Court Opinion

ID: 4291012
Source: CourtListenerOpinion
Date Created: 2018-07-03 15:08:52.151552+00
Date Added: 2024-06-11T07:49:10.255341
License: Public Domain

FILED
                                                                          Jul 03 2018, 9:05 am

                                                                              CLERK
                                                                          Indiana Supreme Court
                                                                             Court of Appeals
                                                                               and Tax Court

ATTORNEYS FOR APPELLANT                                    ATTORNEYS FOR APPELLEES
Donald E. Morgan                                           Clifford R. Courtney
Thomas J. O. Moore                                         Frederic C. Sipe
Deborah L. Law                                             Indianapolis, Indiana
Office of Corporation Counsel                              Robert A. Smith
Indianapolis, Indiana                                      Smith Wade, LLC
James J. Ammeen                                            Noblesville, Indiana
Indianapolis, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

City of Indianapolis,                                      July 3, 2018
Appellant-Plaintiff/Counterclaim                           Court of Appeals Case No.
Defendant,                                                 49A02-1711-OV-2686
       v.                                                  Appeal from the Marion Superior
                                                           Court
Towne & Terrace Corporation, et                            The Honorable Cynthia J. Ayers,
al.,                                                       Judge
Appellees-Defendants/Counterclaim                          Trial Court Cause No.
Plaintiffs.                                                49D04-1311-OV-42187

Riley, Judge.

Court of Appeals of Indiana | Opinion 49A02-1711-OV-2686 | July 3, 2018                           Page 1 of 15
                                 STATEMENT OF THE CASE
[1]   Appellants-Plaintiff/Counterclaim Defendant, City of Indianapolis (City),

      appeals the trial court’s summary judgment in favor of Appellees-

      Defendants/Counterclaim Plaintiffs), Towne & Terrace Corporation, et al.,

      (Towne & Terrace).

[2]   We affirm.

                                                     ISSUES
[3]   The City presents four issues on appeal, three of which we find dispositive and

      which we restate as follows:

          (1) Whether no genuine issue of material fact exists to conclude that Indiana

              Code section 32-31-1-22 barred the City’s claims against Towne &

              Terrace;

          (2) Whether no genuine issue of material fact exists to conclude that the

              City’s public nuisance action under Indiana Code section 32-30-6-7

              against Towne & Terrace is not succesful ; and

          (3) Whether there is no genuine issue of material fact to conclude that the

              City owed Towne & Terrace maintenance assessments on the units it

              acquired ownership to.

      Court of Appeals of Indiana | Opinion 49A02-1711-OV-2686 | July 3, 2018   Page 2 of 15
                       FACTS AND PROCEDURAL HISTORY
[4]   Towne & Terrace is a residential complex near the intersection of East 42nd

      Street and Post Road in Indianapolis, Indiana. Incorporated in 1964 for the

      purpose of owning and maintaining the common areas of the condominium

      development, Towne & Terrace is a private, nonprofit Indiana corporation with

      volunteer directors. Unlike more recent condominium developments, Towne &

      Terrace homeowners are members of Towne & Terrace and do not own any

      interest in its common areas. The individual lots are transferred by deed. To

      keep Towne & Terrace apprised of ownership changes in the individual

      condominiums, the corporation’s Amended Articles of Incorporation require

      the issuance of a certificate of membership to each member, and it is each

      member’s responsibility to inform Towne & Terrace when his or her lot is

      transferred to a new owner. The previous member must then request a new

      certificate of membership to be issued to the new member. As of 2017, the City

      owned at least 49 units in Towne & Terrace. Thirteen of the units were

      acquired as part of a settlement in an unrelated nuisance action. The remainder

      of the units became the City’s possession after they were not purchased at tax

      sales. Since being acquired, each of the City’s homes in Towne & Terrace has

      been left vacant and boarded up.

