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1 University of Tennessee, Knoxville Trace: Tennessee Research and Creative Exchange Tennessee Department of State, Opinions from the Administrative Procedures Division Law HYATT CORPORATION d/b/a AMERISUITES, and PINNACLE HOSPITALITY PARTNERS, LLC, Petitioner, s, vs. TENNESSEE DEPARTMENT OF TRANSPORTATION, Respondent. Case No JAND TENNESSEE DEPARTMENT OF TRANSPORTATION, Petitioner, vs. McINTYRE & ASSOCIATES, LLC d/b/a McINTYRE OUTDOOR ADVERTISING, Respondent. Follow this and additional works at: Part of the Administrative Law Commons This Initial Order by the Administrative Judges of the Administrative Procedures Division, Tennessee Department of State, is a public document made available by the College of Law Library, and the Tennessee Department of State, Administrative Procedures Division. For more information about this public document, please contact administrative.procedures@tn.gov

2 BEFORE THE COMMISSIONER OF THE TENNESSEE DEPARTMENT OF TRANSPORTATION IN THE MATTER OF: HYATT CORPORATION d/b/a AMERISUITES, and PINNACLE HOSPITALITY PARTNERS, LLC, Petitioners, vs. TENNESSEE DEPARTMENT OF TRANSPORTATION, Respondent. Case No J AND TENNESSEE DEPARTMENT OF TRANSPORTATION, Petitioner, vs. McINTYRE & ASSOCIATES, LLC d/b/a McINTYRE OUTDOOR ADVERTISING, Respondent. INITIAL ORDER This matter came for consideration upon the Tennessee Department of Transportation s motion for summary judgment. Oral argument was heard on October 27, 2009, before Steve R. Darnell, Administrative Law Judge, assigned by the Secretary of State, Administrative Procedures Division, and sitting for the Commissioner of the Tennessee Department of Transportation. The Tennessee Department of Transportation (hereinafter TDOT was represented by attorney Leland Jordan. Petitioner, Hyatt Corporation d/b/a AmeriSuites was

3 represented by attorney Anne Martin of the Davidson County bar, and Petitioner, Pinnacle Hospitality Partners, LLC was represented by attorney David Ewing of the Davidson County bar. For convenience Hyatt and Pinnacle will be referred to collectively as Hyatt herein. Respondent, McIntyre & Associates, LLC d/b/a McIntyre Outdoor Advertising (hereinafter McIntyre was represented by Ralph Mello of the Davidson County bar. ISSUES FOR CONSIDERATION This contested case proceeding presents two interrelated issues concerning Hyatt s and McIntyre s outdoor advertising devices (hereinafter billboards located near each other on State Route 155 in Davidson County, Tennessee. 1. First, whether TDOT properly revoked McIntyre s permits and and required the removal of its billboard. 2. Second, whether TDOT properly directed Hyatt to remove its billboard after it failed to timely renew its 2008 permits. PROCEDURAL HISTORY On May 5, 2009, TDOT filed a notice of hearing and charges with the Administrative Procedures Division of the Department of State, requested a contested case hearing pursuant to the APA to determine the status of McIntyre s and Hyatt s billboards. The hearing of this case was set for October 27, TDOT filed a motion for summary judgment on September 24, 2009, asserting there was not a genuine issue of material fact that would warrant a hearing. Hyatt and Pinnacle filed a Joint Response on October 12, McIntyre filed a Response on October 22, Oral argument was heard on October 27, The final post-hearing filings were received on December 2, 2009, at which time the record was closed. Summary judgment is appropriate in this case and granted. 2

4 SUMMARY OF DETERMINATION After consideration of the entire record, affidavits, documents submitted, and the arguments of the Parties, it is DETERMINED that TDOT did properly revoke McIntyre s permits since they were issued ultra vires in violation of Rule (1 and its billboard must be removed. It is further DETERMINED that TDOT erred in failing to advise Hyatt that it could apply for a new permit for its billboard pursuant to T.C.A (b. Hyatt s device is to be permitted by TDOT upon submission of necessary applications and fees. This determination is based upon the following findings of fact and conclusions of law. FINDINGS OF FACT 1. In July 1991, Hyatt s predecessor in interest secured a permit for the construction of a billboard along State Route 155 in Davidson County, Tennessee. Although ownership, permit numbers, and the mile marker designation have changed over the years, the device has remained in the same exact location since Pinnacle owns the land on which the billboard is located as well as the device itself. As noted above, for convenience, Pinnacle and Hyatt are referred to collectively as Hyatt. 3. In March 2004, McIntyre applied for two billboard permits (application numbers 5254 and 5255 for a back-to-back billboard along the same side of State Route 155 seven hundred seventy two (772 feet from Hyatt s billboard. McIntyre incorrectly stated in its applications that the nearest outdoor advertising device on the same side of the road was in excess of one thousand (1000 feet. 3

