Court Opinion

ID: 4578936
Source: CourtListenerOpinion
Date Created: 2020-10-21 15:04:11.880478+00
Date Added: 2024-06-11T13:41:48.860681
License: Public Domain

ATTORNEY FOR APPELLANT                                        ATTORNEYS FOR APPELLEE
MIDWEST ENTERTAINMENT                                         TOWN OF CLARKSVILLE                     FILED
VENTURES, INC.                                                C. Gregory Fifer                   Oct 21 2020, 9:35 am

David E. Mosley                                               Applegate Fifer Pulliam LLC             CLERK
Jeffersonville, Indiana                                       Jeffersonville, Indiana             Indiana Supreme Court
                                                                                                     Court of Appeals
                                                                                                       and Tax Court

ATTORNEY FOR APPELLANT AMW                                    Scott D. Bergthold
INVESTMENTS, INC.                                             Law Office of Scott D. Bergthold,
Mickey K. Weber                                               PLLC
Jeffersonville, Indiana                                       Chattanooga, Tennessee

                                             IN THE
     COURT OF APPEALS OF INDIANA

Midwest Entertainment Ventures,                               October 21, 2020
Inc. (d/b/a Theatre X),                                       Court of Appeals Case No.
Appellant-Petitioner-Counterclaim                             19A-PL-2962
Defendant,                                                    Interlocutory Appeal from the
                                                              Clark Circuit Court
        and                                                   The Honorable Vicki L.
                                                              Carmichael, Judge
AMW Investments, Inc.,                                        Trial Court Cause No.
                                                              10C04-1905-PL-51
Appellant-Counterclaim Defendant,

        v.

The Town of Clarksville, Planning
Commission for the Town of
Clarksville, and Rick Barr, Town
of Clarksville Building
Commissioner,

Court of Appeals of Indiana | Opinion 19A-PL-2962 | October 21, 2020                      Page 1 of 14
      Appellees-Respondents-Counterclaimants

      Crone, Judge.

                                               Case Summary
[1]   In this interlocutory appeal, Midwest Entertainment Ventures, Inc. (d/b/a

      Theatre X) (MEV), and AMW Investments, Inc. (AMW), appeal the trial

      court’s order granting the motion for preliminary injunction filed by the Town

      of Clarksville, Planning Commission for the Town of Clarksville, and Rick

      Barr, Town of Clarksville Building Commissioner (collectively the Town).

      MEV and AMW argue that the trial court lacked subject matter jurisdiction to

      issue the preliminary injunction. AMW further argues that the trial court erred

      by enjoining it. Finding neither of these arguments persuasive, we affirm.

                                  Facts and Procedural History
[2]   MEV is an Indiana corporation doing business as Theatre X at 4505 Highway

      31 East, Clarksville. AMW owns the real estate at 4505 Highway 31 East and

      leases the property to MEV. MEV and AMW share the same principal

      business address in Michigan.

      Court of Appeals of Indiana | Opinion 19A-PL-2962 | October 21, 2020   Page 2 of 14
[3]   In 2018, Theatre X was operating as an adult entertainment venue pursuant to

      an adult business license issued to it by the Town. In October of that year, the

      Building Commissioner issued a notice of violation (NOV) and an order of

      abatement to AMW, notifying AMW that there were holes in the walls

      between Theatre X’s viewing rooms in violation of the Town’s Zoning

      Ordinance and requiring AMW to permanently close the holes. The NOV was

      sent to AMW, as the property owner of the premises, at its principal place of

      business in Michigan and at 4505 Highway 31 East, as well as to AMW’s

      registered agent. AMW did not file a written statement or appeal in response to

      the NOV as provided by the Zoning Ordinance, including any claim that it was

      not the proper party in interest as the owner and/or operator of Theatre X.

[4]   In November 2018, the Building Commissioner was granted permission by

      AMW’s “local attorney David E. Mosley and the manager of Theatre X Joshua

      Jantzen” to inspect Theatre X, but the holes had not been remediated.

