Ruling: County, Lenoir City suit to move forward

BECCA J. G. GODWIN news-herald.net

The ruling for motions to dismiss a Loudon County lawsuit against Lenoir City and two other defendants has been made, but it didn’t provide immediate resolution one way or the other.

The defendants’ motions to dismiss were denied in part and granted in part, according to the ruling from Circuit Court Judge Mike Pemberton issued Aug. 21. Ultimately, the case wasn’t outright dismissed, nor is it proceeding straight to trial.

The property owners at the center of the litigation are Mountain View Estates (MVE), which holds about 120 acres at 5744 U.S. Highway 321, and WNW Properties 5, which has 24 acres nearby on U.S. Highway 70. The lawsuit was initially filed against the city in February 2023; MVE and WNW were added as defendants in a March 27 amended complaint because their interests may be affected by the declaratory relief sought by the county.

The lawsuit argues that the city’s disputed annexations of two unincorporated properties, starting in 2020, didn’t follow state law and weren’t approved by Loudon County Commission as required by a 2005 interlocal agreement between the city and county. The county alleges these actions have stripped its rights to protect its interests.

The county’s lawsuit asks for multiple forms of relief, including that the court hold the purported annexations as invalid and for Loudon County to “be granted such further relief to which this Court believes it is entitled.”

The ruling acknowledged that the issues and discussion as to whether the county’s declaratory judgment action should be dismissed weren’t simple. The city argued in its March 5 motion to dismiss that the county’s complaint should be dismissed on two grounds: lack of subject matter jurisdiction and for failure to state a claim.

The sole purpose of a Tenn R. civ. P. 12.02(6) motion to dismiss, according to the ruling, is to test the sufficiency of the complaint, not the strength of the plaintiff ’s evidence. It requires the courts to review the complaint alone and to look to the complaint’s substance rather than its form.

The city’s motion first argued that the county lacks standing to pursue its causes of action because it has not sustained an “injury in fact.” Secondly, the city argued that the county’s complaint wasn’t filed within 30 days of the effective date of the annexation ordinance as required by statute.

According to the ruling: “The court finds that the county had stated a claim challenging the alleged ultra vires nature of ordinance and that the action was timely filed in that regard. Therefore, the city’s motion is DENIED in that regard. As to any allegations that challenge the reasonableness of the ordinance or that involve alleged procedural defects, the court finds that any such challenge must have been brought within the thirty (30) day quo warranto time frame and GRANTS the city’s motion in that regard.”

The analysis as to the county’s breach of contract claim was much simpler, the ruling said.

The court found that the county has stated a claim for breach of contract.

Lenoir City’s assistant attorney, T. Scott Jones, attended the city council meeting on Aug. 26 to provide an update on the ruling. He said the Council should “take some solace and some encouragement that you were right in what your position was, that you handled it appropriately.” Regarding next steps, counsel for the parties have been ordered to confer and attempt to agree as to which factual claims are procedural in nature and which go to the validity of the ordinance. If the parties are unable to agree, they are instructed to brief the issue of procedural versus validity of the factual claims.

The county’s brief is due on Sept. 13, and the city’s on Sept. 27.

No reply briefs are permitted. The court will decide any issues via conference call on Sept. 30 at 3 p.m. via the court’s remote platform, at which point it will also establish a new scheduling order.