Whitworth v. City of Memphis

689 S.W.3d 579

Robert L. WHITWORTH et al.

v.CITY OF MEMPHIS et al.

Court of Appeals of Tennessee, Western Section, AT JACKSON.

February 7, 2023 Session

FILED April 3, 2023

Application for Permission to Appeal Denied August 9, 2023

Appeal from the Chancery Court for Shelby County, No. CH-21-0423, Jim Kyle, Chancellor

Frank L. Watson, III, William F. Burns and William E. Routt, Memphis, Tennessee, for the appellants, Robert L. Whitworth, Denson Ward, III, Patricia A. Posset, Robert E. Possel, and Sue G. Ward.

Christopher L. Vescovo, Stephen W. Vescovo, and Isaac S. Lew, Memphis, Tennessee, for the appellees, City of Memphis.

OPINION

J. Steven Stafford, P.J., W.S., delivered the opinion of the court, in which Kenny Armstrong and Carma Dennis McGee, JJ., joined.

Appellant city residents sued the City of Memphis for breach of contract, breach of implied contract, unjust enrichment, and promissory estoppel related to inadequate garbage collection services provided by the City. Residents also sought a constructive trust and a declaratory judgment. The trial court dismissed the breach of contract action upon its conclusion that the provision of garbage collection services was a government function that did not create an enforceable contract between the city and its residents. The trial court dismissed the residents’ other contractual claims on the basis that they were barred by sovereign immunity. Finally, the trial court dismissed the claims for constructive trust and declaratory judgment upon its conclusion that they did not state a claim for relief under the circumstances. We affirm.

I. Factual and Procedural Background

On March 21, 2021, Appellant Robert L. Whitworth filed a complaint for damages against Appellee the City of Memphis ("the City") in Shelby County Chancery Court ("the trial court").¹ A day later, an amended complaint was filed to add four additional plaintiffs, Patricia A. Possel, Robert E. Possel, Sue G. Ward, and Denson Ward, III (together with Mr. Whitworth, "Appellants") and to include class action allegations. Appellants thereafter sought leave to amend their complaint a second time, which was granted by consent. The second amended complaint is therefore the operative complaint for purposes of the appeal.

Appellants’ complaint related to substandard garbage services provided to Memphis residents in a particular area of the city referred to as "Area E." According to Appellants, following the annexation of Area E, the City chose to employ a third-party vendor for trash pick up services in that area, unlike other areas of the city. Despite Area E residents paying the monthly line item fee required for trash services mandated by Memphis ordinance, the complaint alleged that the third-party vendors "have failed and refused to provide weekly garbage, recycling and biweekly bulk and yard waste pick up, leaving trash literally piling up in Area E." As a result, Area E residents have "not receive[d] the services for which they contracted and for which they have paid." The complaint further detailed numerous media pieces indicating that the failures were systemic and well-known. Based on these facts, Appellants asserted five claims against the City: (1) breach of contract; (2) breach of the implied duty of good faith and fair dealing; (3) unjust enrichment, breach of implied contract, and promissory estoppel; (4) constructive trust; and (5) declaratory judgment.

The City filed a motion to dismiss on June 4, 2021. Therein, the City argued that each of Appellants’ five claims failed for different reasons. For example, with regard to the breach of contract and the breach of the implied duty of good faith and fair dealing claims, the City asserted that no contract existed between the City and Appellants. With regard to the quasi-contractual claims, the City claimed immunity, or in the alternative, that these claims failed as a matter of law. The City further argued that Appellants could not show they were entitled to a constructive trust and or a declaratory judgment. So the City asked that the complaint be dismissed in its entirety.

Appellants responded in opposition to the City’s motion. In support, Appellants filed the declarations of three of the five named plaintiffs and another Area E property owner, detailing the manner in which fees are charged, how services were advertised and guaranteed, and what services were rendered to Area E residents.

A hearing on the City’s motion was held on September 12, 2021. The trial court then entered an order granting the City’s motion on October 8, 2021. Therein, the trial court essentially credited the City’s argument as to each of the five claims contained in Appellants’ complaint. Appellants therefore appealed to this Court.

II. Issues Presented

Appellants raise a single issue in this appeal, as taken from their brief: "Do resi- dents have contractual and/or equitable causes of action against a municipality that promises to provide trash collection services for a line-item fee and, after receiving payment, fails to adequately provide the promised services?" As we perceive it, the sole issue in this appeal is whether the trial court erred in granting the City’s motion to dismiss.