[5]   Over the years, the East side of Marion County has suffered a major crime

      wave. In 2015, the Federal Bureau of Investigation, the United States

      Attorney’s Office, the Indiana State Police, the Marion County Sheriff, and

      Indianapolis Metropolitan Police Department conducted raids throughout

      Court of Appeals of Indiana | Opinion 49A02-1711-OV-2686 | July 3, 2018   Page 3 of 15
      Indianapolis, leading to the arrest of thirty-five criminals—the vast majority on

      the East side.

[6]   On December 16, 2014, the City filed an Amended Complaint against Towne

      & Terrace and four members of its board in their representative capacities,

      alleging that Towne & Terrace “failed to provide, maintain, and ensure that all

      common areas of the [] residential complex are safe from hazardous conditions,

      including but not limited to general lawlessness and the threat of reasonably

      foreseeable criminal intrusions.” (Appellant’s App. Vol. II, p. 40). Specifically,

      the City noted that “[s]ince January 1, 2008, there have been at least excessive

      police runs and numerous reports filed by the Indianapolis Metropolitan Police

      Department at the [] residential complex involving crimes such as homicide,

      rape, fraud, arson, domestic battery, public intoxication, child abduction, child

      abuse, larceny, burglary, armed robbery, aggravated assault, vandalism,

      intimidation, invasion of privacy, and trespass.” (Appellant’s App. Vol. II, p.

      42). As such, the City requested the trial court, among other things, to

              [a]ward the City compensatory damages against [Towne &
              Terrace], jointly and severally, to compensate the City for all
              damages caused by [Towne & Terrace’s] operation, management
              and maintenance of the [Towne & Terrace] residential complex
              and individual units, including but not limited to:

              i. All resources expended by the City, including but not limited to
              the Department of Public Safety, IMPD, DCE, and MCHD, in
              response to the unreasonable volume of investigations, reports,
              and citations caused by [Towne & Terrace’s] neglect of the []
              residential complex and individual units, and

      Court of Appeals of Indiana | Opinion 49A02-1711-OV-2686 | July 3, 2018    Page 4 of 15
              ii. Any and all other public resource expenditures resulting from
              [Towne & Terrace’s] neglect of the [] residential complex.

      (Appellant’s App. Vol. II, pp. 47-48).

[7]   On January 30, 2015, Towne & Terrace filed an Answer and Counterclaim,

      denying the allegations in the Amended Complaint and asserting that the City

      owed Towne & Terrace maintenance fees on the individual units owned by the

      City. On October 3, 2016, Towne & Terrace moved for summary judgment on

      its counterclaim against the City. The trial court conducted a hearing on May

      17, 2017.

[8]   Prior to the trial court issuing a ruling, Towne & Terrace filed a second motion

      for summary judgment on the City’s Amended Complaint; to which the City

      responded on July 17, 2017. After a hearing on Towne & Terrace’s second

      motion for summary judgment, the trial court issued its ruling on October 18,

      2017, granting summary judgment to Towne & Terrace on the City’s Amended

      Complaint and partial summary judgment on Towne & Terrace’s counterclaim.

                               DISCUSSION AND DECISION
                                              I. Standard of Review

[9]   In reviewing a trial court’s ruling on summary judgment, this court stands in the

      shoes of the trial court, applying the same standards in deciding whether to

      affirm or reverse summary judgment. First Farmers Bank & Trust Co. v. Whorley,

      891 N.E.2d 604, 607 (Ind. Ct. App. 2008), trans. denied. Thus, on appeal, we

      Court of Appeals of Indiana | Opinion 49A02-1711-OV-2686 | July 3, 2018     Page 5 of 15
       must determine whether there is a genuine issue of material fact and whether

       the trial court has correctly applied the law. Id. at 607-08. In doing so, we

       consider all of the designated evidence in the light most favorable to the non-

       moving party. Id. at 608. A fact is ‘material’ for summary judgment purposes if

       it helps to prove or disprove an essential element of the plaintiff’s cause of

       action; a factual issue is ‘genuine’ if the trier of fact is required to resolve an

       opposing party’s different version of the underlying facts. Ind. Farmers Mut. Ins.

