CITY OF PIONEER VILLAGE v. KENTUCKY CGSA, INC.
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RENDERED:
October 11, 2002; 10:00 a.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
2000-CA-001168-MR
CITY OF PIONEER VILLAGE
APPELLANT
APPEAL FROM BULLITT CIRCUIT COURT
HONORABLE THOMAS L. WALLER, JUDGE
ACTION NO. 98-CI-00504
v.
KENTUCKY CGSA, INC.
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BUCKINGHAM, COMBS, AND SCHRODER, JUDGES.
SCHRODER, JUDGE:
This is an appeal from a summary judgment
determining that the City of Pioneer Village’s license tax for
cellular telephone towers in excess of 30 feet was
unconstitutional and in violation of KRS 92.281(3).
The City of
Pioneer Village argues that genuine issues of material fact
existed as to whether appellee had standing to challenge the
license fee and whether members within the same class are treated
differently.
Upon review of the record, we agree with the trial
court that there are no genuine issues of material fact.
we affirm.
Thus,
On October 20, 1997, appellant, the City of Pioneer
Village, enacted Ordinance No. 97-004 imposing a license tax on
various types of businesses within the city limits.
The license
tax for “Commercial Transmission within The City of Voice,
Picture, or data by Non-Land line means using structure 30 feet
or more in height” was $4,100.
The license tax for all other
types of businesses was between $10 and $400.
In fact, Ordinance
No. 97-004 simply amended the existing license tax to
specifically include cellular telephone service providers with
towers 30 feet or higher.
On July 9, 1998, “Kentucky CGSA, Inc. D/B/A BellSouth
Mobility” filed an action challenging the constitutionality of
the ordinance in question on various grounds.
The beginning of
the complaint stated, “The Plaintiff, Kentucky CGSA, Inc. d/b/a
BellSouth Mobility (hereinafter ‘BellSouth’), is a commercial
mobile radio service provider organized under the laws of the
State of Georgia, and authorized to conduct business in the
Commonwealth of Kentucky.”
The remainder of the complaint
referred to the plaintiff as “BellSouth”.
The complaint went on
to allege, among other things, that BellSouth:
had erected a
cellular tower in excess of 30 feet within the city; had paid the
1998 license fee to the city; and, as a public utility, is also
subject to state ad valorem taxation under KRS 136.120, which
includes a tax on its operating tangible property and its
franchise.
On July 23, 1998, Kentucky CGSA, Inc. d/b/a BellSouth
Mobility amended its complaint to reflect that Kentucky CGSA,
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Inc. d/b/a BellSouth Mobility had not, in fact, paid the 1998
license fee to the City of Pioneer Village until July 22, 1998.
Thereafter, on August 12, 1998, the City of Pioneer
Village, (“the City”) filed a motion to dismiss “for failure to
join proper parties, for failure to comply with Chapter 418, or
in the alternative to require the plaintiff to plead with more
certainty as to its identity and by whom regulated.”
The City
then filed in the record a certification from the Kentucky
Secretary of State establishing that Kentucky CGSA, Inc. was a
corporation authorized to do business in Kentucky and that no
Certificate of Assumed Name for the corporation had been filed.
The court denied the City’s motion to dismiss on February 16,
1999.
On that same date, Kentucky CGSA, Inc. filed its second
amended complaint excluding the “d/b/a BellSouth Mobility” from
the caption and alleged as follows:
Louisville CGSA, Inc. (a Georgia corporation)
is the predecessor of Kentucky CGSA. On
April 2, 1984, BellSouth Mobility, Inc. (a
Georgia corporation) entered into an
agreement with Louisville CGSA, Inc. under
which BellSouth Mobility provided Louisville
CGSA, Inc. “All services necessary to
commence and provide for the operation,
management, and administration of said
affiliate’s business in providing cellular
radio service.”
The amended complaint further alleged that “Kentucky CGSA, Inc.,
through its agent BellSouth Mobility”: provides interstate and
intrastate telecommunications services; pays an ad valorem tax
and state tax on its franchise pursuant to KRS 136.120; erected
the cellular tower in question; and paid the City’s 1998 license
tax under protest.
