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City of Charlestown v. Charlestown Pleasant Ridge Neighborhood Association Corp.

Court of Appeals of Indiana

September 10, 2018

City of Charlestown, Indiana, and Charlestown Board of Public Works and Safety, Appellants-Defendants/Cross-Appellees,
v.
Charlestown Pleasant Ridge Neighborhood Association Corporation, Joshua Craven, Tina Barnes, David and Ellen Keith, and Bolder Properties, LLC, Appellees-Plaintiffs/Cross-Appellants.

          Appeal from the Clark Circuit Court The Honorable Jason M. Mount, Special Judge Trial Court Cause No. 10C02-1701-CT-10

          Attorneys for Appellants Bart A. Karwath Mark J. Crandley Barnes & Thornburg LLP Indianapolis, Indiana Michael Allen Gillenwater Gillenwater Law Offices Jeffersonville, Indiana

          Attorneys for Appellees Jeffrey T. Rowes Institute for Justice Austin, Texas Jeffrey H. Redfern Institute for Justice Arlington, Virginia Keith E. Diggs Institute for Justice Tempe, Arizona Stephen W. Voelker Voelker Law Office Jeffersonville, Indiana Anthony B. Sanders Institute for Justice Minneapolis, Minnesota Attorneys for amici curiae NOW!, Inc. J. David Agnew Lorch Naville Ward LLC New Albany, Indiana The Goldwater Institute F. Bradford Johnson Indianapolis, Indiana Matthew R. Miller The Scharf-Norton Center for Constitutional Litigation at the Goldwater Institute Phoenix, Arizona F & J Apartments, LLC, Brown Rental Properties, LLC, Cooley Property Management, LLC, Gregory Development, LLC, Josh Gregory, Greg Yeager, Kenneth T. Westmoreland, Jr., Michelle R. Westmoreland, Matthew Shultz, Lisa Shultz, Dale May, Maria Sanchez, and Manuel Hernandez J. David Agnew Lorch Naville Ward LLC New Albany, Indiana George A. Budd, V Schad & Schad, P.C. New Albany, Indiana

          Crone, Judge.

         Case Summary

         [¶1] Charlestown Pleasant Ridge Neighborhood Association Corporation, Joshua Craven, Tina Barnes, David Keith, Ellen Keith, and Bolder Properties, LLC (collectively "the Homeowners"), filed a motion for preliminary injunction against the City of Charlestown, Indiana, and the Charlestown Board of Public Works and Safety (collectively "the City") with respect to the City's practice of enforcing its Property Maintenance Code ("PMC"). In support of their motion for a preliminary injunction, the Homeowners alleged that the City enforced the PMC in a manner that violated (1) Indiana Code Chapter 36-7-9, also known as the Indiana Unsafe Building Law ("UBL"), (2) the PMC itself, (3) the United States Constitution's Equal Protection Clause, and (4) the Indiana Constitution's Privileges and Immunities Clause. As to the first claim, the trial court found that the City is not required to follow either the UBL or the PMC exclusively. Because the trial court found that the City is not required to follow the UBL, the trial court concluded that the Homeowners are unlikely to succeed on their claim that the City's manner of enforcing the PMC violates the UBL. However, the trial court also concluded that the Homeowners are likely to succeed on their remaining claims. Accordingly, the trial court issued findings of fact and conclusions thereon ("the Appealed Order") and a separate order granting the preliminary injunction.[1]

         [¶2] The City appeals, arguing that the trial court clearly erred in concluding that the Homeowners are likely to succeed on their claims that the City's manner of enforcing the PMC violates the PMC, the Equal Protection Clause, and the Privileges and Immunities Clause. The Homeowners cross-appeal, arguing that the trial court clearly erred in concluding that they are unlikely to succeed on their claim that the City's manner of enforcing the PMC violates the UBL.

