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Town of Brownsburg v. Fight Against Brownsburg Annexation

Supreme Court of Indiana

June 5, 2019

Town of Brownsburg, Indiana, et al., Appellants/Cross-Appellees,
Fight Against Brownsburg Annexation, et al., Appellees/Cross-Appellants.

          Argued: September 20, 2018

          Appeal from the Hendricks Superior Court, No. 32D02-1310-PL-109 The Honorable Heather Welch, Special Judge

         On Petition to Transfer from the Indiana Court of Appeals, No. 32A01-1702-PL-215

          ATTORNEYS FOR APPELLANTS/CROSS-APPELLEES Thomas F. Bedsole Maggie L. Smith Frost Brown Todd LLC Indianapolis, Indiana


          ATTORNEY FOR APPELLEES/CROSS-APPELLANTS Gregory W. Black Gregory W. Black, P.C. Plainfield, Indiana


          Slaughter, Justice.

         In this municipal-annexation case, we hold that a trial court hearing a remonstrance proceeding on judicial review must consider the evidence submitted by both the municipality and the remonstrators. The trial court need not defer to either the municipality's own evidence supporting the annexation or its determination that it met the statutory requirements. Whether the annexation was lawful is a legal question for the trial court. If the court enters special findings of fact and conclusions of law, appellate courts are to apply the standard of review provided in Trial Rule 52. We provide guidance for applying the undefined statutory terms "subdivided" and "reasonably near future" and, on this record, affirm the trial court's judgment for the Remonstrators and against the Town of Brownsburg.

         Factual and Procedural History

         In 2013, Brownsburg adopted an ordinance to annex 4, 462 acres of property adjacent to the Town. A group of affected landowners, acting through a political action committee, Fight Against Brownsburg Annexation, remonstrated and sought a declaration that the Town did not meet the statutory annexation requirements.

         Under the statute, a municipality wanting to annex land must prove several things. Ind. Code § 36-4-3-13(a) (2013 Repl.). Among them are, first, that the municipality has adopted a written fiscal plan to ensure the municipality can afford to provide services to those living in the proposed annexation territory, id. § 36-4-3-13(d); second, that the proposed territory is sufficiently contiguous to the municipality's current boundaries, id. §§ 36-4-3-13(b)(1), 36-4-3-13(c)(1); and, third, that either the proposed territory is sufficiently urban under criteria recited in the statute, id. § 36-4-3-13(b)(2), or the municipality will use the territory for development in the "reasonably near future", id. § 36-4-3-13(c)(2).

         After a three-day bench trial, the court entered extensive findings of fact and conclusions of law and determined that the Town had not met all statutory requirements for annexing the proposed territory. The court thus entered judgment for the Remonstrators and against the Town. The Town then appealed, the Remonstrators cross-appealed, and the court of appeals affirmed. Town of Brownsburg v. Fight Against Brownsburg Annexation, 98 N.E.3d 114 (Ind.Ct.App. 2018). The Town sought transfer, which we now grant, thus vacating the appellate decision.

         Discussion and Decision

         A. Standards of Review

         At issue here are two standards of review. The first deals with the nature and extent of an appellate court's review of a trial court's findings of fact, conclusions of law, and entry of judgment in an annexation case. The second is the degree to which a trial court must defer to a municipality's determination that it has met the applicable criteria under the annexation statute. The Town argues that the trial court paid insufficient deference to the Town's determination to annex the proposed territory in a manner consistent with the governing statute.

         1. Appellate review of trial-court's judgment

         Our standard of appellate review in annexation cases is well-settled. When a trial court enters special findings of fact and conclusions of law, as the court below did here, we apply the standard of review set forth in Trial Rule 52. Town of Fortville v. Certain Fortville Annexation Territory Landowners, 51 N.E.3d 1195, 1198 (Ind. 2016). For purposes of appellate review, that means we review what the trial court found and concluded, not what the municipality did. In other words, we ask not whether the record supports the municipality's decision to enact the annexation ordinance, but whether it supports the trial court's decision to uphold or reject the annexation.

