Trails End Campground, LLC v. Brimstone Recreation, LLC, E2014-00336-COA-R3-CV

Background

Trails End Campground and Brimstone Recreation are local competitors offering ATV/trail access, events, lodging, and sundries near Huntsville, Tennessee.
In 2012 the Town of Huntsville authorized the mayor to lease the centrally located Town Square ("Town Mall") to Brimstone for exclusive use during the week prior to and including Memorial Day and Labor Day each year.
The written lease (signed December 2012) granted Brimstone exclusive use, control, and enjoyment of the Premises for those event periods, with a 10‑year initial term and renewal option for successive 10‑year terms upon 30 days’ notice; Brimstone paid $1,000/year.
Trails End sued claiming the lease was ultra vires under the town charter, created an unconstitutional perpetuity/monopoly (Tenn. Const. art. I, § 22), and violated the Tennessee Trade Practices Act (TTPA).
The trial court granted summary judgment to Brimstone and later to the Town; the court held the lease was within municipal authority, did not create an unlawful monopoly or perpetuity, and the TTPA did not apply.
On appeal the Court of Appeals affirmed: Trails End had standing, the charter authorized the lease, the lease did not offend the rule against perpetuities or the anti‑monopoly clause, and the TTPA was inapplicable because the dispute involved services/lease rights rather than sale of tangible goods.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Authority/ultra vires: whether the Town exceeded its charter power by leasing Town Square exclusively	Mayor lacked power under charter; lease ultra vires and void	Charter expressly authorizes municipalities to lease property and make exclusive contracts/franchises	Lease was within charter authority; not ultra vires
Perpetuity: whether renewal option creates an unconstitutional perpetuity	10‑year term plus successive 10‑year renewals at lessee's option is effectively perpetual	Lease vested immediately and is not a forbidden perpetuity under common‑law rule	No perpetuity problem; lease vested when term began (May 2013) and does not violate rule against perpetuities
Monopoly (Tenn. Const. art. I, § 22): whether exclusive lease created an unlawful monopoly	Exclusive rights to Town Square for event periods unlawfully restrain competition and create monopoly	No prior common right existed to conduct those specific commercial activities there; rights granted are limited in time and scope	No unconstitutional monopoly: activities granted were not previously a common right and exclusivity is limited in time/space
Tennessee Trade Practices Act (TTPA): whether the lease violates the TTPA	Lease tends to lessen competition in local market and thus violates TTPA; remedy includes forfeiture of corporate charter	TTPA protects trade in tangible goods; primary business here is services/lease of property, so TTPA doesn't apply	TTPA inapplicable: dispute centers on services/lease rights (not manufacture/sale of tangible goods); no TTPA violation

Key Cases Cited

Harris v. Haynes, 445 S.W.3d 143 (Tenn. 2014) (summary judgment reviewed de novo)
City of Memphis v. Hargett, 414 S.W.3d 88 (Tenn. 2013) (standing doctrine and prerequisites)
Allmand v. Pavletic, 292 S.W.3d 618 (Tenn. 2009) (municipal actions must conform to charter; ultra vires principles)
City of Lebanon v. Baird, 756 S.W.2d 236 (Tenn. 1988) (municipal powers derive from charter/statute)
State ex rel. Ass’n for the Preservation of Tenn. Antiquities v. City of Jackson, 573 S.W.2d 750 (Tenn. 1978) (upholding lease authority under similar charter provisions)
Franklin v. Armfield, 34 Tenn. (2 Sneed) 305 (Tenn. 1854) (common‑law meaning of perpetuities)
Hamblen Cnty. v. City of Morristown, 584 S.W.2d 673 (Tenn. Ct. App. 1979) (leases that vest immediately do not violate perpetuities rule)
James Cable Partners, L.P. v. City of Jamestown, 818 S.W.2d 338 (Tenn. Ct. App. 1991) (no monopoly where granted right was not previously a common right)
Checker Cab Co. v. City of Johnson City, 216 S.W.2d 335 (Tenn. 1948) (invalidating ordinance that effectively created a private monopoly)
Freeman Indus., LLC v. Eastman Chemical Co., 172 S.W.3d 512 (Tenn. 2005) (TTPA applies where conduct has substantial effect on Tennessee trade or commerce)