Court Opinion

ID: 2788998
Source: CourtListenerOpinion
Date Created: 2015-03-25 15:03:44.894595+00
Date Added: 2024-06-11T11:27:03.952062
License: Public Domain

Mar 25 2015, 10:03 am

      ATTORNEYS FOR APPELLANT                                   ATTORNEYS FOR APPELLEE
      Christopher S. Roberge                                    Douglas A. Hoffman
      Elizabeth A. Roberge                                      Jeremy M. Dilts
      Anelia T.N. Ray                                           Carson Boxberger LLP
      Roberge Law                                               Bloomington, Indiana
      Carmel, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      The Peoples State Bank,                                   March 25, 2015

      Appellant-Plaintiff,                                      Court of Appeals Case No.
                                                                53A01-1409-PL-379
              v.                                                Appeal from the Monroe Circuit
                                                                Court
                                                                The Honorable E. Michael Hoff,
      Benton Township of Monroe                                 Judge
      County, Indiana,                                          Cause No. 53C01-1305-PL-910
      Appellee-Defendant

      Bailey, Judge.

                                           Case Summary
[1]   The Peoples State Bank (“the Bank”) appeals the denial of its motion to correct

      error, which challenged a grant of summary judgment in favor of Benton

      Township of Monroe County, Indiana (“Benton Township”) upon the Bank’s

      Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015                Page 1 of 20
      collection complaint. The Bank presents a single, consolidated issue for review:

      whether summary judgment was improvidently granted to Benton Township as

      opposed to the Bank, upon the trial court’s conclusion that a loan transaction

      was void. We affirm.

                               Facts and Procedural History
[2]   The relevant facts are not in dispute. In 2011, Benton Township Trustee

      Heather Cohee (“Cohee”) secured a loan from the Bank to purchase a fire

      truck. She acted without a prior appropriation of funds by Benton Township or

      compliance with statutory procedures allowing taxpayers an opportunity to

      remonstrate.1

[3]   In order to procure the loan, Cohee produced paperwork including minutes of a

      township board meeting held on October 24, 2011, at which the fire truck

      replacement plan and need for bids was favorably discussed. Also included

      were a notice of a public hearing regarding plans for a new fire truck, a notice to

      bid, and minutes of a meeting where the successful bidder – Wynn Fire

      Equipment, LLC (“Wynn”) – was selected.

[4]   Benton Township part-time employee Danielle Coe executed a promissory note

      for $335,295, signing as the Benton Township Trustee. The Bank then

      deposited $335,295 into Benton Township’s checking account. Benton

      1
          However, there is no evidence that she acted contrary to the wishes of the Benton Township Board.

      Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015                         Page 2 of 20
      Township paid Wynn $287,149 for a fire truck and $616.52 for some related

      equipment. The excess loan proceeds of $47,529.48 that had been deposited

      into Benton Township’s account were used for other township purposes.

[5]   Benton Township did not pay the promissory note installments as they came

      due. Cohee resigned amidst allegations of financial improprieties unrelated to

      the fire truck acquisition. On January 28, 2012, the Indiana State Board of

      Accounts issued its Independent Accountant’s Report based upon a review of

      Benton Township records. The report contained the conclusion that the fire

      truck purchase was made “with proceeds of a loan that was not properly

      approved by the Township Board.” (App. 307.) The report further indicated

      that neither the Trustee nor the Township Board had signed the promissory

      note.

[6]   The Bank seized Benton Township checking account funds and applied those

      funds in setoff to sums due under the promissory note. On December 21, 2012,

      the Bank and Benton Township entered into a Partial Settlement & Dispute

      Resolution Agreement. Pursuant to the terms of the agreement, Benton

      Township surrendered the fire truck, and the Bank sold it for $212,866.00 and

      applied the funds to the outstanding loan. The Bank restored the funds it had

      Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015   Page 3 of 20
      previously taken as an offset, except for $30,000, which was by agreement

      applied to the loan. Benton Township also made a $37,529.48 payment. 2

[7]   After the sale proceeds and payments were applied, the Bank sought

      $102,273.90 in principal and interest, plus attorney’s fees and costs of

      $45,757.65. On May 8, 2013, the Bank filed a complaint against Benton

      Township. Benton Township answered the complaint, denying that the Bank

      was entitled to any additional recovery.

