Court Opinion

ID: 4511875
Source: CourtListenerOpinion
Date Created: 2020-03-02 16:03:40.985184+00
Date Added: 2024-06-11T08:37:03.346317
License: Public Domain

MEMORANDUM DECISION
      Pursuant to Ind. Appellate Rule 65(D),
      this Memorandum Decision shall not be                                       FILED
      regarded as precedent or cited before any                              Mar 02 2020, 9:19 am

      court except for the purpose of establishing                                CLERK
      the defense of res judicata, collateral                                 Indiana Supreme Court
                                                                                 Court of Appeals
                                                                                   and Tax Court
      estoppel, or the law of the case.

      ATTORNEY FOR APPELLANTS                                  ATTORNEYS FOR APPELLEE
      Peter S. Kovacs                                          Jeffrey M. Bellamy
      Peter Kovacs Law PC                                      Stephen R. Donham
      Fishers, Indiana                                         Thrasher Buschmann & Voelkel PC
                                                               Indianapolis, Indiana

                                                 IN THE
          COURT OF APPEALS OF INDIANA

      Craig D. Severance and                                   March 2, 2020
      Catherine Severance,                                     Court of Appeals Case No.
      Appellants-Defendants,                                   19A-PL-1347
                                                               Appeal from the Hamilton
              v.                                               Superior Court
                                                               The Honorable Jonathan M.
      The Pleasant View                                        Brown, Judge
      Homeowners’ Association, Inc.,                           Trial Court Cause No.
      Appellee-Plaintiff.                                      29D02-1504-PL-2764

      Shepard, Senior Judge.

[1]   Craig D. Severance and Catherine Severance appeal the trial court’s order

      permanently enjoining them from parking commercial vehicles on their

      residential lot or in the streets of their subdivision. We affirm.

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-1347 | March 2, 2020                   Page 1 of 7
                               Facts and Procedural History
[2]   The underlying facts, as stated in the Severances’ first appeal, are as follows:

              The Pleasant View Homeowners Association, Inc. (“the HOA”),
              filed a complaint to enjoin Craig and Catherine Severance from
              using their residential lot in a manner inconsistent with Pleasant
              View subdivision’s covenants and restrictions by parking
              commercial vehicles, limousines, on their lot or in the street in
              front of and adjacent to their home located in the subdivision.
              Following an evidentiary hearing, the trial court issued a
              preliminary injunction prohibiting the Severances from
              continuing to park the vehicles in such a manner. However, the
              trial court subsequently declined to enter a permanent injunction
              based upon the Severances’ affirmative defense that the HOA
              lacked the authority to sue the Severances for an injunction
              because the HOA’s board of directors was not properly
              constituted or operating in accordance with its own rules of
              corporate governance. The court set a future date for a hearing
              on the Severances’ claimed damages.

              Prior to the trial court’s entry of a final judgment, the HOA
              directed the trial court to the passage of new statutory law
              regarding the governance of Indiana homeowners associations.
              The HOA claimed that the new law nullified the Severances’
              affirmative defense regarding the HOA’s authority to seek an
              injunction. The trial court held a hearing and thereafter entered
              its final judgment determining that it could not reconsider its
              prior denial of the permanent injunction and that the Severances
              were entitled to no damages.

      Severance v. Pleasant View Homeowners’ Ass’n, Inc., 94 N.E.3d 345, 346 (Ind. Ct.

      App. 2018), trans. denied (“Severance I”). The Severances appealed the trial

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-1347 | March 2, 2020   Page 2 of 7
      court’s denial of their request for damages, and the HOA cross-appealed the

      denial of its request for a permanent injunction.

[3]   On appeal, this Court explained that “[b]ecause much of the trial court’s

      resolution of this case appears to be hinged on its mistaken belief that it was

      precluded from considering the merits of its prior order denying the permanent

      injunction, the appropriate remedy is to reverse the trial court’s judgment and

      remand this case for an evidentiary hearing to consider the merits of issuing a

      permanent injunction against the Severances based on the facts and

      circumstances as they stand today and pursuant to current Indiana law.” Id. at

      349. In Severance I, we further specifically directed the trial court to consider

      Indiana Code section 32-25.5-3-11, the new law cited by the HOA. We noted

      that Section 32-25.5-3-11 was effective upon passage on April 12, 2017 and that

      it “protects the authority of homeowners associations by preventing collateral

      attacks based upon specific board irregularities and nullifying affirmative

      defenses to covenant violations under certain circumstances.” Id. at 349 n.5.

      Accordingly, the case was reversed and remanded to the trial court for further

      proceedings consistent with this Court’s opinion.