III. Standard of Review

The Tennessee Supreme Court has previously outlined the standard of review where a party defending an action files a motion to dismiss the plaintiff’s complaint for failure to state a claim upon which relief can be granted:

A [Tennessee Civil Procedure] Rule 12.02(6) motion challenges only the legal sufficiency of the complaint, not the strength of the plaintiff’s proof or evidence. Highwoods Props., Inc. v. City of Memphis, 297 S.W.3d 695, 700 (Tenn. 2009); Willis v. Tenn. Dep’t of Corr., 113 S.W.3d 706, 710 (Tenn. 2003); Bell ex rel. Snyder v. Icard, Merrill, Cullis, Timm, Furen & Ginsburg, P.A., 986 S.W.2d 550, 554 (Tenn. 1999); Sanders v. Vinson, 558 S.W.2d 838, 840 (Tenn. 1977). The resolution of a 12.02(6) motion to dismiss is determined by an examination of the pleadings alone. Leggett v. Duke Energy Corp., 308 S.W.3d 843, 851 (Tenn. 2010); Trau-Med of Am., Inc. v. Allstate Ins. Co., 71 S.W.3d 691, 696 (Tenn. 2002); Cook ex rel. Uithoven v. Spinnaker's of Rivergate, Inc., 878 S.W.2d 934, 938 (Tenn. 1994); Cornpropst v. Sloan, 528 S.W.2d 188, 190 (Tenn. 1975) (overruled on other grounds by McClung v. Delta Square Ltd. P’ship, 937 S.W.2d 891, 899–900 (Tenn. 1996)). A defendant who files a motion to dismiss " ‘admits the truth of all of the relevant and material allegations contained in the complaint, but … asserts that the allegations fail to establish a cause of action.’ " Brown v. Tenn. Title Loans, Inc., 328 S.W.3d 850, 854 (Tenn. 2010) (quoting Freeman Indus., LLC v. Eastman Chem. Co., 172 S.W.3d 512, 516 (Tenn. 2005)); see Edwards v. Allen, 216 S.W.3d 278, 284 (Tenn. 2007); White v. Revco Disc. Drug Ctrs., Inc., 33 S.W.3d 713, 718 (Tenn. 2000); Holloway v. Putnam Cnty., 534 S.W.2d 292, 296 (Tenn. 1976).

In considering a motion to dismiss, courts " ‘must construe the complaint liberally, presuming all factual allegations to be true and giving the plaintiff the benefit of all reasonable inferences.’ " Tigg v. Pirelli Tire Corp., 232 S.W.3d 28, 31-32 (Tenn. 2007) (quoting Trau-Med, 71 S.W.3d at 696); see Leach v. Taylor, 124 S.W.3d 87, 92–93 (Tenn. 2004); Stein v. Davidson Hotel Co., 945 S.W.2d 714, 716 (Tenn. 1997); Bellar v. Baptist Hosp., Inc., 559 S.W.2d 788, 790 (Tenn. 1978); see also City of Brentwood v. Metro. Bd. of Zoning Appeals, 149 S.W.3d 49, 54 (Tenn. Ct. App. 2004) (holding that courts "must construe the complaint liberally in favor of the plaintiff by … giving the plaintiff the benefit of all the inferences that can be reasonably drawn from the pleaded facts"). A trial court should grant a motion to dismiss "only when it appears that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief." Crews v. Buckman Labs. Int’l, Inc., 78 S.W.3d 852, 857 (Tenn. 2002); see Lanier v. Rains, 229 S.W.3d 656, 660 (Tenn. 2007); Doe v. Sundquist, 2 S.W.3d 919, 922 (Tenn. 1999); Pemberton v. Am. Distilled Spirits Co., 664 S.W.2d 690, 691 (Tenn. 1984); Fuerst v. Methodist Hosp. S., 566 S.W.2d 847, 848 (Tenn. 1978); Ladd v. Roane Hosiery, Inc., 556 S.W.2d 758, 759–60 (Tenn. 1977). We review the trial court’s legal conclusions regarding theadequacy of the complaint de novo. Brown, 328 S.W.3d at 855; Stein, 945 S.W.2d at 716.

Webb v. Nashville Area Habitat for Human., Inc., 346 S.W.3d 422, 426 (Tenn. 2011).²

IV. Analysis

A. Breach of Contract

[1] Appellants’ first cause of action is for breach of contract. "In order to make a prima facie case for a breach of contract claim, a plaintiff must allege: ‘(1) the existence of an enforceable contract, (2) non-performance amounting to a breach of the contract, and (3) damages caused by the breach of the contract.’ " Tolliver v. Tellico Vill. Prop. Owners Ass’n, 579 S.W.3d 8, 25 (Tenn. Ct. App. 2019) (quoting C & W Asset Acquisition, LLC v. Oggs, 230 S.W.3d 671, 676–77 (Tenn. Ct. App. 2007)). The central question here involves whether a contract exists upon which a breach of contract action may lie.

[2] In order to establish a contract, Appellants made the following allegations in their complaint:

By virtue of imposing trash collection fees upon [Appellants] and the Class Members and informing them of the weekly and bi-weekly trash collection dates that their trash would be collected, a contract was formed between the City [ ] and the [Appellants] and Class Members for the weekly collection of solid waste and the bi-weekly collection of bulk/yard waste, based upon the rates billed by MLGW at the City’s direction.³

The trial court ruled that no contract existed between Appellants and the City for trash collection services because the City was performing "an ordinary government function." Appellants counter that such may be the case for other types of government services, such...