[8]   On February 27, 2014, the Bank filed a motion for summary judgment. On

      March 25, 2014, Benton Township filed a cross-motion for summary judgment.

      A hearing on those motions was conducted on June 12, 2014. On July 2, 2014,

      the trial court entered an order granting summary judgment to Benton

      Township, concluding that the loan transaction was void because of the failure

      to provide taxpayers with statutorily-required notice and an opportunity for

      remonstrance. The Bank filed a motion to correct error, which was denied.

      This appeal ensued.

                                 Discussion and Decision

      2
       As such, Benton Township made payments equal to the excess loan proceeds of $47,529.48 and $20,000.00
      on the underlying debt.

      Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015                   Page 4 of 20
                                            Standard of Review
[9]    The Bank contends that the trial court erred when it denied the Bank’s motion

       to correct error following the grant of summary judgment in favor of Benton

       Township. We generally review the denial of a motion to correct error for an

       abuse of discretion. Kornelik v. Mittal Steel USA, Inc., 952 N.E.2d 320, 324 (Ind.

       Ct. App. 2011), trans. denied. An abuse of discretion occurs when the trial

       court’s decision is against the logic and effect of the facts and circumstances

       before the court, or if the court has misinterpreted the law. Hawkins v. Cannon,

       826 N.E.2d 658, 661 (Ind. Ct. App. 2005), trans. denied. Questions of law are

       reviewed de novo and we owe no deference to the trial court’s legal

       conclusions. In re Guardianship of Phillips, 926 N.E.2d 1103, 1106 (Ind. Ct. App.

       2010).

[10]   Here, the Bank’s motion to correct error sought to set aside a grant of summary

       judgment. A trial court’s grant of summary judgment on appeal to this Court is

       ‘“clothed with a presumption of validity,”’ and an appellant has the burden of

       demonstrating that the grant of summary judgment was erroneous. Williams v.

       Tharp, 914 N.E.2d 756, 762 (Ind. 2009) (quoting Rosi v. Bus. Furniture Corp., 615

       N.E.2d 431, 434 (Ind. 1993)). The standard of review is not altered by the fact

       that the parties made cross-motions for summary judgment. Ind. Farmers Mut.

       Ins. Grp. v. Blaskie, 727 N.E.2d 13, 15 (Ind. Ct. App. 2000). Instead, we

       consider each motion separately according to our well established standard of

       review:

       Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015   Page 5 of 20
               When reviewing a grant of summary judgment, our standard of review
               is the same as that of the trial court. Considering only those facts that
               the parties designated to the trial court, we must determine whether
               there is a “genuine issue as to any material fact” and whether “the
               moving party is entitled to a judgment as a matter of law.” In
               answering these questions, the reviewing court construes all factual
               inferences in the non-moving party’s favor and resolves all doubts as to
               the existence of a material issue against the moving party. The moving
               party bears the burden of making a prima facie showing that there are
               no genuine issues of material fact and that the movant is entitled to
               judgment as a matter of law; and once the movant satisfies the burden,
               the burden then shifts to the non-moving party to designate and
               produce evidence of facts showing the existence of a genuine issue of
               material fact.

       Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267, 1269-70 (Ind. 2009)

       (internal citations omitted).

[11]   In moving for summary judgment, the Bank contended that it has a valid

       promissory note and that it is equitably entitled to payment for that which

       Benton Township has received and enjoyed. In support of its cross-motion for

       summary judgment, Benton Township argued that the purported contract for

       debt is void because it was not incurred in a statutorily-prescribed manner. The

       trial court entered findings of fact and conclusions in response to these

       arguments. While a trial court’s annunciation of findings of fact and

       conclusions on such matters may aid our review and reveal the reasoning of the

       trial court, they are not required and are not binding upon appeal. New Albany

       Historic Pres. Comm’n v. Bradford Realty, Inc., 965 N.E.2d 79, 84 (Ind. Ct. App.

