Court Opinion

ID: 2727554
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:18:45.43474+00
Date Added: 2024-06-11T09:02:21.296369
License: Public Domain

FOR PUBLICATION

ATTORNEY FOR APPELLANT:                        ATTORNEY FOR APPELLEE:

JAMES C. SPENCER                               WILLIAM JOSEPH JENNER
Dattilo Law Office                             Jenner Pattison Hensley & Wynn, LLP
Madison, Indiana                               Madison, Indiana

                                                                       Apr 30 2013, 9:16 am
                            IN THE
                  COURT OF APPEALS OF INDIANA

JOHN A. HUTCHINSON,                            )
                                               )
     Appellant-Plaintiff/Counter Defendant,    )
                                               )
            vs.                                )      No. 39A01-1208-CC-394
                                               )
THE CITY OF MADISON,                           )
                                               )
     Appellee-Defendant/Counter Plaintiff.     )

                  APPEAL FROM THE JEFFERSON SUPERIOR COURT
                      The Honorable Daniel E. Moore, Special Judge
                            Cause No. 39D01-1103-CC-200

                                     April 30, 2013

                           OPINION - FOR PUBLICATION

BARNES, Judge
                                    Case Summary

      John Hutchinson appeals the trial court’s dismissal without prejudice of the

counterclaim for appropriation of real estate filed by the City of Madison (“the City”).

Hutchinson also appeals the trial court’s determination that an interlocal agreement

between the City and Jefferson County (“the County”) was valid. We affirm.

                                         Issues

      Hutchinson raises two issues, which we restate as:

             I.     whether the trial court should have dismissed the
                    City’s counterclaim for appropriation of real estate
                    with prejudice; and

             II.    whether the trial court properly determined that the
                    interlocal agreement between the City and the County
                    was valid.

                                         Facts

      Hutchinson owns property north and south of Hutchinson Lane in Jefferson

County. In 2011, the City and the County entered into an interlocal agreement (“the

Agreement”) addressing the improvement of Hutchinson Lane.              Pursuant to the

Agreement, the City was to serve as the lead agency for the design and construction of

the improvements, and the City agreed to be responsible for the overall administration of

the design and construction.    Because portions of the project were located within

corporate boundaries of the City and other portions were located within the corporate

boundaries of the County, it was necessary for the City to acquire land within the

corporate boundaries of the County to complete the project. The project required the

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appropriation of approximately four acres of Hutchinson’s property by the City for

temporary and permanent right-of-ways.

       Section One of the Agreement contained nine specific obligations of the City

regarding the improvements. Section Two of the Agreement provided, “Obligations of

the County. The County shall have no obligation for the Project other than to agree that

the City is given the powers to perform and may perform the Project as set forth in

Section One above.” App. p. 111.

       Before formally entering into the Agreement, the City offered Hutchinson

$25,107.50 for the property. Hutchinson responded, indicating that the offer did not

include an appraisal and suggesting that he would respond to the offer after receiving an

appraisal. On March 2, 2011, Hutchinson filed a declaratory judgment action challenging

the Agreement. On May 2, 2011, the City1 filed its answer and a counterclaim for

appropriation of the portion of Hutchinson’s property it needed for the project. On

January 20, 2012, after a hearing, the trial court concluded that the Agreement was valid

and entered judgment against Hutchinson on the declaratory judgment action.

Hutchinson petitioned to certify the trial court’s order for interlocutory appeal, but the

trial court denied the request.

       On February 8, 2012, Hutchinson filed statutory objections to the City’s

counterclaim for appropriation, including an assertion that the property had not been

properly appraised. On July 25, 2012, the trial court conducted a hearing at which

1
  The declaratory judgment action named several City and County entities. Because the City is the only
named party on appeal, we refer to them collectively as the City for purposes of this litigation.
                                                  3
Hutchinson presented evidence.        On August 6, 2012, the trial court sustained

Hutchinson’s objection and dismissed the counterclaim without prejudice. Hutchinson

now appeals.

                                        Analysis

       As an initial matter, the parties disagree regarding the proper standard of review.

Because the underlying facts are not in dispute, and the issues raised by Hutchinson are

questions of law, we apply a de novo standard of review and owe no deference to the trial

court’s determination of such questions. See Tankersley v. Parkview Hosp., Inc., 791

N.E.2d 201, 204 (Ind. 2003).

                                       I. Dismissal

       Before proceeding to condemn, the City was statutorily required to make an effort

to purchase the property from Hutchinson. See Ind. Code § 32-24-1-3(b). An effort to

purchase must include establishing a proposed purchase price for the property, providing

the owner with an appraisal or other evidence used to establish the proposed purchase

price, and conducting good faith negotiations. I.C. § 32-24-1-3(c); see also Unger v.

