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Indy Diamond, LLC v. The City of Indianapolis

Court of Appeals of Indiana

August 15, 2019

Indy Diamond, LLC, Appellant-Defendant,
v.
The City of Indianapolis, Appellee-Plaintiff

          Appeal from the Marion Superior Court The Honorable Carol J. Orbison, Senior Judge, Trial Court Cause No. 49D04-1311-OV-42176

          Attorneys for Appellant Craig E. Beougher Eric C. Welch Welch & Company, LLC Muncie, Indiana

          Attorney for Appellee Deborah L. Law Office of Corporation Counsel Indianapolis, Indiana

          CRONE, JUDGE.

         Case Summary

         [¶1] Indy Diamond, LLC ("Indy Diamond"), [1] is the owner of a large parcel of property located in Marion County ("the Real Estate"). The Real Estate consists of a severely dilapidated former apartment complex that is currently vacant aside from criminals and squatters who frequent the property. After years of fighting with the City of Indianapolis ("the City") over numerous municipal code violations, the parties entered into an agreed judgment that was adopted by the trial court, whereby Indy Diamond agreed to secure and maintain the Real Estate. Indy Diamond failed to do so, and the City filed a contempt petition. The trial court subsequently found Indy Diamond in contempt and, as a sanction, ordered Indy Diamond to demolish the buildings located on the Real Estate.

         [¶2] On appeal, Indy Diamond contends that the trial court abused its discretion in ordering demolition as a contempt sanction. Indy Diamond further asserts that it has been denied due process and that the trial judge was personally biased against it. Finding neither an abuse of discretion nor a due process violation, and concluding that there is no evidence of personal bias, we affirm.

         Facts and Procedural History

         [¶3] The convoluted history of this case began in November 2013, when the City filed a complaint for injunction, fines, and damages against Indy Diamond alleging that Indy Diamond was maintaining a public nuisance in violation of Indiana statutory law and municipal codes. Specifically, the City alleged that Indy Diamond was neglecting the Real Estate, commonly known as Oaktree Apartments, and that the Real Estate's deteriorated condition "unreasonably harms the City and citizens it serves and represents by contributing to the urban blight, depressing property values, discouraging development, imperiling the public, and consuming substantial public resources." Appellee's App. Vol. 2 at 2.[2] The City alleged that from July 26, 2012, to August 27, 2013, there had been at least 372 police runs to the Real Estate and 125 police reports for criminal activity including crimes of rape, arson, domestic battery, public intoxication, child abduction, child abuse, burglary, armed robbery, aggravated assault, vandalism, intimidation, and trespassing. The City further alleged that, during the same time period, there had been fifty Department of Code Enforcement and Marion County Public Health Department cases opened against Indy Diamond and at least 146 inspections conducted of and relating to the poor condition of the Real Estate.

         [¶4] In January 2014, the Health and Hospital Corporation of Marion County filed a complaint for injunction and fine against Indy Diamond. Following a hearing, Indy Diamond was ordered to vacate and board all occupied apartment units located on the Real Estate. Consequently, in February 2014, the City filed a request for preliminary injunction to prohibit Indy Diamond from using the Real Estate for rental purposes and to require Indy Diamond to keep the property fully secured. Thereafter, following a hearing, the trial court granted the City's request, entered a permanent injunction, and, in the City's words, the Real Estate was essentially "condemned." Appellee's Br. at 11.[3]

         [¶5] After the condition of the Real Estate deteriorated further, in August 2015, the City filed an "Emergency Motion for Order Compelling Maintenance of the Property." Appellee's App. Vol. 2 at 25. The City's motion alleged that although Indy Diamond had removed all residents from the Real Estate, it had since failed to maintain the Real Estate in accordance with the municipal code. The allegations of code violations included: (1) the grass and weeds exceeded twelve inches in height; (2) doors and windows on the buildings were not equipped with proper hardware for locking to prevent unauthorized entry; (3) there were several broken windows; and (4) junk, trash, and debris littered the Real Estate. The City also alleged that local police and fire officials had been forced to respond to and address significant public safety concerns at the Real Estate, including two fires on the property and numerous squatters living inside unsafe structures. The City's motion included photographs of the poor conditions of the Real Estate as well as emails from the City to Indy Diamond urging its attention to these matters. Following a hearing, the trial court entered an order compelling Indy Diamond to secure the Real Estate in accordance with municipal code boarding standards, maintain the Real Estate in a safe and sanitary condition, and to remove any and all unauthorized persons found on the Real Estate. The court set the matter for a September 2015 compliance hearing.