      Appellees’ App. Vol. 2 at 232-33. As a result, the Building Commissioner sent

      AMW notice that its adult business license was suspended until the violations

      were cured or for a period of thirty days and that the Town was assessing civil

      penalties against AMW for the violations of the Zoning Ordinance. AMW did

      not file any written statement or appeal in response, including any claim that it

      was not the proper party in interest as the owner and/or operator of Theatre X.

      Theatre X continued operating even though its license was suspended. AMW

      took the necessary steps to have the holes between the viewing rooms closed

      up, and another inspection revealed that the required remediation had been

      Court of Appeals of Indiana | Opinion 19A-PL-2962 | October 21, 2020     Page 3 of 14
      completed. The Building Commissioner then informed AMW that the license

      suspension was lifted. The Building Commissioner issued an amended order to

      AMW, notifying AMW that the aggregate civil penalty assessed from Theatre

      X’s zoning violations was $9100. This civil penalty has not been paid.

[5]   In January 2019, the Town issued an adult business license to Theatre X for the

      calendar year 2019. In February 2019, police observed Theatre X patrons

      engaged in indecent acts on the premises. The Building Commissioner sent

      AMW notice of intent to revoke Theatre X’s adult business license on the

      grounds that (1) Theatre X’s license had been suspended during the previous

      twelve months, and Theatre X had knowingly operated the business while the

      license was suspended, and (2) Theatre X had violated the Zoning Ordinance

      by knowingly allowing acts of sexual intercourse, sodomy, oral copulation,

      masturbation, or other sex to occur in or on the premises. Counsel for MEV

      sent an email to the Building Commissioner informing him that the revocation

      notice should have been served on MEV as the actual holder of the adult

      business license. The Building Commissioner sent an amended notice of intent

      to revoke license to MEV at the same addresses at which AMW was initially

      served.

[6]   In April 2019, the Clarksville Town Council held an evidentiary hearing on the

      revocation of Theatre X’s adult business license. MEV appeared by counsel

      David E. Mosley. The Building Commissioner appeared with counsel, and

      evidence was admitted. In May 2019, the Town Council issued an order

      revoking MEV’s adult business license, finding that Theatre X had been

      Court of Appeals of Indiana | Opinion 19A-PL-2962 | October 21, 2020     Page 4 of 14
      operating in violation of the Zoning Ordinance because Theatre X was not

      configured so that every manager’s station had an unobstructed view, by a

      direct line of sight, to every area of the premises, and Theatre X management

      was knowingly allowing its patrons to commit indecent acts to occur on the

      premises. AMW’s App. Vol. 2 at 53. The following month, MEV filed in the

      Clark Circuit Court a petition to appeal the revocation of adult business license,

      naming the Town, the Planning Commission, and the Building Commissioner

      as respondents. Id. at 37.

[7]   In June 2019, the Town Council adopted an ordinance to regulate sexually

      oriented businesses (SOB Ordinance), codified in Chapter 117 of its municipal

      code. Id. at 119. Similar to the Zoning Ordinance, the SOB Ordinance requires

      the interior premises of adult theaters to be configured so that every manager’s

      station has an unobstructed view, by a direct line of sight, to every area of the

      premises (except restrooms) where patrons are permitted. Id. at 127. In

      addition, the SOB Ordinance requires sexually oriented businesses to be closed

      between midnight and 6:00 a.m. Id. at 126.

[8]   Also, in June 2019, the Town filed an answer to MEV’s petition, as well as

      counterclaims against MEV and AMW, seeking injunctive relief under the

      Zoning Ordinance and the SOB Ordinance and against AMW for the unpaid

      civil penalties of $9100 imposed on it for the 2018 Zoning Ordinance violations.