         First, we consider whether the evidence supports the trial court's findings. We will not set aside findings unless they are clearly erroneous-i.e., the record contains no facts supporting them either directly or inferentially. Id. This standard is highly deferential. If a factual finding is plausible given the entire record, we will not reverse it even if we would have decided the matter differently were we sitting as finders of fact. We give great deference to a court's findings because of its capacity to judge witness credibility. This standard applies equally to expert testimony. "The weight to be accorded expert testimony as well as lay testimony[] is the exclusive province of the trier of fact which is at liberty to discount it or to reject it in the face of lay testimony, which it finds more persuasive." Fordyce v. State, 425 N.E.2d 108, 110 (Ind. 1981) (citation omitted). Thus, the trier of fact-not a reviewing court-decides the weight and credibility to give the testimony of dueling experts. We will reject a finding as clearly erroneous only if we are left with the definite and firm conviction, based on all the evidence, that the court erred. Fortville, 51 N.E.3d at 1198 (citing Yanoff v. Muncy, 688 N.E.2d 1259, 1262 (Ind. 1997)).

         Next, we ask whether the findings support the court's legal conclusions. We give no deference to conclusions of law but review them de novo. In re Marriage of Gertiser, 45 N.E.3d 363, 369 (Ind. 2015). The court's ultimate judgment-who wins on which counts or claims, and who loses-must follow from the conclusions of law and is clearly erroneous if the court applied the "wrong legal standard to properly found facts." Fortville, 51 N.E.3d at 1198 (citing Yanoff, 688 N.E.2d at 1262).

         Here, the Town appeals from a negative judgment-one adverse to the party with the burden of proof at trial. Under our case law, the party challenging a negative judgment generally must show on appeal that "the evidence as a whole … leads unerringly and unmistakably to a decision opposite that reached by the trial court." Spranger v. State, 650 N.E.2d 1117, 1119 (Ind. 1995) (citations omitted). The Town argues that the court of appeals erred by referencing the negative-judgment standard, 98 N.E.3d at 118-19, and emphasizes that Fortville, which also involved a municipality appealing from a negative judgment, applied only the Rule 52 standard.

         Given our analysis and holding in Fortville, we agree with the Town that the negative-judgment standard does not apply in annexation cases. Although the court of appeals mentioned this standard, it does not seem to have applied it. Throughout its opinion, the court assessed the trial court's decision under Rule 52's "clearly erroneous" standard, id. at 125, 130, which is the correct standard. We note that commentators have questioned whether there is any appreciable, discernible difference between these two standards of appellate review-the negative-judgment standard and the Rule 52 standard. As Professor Stroud observed in his influential treatise on Indiana practice, "there is no apparent reason to conceive of a negative judgment review in terms different than sufficiency review." Spranger, 650 N.E.2d at 1120 n.1 (quoting Kenneth M. Stroud, 4A Indiana Practice, § 12.7 at 144 (1990)). He continued: "the burden imposed upon either losing party on appeal in order to realize reversal, and the standards by which the judgment will be evaluated, are in the final analysis, functionally indistinguishable." Id.

         There is much practical wisdom in Professor Stroud's observation. It is hard to conceive of a situation where an appellant would satisfy the sufficiency-based "clearly erroneous" standard of Rule 52 yet would fail to meet the supposedly more onerous negative-judgment standard. We yielded to Professor Stroud, in part, in Spranger when we "distinguished" the two standards this way: "In one, the inquiry is essentially whether there is any way the trial court could have reached its decision. In the other, it is whether there is no way the court could have" done so. 650 N.E.2d at 1120 (emphasis in original). Then, we concluded, "Arguably, this is a distinction without a difference." Id. (footnote omitted).

