Case Name: NOBLE COUNTY et al., Appellants (Plaintiffs below), v. Crystal ROGERS, Appellee (Defendant below)
Court: Supreme Court of Indiana
Jurisdiction: Indiana
Decision Date: 2001-03-27
Citations: 745 N.E.2d 194
Docket Number: No. 57S03-0003-CV-218
Parties: NOBLE COUNTY et al., Appellants (Plaintiffs below), v. Crystal ROGERS, Appellee (Defendant below).
Judges: SHEPARD, C.J., and RUCKER, J., concur.
Reporter: North Eastern Reporter 2d
Volume: 745
Pages: 194–207

Head Matter:
NOBLE COUNTY et al., Appellants (Plaintiffs below), v. Crystal ROGERS, Appellee (Defendant below).
No. 57S03-0003-CV-218.
Supreme Court of Indiana.
March 27, 2001.
Phillip A. Renz, Diana C. Bauer, Miller, Carson, Boxberger & Murphy, Fort Wayne, IN, Attorneys for Appellant.
Jeffrey A. Modisett, Attorney General of Indiana, Jon Laramore, Deputy Attorney General, Indianapolis, IN, Attorneys for Amicus Curiae State of Indiana.
Crystal Rogers, Cromwell, IN, Pro Se.

Opinion:
ON PETITION TO TRANSFER
SULLIVAN, Justice.
After a court overturned a restraining order that a county building inspector had obtained against {Crystal Rogers, she sought damages under a trial rule that awards costs and damages to those wrongfully enjoined by governmental entities. Both the trial court and the Court of Appeals held that Rogers could recover under the trial rule despite the immunity provisions of the Indiana Tort Claims Act. We hold that Rogers is not entitled to damages because the county's conduct was not wrongful for purposes of the trial rule.
Background
In November, 1996, Crystal Rogers began a renovation project on a house that she owned in an unincorporated area of Noble County. Rogers had hoped to add a second story to the home. However, a Noble County building inspector issued a stop work order on November 12, 1996, asserting that the project violated the Noble County Building Code because Rogers had not obtained a building permit. Rogers continued construction until the county obtained a temporary restraining order.
Rogers appealed the trial court's decision to the Court of Appeals, which reversed and dissolved the temporary restraining order. Rogers v. Noble County By and Through the Noble County Bd. of Comm'rs, 679 N.E.2d 158 (Ind.Ct.App.1997), transfer denied. The court first held that the pertinent Noble County ordinances amounted to a "building code" under Indiana Code § 36-7-8-8 and not a "housing code" under Indiana Code §$ 86-7-8-4. It then dissolved the temporary restraining order because such "building codes" do not apply to "private homes that are built by individuals and used for their own occupancy." Ind.Code § 86-7-8-3(d) (1998).
On remand, Rogers asserted that she was entitled to damages under Indiana Trial Rule 65(C). Her counterclaim sought compensation for the cost of finding another place to live while the restraining order was in place and for damage to the house caused by exposure to the elements. Noble County moved for summary judgment on the counterclaim, arguing that the Indiana Tort Claims Act precluded her recovery. The trial court denied summary judgment, but certified its order for interlocutory appeal.
The Court of Appeals held that Trial Rule 65 is procedural in nature and therefore trumped the conflicting provisions of the Tort Claims Act. Noble County ex rel. Noble County Bd. of Comm'rs v. Rogers, 717 N.E.2d 591, 596 (Ind.Ct.App.1999). We granted transfer, thereby vacating the Court of Appeals decision. Noble County v. Rogers, 735 N.E.2d 227 (Ind.2000) (table).
Discussion
Rogers's primary contention in this appeal is that she is entitled to "costs and damages" under Indiana Trial Rule 65(C), which reads:
No restraining order or preliminary injunction shall issue except upon the giving of security by the applicant, in such sum as the court deems proper, for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained. No such security shall be required of a governmental organization, but such governmental organization shall be responsible for costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained.
(emphasis added). Rogers argues that because the restraining order was lifted after her first appeal, Trial Rule 65(C) requires Noble County to pay for the costs and damages she incurred while the restraining order was in effect.