      In July 2019, the Town filed a motion for a preliminary injunction, seeking to

      enjoin MEV and AMW from operating Theatre X in violation of the Zoning

      Ordinance and the SOB Ordinance. MEV and AMW each filed a motion to

      Court of Appeals of Indiana | Opinion 19A-PL-2962 | October 21, 2020      Page 5 of 14
       dismiss the Town’s counterclaims and motion for preliminary injunction. The

       trial court held a hearing on the motions to dismiss and the Town’s motion for

       a preliminary injunction, at which the Town presented one witness and offered

       three exhibits, all of which were admitted.

[9]    In November 2019, the trial court issued an order denying MEV’s and AMW’s

       motions to dismiss. The trial court also issued an order granting the Town’s

       motion for a preliminary injunction. The trial court entered a preliminary

       injunction (1) enjoining MEV and AMW from operating Theatre X unless (a)

       the building is configured in such a manner that every manager’s station has an

       unobstructed view, by a direct line of sight, to every area inside the building to

       which any patron is permitted (excluding restrooms), (b) each manager’s station

       is in a fixed designated location that does not exceed thirty-two square feet of

       floor area, and (c) an employee is on duty in a manager’s station at all times

       any patron is on the premises; and (2) enjoining MEV and AMW from

       operating Theatre X between midnight and 6:00 a.m. on any day. Appealed

       Order at 10-11. This interlocutory appeal ensued.

                                       Discussion and Decision

        Section 1 – Our scope of review in this interlocutory appeal is
          limited to the order granting the preliminary injunction.
[10]   As an initial matter, we note that MEV and AMW seem to misunderstand the

       scope of this interlocutory appeal. In their notices of appeal, MEV and AMW

       identified the order being appealed as the order granting the preliminary

       Court of Appeals of Indiana | Opinion 19A-PL-2962 | October 21, 2020      Page 6 of 14
       injunction. However, in their briefs, MEV and AMW ask this Court to vacate

       both the order denying their motions to dismiss and the order granting the

       preliminary injunction, and to strike the Town’s counterclaims and answer and

       the testimony and exhibits presented during the hearing on the motions. We

       observe that “[a]n appeal from an interlocutory order is not allowed unless

       specifically authorized by the Indiana Constitution, statutes, or the rules of

       court. The authorization is to be strictly construed, and any attempt to perfect

       an appeal without such authorization warrants a dismissal.” Allstate Ins. Co. v.

       Scroghan, 801 N.E.2d 191, 193 (Ind. Ct. App. 2004), trans. denied.

[11]   The Court of Appeals has “jurisdiction over appeals of interlocutory orders

       under Appellate Rule 14 except those appeals described in Rule 4(A)(3).” 1 Ind.

       Appellate Rule 5(B). Here, the order granting the preliminary injunction is

       appealable as a matter of right under Appellate Rule 14(A), but the order

       denying MEV’s and AMW’s motions to dismiss is not an order that is

       appealable as matter of right. Furthermore, the order denying the motions to

       dismiss was not certified by the trial court for interlocutory appeal pursuant to

       Appellate Rule 14(B). 2 Therefore, the order denying the motions to dismiss is

       not properly before us. “Our scope of review in interlocutory appeals is limited

       to the interlocutory order on appeal.” See DuSablon v. Jackson Cty. Bank, 132

       1
           Appellate Rule 4(A)(3) describes the interlocutory appeals over which our supreme court has jurisdiction.
       2
         Appellate Rule 14(C) governs orders granting or denying class action certification and is therefore
       inapplicable. Appellate Rule 14(D) provides that other interlocutory appeals may be taken as provided by
       statute, but neither MEV nor AMW cites to a statute that would provide such an interlocutory appeal.

       Court of Appeals of Indiana | Opinion 19A-PL-2962 | October 21, 2020                               Page 7 of 14
N.E.3d 69, 76 (Ind. Ct. App. 2019), trans. denied (2020). Our supreme court has

       stated that “an interlocutory appeal raises every issue presented by the order

       that is the subject of the appeal.” Tom-Wat, Inc. v. Fink, 741 N.E.2d 343, 346

       (Ind. 2001). Such interlocutory appeals “are not vehicles through which one

       may attack the trial court proceedings as a whole and without regard to the

       order on appeal.” DuSablon, 132 N.E.3d at 76. Accordingly, we limit our

       review in this interlocutory appeal to the order granting the preliminary

       injunction. 3

[12]   Even if the order denying the motions to dismiss was properly before us, we

       would find MEV’s and AMW’s challenges to it without merit. MEV’s sole

       argument on appeal is that the trial court lacked subject matter jurisdiction.

