in May 2016 by Ordinance No. BL2016-177, Metro Code § 6.28.010 now includes the following provision:

If inspection of the book or register is refused, the operator, manager, or person in charge shall secure the book or register in the manner required by the requesting police officer, so that its contents are preserved. The book or register shall be kept in the secured location until such time as an administrative or judicial search warrant, subpoena, or order can be granted or denied, and any appeal resolved.

         Subsequent to the amendment of Metro Code § 6.28.010, an ordinance was introduced in July 2016 to amend the ban on advertising included within the STRP ordinance. Specifically, the ordinance proposed deleting Metro Code § 6.28.030.E, which had prohibited homeowners from displaying STRP advertising on their property, and replacing it with the following language: "Signage. Any sign, as defined in M.C.L. 17.32.030.B, on a property used as a short term rental property shall be governed by the provision of M.C.L[.] Chapter 17.32 Sign Regulations." The ordinance passed its second reading on August 2, 2016.

         In light of the changes to Metro Code § 6.28.010 and the impending changes to Metro Code § 6.28.030.E, Metro filed a motion on August 12, 2016 to dissolve the preliminary injunction that had been granted by the trial court and to dismiss the Andersons' free speech and search and seizure claims. According to Metro, the Andersons' free speech and search and seizure claims were rendered moot by the changes (and imminent changes) to the Metro Code. On August 17, 2016, subsequent to the filing of Metro's motion, the ordinance amending the STRP advertising restrictions was finally approved. The following week, on August 25, 2016, the trial court entered an agreed order dismissing the Andersons' free speech and search and seizure claims as moot. Incident to its dismissal of these claims, the trial court dissolved its preliminary injunction.

         Following the dissolution of the preliminary injunction, four primary claims remained pending in the trial court: (1) the Andersons' claim for an exemption under the STRP ordinance; (2) the constitutional "vagueness" claim; (3) the equal protection claim; and (4) the anti-monopoly claim. These claims were subsequently the center of competing motions for summary judgment, and on October 28, 2016, the trial court entered an order with respect to each side's request for summary judgment. Although the trial court concluded that the "STRP" definition was unconstitutionally vague as had been argued by the Andersons, it granted Metro's motion for summary judgment with respect to the Andersons' equal protection and anti-monopoly claims.[2] The trial court later amended its October 28 order by clarifying that the STRP definition was unconstitutionally vague "as-applied" to the Andersons, and in an order entered on January 23, 2017, awarded the Andersons over $100, 000.00 in attorney's fees. This appeal followed.

         ISSUES PRESENTED

         Collectively, the parties' principal appellate briefs raise the following issues:

1. Did the trial court err in determining that the STRP definition was unconstitutionally vague?
2. Did the trial court err in failing to conclude that the 3% cap represented an unlawful monopoly?
3. Did the trial court err in awarding attorney's fees and costs to the Andersons based on its "vagueness" ruling?
4. Did the trial court err in concluding that the Andersons only prevailed on their constitutional "vagueness" claim?

         STANDARD OF REVIEW

         Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Robinson v. Baptist Mem'l Hosp., 464 S.W.3d 599, 606 (Tenn. Ct. App. 2014) (citations omitted). "The resolution of a motion for summary judgment is a matter of law, which we review de novo with no presumption of correctness." Id. at 607 (citing Martin v. Norfolk S. Ry. Co., 271 S.W.3d 76, 84 (Tenn. 2008)). In general, an award of attorney's fees will be reversed or altered only if the trial court has abused its discretion. Sunburst Bank v. Patterson, 971 S.W.2d 1, 7 (Tenn. Ct. App. 1997) (citations omitted). "A court abuses its discretion when it causes an injustice to the party challenging the decision by (1) applying an incorrect legal standard, (2) reaching an illogical or unreasonable decision, or (3) basing its decision on a clearly erroneous assessment of the evidence." Lee Med., Inc. v. Beecher, 312 S.W.3d 515, 524 (Tenn. 2010) (citations omitted).

         DISCUSSION

         The Andersons' Constitutional ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.