Lawsuits and More Lawsuits

In total, over the past five years local school systems and governments inside of Coffee County – including Manchester City, Manchester City Schools, Tullahoma City, Tullahoma City Schools, Coffee County and Coffee County Schools – have filed, settled or prepared to file approximately $4.46 million dollars in litigation against one another.
According to a report in the Tullahoma News, a heavy influx of litigation began early this year after County Technical Advisory Service (CTAS) and state officials pronounced that liquor-by-the-drink (LBD) taxes were unremitted for years by counties and municipalities across the state.
The Coffee County School System is seeking $387,488 from the City of Tullahoma and an additional $137,340 from the City of Manchester, but the case was dismissed by Coffee County Judge Vanessa Jackson Sept. 18 and upheld by Jackson Nov. 3, leaving the other cases more in question.
According to the order filed by Jackson in Coffee County Chancery Court Nov. 3 to deny the school board’s request, the county school board does not have the authority delegated to it to maintain the cause of action. Attorney Eric Burch has filed an appeal with the Tennessee Court of Appeals.
After statements from the Tennessee Attorney General’s office that LBD money would be owed to many school districts across the state, local school systems began seeking that money from local governments inside Coffee County.
The City of Tullahoma recently agreed to pay its city school system $127,603.60 in installments of $31,923. Meanwhile, Tullahoma School System is still seeking approximately $83,360 from the City of Manchester government.
The Manchester School System could seek $109,948.33 from the City of Tullahoma and $40,000 from the City of Manchester government in LBD money. However, because the system didn’t file to seek reimbursement prior to June 1, it forgoes funds owed prior to 1999, leaving the Manchester Schools able to seek $33,574 from Manchester’s government and $76,518 from Tullahoma.
Both Tullahoma and Manchester municipalities are not set to negotiate at this time with the school systems.
In addition to LBD tax disputes, Manchester City Schools recently re-opened a lawsuit against the Coffee County government seeking $1.56 million and pre-judgment interest for misappropriated second-half sales tax dating back to 1983.