Indiana & Michigan Elec. Co., 420 N.E.2d 1250, 1258 (Ind. Ct. App. 1981) (observing

that “a good faith effort to purchase is a condition precedent to the right to proceed upon

a complaint in condemnation.”). On appeal, the City concedes that it violated Indiana

Code Section 32-24-1-3(c) because it failed to tender an appraisal when its acquisition

offer was presented to Hutchinson. Accordingly, the parties do not dispute that dismissal

was proper—they only dispute whether the dismissal should have been with or without

prejudice.

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        Hutchinson asserts that the trial court should have dismissed the City’s

counterclaim with prejudice because it was an adjudication on the merits. Hutchinson

also suggests that relitigation of the condemnation action would be barred by res

judicata.2 See Midway Ford Truck Ctr., Inc. v. Gilmore, 415 N.E.2d 134, 136 (Ind. Ct.

App. 1981) (“It is generally recognized that a dismissal with prejudice is a dismissal on

the merits. . . . As such it is conclusive of the rights of the parties and res judicata as to

the questions which might have been litigated.”).

        Hutchinson claims that the dismissal was an adjudication on the merits because the

July 25, 2012 hearing was a “full-blown hearing” on the issue of whether the City

complied with Indiana Code 32-24-1-3(c).3                   However, the evidence offered by

Hutchinson showed that the City did not provide him with an appraisal and established

only that the City did not meet a condition precedent for filing its counterclaim for the

appropriation of his property. In other words, although Hutchinson showed that the

City’s counterclaim was procedurally defective, he did not establish that the City did not

have the authority to acquire his property through eminent domain proceedings generally.

        In fact, “[t]he state has inherent authority to take private property for public use.”

Murray v. City of Lawrenceburg, 925 N.E.2d 728, 731 (Ind. 2010) (citing Kelo v. City of

2
  In making this argument, Hutchinson seems to equate a final judgment with a decision on the merits.
Not all final judgments, however, are adjudications on the merits. See, e.g., Thacker v. Bartlett, 785
N.E.2d 621 (Ind. Ct. App. 2003) (acknowledging that, although the dismissal of plaintiff’s original
complaint under Trial Rule 12(B)(6) constituted a final judgment, it did not operate as an adjudication on
the merits).
3
  Hutchinson’s description of the July 25, 2012 hearing is received with caution because much of
Hutchinson’s evidence focused on the valuation of the property and was not relevant to the issue of
whether the City provided him with an appraisal.
                                                    5
New London, 545 U.S. 469, 477, 125 S. Ct. 2655 (2005)). The Indiana Constitution and

the Fifth Amendment to the United States Constitution require just compensation if this

authority is exercised, and Indiana Code Chapter 32-24-1 outlines the process by which

the State or other governmental entity is to initiate eminent domain proceedings. Id.

“The fundamental purpose of the eminent domain act is to ensure landowners receive just

compensation for property taken for public use.”          Unger, 420 N.E.2d at 1257.

Accordingly, we are not convinced that the failure to comply with Indiana Code Section

32-24-1-3(c) forever bars the state from acquiring that property so long as a property

owner receives just compensation for the taking.

       This conclusion is supported by Indiana Code Section 32-24-1-8(d), which

provides that, if a property owner objects to the proceedings and the objection is

sustained, the complaint may be amended or the decision appealed. Although, as the

parties acknowledge, the City cannot remedy the failure to provide an appraisal by

amending the complaint, we believe this provision is indicative of the legislature’s intent

to allow the City the opportunity to correct procedural errors and refile the complaint.

Also, Indiana Code Section 32-24-1-16 contemplates a taking without the initiation of a

condemnation proceeding and allows a property owner to bring a suit for inverse

condemnation to recover money damages.          Murray, 925 N.E.2d at 731.       Surely, if

interests in land may be taken for public use without having been obtained under the

eminent domain statutes, then at the very least the City should be permitted to refile an

action for appropriation upon complying with Indiana Code Section 32-24-1-3(c).

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       We also disagree with Hutchinson’s assertion that the City’s failure to comply

with Indiana Code Section 32-24-1-3(c) is reason enough to dismiss the counterclaim

with prejudice because the failure to provide an appraisal frustrates the statutory goal of

good-faith negotiations. “[T]he purpose of the good faith effort to purchase is to bring

the landowner and condemnor together, if only briefly, to attempt to negotiate a sale and

purchase upon favorable terms.” Unger, 420 N.E.2d at 1260. “In complying with this

requirement, the potential parties to an action in condemnation are presented with an

opportunity to agree upon mutually satisfactory terms for what amounts to the

relinquishment of certain property rights and thereby to avoid the costs and inherent risks

of such a proceeding.” Id. at 1258. “Terms proffered and rejected fall by the wayside as

appraisers and juries make their determinations, i.e. the parties’ dealings have no bearing

upon the ultimate award of just compensation.” Id. at 1260. Thus, the purpose of the

good faith offer requirement is to avoid unnecessary litigation, not to confer a substantive

benefit on the property owner, and we are not convinced that the failure to conduct good

faith negotiations alone warrants the dismissal of a condemnation action with prejudice.