       Group v. Blaskie, 727 N.E.2d 13, 15 (Ind. 2000). The party appealing the grant

       of summary judgment has the burden of persuading this court that the trial

       court’s ruling was improper. First Farmers Bank & Trust Co., 891 N.E.2d at 607.

       When the defendant is the moving party, the defendant must show that the

       undisputed facts negate at least one element of the plaintiff’s cause of action or

       that the defendant has a factually unchallenged affirmative defense that bars the

       plaintiff’s claim. Id. Accordingly, the grant of summary judgment must be

       reversed if the record discloses an incorrect application of the law to the facts.

       Id.

[10]   We observe that, in the present case, the trial court entered findings of fact and

       conclusions of law in support of its judgment. Special findings are not required

       in summary judgment proceedings and are not binding on appeal.

       AutoXchange.com. Inc. v. Dreyer and Reinbold, Inc., 816 N.E.2d 40, 48 (Ind. Ct.

       App. 2004). However, such findings offer this court valuable insight into the

       trial court’s rationale for its review and facilitate appellate review. Id.

                                       I. Indiana Code section 32-31-1-22

       Court of Appeals of Indiana | Opinion 49A02-1711-OV-2686 | July 3, 2018       Page 6 of 15
[11]   Indiana Code section 32-31-1-22 was enacted as part of P.L. 266-2017 and

       became effective July 1, 2017, several years after the City filed its Amended

       Complaint. The statute provides, in pertinent part:

                (d) [] a political subdivision may not adopt or enforce any
                ordinance, rule or regulation that imposes a penalty, 1 or allows
                for the imposition of a penalty against a tenant, an owner, or a
                landlord for a contact made to request law enforcement
                assistance or other emergency assistance for one (1) or more
                rental units if:

                         (1) the contact is made by or on behalf of:

                                  (A) a victim or potential victim of abuse:

                                  (B) a victim or potential victim of a crime; or

                                  (C) an individual in an emergency; and

                         (2) either of the following applies:

                                  (A) at the time the contact is made, the person
                                  making the contact reasonably believes that law
                                  enforcement assistance or other emergency
                                  assistance is necessary to prevent the perpetration or
                                  escalation of abuse, a crime, or an emergency.

                                  (B) if abuse, a crime, or an emergency occurs, the
                                  law enforcement assistance or other emergency
                                  assistance was needed.

                ****

                (i) Nothing in this section shall be construed to prevent an
                attorney representing a city, county or town from bringing a
                nuisance action described under [I.C. §] 32-30-6-7(b) against a
                landlord or owner of a rental unit.

       1
         “Penalty” is defined as “(1) the assessment of a penalty, fine, or fee (2) Actual or threatened eviction from a
       rental unit, or the causing of an actual or threatened eviction from a rental unit.” I.C. § 32-31-1-22(b).

       Court of Appeals of Indiana | Opinion 49A02-1711-OV-2686 | July 3, 2018                              Page 7 of 15
       The City focuses on several different reasons for its contention that the statute

       does not apply to the current situation. Asserting that the trial court

       retroactively applied the statute, 2 the City maintains that it is not trying to

       enforce an ordinance, rule, or regulation; rather, it is bringing a nuisance action

       under I.C. § 32-30-6-7 and seeking “compensatory damages for a public

       nuisance for which it alleges Towne & Terrace is responsible.” (Appellant’s Br.

       p. 8).

[12]   While we agree with the City that it brought a nuisance action against Towne &

       Terrace as allowed under I.C. § 32-31-1-22(i), at the same time the City is

       seeking damages for “resources expended by the City, including but not limited

       to the Department of Public Safety, IMPD, DCE, and MCHD, in response to

       the unreasonable volume of investigations, reports, and citations caused by

       [Towne & Terrace’s] neglect of the [] residential complex and individual units,”

       which is seemingly prohibited under I.C. § 32-31-1-22(d).