       2012). The role of the trial court at summary judgment is not to act as a trier of

       fact, but rather to determine whether the movant established, prima facie, either

       Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015       Page 6 of 20
       that there is insufficient evidence to proceed to trial, or that the movant is

       otherwise entitled to judgment as a matter of law. Kader v. State Dept. of

       Correction, 1 N.E.3d 717, 727 (Ind. Ct. App. 2013). Witness credibility and the

       relative apparent weight of evidence are not relevant considerations at summary

       judgment. Id.

                                                     Analysis
[12]   In asserting its entitlement to summary judgment, the Bank primarily relies

       upon the fact that it holds a promissory note evidencing the indebtedness.

       Generally, construction of written contracts is a question of law for which

       summary judgment is particularly appropriate. Stelko Elec. v. Taylor Comm.

       Schls, 826 N.E.2d 152, 155 (Ind. Ct. App. 2005). When terms of a contract are

       clear and unambiguous, the terms are conclusive, and the court will not

       construe the contract or look at extrinsic evidence, but will simply apply the

       contract provisions. Id. at 156.

[13]   However, the instant promissory note does not give rise to claims of ambiguity

       or competing interpretations of its terms. Rather, it is alleged to be

       unenforceable against the Township Board because neither the Trustee nor a

       board member executed it. Moreover, because of statutory enactments, the

       Benton Township taxpayers must essentially be made parties to a valid contract

       for indebtedness for which they will ultimately be liable.

[14]   The parties agree that Indiana Code section 36-8-13-6.5 affords taxpayers a

       right of judicial review of township expenditures. Benton Township contends –

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       and the trial court agreed – that the instant claim is barred because the

       taxpayers were not given notice and opportunity for objection or judicial

       review. The Bank, while recognizing that taxpayers have a right of

       remonstrance, argues that the omission does not render a township loan

       obligation invalid, because a township is authorized to borrow funds for

       equipment and an obligation of the township is binding notwithstanding other

       law.

[15]   Thus, the dispute between the parties distills to one of statutory interpretation.

       The interpretation of a statute is a question of law, to be reviewed de novo.

       Porter Dev., LLC v. First Nat’l Bank of Valparaiso, 866 N.E.2d 775, 778 (Ind.

       2007). An unambiguous statute will not be subject to interpretation but rather

       the words and phrases will be read in the plain, ordinary, and usual sense.

       Butler v. Ind. Dep’t of Ins., 904 N.E.2d 198, 202 (Ind. 2009). When a statute is

       susceptible to more than one interpretation, it is deemed ambiguous and the

       well-established rules of statutory construction are applicable. Barrett v. City of

       Brazil, 919 N.E.2d 1176, 1179 (Ind. Ct. App. 2010), trans. denied. One such rule

       is that the primary goal of statutory construction is to determine, give effect to,

       and implement the intent of our Legislature. Id. Additionally, statutes

       concerning the same subject matter must be read together in an attempt to

       harmonize and give effect to each. Id. Where provisions of a statute are in

       conflict, the specific provision will take priority over the general provision. Id.

       Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015    Page 8 of 20
[16]   Both parties direct our attention to Indiana Code section 36-8-13-6, entitled

       “Purchase of firefighting apparatus and equipment; loans; tax levy,” which

       provides:

                    (a) Subject to section 6.5 of this chapter, the executive and
                        legislative body, on behalf of the township, may also borrow
                        the necessary money from a financial institution in Indiana to
                        make the purchase on the same terms. They shall, on behalf of
                        the township, execute and deliver to the institution the
                        negotiable note or bond of the township for the sum borrowed.
                        The note or bond must bear interest, with both principal and
                        interest payable in equal or approximately equal installments
                        on January 1 and July 1 each year over a period not exceeding
                        six (6) years.
                    (b) The first installment of principal and interest on a contract,
                        chattel mortgage, note, or bond is due on the next January 1 or
                        July 1 following the first tax collection for which it is possible
                        for the township to levy a tax. The executive and legislative
                        body shall appropriate and levy a tax each year sufficient to pay
                        the obligation according to its terms. An obligation of the
                        township executed under this chapter is a valid and binding
                        obligation of the township, notwithstanding any tax limitation,
                        debt limitation, bonding, borrowing, or other statute to the
                        contrary.