In the remainder of the amended complaint,
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Kentucky CGSA referred to itself as “the Plaintiff” or “Kentucky
CGSA, Inc.”
Subsequently, on October 12, 1999, Kentucky CGSA, Inc.
filed a motion for summary judgment with a supporting affidavit
of its Assistant Vice President of Taxes, Pamela Cook.
The court
ultimately granted the summary judgment on March 7, 2000.
The
City then filed a motion to vacate and reconsider, alleging that
Kentucky CGSA:
does not own the cellular tower in question; did
not pay the 1998 license tax; is not a telephone company; and
does not pay tax on its operating property.
Kentucky CGSA
responded by filing another affidavit of Pamela Cook which
reiterated much of what was in her prior affidavit.
Cook stated
that Kentucky CGSA is a cellular telephone service provider in
Kentucky which owns the cellular tower in question.
The
affidavit also confirmed:
5. That, as agent for Kentucky CGSA,
BellSouth Mobility, Inc. (an affiliated
company) markets cellular telephone service
in Kentucky on behalf of Kentucky CGSA;
6. That Kentucky CGSA has paid the 1998
license tax in dispute through its affiliated
company, BellSouth Corporation, . . .
7. That, since it began doing business in
Kentucky, Kentucky CGSA has paid the property
tax imposed on public service companies,
including cellular telephone companies, under
KRS 136.120.
From the order denying the City’s motion to vacate or reconsider,
the City now appeals.
Summary judgment is proper only where the trial court,
drawing all inferences in favor of the nonmoving party, can
conclude that there are no genuine issues as to any material fact
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and that the moving party is entitled to judgment as a matter of
law.
CR 56.03; Fischer v. Jeffries, Ky. App., 697 S.W.2d 159
(1985).
Summary judgment should be used to terminate litigation
when, as a matter of law, it appears it would be impossible for
the respondent to produce evidence at the trial warranting a
judgment in his favor and against the movant.
Steelvest, Inc. v.
Scansteel Service Center, Inc., Ky., 807 S.W.2d 476 (1991).
In
determining whether a material fact exists, the trial court is to
look at the “pleadings, depositions, answers to interrogatories,
stipulations, and admissions on file, together with any
affidavits”.
CR 56.03.
On a motion for summary judgment, the
moving party has the initial burden of showing that no genuine
issue of material fact exists, and then the other party must
refute the contentions of the moving party.
Roberts v. Davis,
Ky., 422 S.W.2d 890 (1967).
The City argues that there were several genuine issues
of material fact as to whether Kentucky CGSA had standing to
challenge the constitutionality of the license tax.
First, the
City claims there were questions of fact as to whether Kentucky
CGSA actually owned the cellular tower at issue in the City of
Pioneer Village.
The City notes that it has affirmatively denied
that Kentucky CGSA owns the tower.
While neither side has
presented a copy of a lease, deed or any other formal document
confirming ownership of the tower, Kentucky CGSA alleges
ownership of the tower in the second affidavit of Pamela Cook, in
its response to the motion to dismiss, and in its answers to the
City’s interrogatories.
In its answers to the City’s
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interrogatories, Kentucky CGSA states the cost of constructing
the tower, the cost to lease the property on which the tower is
located, and the cost of improvements made to said property.
Through this evidence, we believe that Kentucky CGSA has
sufficiently met its burden of proof in showing ownership of the
tower for summary judgment purposes, and the City has not
rebutted this evidence with any evidence that Kentucky CGSA does
not own the tower.
The City next contends that there were questions of
fact as to whether Kentucky CGSA paid the license tax at issue.
Although the evidence from the City established that Kentucky
CGSA had not actually paid the 1998 license tax at the time the
complaint was filed, there was evidence that Kentucky CGSA paid
the tax on July 22, 1998, and the trial court allowed Kentucky
CGSA to amend its complaint to reflect this fact.
