Carole J. Boyd Et. Al. v. Town of Morrison

The issues in this appeal arise from protracted litigation in three courts involving several property owners (“Plaintiffs”) who contend the Town of Morrison, Tennessee, (“the Town”) is estopped, for various reasons, from collecting property taxes on their properties. Although the dispute initially involved a challenge to whether the Town lawfully annexed Plaintiffs’ properties, it is no longer disputed that the Town annexed the properties with the passage of Ordinances 01-01 and 01-02 on second and final reading on November 5, 2001. The genesis of the dispute occurred in 2017 when Plaintiffs were cited to the Municipal Court for violating the Town’s zoning ordinances. During the hearing, the Town was required to establish that Plaintiffs’ properties had been annexed. To prove it had annexed the properties, the Town erroneously relied upon Ordinance 01-03, instead of Ordinances 01-01 and 01-02. The Municipal Court found that the Town had not lawfully enacted Ordinance 01-03 to annex Plaintiffs’ properties; therefore, the court dismissed the citations. The Town did not appeal that decision. Two years later, the Town filed a petition for declaratory judgment in the Chancery Court, arguing that it had properly annexed the subject properties. The Chancery Court dismissed the petition concluding that the Town was collaterally estopped from relitigating the issue because “the relevant issue was litigated and determined by the Municipal Court . . . , [which] was a court of competent jurisdiction, and therefore, this Chancery Court will not disturb that Court’s findings.” The Town appealed the Chancery Court decision; however, it voluntarily dismissed the appeal. Nevertheless, the Town continued to send delinquent tax notices to Plaintiffs. As a consequence, Plaintiffs commenced this action seeking a declaration that their properties had not been properly annexed by the Town. In its Answer, the Town asserted, for the first time, that it had annexed Plaintiffs’ properties in 2001 pursuant to Ordinances 01-01 and 01-02. Although Plaintiffs argued that the Town was collaterally estopped from relying on these ordnances, the chancellor ruled otherwise. Specifically, the chancellor held that Ordinances 01-01 and 01-02 were not at issue in the Municipal Court proceedings and because the issues raised in that proceeding were not identical to those raised in the prior court proceedings, collateral estoppel did not apply. Further, the chancellor ruled that the Town had lawfully annexed the properties in November 2001 pursuant to Ordinances 01-01 and 01-02. However, the chancellor also ruled that the Town was equitably estopped from collecting delinquent taxes owed prior to 2022. This appeal followed. We have determined that the Municipal Court lacked subject matter jurisdiction to determine whether the Town had lawfully annexed Plaintiffs’ properties; therefore, the judgment of the Municipal Court is a null and void judgment that may not constitute a basis for collateral estoppel. For this and other reasons, we affirm the chancellor’s decision to deny Plaintiffs’ Petition for Injunctive Relief. However, we reverse the chancellor’s ruling that the Town is equitably estopped from collecting delinquent property taxes from Plaintiffs.