[17]   Indiana Code section 36-8-13-6.5, entitled “Taxpayers’ objections; judicial

       review,” provides in relevant part:

               (a) If the executive and the legislative body determine that money
                   should be borrowed under section 6 of this chapter, not less than
                   ten (10) taxpayers in the township who disagree with the
                   determination may file a petition in the office of the county auditor
                   not more than thirty (30) days after notice of the determination is
                   given. The petition must state the taxpayers’ objections and the
                   reasons why the taxpayers believe the borrowing to be unnecessary
                   or unwise.

       Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015          Page 9 of 20
               (b) The county auditor shall immediately certify a copy of the petition,
                   together with other data necessary to present the questions
                   involved, to the department of local government finance. Upon
                   receipt of the certified petition and other data, the department of
                   local government finance shall fix a time and place for the hearing
                   of the matter. . . .

[18]   The Bank relies upon the language of Indiana Code section 36-8-13-6.5(b)

       recognizing the valid and binding nature of a township obligation. The trial

       court observed the inclusion of language describing binding debt as debt

       incurred “subject to section 6.5 of this chapter.”

[19]   The statute authorizing a purchase of firefighting apparatus first provides that

       borrowing is “subject to section 6.5 of this chapter[.]” Ind. Code § 36-8-13-6(a).

       In turn, section 6.5 provides for taxpayer remonstrance and judicial review,

       with requisite notice and hearing. “The Court presumes that the legislature

       intended for the statutory language to be applied in a logical manner consistent

       with the statute’s underlying policy and goals.” Prewitt v. State, 878 N.E.2d 184,

       186 (Ind. 2007). Although a township board is empowered to borrow for

       firefighting equipment, it must do so in compliance with statutory procedures.

       A valid contract for purchase of firefighting equipment effectively binds the

       taxpayers. The taxpayers are entitled to statutory protections including notice

       and opportunity to object.

[20]   The Bank does not deny the absence of a formal appropriation or statutory

       compliance. Nor does the Bank dispute that it tendered a large sum of money

       upon execution of a promissory note by a part-time employee, as Trustee,

       Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015      Page 10 of 20
       although she was not the Trustee. The Bank’s proposed remedy for its lack of

       diligence is that statutory protections afforded the taxpayers be disregarded and

       the Bank collect in full according to the stated terms of its promissory note.

[21]   However, our Courts have not historically rewarded a lack of diligence on the

       part of the lender by dispensing with taxpayer protections. A party dealing with

       a municipality is bound to take notice of the limited powers of the municipality

       and of the laws governing the municipality in making contracts. City of New

       Albany v. New Albany St. Ry. Co., 172 Ind. 487, 490, 87 N.E. 1084 (1909).

[22]   In Sunman-Dearborn Comm. Sch. Corp. v. Kral-Zepf-Freitag & Assoc., 338 N.E.2d

       707, 708 (Ind. Ct. App. 1975), an architectural firm had initiated an action

       against a school corporation, seeking to recover the value of architectural and

       engineering services, although the trustee had not complied with the provisions

       of the Township Reform Act [I.C. § 17-4-29-3 (1971) (repealed)]. At that time,

       one provision of the Township Reform Act stated: “All contracts made in

       violation of this act shall be null and void.” I.C. § 17-4-29-5. The Court

       acknowledged the statutory language and additionally quoted the language of

       our Indiana Supreme Court in Mitchelltree Sch. Twp. v. Hall, 163 Ind. 667, 72

       N.E. 641 (1904):

               It has been uniformly held that a township trustee is a special agent,
               possessing only statutory powers, and can only bind the township
               when authorized by statute and in the manner specified therein, and
               that all who deal with him must, at their peril, take notice of the extent
               of his authority, and the party seeking to enforce a contract against a
               township for a debt contracted by the township trustee takes the

       Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015        Page 11 of 20
               burden of showing by allegation and proof that all the conditions
               existed which conferred authority upon the trustee to contract the debt.