5 4. The billboard permit application clearly states: I hereby certify that I have personally examined and understand the Rules and Regulations for the Control for [sic] Outdoor Advertising and this application is made in compliance with same, and further certify that the statements made on this application are accurate and true to the best of my knowledge and understand that if investigation reveals that any of the information on the application is false the permit will be voided, tag confiscated, and the Outdoor Advertising Device will be declared illegal. The foregoing certification was signed by James R. McIntyre. TDOT granted permits and to McIntyre in May 6, In July 2004, TDOT determined that permits and were issued in error to McIntyre since it is discovered that the properly permitted Hyatt billboard is only seven hundred seventy two (772 feet from the McIntyre location. TDOT sent McIntyre a notice dated August 9, 2004 informing McIntyre that permits and were being revoked. This letter references a prior telephone conversation between TDOT and McIntyre that occurred on July 29, When TDOT first notified McIntyre of the problem, McIntyre had not yet erected the disputed billboard. Mr. McIntyre s affidavit states that when he received notice from TDOT he had received the structure and was beginning construction. It is not clear how far along the project was at this point. 7. McIntyre requested a hearing on the revocation of its permits by letter from its attorney dated August 21, It is uncertain why, but a contested case was not initiated on this appeal request until November 27, While the aforementioned case was pending, Hyatt failed to renew permits and by December 31, TDOT informed Hyatt by letter dated June 4,

6 that the only remedial action available to it to correct the now unlawfulness of its sign was to request a hearing or remove the billboard. TDOT did not offer Hyatt the opportunity to file an application for a new permit because of the status of McIntyre s permits. TDOT s letter states, Due to the location of other permitted devices, the Department is unable to offer the remedial action of accepting a new application to cure this default. 9. By letter dated June 26, 2008, Hyatt requested an appeal of TDOT s decision that it must remove its billboard. TDOT dismissed the pending McIntyre case and initiated his case to address both issues together. CONCLUSIONS OF LAW 1. Summary judgment is designed to provide a quick, inexpensive means of concluding cases on issues to which there is no dispute regarding material facts. Byrd v. Hall, 847 S.W. 2d 208 (Tenn Any Party may move with or without supporting affidavits for summary judgment in the Party s favor upon all or any part of a claim. An adverse Party may not rest upon the mere allegations or denials of the adverse Party s pleading, but his or her response, by affidavit or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. T.R.C.P Tennessee adopted the Billboard Regulation and Control Act of 1972 which is codified in T.C.A et seq. T.C.A (4 provides: No outdoor advertising shall be erected or maintained within six hundred sixty feet (660 of the nearest edge of the right-of-way and visible from the main traveled way of the interstate or primary highway system in this state except the following... (4 Signs, displays and devices located in areas which are zoned industrial or commercial under authority of law and whose size, lighting and spacing are consistent with customary use as determined by agreement between the State of 5

7 Tennessee and the Secretary of Transportation of the United States and subject to regulations promulgated by the Commissioner. (emphasis added 4. Tennessee Department of Transportation Rule (1(a4(i(I states, in pertinent part: (1 Restriction on Outdoor Advertising adjacent to Interstate and Primary Highways (a Outdoor Advertising erected or maintained within 660 feet of the nearest edge of the right-of-way and visible from the main traveled way are subject to the following restrictions. Spacing: (i Interstate Highway Systems and Controlled Access Primary Highways. (I No two structures shall be spaced less than 1000 feet apart on the same side of the highway. 5. A government action may be declared ultra vires for one of the following reasons: (1 the action was wholly outside the scope of the agency's authority, or (2 the action was not undertaken consistent with the mandatory provisions of its governing structures. The difference between these two scenarios involve 1 whether the government had the authority to perform an act and/or 2 whether the government followed the proper procedure to perform the otherwise valid act. When an act is declared ultra vires under the first situation, not even equity can generally save the action. City of Lebanon v. Baird, 756 S.W. 2d 236, 241 (Tenn At the time of the issuance of the McIntyre permits by TDOT, the applicable spacing requirement was not met since it is undisputed that the properly permitted Hyatt device was only seven hundred seventy-two (772 feet from McIntyre s proposed location. Since the McIntyre permits were beyond the scope of what TDOT could grant, they were issued ultra vires in violation of Rule (1. Thus, the permits are void and the outdoor advertising device is illegal. 6

