Pinnacle Towers Acquisition, LLC v. Boris Penchion
523 S.W.3d 673
Tenn. Ct. App.2017Background
- Shirley Kennedy owned a 10.935-acre tract in Shelby County; she granted Pinnacle Towers Acquisition LLC (Pinnacle) a perpetual easement over a small portion for a communications tower and signed an easement agreement in 2004. The easement was recorded.
- The Shelby County Tax Assessor began treating the property as two tax parcels: the larger “C” parcel (remainder) and the smaller “L” parcel (easement site). Pinnacle paid all taxes billed for the L parcel; Kennedy did not pay taxes on the C parcel.
- Shelby County sold the C parcel at a 2010 tax sale for unpaid taxes; the county later quitclaimed the C parcel to Boris Penchion in 2012. Penchion then blocked Pinnacle’s access to the easement/site.
- Pinnacle sued for declaratory relief, quiet title to the L parcel subject to the easement, and an injunction; the trial court granted summary judgment in Pinnacle’s favor, holding the easement survived the tax sale but also finding Penchion the owner of the subject property.
- The Court of Appeals held the tax sale was invalid because statutory tax liens attach to the entire fee despite separate tax assessments; partial payments by Pinnacle did not prevent enforcement on the whole fee, so the sale must be invalidated and the trial court’s summary judgment vacated.
Issues
| Issue | Plaintiff's Argument (Pinnacle) | Defendant's Argument (Penchion/Shelby County) | Held |
|---|---|---|---|
| Did the tax sale extinguish Pinnacle’s easement? | Easement survived because the L parcel had a separate tax ID and Pinnacle paid L-parcel taxes. | Tax sale conveyed unencumbered title to purchaser; sale extinguishes prior encumbrances. | Sale invalidated: statutory tax lien attached to entire fee despite separate assessments; partial L-parcel payments did not prevent enforcement on whole fee. |
| Did separate tax assessment create separable liens/ownership? | Separate assessments show distinct taxable parcels; L-parcel taxes paid, so lien only on C parcel. | Entire fee remains subject to lien when owner fails to pay taxes; division for assessment doesn’t change fee ownership. | Division for tax assessment irrelevant to fee ownership; lien extends to entire tract. |
| Do partial tax payments release lien or prevent sale? | Pinnacle’s payments on L parcel satisfied taxes as to easement area; sale should not affect easement. | Partial payments do not release tax lien; entire delinquent amount must be paid to avoid sale. | Partial payments do not release lien; trustee may still enforce sale if full delinquency remains. |
| Should other issues about notice/easement validity be resolved? | (Pinnacle argued easement valid and notice complied) | (Penchion challenged notice and other defenses) | Court pretermitted other issues as moot after holding tax sale invalid. |
Key Cases Cited
- Rye v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235 (Tenn. 2015) (summary judgment standard and burden of proof explanation)
- Hefner v. Nw. Mut. Life Ins. Co., 123 U.S. 747 (1887) (tax sale generally conveys unencumbered title)
- Dick Broad. Co., Inc. of Tenn. v. Oak Ridge FM, Inc., 395 S.W.3d 653 (Tenn. 2013) (summary judgment review principles)
- Myers v. AMISUB (SFH), Inc., 382 S.W.3d 300 (Tenn. 2012) (statutory construction rules)