       Sunman-Dearborn, 338 N.E.2d at 715. The Court concluded that the

       architectural firm was required to prove statutory compliance as a condition to

       enforcement of the contracts in question, and had failed to do so. Id.

[23]   Here, the lack of statutory compliance is undisputed. A single conclusion can

       be drawn – the purported contract between Benton Township and the Bank is

       invalid.

[24]   The Bank alternatively contends that, even if its contract is unenforceable, it is

       entitled to recover based upon common law or equitable theories. First, the

       Bank claims that there is an “account stated” because Benton Township made

       no objection to multiple monthly statements detailing sums advanced and

       payments due. The Bank directs our attention to B.E.I., Inc. v. Newcomer Lumber

       & Supply, 745 N.E.2d 233 (Ind. Ct. App. 2001). The B.E.I. court described an

       account stated as “an agreement between the parties that all items of an account

       and balance are correct, together with a promise, expressed or implied to pay

       the balance.” Id. at 236. The Court then explained: “[i]t operates as a new

       contract without the need for renewed consideration, and the plaintiff does not

       need to plead and prove the creation and performance of each contract

       underlying the account.” Id.

[25]   In accordance with B.E.I., the Bank asserts that a new contract was formed

       when statements to Benton Township were received without protest. In effect,

       Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015     Page 12 of 20
       the Bank suggests that a township, although required to comply with statutory

       procedures to incur debt, may circumvent those requirements by simply

       acknowledging the existence of a debt. The Bank’s position is unavailing, in

       that the parties are not simply a creditor and account debtor. Ultimately, it is

       the taxpayers who must pay. Any “new contract” for firefighting equipment

       could not be formed in disregard of the relevant statutory requirements. A

       steward of public funds may not simply dispense with taxpayer protections by

       accepting statements without complaint.

[26]   The Bank also deems itself entitled to equitable remedies because of the conduct

       of Benton Township after procedural errors came to light. According to the

       Bank, Benton Township board members simply determined that a smaller truck

       would be more desirable to maneuver on rural roads and thereafter deliberately

       failed to cure defects in its acquisition of debt.

[27]   The Bank suggests that appropriate equitable theories are “a theory of money

       had and received” and quantum meruit – also referred to as unjust enrichment.

       (Appellant’s Brief at 16-18.) The Bank insists that it conferred a measurable

       benefit upon Benton Township under such circumstances that Benton

       Township’s retention of the benefit would be unjust. See Bayh v. Sonnenburg,

       573 N.E.2d 398, 408 (Ind. 1991) (describing quantum meruit as a legal fiction

       to permit recovery where there is no contract but where the circumstances are

       such that under the law of natural and immutable justice there should be a

       recovery as though there had been a promise).

       Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015   Page 13 of 20
[28]   The Bank maintains that a lack of full statutory compliance in executing a

       contract has been excused to permit payments for goods received and enjoyed.

       See Boyd v. Black Sch. Twp., 123 Ind. 1, 23 N.E. 862 (1890). In Boyd, a school

       township did not follow statutory procedures for incurring debt, but received

       and used school furniture which was “suitable and necessary.” Id. at 863. On

       appeal after the vendor was awarded less than the full contract price, the Court

       acknowledged that “the contract was invalid for want of a compliance with the

       statute,” and determined that the township was “only bound to pay the actual

       value of what it received.” Id. Ultimately, the township paid $118.57 as

       opposed to the contract price of $342.00. See also Schipper v. City of Aurora, 121

       Ind. 154, 22 N.E. 878, 879 (1889):

               Where a city or municipality receives the benefit of money, labor, or
               property upon a contract made without due formality, or which it had
               no authority to make, and which it refuses to execute, it will
               nevertheless be liable to the person conferring the benefit to the extent
               of the value of what has been received and appropriated, unless the
               contract was prohibited by statute, or in violation of public policy.
       In Schipper, the town was required to pay for “an appropriation of the plaintiff’s

       work.” Id. at 880.