The affidavits
of Pamela Cook stated that Kentucky CGSA paid the tax under
protest through its agent, BellSouth, with which it has an
agreement whereby BellSouth markets cellular telephone service on
its behalf.
A copy of the $4,100 check dated July 22, 1998 from
BellSouth to the City, together with a copy of the letter stating
that said payment was for the 1998 license tax and was being made
on behalf of Kentucky CGSA, was also filed in the record.
Finally, Kentucky CGSA’s response to the motion to dismiss and
its answers to the City’s interrogatories stated that Kentucky
CGSA had paid the 1998 license tax.
The City presented no
rebutting evidence that Kentucky CGSA was not the real party in
interest, i.e. that the agreement between BellSouth and Kentucky
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CGSA did not exist or that BellSouth was not really paying the
1998 license tax on behalf of Kentucky CGSA.
The City points
only to the fact that in the letter accompanying payment of the
license tax, BellSouth requests a refund of the tax.
However, as
noted earlier, the letter clearly states that BellSouth was
making said payment on behalf of Kentucky CGSA and, thus, one
would conclude that BellSouth was likewise seeking the refund on
behalf of Kentucky CGSA.
We are not aware of any law which would
prevent Kentucky CGSA from having standing to challenge a tax
because it had an agent pay said tax on its behalf.
Accordingly,
we do not see that there were any questions of fact as to whether
Kentucky CGSA paid the license tax at issue.
The City also contends there are questions of fact as
to whether Kentucky CGSA is a telephone company.
Kentucky CGSA
has maintained in all of its pleadings that it is a provider of
cellular telephone service.
As stated earlier, in its second
amended complaint, Kentucky CGSA stated that pursuant to an
agreement with BellSouth, it provides cellular telephone service
through BellSouth, to which Pamela Cook also attested in both of
her affidavits.
Once again, the City fails to present any
rebutting evidence that such an agreement does not exist or that
BellSouth is really the party providing cellular telephone
service.
The City’s final argument regarding standing is that
there are questions of fact as to whether Kentucky CGSA also pays
tax on its operating property.
This issue is relevant because it
is well settled that under Section 181 of the Kentucky
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Constitution and KRS 92.281(3), if a company pays taxes on its
operating property, it is not also subject to local license tax,
City of Pikeville v. United Parcel Service, Inc., Ky., 417 S.W.2d
140 (1967); City of Covington v. Cincinnati, Newport, & Covington
Transp. Co., Ky., 515 S.W.2d 617 (1974), which was one of the
bases of the trial court’s decision in the instant case.
Kentucky CGSA has maintained throughout the pendency of the
action that it has paid tax on its operating property, which
includes franchise and ad valorem taxes, pursuant to KRS 136.120.
In its answers to interrogatories, Kentucky CGSA lists as one of
the taxes it pays “[p]ublic service company property tax:
136.120".
KRS
In the affidavits of Pamela Cook, she states that
Kentucky CGSA has always paid the property tax as a public
service company under KRS 136.120.
Yet again, the City has not
presented any proof to rebut this evidence.
The City’s only argument as to the merits of the
constitutional challenge is that, contrary to the trial court’s
finding, there was no evidence that members of the same class as
Kentucky CGSA were treated differently under the City’s
ordinance.
We need not address this issue, which pertains to the
trial court’s conclusion that the ordinance violated Section 171
of Kentucky Constitution.
In a case with identical facts, this
Court has held that a city’s license tax on cellular telephone
service providers using towers 30 feet or more is in violation of
Section 181 of the Kentucky Constitution and KRS 92.281(3).
City
of Lebanon Junction v. Cellco Partnership d/b/a Verizon Wireless,
Ky. App., 80 S.W.3d 761 (2001).
Hence, solely on those grounds,
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the trial court in the present case likewise properly found the
ordinance to be unconstitutional.
For the reasons stated above, the judgment of the
Bullitt Circuit Court is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Norman R. Lemme
Shepherdsville, Kentucky
Bruce F. Clark
Jennifer S. Smart
Frankfort, Kentucky
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