         Indeed, the practical difference, if any, between these two standards of appellate review is far from clear. But for now, we need not explore further the scope or extent of any such distinction because the parties did not ask us to reconsider prevailing law or to merge these two standards. Cf. United States v. Boyd, 55 F.3d 239, 242 (7th Cir. 1995) (Posner, J.) ("as we have sometimes heretically suggested, there are operationally only two degrees of review, plenary (that is, no deference given to the tribunal being reviewed) and deferential") (citations omitted).

         2. Trial-court review of municipality's annexation decision

         Annexation is the statutory process by which municipalities acquire additional territory outside their existing corporate boundaries. Annexation cases today involve two "legislative" choices, by which we mean policy choices for the political branches and not legal questions for the courts.

         First, the General Assembly determines whether to permit a municipality to annex additional territory at all and, if so, under what conditions. Over the past two centuries, the legislature has answered this policy question differently, as is its prerogative. For example, on whether to subject municipal annexations to judicial review, this requirement has, at various times, been expressly conferred, expressly withheld, and completely unmentioned.

         Second, when the General Assembly allows it, the other "legislative" choice is the municipality's to decide which specific territory to annex, subject to the power of remonstrators to challenge the annexation and of courts to pass on the annexation's legality. "The framework of Indiana's annexation laws has long featured three basic stages: (1) legislative adoption of an ordinance annexing certain territory and pledging to deliver certain services within a fixed period of time; (2) an opportunity for remonstrance by affected landowners; and (3) judicial review." Fortville, 51 N.E.3d at 1197 (quoting City of Carmel v. Steele, 865 N.E.2d 612, 615 (Ind. 2007)).

         Apart from the current scheme, one can imagine a wide array of legislative options concerning whether to allow annexations at all; whether annexations can be challenged; and whether courts are to assess their legality. Regardless of which annexation protocols the General Assembly enacts, it has considerable leeway to subject its own (or municipalities') annexation decisions to varying degrees of judicial review-plenary, limited, or none.

         Under current law, remonstrators cannot oppose annexation merely because they do not want to live in the municipality or because they believe annexation will affect them adversely, such as by raising their taxes or altering their way of life. The General Assembly has created statutory requirements for valid remonstration. These requirements place the burden of pleading on the remonstrators challenging the annexation. Rogers v. Municipal City of Elkhart, 688 N.E.2d 1238, 1240 (Ind. 1997). But "the burden of proof is on the municipality to demonstrate compliance with the statute." Fortville, 51 N.E.3d at 1198 (citation omitted).

         If those objecting to the annexation satisfy the remonstrance procedures, a court must determine whether the municipality satisfied the statutory requirements for annexation. The trial court sits as finder of fact and, after receiving evidence and hearing argument, assesses whether the legal requirements were met. The court does not weigh competing views about the wisdom or desirability of the proposed annexation. Instead, it plays a "limited role" in annexations and must afford "substantial deference" to the municipality's legislative judgment-i.e., to its policy choice to annex the disputed territory. Id. (citation omitted). The court's role, however, is not to "sustain blindly" an exercise of such judgment, but to ensure that the municipality did "not exceed[] its authority", and that the "statutory conditions for annexation [were] satisfied." Id. (quoting Chidester v. City of Hobart, 631 N.E.2d 908, 910 (Ind. 1994)). Stated differently, whether and what to annex are policy choices for the municipality; whether the annexation was lawful is a legal question for the courts.

         Neither the governing annexation statute nor separation-of-powers principles compel a different result, despite the Town's contrary argument. In its transfer petition, the Town argues that the "substantial deference" courts owe municipalities' policy choices also applies to legal questions: "If substantial deference is to mean anything, it has to mean that a municipality's reasoned and factually informed understanding of the statutory criteria and the evidence supporting that [sic] criteria must be given priority over the remonstrator's and the trial court's contrary conclusions." What the Town seeks, in effect, is an interpretation that renders the Remonstrators' evidence superfluous-i.e., either the Town ...

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