Noble County contends that the Trial Rule conflicts with the immunity granted to governmental entities by the Indiana Tort Claims Act ("ITCA"). See Ind.Code § 34-18-3-1 to § 34-18-8-25 (1998). Noble County argues that two of the specific immunity provisions of Indiana Code § 34-13-3-8 preclude the damages Rogers sought in her counterclaim:
A governmental entity or an employee acting within the seope of the employee's employment is not liable if a loss results from:
(5) the initiation of a judicial or an administrative proceeding;
(6) the performance of a discretionary function; .
The parties ask us to resolve this apparent conflict by applying either the Trial Rule or the TTCA to the exclusion of the other. This posture puts into tension the powers of coordinate branches of our state government by asking us to ignore the pronouncement of one such branch. However, we have long held that "[ilf an act admits of two reasonable interpretations, one of which is constitutional and the other not, we choose that path which permits upholding the act." Price v. State, 622 N.E.2d 954, 963 (Ind.1993), reh'g denied. See also A Woman's Choice-East Side Women's Clinic v. Newman, 671 N.E.2d 104, 111 (Ind.1996) (Dickson, J., concurring in result) (discussing "our overriding obligation to construe our statutes in such a way as to render them constitutional if reasonably possible"), reh'g denied; Baldwin v. Reagan, 715 N.E.2d 332, 338 (Ind.1999) ("If there is more than one reasonable interpretation of a statute, at least one of which is constitutional, we will choose that path which permits upholding the act.").
To this end, a proper construction of the word "wrongfully" in the Trial Rule resolves the conflict between the rule and the statute. We have never had the opportunity to determine the scope of wrong ful conduct for governmental actors under TR. 65(C). We now hold that their conduct is wrongful only to the extent that they have acted with such bad faith and malice that their actions undermine the authority of the court issuing the restraining order or injunction.
This construction harmonizes the immunity provisions of the ITCA with our inherent power to sanction litigants for improper or untoward behavior in judicial proceedings. The ITCA expresses a legislative policy to protect the State's finances while ensuring " 'that public employees can exercise their independent judgment nee-essary to carry out their duties without threat of harassment by litigation or threats of litigation over decisions made within the seope of their employment.!" Celebration Fireworks, Inc. v. Smith, 727 N.E.2d 450, 452 (Ind.2000) (quoting Indiana Dep't. of Corr. v. Stagg, 556 N.E.2d 1338, 1343 (Ind.Ct.App.1990), transfer denied ). To achieve these goals, the Legislature placed 20 categories of substantive behavior beyond the reach of tort suits. See Ind.Code § 34-13-3-3 (1998).
The Legislature's ability to immunize government actions knows few limits, but those limits are reached when immunity impinges upon the judiciary's constitutional sphere. That is, while the Legislature may shield the State from substantive tort liabilities, it may not immunize the State from our power to sanction the attorneys and parties appearing before us. See State v. Kuespert, 411 N.E.2d 435, 438-39 (Ind.Ct.App.1980) (upholding power of the trial court to issue monetary sanctions against the State for discovery violations under Trial Rule 37). Cf. Ind. Const. art. VII, § 1 ("The judicial power of the State shall be vested in one Supreme Court, one Court of Appeals, Cireuit Courts, and such other courts as the General Assembly may establish.") (emphasis added); State ex rel. Indianapolis-Marion County Bldg. Auth. v. Superior Court of Marion County, Room No. 1, 264 Ind. 313, 317, 344 N.E.2d 61, 64 (1976) ("Over the years, this Court, in its opinions, has cireumseribed a segment of judicial authority and called it inherent and incidental. Courts are vested with an inherent power to order, in emergency situations, the removal of obstacles to the due administration of justice in the court."). This power to sanction is a necessary precondition to the exercise of our independent judicial power:
To deny a court the power to enforce obedience to its lawful orders against parties who have been subjected properly to its jurisdiction in the first instance, is to nullify its effectiveness as an independent branch of our government. The power of a court to enforee compliance with its orders and decrees duly entered is inherent. No statutory sanction is needed. In both equity and law a court would be powerless to give effective relief were its arms tied by such requirements as relator asserts are nee-essary.