       AMW presents the same argument. We observe that where the facts before the

       trial court are not in dispute, the question of subject matter jurisdiction is one of

       law, which we review de novo. Citizens Action Coal. of Ind. v. Koch, 51 N.E.3d
236, 240 (Ind. 2016). “Subject matter jurisdiction is the power to hear and

       determine cases of the general class to which any particular proceeding

       belongs.” K.S. v. State, 849 N.E.2d 538, 540 (Ind. 2006). “All circuit courts

       have … original and concurrent jurisdiction in all civil cases ….” Ind. Code §

       33-28-1-2. In addition, “[i]t is within the province of our courts, using both

       common law and chancery jurisdiction, to grant injunctive relief.” Washel v.

       3
        Although the Town explains in its appellees’ brief that the order denying the motions to dismiss is not the
       order being appealed, MEV and AMW do not respond to that fact in their reply briefs.

       Court of Appeals of Indiana | Opinion 19A-PL-2962 | October 21, 2020                              Page 8 of 14
       Bryant, 770 N.E.2d 902, 906 (Ind. Ct. App. 2002). This is a civil action, circuit

       courts are vested with power to hear civil cases, and there can be no question

       that the trial court has subject matter jurisdiction to grant the preliminary

       injunction.

[13]   Ignoring that line of reasoning, MEV and AMW argue that because MEV filed

       a “petition for review[,]” as opposed to a “complaint[,]” the petition is not a

       pleading under the Indiana Trial Rules, and therefore the Town did not have

       standing to file an answer, counterclaims, or a motion for a preliminary

       injunction, and the trial court did not have jurisdiction to issue the preliminary

       injunction. MEV’s Br. at 11-12. 4 We disagree. A petition for judicial review is

       analogous to a complaint. Ind. Dep’t of Highways v. Dixon, 541 N.E.2d 877, 880

       (Ind. 1989). “A civil action is commenced by filing with the court a complaint

       or such equivalent pleading or document as may be specified by statute.” Ind.

       Trial Rule 3 (emphasis added). After MEV filed its petition for review, the trial

       rules permitted the Town to file a responsive pleading. See Ind. Trial Rule 7(A)

       (identifying, inter alia, a complaint and answer as pleadings). Indiana Trial

       Rule 13(B) provides that “[a] pleading may state as a counterclaim any claim

       against an opposing party not arising out of the transaction or occurrence that is

       the subject matter of the opposing party’s claims.” Indiana’s modern rules of

       trial procedure “abrogate all restrictions on the right to plead a counterclaim.”

       4
           AMW makes the same argument, but for simplicity’s sake, we cite only MEV’s brief.

       Court of Appeals of Indiana | Opinion 19A-PL-2962 | October 21, 2020                    Page 9 of 14
       Nelson v. Butcher, 170 Ind. App. 101, 112, 352 N.E.2d 106, 114 (1976), trans.

       denied. Therefore, we have no difficulty concluding that the Town had standing

       to file an answer and counterclaims, and a motion for a preliminary injunction

       based on the counterclaims. 5 MEV’s and AMW’s argument that the trial court

       did not have jurisdiction to issue the preliminary injunction fails. 6

            Section 2 – The trial court did not abuse its discretion by
                       issuing the preliminary injunction.
[14]   MEV and AMW argue that the trial court did not have subject matter

       jurisdiction to issue the preliminary injunction, but as explained above, we

       reject this argument. MEV presents no other arguments challenging the order

       granting the preliminary injunction, and therefore we affirm that order as it

       applies to MEV.