         [¶3] The issue raised in the Homeowners' cross-appeal is dispositive at this stage of the proceedings. As to that issue, we conclude that the trial court clearly erred in finding that the City is not required to follow the UBL. Specifically, we conclude that because the City has adopted the UBL, the City is required to act in accordance with its provisions. That does not mean that the PMC is without legal force, but rather that the City is precluded from enforcing the PMC in a manner that is inconsistent with the UBL. Because the trial court found that the City was not required to follow the UBL, the trial court did not address how the UBL impacts the City's enforcement of the PMC. Some of the provisions in the UBL are permissive, others are mandatory. Some provisions of the PMC may conflict with the UBL, some PMC provisions will be compatible with the UBL, and many PMC provisions will address subject matter not covered by the UBL. Therefore, we remand for the trial court to consider how the UBL and the PMC work together in light of our conclusion that the PMC must work within the confines and strictures of the UBL, and to reconsider the Homeowners' claim that the City's enforcement of the PMC violates the UBL. Further, because the trial court decided the Homeowners' remaining three claims based on the erroneous premise that the City was not required to follow the UBL, those claims, if the Homeowners choose to pursue them, will need to be reexamined. Accordingly, we reverse the Appealed Order and the order granting the preliminary injunction and remand for further proceedings consistent with this opinion.

         Facts and Procedural History

         [¶4] The undisputed facts show that Pleasant Ridge is a neighborhood within the City of Charlestown.[2] Appealed Order at 3 (finding #8). The City believes that Pleasant Ridge needs redevelopment. Id. at 4 (#13). The Association is a nonprofit corporation with approximately fifty members, all of whom are Pleasant Ridge property owners, and the Association itself owns and rents a duplex in Pleasant Ridge. Id. at 2 (#1). Joshua Craven, Tina Barnes, David Keith, and Ellen Keith are Pleasant Ridge residents and homeowners. Id. (#2-4). Craven is the president of the Association. Barnes is a member of the Charlestown City Council ("the City Council").[3] Bolder Properties owns four duplexes in Pleasant Ridge. Id. (#5).

         [¶5] In 2001, the City Council passed an ordinance adopting the UBL pursuant to Indiana Code Section 36-7-9-3. Id. at 19 (#85).[4] The UBL provides local governments with procedures to address unsafe buildings and premises but does not set forth specific building safety standards. The UBL defines an "unsafe building" in relevant part as one that is "dangerous to a person or property because of a violation of a statute or ordinance concerning building condition or maintenance." Ind. Code § 36-7-9-4. An "unsafe premises" is an unsafe building and the property it is located on. Id. The UBL authorizes local governments to issue orders to property owners "requiring action relative to any unsafe premises," including "repair or rehabilitation of an unsafe building to bring it into compliance with standards for building condition or maintenance required for human habitation, occupancy, or use by a statute, a rule adopted under IC 4-22-2, or an ordinance." Ind. Code § 36-7-9-5(a)(5). The UBL provides procedural protections for property owners who receive an order to repair or rehabilitate an unsafe building, such as requirements as to the information to be included in an order, a "sufficient time" of ten to sixty days to make repairs before a fine may be imposed, a ten-day period to appeal the order, and limits on the civil penalty for noncompliance with an order to $2500 and on the accrual of such a civil penalty to not more than $1000 every ninety days. Ind. Code §§ 36-7-9-5(b)-(c), -7(a), -7.5(b)-(c).

         [¶6] In 2008, the City Council enacted the PMC, which establishes "minimum requirements and standards" for existing residential and nonresidential structures and premises "to insure public health, safety, and welfare." Ex. Vol. 4 at 6.[5] In addition, the PMC contains provisions to enforce its safety requirements and standards, many of which address the same subject matter as the enforcement provisions in the UBL, such as provisions which govern orders and notice, the imposition of penalties, and the appeals process. Id. at 8-9, 11. However, many PMC enforcement provisions differ from those in the UBL. For example, the PMC allows twenty days to appeal an order rather than the ten days provided by the UBL. Id. at 11 (§ 111.1). Also, the PMC provides, "This ordinance does not supersede Federal or State laws, statutes or regulations, except as allowed." Id. at 26.