8 7. McIntyre s reliance on the doctrine of equitable estoppel is misplaced. Sexton v. Sevier County, 948 S.W. 2d 747 (Tenn. App stated as follows: Generally speaking, the doctrine of estoppel is not favored under our law. Although the doctrine may be invoked against a county, very exceptional circumstances are required to invoke the doctrine against the State and its governmental subdivisions. In order to invoke the doctrine of equitable estoppel, a party must show the following: his or her lack of knowledge and of the means of knowledge of the truth as to in question; the facts his or her reliance upon the conduct of the party who is estopped; and action by the invoking party based thereon of such a character as to change that party s position prejudicially. 8. In Bledsoe County v. McReynolds, 703 S.W. 2d 123 (Tenn. 1986, Tennessee s Supreme Court summed up Tennessee s law on estoppel as it applies to government agencies as follows: The rule in this State is that the doctrine of equitable estoppel generally does not apply to the acts of public officials or public agencies. That is the rule in the majority of jurisdictions. Public agencies are not subject to equitable estoppel or estoppel in pais to the same extent as private parties and very exceptional circumstances are required to invoke the doctrine against the State and its governmental subdivisions. 9. McIntyre claims that by issuing these permits, TDOT induced them to expend substantial sums of money having a structure built, shipped, and erected on the permitted site. However, McIntyre admits that when TDOT notified them of its intention to revoke the permits, the construction of the billboard had just begun and that the structure had not been erected. Since McIntyre does not dispute that there was a spacing violation with the Hyatt/Pinnacle billboard, McIntyre should have halted construction at that time knowing that there was a 7

9 spacing violation. Instead, it proceeded to erect an outdoor advertising device and has profited from its use since Further, McIntyre had the means available to determine that neither it nor any other entity could receive a valid permit for the device because the device did not meet the applicable spacing rules. 10. Further, by stating on its permit application that the proposed location for its outdoor advertising device was over 1,000 feet from the nearest outdoor advertising device, McIntyre made a false statement. McIntyre was on notice that any false information on the application would cause the permit to be voided, tag confiscated, and the outdoor advertising device declared illegal since the application clearly stated if investigation reveals that any of the information on the application is false the permit will be voided, tag confiscated, and the Outdoor Advertising Device will be declared illegal. 11. T.C.A (c provides, in pertinent part, as follows: All tags issued shall be permanent; however, permits shall be renewed annually between November 1 and December T.C.A provides, in pertinent part, as follows: (a(1 Any person, either owner or lessee, of any outdoor advertising who has failed to act in accordance with the provisions of shall remove the same immediately. (b Prior to invoking the provisions of this section, the commissioner shall give notice either by certified mail or by personal service to the owner of the sign, or occupant of the land on which the advertising structure is located. Such notice shall specify the basis for the alleged unlawfulness, shall specify the remedial action which is required to correct the unlawfulness, and shall advise that a failure to take the remedial action within thirty (30 days will result in the sign being removed. (Emphasis added 13. It is undisputed that Hyatt failed to renew their permits by December 31, 2007, and that their permits were void as of January 1, However, since the McIntyre permits 8

10 were issued ultra vires, TDOT was required to allow Hyatt the option of applying for new permits as remedial action to correct the unlawfulness pursuant to T.C.A (b. TDOT erred when it did not allow that opportunity for correction. IT IS THEREFORE ORDERED that the McIntyre permits are void and McIntyre s outdoor advertising device is illegal and must be removed by McIntyre. It is further ORDERED that Hyatt shall submit a new application to TDOT for its device for the 2008 calendar year and a renewal for the 2009 calendar year along with the appropriate fees for both. This Order entered and effective this 10th day of December, Steve R. Darnell Administrative Law Judge Filed in the Administrative Procedures Division, Office of the Secretary of State, this the day of, Thomas G. Stovall, Director Administrative Procedures Division 9