       Given the City’s inherent authority to take private property and the statutory

scheme for appropriating property, we do not believe that the dismissal based on the

failure to provide an appraisal with an offer to purchase was an adjudication on the

merits. See, e.g., In re L.B., 889 N.E.2d 326, 333-34 (Ind. Ct. App. 2008) (concluding

that the dismissal of a petition to terminate parental rights because parents were not

notified of the proceeding as mandated by statute, a procedural precedent that must be

performed before a termination action is commenced, was not a judgment on the merits);

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St. Anthony Med. Ctr., Inc. v. Smith, 592 N.E.2d 732, 736 (Ind. Ct. App. 1992) (“The

proper course of action when a plaintiff fails to comply with the [Medical Malpractice]

Act is for the trial court to dismiss the complaint without prejudice, thereby allowing the

plaintiff to refile after the medical review panel has issued its opinion.”); Cf., Creech v.

Town of Walkerton, 472 N.E.2d 226, 229 (Ind. Ct. App. 1984) (observing that an

adjudication based on the running of a statute of limitation is a judgment on the merits

and concluding that, because original claim was dismissed for failing to comply with the

notice provisions of the Tort Claims Act, there was an adjudication on the merits barring

further pursuit of such claim).     Thus, the trial court properly dismissed the City’s

counterclaim without prejudice.

                                   II. The Agreement

       “Generally, ‘Interlocal Agreements,’ also referred to as ‘Interlocal Cooperation

Agreements,’ are formal vehicles through which municipalities or political subdivisions

may eliminate barriers imposed by jurisdictional lines in order to offer public services

more efficiently.” City of Carmel v. Steele, 865 N.E.2d 612, 620 (Ind. 2007). “The

primary types of agreements are service contracts, under which one local government

provides services to another, and joint enterprise contracts, under which two or more

local units jointly undertake a project.” Id. Indiana Code Section 36-1-7-9 provides:

              (a) This section may be used only for an agreement between
              an Indiana municipality and the executive of the county in
              which it is located concerning highway construction and
              maintenance and related matters.

              (b) An agreement under this section must provide for the
              following:

                                             8
                     (1) Its duration, which may not be more than four (4)
                     years.

                     (2) The specific functions and services to be performed
                     or furnished by the county on behalf of the
                     municipality.

             In addition, such an agreement may provide for any other
             appropriate matters.

             (c) An agreement under this section may provide for either of
             the following:

                     (1) A stipulation that distributions from the motor
                     vehicle highway account under IC 8-14-1, the local
                     road and street account under IC 8-14-2, or both, be
                     made to the county rather than to the municipality.

                     (2) A stipulation that the municipality will appropriate
                     a specified part of those distributions for purposes
                     listed in the agreement.

(Emphasis added).

      Hutchinson argues that comparing the City’s obligations with the County’s

obligations in the Agreement leaves no doubt that the City had all of the obligations and

the County had none. According to Hutchinson, Indiana Code Section 36-1-7-9(b)(2)

“requires County functions and services to be specifically provided in Interlocal

Agreements.” Appellant’s Br. p. 16. Hutchinson concludes that the lack of specific

functions and services to be performed by the County on behalf of the City renders the

Agreement invalid.

      “In applying a statute, our primary goal is to ascertain and give effect to the

Legislature’s intent.” Crowel v. Marshall County Drainage Bd., 971 N.E.2d 638, 645

                                            9
(Ind. 2012). The best indicator of legislative intent is the statutory language, and where

the statute is clear and unambiguous, we apply it as drafted without resort to the nuanced

principles of statutory interpretation. Id. at 646.

       Our reading of the plain language of Indiana Code Section 36-1-7-9(b)(2) is that

any such agreement must expressly list the specific functions and services to be

performed or furnished by a county. We do not read this section as requiring a county to

perform or furnish certain functions or services.      Here, the Agreement specifically

provides, “The County shall have no obligation for the Project other than to agree that the

City is given the powers to and may perform the Project as set forth in Section One

above.” App. p. 111. Thus, the Agreement does include a term detailing the specific

functions and services to be performed or furnished by the County as required by Indiana

Code Section 36-1-7-9(b)(2).

       Further, we disagree with Hutchinson’s assertion that there is not any real

exchange of promises. By the express terms of the agreement, the County was required

to give the City the authority to perform the project, including on land within the

County’s boundaries. In other words, the County gave up its right to oversee the project.

Without more, Hutchinson has not established that the Agreement is invalid.

                                         Conclusion

       The trial court properly dismissed the City’s counterclaim without prejudice. The

trial court also properly determined that the Agreement was valid. We affirm.

       Affirmed.

NAJAM, J., and BAILEY, J., concur.

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