         [¶7] In February 2016, the City Council enacted an ordinance that established an inspection program. Appealed Order at 5 (#22). In August 2016, the City began inspecting Pleasant Ridge rental properties for PMC violations and issuing citations. The citations imposed a separate fine for each violation, the fines were imposed as of the date the violation was discovered, and the fines began accumulating daily. Id. at 9 (#42). In addition, the citations did not provide any grace period to allow property owners to make repairs during which fines would not be imposed. Id. The citations cite both the UBL and the PMC and are confusing as to which provisions the City was intending to operate under. Id. at 20 (#91-92). The citations explain that an appeal of the order and fine may be made to the "hearing authority," which is the term used in the UBL. Id. (#91); Ex. Vol. 8 at 187, 192. The citations indicate that the appeal period is ten days, which is from the UBL, rather than twenty days as provided in the PMC. Appealed Order at 20 (#91) (citing Ind. Code § 36-7-9-7(a) and PMC § 111.1); Ex. Vol. 8 at 187, 192. During the inspection process, the City sought a search warrant to conduct an interior inspection, which was issued pursuant to the UBL. Appealed Order at 20 (#91) (citing Ind. Code § 36-7-9-16).

         [¶8] In January 2017, the Association filed an eleven-count complaint against the City, which was subsequently amended to add the remaining appellees. In February 2017, the Homeowners moved for a preliminary injunction, asking the trial court to enjoin the City from continuing its practice of "imposing ruinous fines that can be waived only by selling to the developer or tearing down one's own home" to force Pleasant Ridge property owners to sell to the developer so that the developer can demolish every home and build a new subdivision. Appellants' App. Vol. 2 at 127-28. The motion for preliminary injunction was based on four of the eleven counts in the complaint; namely, that the City's manner of enforcing the PMC violated (1) the UBL, (2) the PMC itself, (3) the Equal Protection Clause, and (4) the Privileges and Immunities Clause. Id. at 128.

         [¶9] In September 2017, the trial court held an evidentiary hearing on the Homeowners' motion for preliminary injunction. In December 2017, the trial court issued the Appealed Order granting a preliminary injunction. As to the Homeowners' claim that the City's manner of enforcing the PMC violates the UBL, the trial court concluded that they are unlikely to prevail on that claim because the City is not required to follow the UBL. In relevant part, the trial court found that based on the plain language of the UBL and Indiana Code Chapter 36-1-3, also known as the Home Rule Act, the City was not required to exclusively follow the UBL. Appealed Order at 18-20 (#83-92). The trial court also found that the citations are "confusing as to what provisions of the UBL and/or the PMC it is that the City intends to operate under, but the court cannot find that they are REQUIRED to do one or the other exclusively." Id. at 20 (#92). The trial court declined the Homeowners' request to make specific findings regarding the City's violations of the UBL, although it found that the City "made no effort to argue that it ha[d] complied with the procedural requirements" of the UBL, and that "if the UBL were mandatory, the City is not in compliance." Id. at 18, 20 (#82, 93).

         [¶10] In contrast to its conclusion regarding the Homeowners' UBL claim, the trial court concluded that the Homeowners are likely to prevail on their claims that the City's manner of enforcing the PMC violated the PMC, the Equal Protection Clause, and the Privileges and Immunities Clause. The trial court concluded that because the Homeowners are likely to succeed on the merits of a claim that the government is violating the law, a preliminary injunction should issue under Indiana's per se rule.[6] The City now brings this interlocutory appeal. The Homeowners cross-appeal the trial court's finding that the City is not required to follow the UBL and the conclusion that they are unlikely to succeed on their UBL claim.

         Discussion and Decision

         [¶11] This is an appeal from the grant of a preliminary injunction. We observe that the trial court is required to issue special findings of fact and conclusions thereon when determining whether to grant a preliminary injunction. Thornton-Tomasetti Eng'rs v. Indianapolis-Marion Cty. Pub. Library, 851 N.E.2d 1269, 1277 (Ind.Ct.App. 2006); Ind. Trial Rule 52(A). 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." Coates v. Heat Wagons, Inc., 942 N.E.2d 905, 912 (Ind.Ct.App. 2011). "We neither reweigh the evidence nor reassess witness credibility, but consider only the evidence favorable to the judgment and all reasonable inferences to be drawn ...


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