[15]   AMW contends that the trial court erred by enjoining it. The trial court made

       numerous findings of fact relevant to this contention. The trial court found that

       5
         We decline to address MEV’s and AMW’s arguments relying on the Administrative Orders and Procedures
       Act (AOPA) because they did not present those arguments to the trial court, as shown by the complete
       absence of any reference to the AOPA in the order denying their motions to dismiss. See Freeman v.
       Timberland Home Ctr., Inc., 148 N.E.3d 321, 324-25 (Ind. Ct. App. 2020) (“Generally, a party may not present
       an argument or issue to an appellate court unless the party raised that argument or issue to the trial court.”)
       (quoting Baird v. ASA Collections, 910 N.E.2d 780, 786 (Ind. Ct. App. 2009), trans. denied (2010)).
       6
         AMW also argues that its joinder to the action is impermissible. Specifically, AMW argues that it was
       misjoined because it was not joined when the revocation of MEV’s adult business license was heard by the
       Town Council and because AMW has no interest in the adult business license. These arguments ignore that
       AMW was named as a party pursuant to the Town’s counterclaims, and the counterclaims do not seek to
       make AMW a party to MEV’s appeal of the license revocation. In addition, the Town’s counterclaim for the
       civil penalties imposed on AMW for the 2018 Zoning Ordinance violations concerns only AMW.
       Accordingly, this argument also fails.

       Court of Appeals of Indiana | Opinion 19A-PL-2962 | October 21, 2020                             Page 10 of 14
MEV operates Theatre X, MEV and AMW share the same principal business

address, AMW owns the land and the building in which Theatre X is operated,

and both MEV and AMW are subject to the Zoning Ordinance and the SOB

Ordinance. Appealed Order at 3. The trial court also found that the lease

agreement between MEV and AMW requires the property to be used only for

adult entertainment and quoted the following lease provision:

        Alterations. [MEV] shall not remodel, reconstruct, add to, or
        demolish any part of the Building (s) or subtract from any real
        or personal property included in the Leased Premises or make
        any alterations to the interior of the Building(s) without the prior
        written consent of [AMW] (sic) all such alterations, changes,
        improvements and additions to the Leased Premises for which
        [MEV] has obtained [AMW]’s consent shall not (i) impair the
        structural integrity or soundness of the Building(s) or any
        improvements on the Leased Premises, or (ii) impair the
        economic value of the Leased Premises; and such alterations,
        changes, improvements and additions by [MEV] shall be made
        in compliance with all applicable governmental requirements,
        codes, and applicable zoning ordinances; and any alterations,
        changes improvements and additions made by [MEV] shall
        immediately become the property of [AMW] and shall become and be
        part of the Leased Premises. (Emphasis added).
Id. at 4 (underlining replaced with italics). In addition, the trial court found that

the “record shows that AMW has the power to correct, and prevent, violations

of the Town’s ordinances occurring at AMW’s Theatre X property.” Id. The

trial court found that AMW, as the owner of Theatre X, was notified in 2018

that the holes between the viewing rooms in Theatre X were in violation of the

Zoning Ordinance, AMW permitted inspection of Theatre X, the Building

Court of Appeals of Indiana | Opinion 19A-PL-2962 | October 21, 2020      Page 11 of 14
       Commissioner sent notice to AMW that Theatre X’s adult business license was

       suspended, AMW had the holes closed up, and the Building Commissioner

       notified AMW’s counsel that the suspension was lifted, all of which

       demonstrated AMW’s control over Theatre X. Id. at 4-5. Finally, the trial

       court found that MEV and AMW “knowingly maintained the Theatre X

       premises in violation of, and have knowingly permitted, allowed, and failed to

       prevent violations of, the Zoning Ordinance and SOB Ordinance [direct-]line-

       of-sight requirements, as well as the SOB Ordinance hours of operation

       regulation.” Id. at 9.