[29]   Also with regard to the provision of services to a municipality, in Rieth-Riley

       Constr. Co., Inc. v. Town of Indian Village, 138 Ind. App. 341, 348, 214 N.E.2d

       208, 211 (1966), this Court noted that when certain salient facts are proven,

       recovery is possible, even in the absence of a valid contract. The defendant

       town had contracted for materials and labor necessary to improve streets but

       had failed to comply with a statute regarding public works projects. See Id. On

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       appeal, the town argued that the contract was void and unenforceable but the

       Court found “if the contract be invalid for want of compliance with a statute

       but the town receives and enjoys the benefits, the town is nevertheless liable to

       pay the actual value of what it received.” Id. at 138 Ind. App. 347-48; 214

       N.E.2d at 211. According to the Court, “there is not one law for the state and

       another for its subjects.” Id.

[30]   Likewise, in Heeter v. Western Boone Cnty. Comm. Sch. Corp., 147 Ind. Ct. App.

       153, 259 N.E.2d 99, 100 (1970), the defendant school corporation could

       ultimately be required to pay an architect for the value of his services. The facts

       to be established to permit recovery of the reasonable value of services are:

               Services were rendered in favor of the municipal corporation in
               question;
               Services were rendered with the full knowledge of the governing body
               of such municipal corporation;
               The governing body of such municipal corporation knowingly
               accepted the benefits of such services; and
               The purported contract for such services was not wholly beyond the
               scope of the municipal corporation’s powers.
       147 Ind. Ct. App. at 162; 259 N.E.2d at 104.

[31]   Benton Township responds that, with rare exception, equitable remedies will

       not be applied against a governmental entity. See Hannon v. Metro. Dev. Comm’n

       of Marion Cnty., 685 N.E.2d 1075, 1080 (Ind. Ct. App. 1997) (acknowledging, in

       discussing a claim of equitable estoppel and laches, that “equitable estoppel

       cannot ordinarily be applied against government entities” and “the exception is

       if the public interest would be threatened by the government’s conduct”).

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       Benton Township heavily relies upon the language of Cablevision of Chicago v.

       Colby Cable Corp., 417 N.E.2d 348 (Ind. Ct. App. 1981).

[32]   Cablevision involved facts dissimilar to those of the instant case. Cablevision

       and a taxpayer sought a declaration that a purported cable television franchise

       received by Colby was invalid, as the franchise was not preceded by a contract

       with the Hammond Board of Public Works and Safety, as required by statute.

       Id. at 351. In addressing the issue of whether the trial court abused its

       discretion by denying Cablevision’s request for preliminary injunctive relief, the

       Court addressed whether actions by a municipality in violation of controlling

       statutes are subject to the equitable defenses of estoppel or laches. Id. at 354.

       The Court acknowledged the general rule in Indiana, that is, “the public,

       whether it be a state or local governmental body, cannot be estopped by the

       unlawful acts of public officials.” Id. The reason underlying the rule is that ‘“if

       laches, waiver or estoppel did apply against the public, a dishonest,

       incompetent or negligent public official could wreck the interests of the

       public.”’ Id. (quoting State v. Roberts, 226 Ind. 106, 134, 78 N.E.2d 440, 446

       (1948), disapproved on other grounds by State ex rel. Indiana Dept. of Conservation v.

       Pulaski Circuit Court, 231 Ind. 245 (1952)). Therefore, our courts have been

       particularly unsolicitous of estoppel and laches arguments in cases where the

       unauthorized acts of public officials on some level implicate government

       spending powers. Id.

[33]   The Cablevision Court described as an example a contract for garbage collection

       that was at issue in Mazac v. City of Michigan City, 98 Ind. App. 366, 189 N.E.

       Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015     Page 16 of 20
       400 (1934). The contract entered into by Mazac had not been submitted to the

       city council as required by law, but Mazac alleged that the city was estopped

       from denying liability under the contract because the contract had been partly

       performed. See id. at 402. On appeal, the Court reasoned that a void contract

       could not be ratified. “Since the contract is void, and cannot become effective,

       there could be no estoppel.” Id.