[13]   A court’s first task in statutory interpretation is to attempt to harmonize two

       conflicting statutes. State v. Universal Outdoor, Inc., 880 N.E.2d 1188, 1191 (Ind.

       2008). As long as two statutes can be read in harmony with one another, we

       presume that the Legislature intended for them both to have effect. Id. Where

       2
        Even though the Statute only became effective after incurring the expenses and filing the Amended
       Complaint, the statute clearly speaks to the situation where a political subdivision, as here, “enforce[s] any
       ordinance, rule, or regulation that imposes a penalty.” I.C. § 32-31-1-22(d).

       Court of Appeals of Indiana | Opinion 49A02-1711-OV-2686 | July 3, 2018                             Page 8 of 15
       possible, if conflicting portions of a statute can be reconciled with the remainder

       of the statute, every word in the statute must be given effect and meaning, with

       no part being held meaningless. Id.

[14]   Indiana Code section 32-31-1-22(i) unequivocally allows the pursuit of nuisance

       actions brought by a city, county or town. Even though this section (i) is silent

       as to the type of damages a city, county, or town may demand under a nuisance

       action, section (d) of the statute clarifies that the enforcement of the nuisance

       rules cannot be used to penalize an individual in requesting law enforcement’s

       assistance. Furthermore, section (i) only limits the type of damages that may be

       pursued against “a landlord or owner of a rental unit.” Here, both parties

       agreed that Towne & Terrace owns and maintains the common areas of the

       condominium development but does not own individual units. In return for use

       of the common areas by the individual units, Town and Terrace imposes

       assessment and maintenance fees. As such, Towne & Terrace can be

       considered a landlord for the common areas of the condominium complex.

       Accordingly, the City’s nuisance action against Town and Terrace to refund the

       City’s resources spent on law enforcement’s investigations and responses to the

       residential complex, is barred by I.C. § 32-31-1-22(d).

                                         III. The City’s Nuisance Action

[15]   In so far as Towne & Terrace cannot be considered a landlord for the common

       areas or the City’s nuisance action encompasses other damages than merely fees

       Court of Appeals of Indiana | Opinion 49A02-1711-OV-2686 | July 3, 2018   Page 9 of 15
       for excessively calling upon law enforcement, we will address the City’s

       nuisance action against Towne & Terrace.

[16]   The City contends that the trial court erred in determining that the City could

       not maintain its nuisance claim based on the allegation that “Towne & Terrace

       took no reasonable action to prevent the property from descending into criminal

       chaos, nor did it take any reasonable steps to ameliorate the situation.”

       (Appellant’s Br. p. 10). In denying the City’s claim, the trial court maintained

       that:

               Towne & Terrace owns only the common areas of the Towne &
               Terrace condominium property. Towne & Terrace Corp. owns
               no lots, individual units or any other property on the site. Towne
               & Terrace has no direct control over the individual dwellings
               within the condominium community.

               Further, the directors of Towne & Terrace have no police
               powers, no authorization to enforce laws, and no control over
               what happens inside a particular residence. The directors have
               no authority to correct operations, management, or maintenance
               issues. Only the owners can make such changes and the City did
               not sue any individual owners in this case.

       (Appellant’s App. Vol. II, p. 28).

[17]   Indiana’s nuisance statute allows a county, city, or town to bring an action to

       “abate or enjoin a nuisance.” I.C. § 32-30-6-7. “Nuisance” is described as

       “Whatever is (1) injurious to health; (2) indecent; (3) offensive to the senses; or

       (4) an obstruction to the free use of property.” I.C. § 32-30-6-6. In interpreting

       the nuisance statute, our supreme court rejected the contention that a party
       Court of Appeals of Indiana | Opinion 49A02-1711-OV-2686 | July 3, 2018   Page 10 of 15
       must be the owner or controller of property to be held liable for a nuisance. City

       of Gary ex rel. King v. Smith & Wesson Corp., 801 N.E.2d 1222, 1232 (Ind. 2003).