[16]   “We review a trial court’s grant or denial of a preliminary injunction for an

       abuse of discretion.” Great Lakes Anesthesia, P.C. v. O’Bryan, 99 N.E.3d 260, 268

       (Ind. Ct. App. 2018). In granting a preliminary injunction, the trial court is

       required to issue special findings of fact and conclusions thereon. Ind. Trial

       Rules 52(A), 65(D). We review the special findings and conclusions for clear

       error. Ind. Trial Rule 52(A). “Findings of fact are clearly erroneous when the

       record lacks evidence or reasonable inferences from the evidence to support

       them. A judgment is clearly erroneous when a review of the record leaves us

       with a firm conviction that a mistake has been made.” Sperro LLC v. Ford Motor

       Credit Co., 64 N.E.3d 235, 244 (Ind. Ct. App. 2016) (quoting Orndorff v. Ind.

       Bureau of Motor Vehicles, 982 N.E.2d 312, 319 (Ind. Ct. App. 2012), trans. denied

       (2013)). In making this determination, we neither reweigh evidence nor assess

       witness credibility, and “we consider only the evidence favorable to the

       judgment and the reasonable inferences arising therefrom.” Great Lakes

       Court of Appeals of Indiana | Opinion 19A-PL-2962 | October 21, 2020    Page 12 of 14
       Anesthesia, 99 N.E.3d at 268. We owe no deference to a trial court’s

       determination of questions of law and review such questions de novo. McCauley

       v. Harris, 928 N.E.2d 309, 313 (Ind. Ct. App. 2010), trans. denied (2011).

[17]   “In seeking an injunction for a zoning violation, the moving party must prove

       the existence of a valid ordinance and a violation of that ordinance.” Plaza Grp.

       Properties, LLC v. Spencer Cty. Plan Comm’n, 877 N.E.2d 877, 896 (Ind. Ct. App.

       2007), trans. denied (2008). AMW does not challenge the validity of the Zoning

       Ordinance or the SOB Ordinance but argues that the Town failed to

       demonstrate that AMW violated any ordinance and that the trial court clearly

       erred in finding that AMW had the power to correct and prevent the violations.

       Specifically, AMW contends that the Town provided no evidence that AMW

       “operates” Theatre X, citing provisions of the SOB Ordinance defining

       “operates” and “operating[.]” AMW’s Br. at 25. This argument relates only to

       the SOB Ordinance; AMW presents no argument that the Town failed to

       demonstrate that AMW, as the owner of Theatre X, violated the Zoning

       Ordinance. Accordingly, even if AMW’s argument had merit, it would affect

       only the portion of the preliminary injunction involving Theatre X’s business

       hours. However, we are unpersuaded by AMW’s argument.

[18]   Section 117.05(A) of the SOB Ordinance provides, “A person who operates or

       causes to be operated an adult arcade or adult motion theatre shall comply with

       Court of Appeals of Indiana | Opinion 19A-PL-2962 | October 21, 2020    Page 13 of 14
       the following requirements.” 7 AMW’s App. Vol. 2 at 126 (emphasis added).

       Section 117.02 defines “[o]perate” to mean, “to cause to function or to put or

       keep in a state of doing business.” Id. at 124. Under the lease agreement,

       AMW requires MEV to operate the premises as an adult entertainment venue,

       and AMW retains the ultimate authority to control any changes to the building,

       including those necessary to comply with applicable ordinances. In addition,

       the evidence in the record before us supports the trial court’s findings regarding

       AMW’s participation in the 2018 Zoning Ordinance violations. AMW’s

       argument on this issue is merely a request to reweigh the evidence, which we

       must decline. We conclude that the trial court did not abuse its discretion by

       enjoining AMW.

[19]   Based on the foregoing, we affirm the order granting the preliminary injunction.

[20]   Affirmed.

       Robb, J., and Brown, J., concur.

       7
        AMW maintains that it is not a person, but person as defined in the SOB Ordinance includes a corporation.
       AMW’s App. Vol. 2 at 124.

       Court of Appeals of Indiana | Opinion 19A-PL-2962 | October 21, 2020                         Page 14 of 14