         [¶6] A September compliance hearing was held, after which the trial court found that the evidence presented established that Indy Diamond had failed, without good cause, to comply with the court's previous order. Accordingly, the trial court assessed a $15, 000 fine against Indy Diamond, and again ordered Indy Diamond to comply with the previous order to secure and maintain the Real Estate. The matter was set for another compliance hearing on October 7, 2015. Both parties appeared by counsel at that hearing and stipulated that the Real Estate was not in compliance with the court's order. The court gave Indy Diamond two additional weeks to bring the property into compliance. At the next compliance hearing, the trial court found that the evidence presented established that Indy Diamond had again failed, without good cause, to comply with the court's order. The trial court assessed a $30, 000 fine against Indy Diamond and ordered Indy Diamond to comply with the previous orders to secure and maintain the Real Estate. The matter was set for a December 2015 compliance hearing, which was subsequently vacated by the parties for unknown reasons.

         [¶7] On July 15, 2016, the City filed a motion for pretrial conference on its original complaint. The City alleged that in both February 2016 and June 2016, it had tried to contact counsel for Indy Diamond but had received no response. The trial court set the matter for pretrial conference in August 2016, but the parties subsequently agreed to a continuance. In the interim, Indy Diamond agreed to secure all units by August 29, 2016, to establish a mowing schedule, and to mow the property before the conference. Another joint motion to continue was filed in September 2016, and the pretrial conference was reset to December 2016, with a trial date set for January 18, 2017.

         [¶8] Rather than proceed to trial, the parties filed an agreed judgment and order ("Agreed Judgment Order") with the trial court on December 21, 2016. Pursuant to the Agreed Judgment Order, Indy Diamond admitted to all alleged statutory and municipal code violations, agreed to pay a $10, 000 fine and court costs, and agreed to comply with all prior orders of the court to secure and maintain the Real Estate. However, the condition of the Real Estate continued to deteriorate throughout 2017. Accordingly, on January 23, 2018, the City filed a verified petition for contempt alleging that Indy Diamond violated the Agreed Judgment Order. Specifically, the City alleged that Indy Diamond had failed to secure and board the buildings on the Real Estate, remove trash and debris, and maintain the Real Estate in a safe and sanitary condition, as required by the Agreed Judgment Order. The City further alleged that Indy Diamond had unpaid fines and court costs totaling $10, 133. The petition for contempt also alleged that the City, through its Department of Business and Neighborhood Services, had repeatedly inspected the property and issued numerous board orders, but had been forced to spend taxpayer funds to continually board and reboard the structures on the Real Estate due to Indy Diamond's failures.

         [¶9] The trial court held a hearing on the City's contempt petition on February 26, 2018. During the hearing, the City presented seventy-eight photographs depicting the condition of the Real Estate. At the conclusion of the hearing, counsel for the City made an oral request for the court to issue a demolition order for the buildings on the Real Estate. Thereafter, on March 2, 2018, the trial court entered its order concluding that based on the evidence presented at the hearing, the City met its burden to show that Indy Diamond was in violation of the Agreed Judgment Order. Accordingly, the trial court entered an order for Indy Diamond to demolish all structures on the Real Estate within sixty days.[4] The trial court further ordered that Indy Diamond thereafter maintain the vacant Real Estate in accordance with the municipal code, so long as Indy Diamond retains an ownership interest in the Real Estate.

         [¶10] Indy Diamond filed a motion to correct error on March 30, 2018, arguing that the City's written contempt petition did not request an order of demolition, and therefore the court's order violated Indy Diamond's due process rights. Indy Diamond further argued that the civil contempt remedy of demolition was improperly punitive rather than coercive ...


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