State ex rel. Brubaker v. Pritchard, 236 Ind. 222, 226-27, 138 N.E.2d 233, 235 (1956). See also O'Conner v. State, 178 Ind.App. 415, 382 N.E.2d 994, 998 (1978) ("In protecting this discovery process, the trial court has the inherent power to impose sanctions...."), aff'd, 272 Ind. 460, 399 N.E.2d 364 (1980). To protect the proper functioning of judicial proceedings, we also have imbedded this power in numerous court rules. See, eg., Ind.Trial Rule 11, Ind.Trial Rule 37, Zwiebel v. Zwiebel, 689 N.E.2d 746, 750 (Ind.Ct.App. 1997) ("[Under Trial Rule 11], the trial court has the discretion to impose sance-tions where it determines that the verified motion contains information that the attorney knows to be false."), transfer denied. Similarly, the judicial power encompasses the ability to hold a litigant in contempt. See, eg., Meyer v. Wolvos, 707 N.E.2d 1029, 1031 (Ind.Ct.App.1999) ("We have recognized the inherent judicial power to deal with contempt. No statutory sanction is needed as a court's power to enforce compliance with its orders and decrees duly entered is inherent."), transfer denied; Crowl v. Berryhill, 678 N.E.2d 828, 831 (Ind.Ct.App.1997) ("Time and time again, Indiana appellate courts have recognized the inherent judicial power to deal with contempt.").
It is beyond question that this power extends to governmental attorneys and parties. "When the State enters the court as a litigant, it places itself on the same basis as any other litigant; subjecting itself to the inherent authority of the court to control actions before it, just as any other litigant." State v. Blenden, 748 So.2d 77, 88-89 (Miss.1999), reh'g denied. See also State ex rel. Mass Transp. Auth. of Greater Indianapolis v. Indiana Revenue Bd., 146 Ind.App. 334, 837-38, 255 N.E.2d 833, 835-86 (holding state auditor in contempt for refusing to comply with a court order), cert. denied, 400 U.S. 877, 91 S.Ct. 117 (1970); State ex rel. Indiana State Bar Assoc. v. Moritz, 244 Ind. 156, 164, 191 N.E.2d 21, 25 (19683) (enjoining properly elected prosecutor from appearing in court because prosecutor had not been admitted to the bar), Bangs v. Northern Indiana Power Co., 211 Ind. 628, 635, 6 N.E.2d 563, 566 (1937) (upholding power of trial court to award damages against mayor of Huntington for violating injunction; "The courts are clothed with the power, in such actions, to enter judgment of a coercive and remedial nature."). Other jurisdictions similarly uphold this judicial power in the face of misconduct by the government. See, eg., Nelson v. Steiner, 279 F.2d 944, 948 (7th Cir.1960) ("The executive branch of government has no right to treat with impunity the valid orders of the judicial branch.").
Therefore, our interpretation of the word "wrongfully" in the last sentence of TR. 65(C) must balance the limitations of the ITCA with the judiciary's inherent power to sanction. So long as any damages granted under Trial Rule 65(C) are part and parcel of our sanctioning power, the constitutional conflict the parties point to is not at issue. Under this balance, a restraining order or an injunction obtained by the government is wrongful only when the government acts in bad faith or with malice so as to threaten the proper functioning of the court. This standard protects the legislative policy of immunizing discretionary government actions while preserving the courts' ability to control litigation. We therefore recognize that in those rare cases where this standard is met, TR. 65(C) may operate as a sanction for the government's wrongful conduct despite the immunity otherwise granted by the ITCA.
Here, however, Rogers's counterclaim sought damages solely on the basis of the dissolution of the restraining order after her initial appeal, and no such bad faith is presented in the record. The dispute over the restraining order focused on the purely legal question of the charac terization of a building code. See Rogers v. Noble County By and Through the Noble County Bd. of Comm'rs, 679 N.E.2d 158 (Ind.Ct.App.1997). The record and the two previous opinions reveal no hint that Noble County was motivated by anything other than a concern for safety. The trial court should have granted Noble County's motion for summary judgment as to Rogers's damage claims.
Conclusion
Having previously granted transfer, thereby vacating the opinion of the Court of Appeals pursuant to Ind.Appellate Rule 11(B)(3), we remand this case for proceedings consistent with this opinion.