[34]   Likewise, in Hamer v. City of Huntington, 215 Ind. 594, 21 N.E.2d 407 (1939), a

       city was not contractually bound to pay for a fire truck where funds were not

       appropriated until after the contract was entered into and Indiana law required

       that funds be appropriated before the execution of the contract. Although the

       fire truck had been delivered and accepted, the equitable doctrine of estoppel

       was rejected:

               If one dealing with the city could plead ignorance of the laws
               governing the city or of the appropriated balance which the city has
               and thereby make valid a contract made by the city contrary to § 48-
               1507, … the effect of such statute and our budget laws would be
               destroyed.
       Id. at 603, 21 N.E.2d at 411.

[35]   In City of Evansville v. Follis, 161 Ind. Ct. App. 396, 315 N.E.2d 724 (1974), the

       building commissioner had issued a building permit without checking property

       descriptions for a public easement. The homeowner attempted to raise the

       defense of estoppel, but our Court concluded: “[i]t has been held that where the

       facts are equally known or accessible to all parties concerned, as there were in

       the case at bar, there can be no estoppel. … [S]ince this information was readily

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       accessible to both parties from public records, the requisite elements of estoppel

       are missing.” Id. at 403, 315 N.E.2d at 728.

[36]   After reviewing this authority, the Cablevision Court reiterated:

               What is certain is that when our law clearly limits the authority of
               government officials to act, or when the law clearly prescribes a
               procedure to be followed, private parties must carefully take note of
               that limitation or procedure before dealing with a governmental entity.
               … Similarly, when the public record contains information relevant to
               the individual’s circumstance, he must seek it out.
[37]   417 N.E.2d at 355-56. Nonetheless, the Court recognized that application of

       equitable doctrines when dealing with a public entity is not absolutely

       prohibited. Id. at 356. Observing that the case did not “involve the

       unauthorized expenditure of taxpayers’ money as did Mazac and Hamer,” the

       Court determined that there remained a question of fact on whether the

       elements of estoppel or laches were present. Id. at 356-57.

[38]   To synthesize, municipal corporations must exercise their powers in strict

       compliance with statutory procedures and doctrines of estoppel or ratification

       will not validate a contract formed outside statutory parameters. However, in

       some instances, quantum meruit relief may be available to prevent the unfair

       retention of benefits. As an over-arching principle, it is clear that those who

       deal with taxpayer funds must be ever-vigilant to ascertain the public actor’s

       authority. Cablevision, 417 N.E.2d at 355.

[39]   “When the legislature enacts procedures and timetables which act as precedent

       to the exercise of some right or remedy, those procedures cannot be

       Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015     Page 18 of 20
       circumvented by the unauthorized acts and statements of officers, agents or staff

       of the various departments of our state government.” Middleton Motors, Inc. v.

       Ind. Dep’t of State Revenue, 269 Ind. 282, 285, 380 N.E.2d 79, 81 (1978). We

       conclude that the promissory note at issue is not a proper basis for a grant of

       equitable relief. First, the matter involves the unauthorized expenditure of

       taxpayer funds. Second, the circumstances are such that the Bank was obliged

       to seek out information of public record and failed to do so. Indeed, the Bank

       prepared a promissory note for execution by a part-time township employee

       rather than the Benton Township Trustee. Finally, Benton Township did not

       retain property for which it refused to pay, and the parties essentially addressed

       the equities surrounding the surrender by entering into a partial settlement.

       Although the loan was invalid, the township nevertheless mitigated the Bank’s

       damages by surrendering the fire truck and paying cash of $67,529.48. This is

       not a situation involving “extreme unfairness” such that equity should step in

       against a governmental entity. Thomas v. Ind. Bureau of Motor Vehicles, 979

       N.E.2d 169, 174 (Ind. Ct. App. 2012). Equitable remedies are not available to

       permit the Bank’s collection in full upon its faulty promissory note.

                                                Conclusion
[40]   The purported contract executed by a township employee in contravention of

       statutory requirements is invalid. The Bank may not pursue additional

       equitable remedies against Benton Township, beyond the partial settlement

       Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015   Page 19 of 20
       agreement. Accordingly, the trial court properly granted summary judgment to

       Benton Township as opposed to the Bank.

[41]   Affirmed.

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

       Court of Appeals of Indiana | Opinion 53A01-1409-PL-379 | March 25, 2015   Page 20 of 20