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Kosciusko County Community Fair, Inc. v. Clemens

Court of Appeals of Indiana

December 20, 2018

Kosciusko County Community Fair, Inc., Appellant-Defendant,
v.
Mary Clemens, Merle Conner, Judith Conner, and Chris Cummins, Appellees-Plaintiffs.

          Appeal from the Kosciusko Circuit Court Trial Court Cause No. 43C01-1805-PL-50 The Honorable Michael W. Reed, Judge

          Attorney for Appellant Edward W. Hearn Johnson & Bell, P.C. Crown Point, Indiana

          Attorneys for Appellees Michael H. Michmerhuizen William A. Ramsey Patrick G. Murphy Barrett McNagny LLP Fort Wayne, Indiana

          Friedlander, Senior Judge.

         [¶1] In May of 2018, the trial court preliminarily enjoined Kosciusko County Community Fair, Inc. ("the Fair") from conducting motorized races on its property. On appeal, the Fair contends that Mary Clemens, Merle Conner, Judith Conner, and Chris Cummins (collectively, "Homeowners") lacked standing to seek the requested injunctive relief. The Fair alternatively contends that the trial court erred in granting said relief. We affirm.

         [¶2] On June 27, 1989, James A. Cummins, Robert L. Fuson, Michael G. Hall, R. John Handel, George M. Haymond, J. Joseph Shellabarger, Fredric T. Stephens, Kenneth O. Truman, and H. Rex Wildman (collectively, "Original Homeowners") filed a complaint against the Fair's predecessor[1] after a dispute arose regarding the operation of an automobile racetrack located on the Fair's property. As part of the settlement of Original Homeowners' lawsuit, on July 18, 1990, the Fair executed a restrictive covenant limiting use of the racetrack. The restrictive covenant provided that after August 11, 1990, the Fair shall not use its property for motorized racing, except that it "shall have the right to continue the use of its grandstand and racetrack facility … for recreational and/or fairground activities other than motorized racing[.]" Ex. 1. The permissible activities included truck and tractor pulling contests during fair week each calendar year, two automobile demolition derbies each calendar year, musical presentations, bicycle racing, and rodeos. Pursuant to its terms, the restrictive covenant was binding on the Fair and Original Homeowners and was enforceable by Original Homeowners and their successors and assigns.

         [¶3] On May 2, 2018, Homeowners filed a complaint requesting injunctive relief against the Fair. Specifically, Homeowners sought to enforce the restrictive covenant and to prevent the Fair from conducting motorized races on its property. On May 16, 2018, the trial court found that Chris Cummins had standing to seek to enforce the restrictive covenant and issued a preliminary injunction enforcing the restrictive covenant and enjoining the Fair from conducting motorized racing on its property.

         1. Standing

         [¶4] The Fair contends that in order for Homeowners to have standing to sue to enforce the restrictive covenant, at least one of them must be an Original Homeowner or a successor or assign of one of the Original Homeowners listed in the covenant, and, because that is not the case, Homeowners lack standing to enforce the restrictive covenant. "The doctrine of standing focuses on whether the complaining party is the proper person to invoke the Court's power." Hulse v. Ind. State Fair Bd., 94 N.E.3d 726, 730 (Ind.Ct.App. 2018) (internal quotation omitted). "The standing requirement restrains the judiciary to resolving only those cases and controversies in which the complaining party has a demonstrable injury." Id. "Whether a party has standing is a pure question of law that we review de novo." Id.

         [¶5] In arguing that Homeowners lack standing, the Fair alleges that the restrictive covenant at issue does not extend to them. "Restrictive covenants are a form of express contract between grantor and grantee." Rasp v. Hidden Valley Lake, Inc., 519 N.E.2d 153, 157 (Ind.Ct.App. 1988). "Generally, the purpose behind a restrictive covenant is to maintain or enhance the value of land, often times by controlling the nature and use of surrounding lands." Id. These covenants obligate a party "to do or not to do a particular act." Keene v. Elkhart Cty. Park & Rec. Bd., 740 N.E.2d 893, 896 (Ind.Ct.App. 2000). Covenants, when written, "are generally construed in the same manner as other written contracts, and we apply them according to their ordinary meaning when possible." Land Innovators Co., L.P. v. Bogan, 15 N.E.3d 23, 31 (Ind.Ct.App. 2014), trans. denied.

         [¶6] "Restrictive covenants run with the land if 1) the covenantors intended it to run, 2) the covenant touches and concerns the land, and 3) there is privity of estate between subsequent grantees of the original covenantor and covenantee." Oakes v. Hattabaugh, 631 N.E.2d 949, 952 (Ind.Ct.App. 1994), trans. denied. There are two types of privity, horizontal privity and vertical privity. Columbia Club, Inc. v. Am. Fletcher Realty Corp., 720 N.E.2d 411 (Ind.Ct.App. 1999), trans. denied. "Horizontal privity is generally established by evidence that the original parties to the covenant had some mutual or successive interest either in the land burdened by the covenant or the land benefitted by it." Id. at 421. Vertical privity is established "where the party seeking to enforce the covenant and the party against whom it is to be enforced are successors in title to the property of the covenantee and covenantor respectively." Id.

         [¶7] The restrictive covenant at issue in this case provides as follows:

[A]fter August 11, 1990, [the Fair] shall not use the Real Estate for motorized racing, except [the Fair] shall have the right to continue the use of its grandstand and racetrack facility on the Real Estate for recreational and/or fairground activities other than motorized racing, including but not limited to truck and tractor pulling contests during fair week each calendar year, two (2) automobile demolition derbies each calendar year, musical presentations, bicycle racing, and rodeos. The foregoing shall constitute a covenant running with the Real Estate and shall be binding upon [the Fair] and [Original] Homeowners and all persons claiming under them. This covenant shall be enforceable by [Original] Homeowners and their successors and assigns.

Ex. 1 (emphases added). The above-quoted language clearly indicates that the covenantor intended for the covenant to run with the land and it is undisputed that the covenant touches and concerns the land. As such, the only question remaining is whether there is ...


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