SHEPARD, C.J., and RUCKER, J., concur.
BOEHM, J., dissents with separate opinion in which DICKSON, J., concurs.
. Although not cited in Noble County's brief, two other subsections of Ind.Code § 34-13-3-3 are arguably invoked by these facts:
(7) the adoption and enforcement of or failure to adopt or enforce a law (including rules and regulations), unless the act of enforcement constitutes false arrest or false imprisonment;
(8) an act or omission performed in good faith and without malice under the apparent authority of a statute which is invalid, if the employee would not have been liable had the statute been valid .
. We note that the Illinois Court of Appeals has held that a statutory scheme of sovereign immunity overrides a trial rule that awards damages for a wrongfully obtained injunction. See Village of Lake in the Hills v. Laidlaw Waste Systems, Inc., 160 Ill. 427, 112 Ill.Dec. 184, 513 N.E.2d 598 (1987).
. When construing a trial rule, we employ such standard tools of statutory interpretation. See Halsey v. Smeltzer, 722 N.E.2d 871, 873 (Ind.Ct.App.2000) (citing Johnson v. State, 708 N.E.2d 912, 915 (Ind.Ct.App.1999), transfer denied ), transfer denied. Cf. Rumfelt v. Himes, 438 N.E.2d 980, 983-84 (Ind.1982) ("Generally, the Rules of Trial Procedure are to be construed together and harmoniously if possible. However, as with statutes, a specific rule controls over a general one on the same subject matter.") (citations omitted).
. Because the initial sentences of TR. 65(C) deal solely with private parties and do not operate against the backdrop of the ITCA, we express no opinion as to what constitutes a "wrongfully" obtained restraining order or injunction in a purely private suit. See, eg., National Sanitary Supply Co. v. Wright, 644 N.E.2d 903, 906 (Ind.Ct.App.1994) ("[Wle hold that the test for determining if a preliminary injunction was wrongfully issued [as between private entities] is not whether the injunction was ultimately dissolved but rather whether injunctive relief was warranted under the facts of the case."), transfer denied.
. Courts in other jurisdictions have also recognized such inherent authority:
We have consistently upheld this Court's plenary power to control the course of litigation in the trial courts. The legislature recognizes these pertinent constitutional provisions which afford this Court full authority over rules of practice and procedure and the Courts inherent power to prescribe rules. The prescription of the practice and procedure attending the imposition of sanctions for the signing and filing of papers with the courts is a procedural, not a substantive, maiter. The legislature is prohibited from enacting statutes pertaining to such matter.
Squillace v. Kelley, 990 P.2d 497, 501 (Wyo.1999) (citations omitted). See also Cotner v. Hopkins, 795 F.2d 900, 902 (10th Cir.1986) (''There is strong precedent establishing the inherent power of federal courts to regulate the activities of abusive litigants by imposing carefully tailored restrictions under the appropriate circumstances.").
. However, several Indiana cases bave refused to award attorneys fees and costs against the government on the grounds that it is immune from "punitive" awards. See, e.g., State v. Denny, 273 Ind. 556, 557, 406 N.E.2d 240, 241 (1980) (refusing to shift costs under Ind.Appellate Rule 15(g)); State v. Carter, 658 N.E.2d 618, 623-24 (Ind.Ct.App.1995). These cases fall under the so-called American rule that a party may not shift the expense of bringing a lawsuit absent statutory authority. This refusal to allocate costs from party to party as a providential matter is a separate analysis from a court's power to sanction litigants.
. Cf. Grand Trunk Western R. Co. v. Kapitan, 698 N.E.2d 363, 368 (Ind.Ct.App.1998) (Darden, J., concurring in part and dissenting in part) ("'Under Indiana Trial Rule 65(C), a party may recover damages, including attorney's fees, for a wrongful injunction. However, I do not believe the injunction in this case should be characterized as 'wrongful' so as to warrant an award of attorney fees [because the underlying issue] was a pure question of law . I further believe such an award seis a bad precedent by punishing litigants for an error on the part of the court and, as such, augurs a chilling effect upon litigants.") (emphasis in original), transfer denied.