       Rather, the court held “that there is no requirement that the activity involve an

       unlawful activity or use of land. If an activity meets the requirements of an

       unreasonable interference with a public right, it may constitute a public

       nuisance.” Id.

[18]   Asserting that Towne & Terrace did nothing to increase security and safety at

       the condominiums and negligently operated the complex, the City alleged in its

       Amended Complaint that the Towne & Terrace complex is rife with “crimes

       such as homicide, rape, fraud, arson, domestic battery, public intoxication,

       child abduction, child abuse, larceny, burglary, armed robbery, aggravated

       assault, vandalism, intimidation, invasion of privacy, and trespass, necessitating

       excessive police runs[.]” (Appellant’s App. Vol. II, p. 42). As a result, the

       Towne & Terrace residential complex has encouraged general lawlessness, with

       the individual units posing a heightened and unreasonable risk of injury and

       contributing to urban blight.

[19]   In its second motion for summary judgment, Towne & Terrace contended that

       “Towne & Terrace is not capable of controlling crime and is not authorized to

       enforce criminal laws. Law Enforcement is the sole province of the City[.]”

       (Appellant’s App. Vol. II, p. 161). Towne & Terrace “has no ownership of any

       of the Lots or dwellings within Towne & Terrace.” (Appellant’s App. Vol. II,

       p. 162). To this end, Towne & Terrace designated its Covenants & Restrictions

       and its Articles of Incorporation, which reflected that Towne & Terrace only

       Court of Appeals of Indiana | Opinion 49A02-1711-OV-2686 | July 3, 2018   Page 11 of 15
       owns the common areas and has no control over the individual units in the

       complex nor can it compel compliance with existing ordinances from an

       individual owner. It merely has an obligation to maintain the common areas.

[20]   During the hearing on Town & Terrace’s motions for summary judgment, the

       City alleged that the individual residents at the condominium complex caused a

       misuse and abuse of police and emergency resources by repetitive first

       responder runs to the complex. However, at no point did the City designate

       evidence indicating that Towne & Terrace’s use or maintenance of the common

       areas amounted to a nuisance. As “the moving party demonstrated that its

       designated evidence raised no genuine issues of material fact,” Towne &

       Terrace was entitled to judgment in its favor as a matter of law. See Hughley v.

       State, 15 N.E.3d 1000, 1003 (Ind. 2014).

                                       IV. Maintenance Assessment Fees

[21]   Lastly, the City maintains that the trial court erroneously issued partial

       summary judgment to Towne & Terrace on the corporation’s counterclaim for

       maintenance assessment fees.

[22]   Article IV of the Towne & Terrace’s Declaration of Covenants and Restrictions

       (Covenants) provides as follows:

               Section 1. Creation of the Lien and Personal Obligation of
               Assessments. The Declarant of each Lot owned by it within The
               Properties hereby covenants and each purchaser of any Lot by
               acceptance of a Deed therefor, whether or not it shall be so
               expressed in any such deed or other conveyance, shall be deemed

       Court of Appeals of Indiana | Opinion 49A02-1711-OV-2686 | July 3, 2018   Page 12 of 15
               to covenant and agree to pay the Corporation: (1) annual
               assessments or charges; (2) special assessments for capital
               improvements, such assessments to be fixed, established and
               collected from time to time as hereinafter provided. The annual
               and special assessments, together with such interest thereon and
               costs of collection thereof as hereinafter provided shall be a
               charge on the land and shall be a continuing lien upon the
               property against which each such assessment is made. Each such
               assessment, together with such interest thereon and cost of
               collection thereof as hereinafter provided shall also be the
               personal obligation of the person who was the Owner of such
               property at the time when the assessment fell due.