[4]   On remand, the trial court held an evidentiary hearing at which it considered

      Section 32-25.5-3-11 and entered a permanent injunction against the

      Severances. In addition, the court ordered the Severances to pay the HOA’s

      attorney fees in the amount of $43,261.58.

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-1347 | March 2, 2020   Page 3 of 7
                                                     Issue
[5]   The sole issue we decide is whether the trial court erred by entering a

      permanent injunction against the Severances on the basis of a newly-enacted

      statute.

                                   Discussion and Decision
[6]   The Severances challenge the entry of the permanent injunction based on the

      trial court’s application of Indiana Code section 32-25.5-3-11, which became

      effective several years after the events giving rise to this case. The Severances

      argue that Section 32-25.5-3-11 is not retroactive.

[7]   The grant of an injunction is discretionary, and we will not reverse unless the

      trial court’s action was arbitrary or constituted a clear abuse of discretion. Cty.

      of Lake v. Pahl, 28 N.E.3d 1092 (Ind. Ct. App. 2015), trans. denied. An abuse of

      discretion occurs when the trial court’s decision is clearly against the logic and

      effect of the facts and circumstances or if the trial court misinterprets the law.

      Id.

[8]   Generally, statutes are to be given prospective effect only, unless the legislature

      unequivocally and unambiguously intended retrospective effect as well. Ind.

      Bureau of Motor Vehicles v. Watson, 70 N.E.3d 380 (Ind. Ct. App. 2017). An

      exception to this rule exists for procedural statutes—they are not required to be,

      but they may be, applied retroactively. Id. Procedural law is law that prescribes

      the method of enforcing a right or obtaining redress for invasion of that right.

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-1347 | March 2, 2020   Page 4 of 7
      Hayden v. State, 771 N.E.2d 100 (Ind. Ct. App. 2002), trans. denied. Conversely,

      substantive law creates, defines and regulates rights. Id.

[9]   Section 32-25.5-3-11 provides:

              (a) If:

              (1) a meeting of a homeowners association is called in
              accordance with the requirements of the homeowners
              association’s governing documents, regardless of whether the
              meeting is:

              (A) an annual meeting;

              (B) a special meeting; or

              (C) any other meeting called by the board or the members;

              (2) a purpose of the meeting is the election or appointment of
              members of the board of directors of the homeowners
              association; and

              (3) the number of members of the homeowners association in
              attendance at the meeting does not constitute a quorum as
              defined in the governing documents of the homeowners
              association;

              the members of the board of directors at the time of the meeting
              may continue to serve until their successors are selected and
              qualified, regardless of the length of any member’s term or the
              number of terms the member has served.

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-1347 | March 2, 2020   Page 5 of 7
               (b) The failure of a homeowners association to achieve a quorum
               at a meeting described in subsection (a) does not exempt any
               member from, or create an affirmative defense for any member
               with respect to:

               (1) the member’s obligations under the homeowners association’s
               governing documents; or

               (2) the member’s obligations to otherwise abide by covenants
               regulating:

               (A) the use of real estate; or

               (B) the payment of assessments.

               (c) If a homeowners association’s governing documents permit
               both the homeowners association and members of the
               homeowners association to enforce provisions of the governing
               documents, the homeowners association has authority both:

               (1) as a corporation or an entity; and

               (2) as derived from the members of the homeowners association’s
               board;

               to enforce the governing documents of the homeowners
               association.

[10]   The statute is procedural in nature—it relates to corporate procedures in the

       absence of a quorum. It does not, however, deprive the Severances or other

       members of the homeowners association of a right to seek redress for violations

       of the association agreement or covenants. Rather, the statute merely prescribes
       Court of Appeals of Indiana | Memorandum Decision 19A-PL-1347 | March 2, 2020   Page 6 of 7
       the manner by which homeowners associations may remain functional to

       enforce substantive rights under association agreements when a quorum is

       lacking.

[11]   As a procedural statute, Section 32-25.5-3-11 may be applied retroactively. See

       Ind. Bureau of Motor Vehicles, 70 N.E.3d 380. Indeed, our Supreme Court long

       ago noted, “it appears that the great weight of authority is that a statute

       regulating or modifying procedure in actions operates retrospectively so far as

       to control proceedings in cases pending at the time the act took effect.”

       Evansville & T. H. R. Co. v. City of Terre Haute, 161 Ind. 26, 67 N.E. 686, 690

       (1903).

                                                 Conclusion
[12]   The trial court did not err when it retroactively applied Section 32-25.5-3-11 to

       the Severances’ dispute with the HOA and entered a permanent injunction.

[13]   Affirmed.

       Najam, J., and Tavitas, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 19A-PL-1347 | March 2, 2020   Page 7 of 7