       (Appellant’s App. Vol. II, pp. 84-85). Relying on the Covenants’ language that

       only the ‘purchaser’ of a Lot is assessed maintenance fees, the City maintains

       that “[m]any of the lots owned by the City were not purchased, the deeds came

       into the City’s possession because no one bought the properties at tax sale.”

       (Appellant’s Br. p. 13). Claiming to be no more than an “owner of last resort,”

       the City asserts that it is not required to pay maintenance assessments.

       (Appellant’s Br. p. 13).

[23]   Absent a definition in the Covenants, we resort to English language dictionaries

       to ascertain the plain and ordinary meaning of “purchaser.” See Vanderburgh

       Co. Election Bd. v. Vanderburgh Co. Democratic Cent. Committee, 833 N.E.2d 508,

       510 (Ind. Ct. App. 2005). Black’s Law Dictionary defines purchaser as “[o]ne

       who acquires real property by means other than descent, gift, or inheritance.”

       BLACK’S LAW DICTIONARY (8th ed. 2004). The City is not challenging its

       current ownership of the individual units; rather, it is contesting the manner in

       which it acquired these individual condominiums. However, the designated
       Court of Appeals of Indiana | Opinion 49A02-1711-OV-2686 | July 3, 2018    Page 13 of 15
       evidence reflects that its acquisition was not through descent, gift, or

       inheritance. Instead, the City acquired the individual lots through a tax sale

       and recorded the deeds to the lots. To exclude this manner of acquisition from

       the meaning of purchaser for purposes of maintenance assessments would be to

       elevate form over substance—which we decline to do.

[24]   The City now attempts to avoid being assessed for maintenance fees by

       referring to the Amended Articles of Incorporation, which included, in

       pertinent part:

               Every person or entity who is a record owner of a fee interest in
               any Lot which is part of The Properties shall be a member of the
               corporation, provided that any such person or entity who holds
               such interest merely as a security for the performance of an
               obligation shall not be a member. Such membership shall be
               evidence[d] by a certificate of membership issued by the
               Corporation Secretary. It shall be the obligation of each member
               to have the certificate of membership transferred by the
               Corporation Secretary upon transfer of title to any Lot. Failure
               to do so will leave the certificate holder liable under all by-laws,
               rules, and other regulations of the Corporation.

       (Appellees’ App. Vol. II, p. 149). As it is uncontested that Towne & Terrace

       failed to issue membership certificates to the City when it acquired the

       individual rental units, the City contends that the previous owner remains liable

       for the maintenance assessments. We disagree.

[25]   Article IV of the Covenants does not condition the assessment of maintenance

       charges on the certificate of membership. Rather, each ‘purchaser of any lot’ at

       Court of Appeals of Indiana | Opinion 49A02-1711-OV-2686 | July 3, 2018    Page 14 of 15
       the time the assessment falls due is subject to annual assessments or charges.

       Likewise, the Articles of Incorporation fail to include any reference to the

       Covenants and merely provides guidance as to the internal workings of the

       corporation. Nothing in the Articles of Incorporation or in the Covenants

       exempts purchasers of lots from maintenance assessments if the certification of

       membership is not issued. To the contrary, the Articles of Incorporation

       purport to safeguard the financial health of Towne & Terrace by increasing the

       number of parties responsible for the maintenance assessments. In other words,

       if the previous owner refrains from notifying the corporation of a change in

       ownership of the rental unit, the previous owner—together with the new

       purchaser—shall be liable for payment of the annual assessment. Therefore, we

       conclude that there is no genuine issue of material fact that the City is

       responsible for the payment of maintenance charges assessed on its rental units

       in the Towne & Terrace condominium complex.

                                             CONCLUSIONS
[26]   Based on the foregoing, we hold that the trial court properly issued summary

       judgment on Towne & Terrace’s motions for summary judgment.

[27]   Affirmed.

[28]   May, J. and Mathias, J. concur

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