The City of Lawrenceburg, Indiana, the Mayor of the City of Lawrenceburg in his official capacity, and The Common Council of the City of Lawrenceburg in their official capacities, Appellants-Defendants,
Franklin County, Indiana, and The Franklin County Board of Commissioners in their official capacities, Appellees-Plaintiffs
from the Decatur Superior Court The Honorable Matthew D.
Bailey, Judge Trial Court Cause No. 16D01-1702-PL-89.
Attorneys for Appellants Alice M. Morical Michael R. Limrick
Evan D. Carr Hoover Hull Turner LLP Indianapolis, Indiana
Attorneys for Appellees Paul L. Jefferson McNeely Stephenson
Indianapolis, Indiana Grant M. Reeves Barada Law Offices LLC
The City of Lawrenceburg (Lawrenceburg) entered into an
agreement with Franklin County (Franklin), pursuant to which
Lawrenceburg would share its gaming tax revenue with Franklin
by making annual payments of $500, 000. In 2014, Lawrenceburg
stopped making those payments. Franklin sued for breach of
contract and the trial court entered summary judgment in its
favor. Lawrenceburg appeals, raising the following arguments:
(1) the trial court erroneously determined that it had waived
its defenses; (2) the agreement is void by statute; and (3)
there are genuine issues of material fact regarding
consideration, Franklin's performance of its obligations,
and the duration of the agreement. We hold that Lawrenceburg
did not waive its defenses and that the agreement is void by
statute. Consequently, we reverse and remand with
instructions to enter judgment in favor of Lawrenceburg.
As the home dock of a riverboat casino, Lawrenceburg receives
a percentage of Gaming Tax Revenue collected by the State each
year. In 2005, Lawrenceburg created a revenue sharing
program, pursuant to which it shared some of its Gaming Tax
Revenue with surrounding counties, including Franklin.
On January 17, 2006, Lawrenceburg and Franklin entered into a
"Special Revenue Sharing Agreement" (the
Agreement). Appellants' App. Vol. II p. 100. The recitals
of the Agreement indicate that it was made "in
consideration of the mutual covenants and promises contained
herein[.]" Id. The Agreement required
Lawrenceburg to make annual $500, 000 payments to Franklin;
those payments were to be made "from the net amount of
Gaming Tax Revenues Lawrenceburg receives on an annual
basis." Id. at 101. The Agreement "is
contingent upon Lawrenceburg's continued receipt of
Wagering Tax Revenue . . . ." Id. Both entities
agreed that they had "the necessary power and authority
to enter into this Agreement" and that they would
"cooperate with each other in a marketing plan to
promote tourism and development in each area."
After the Agreement was executed, the Lawrenceburg Common
Council appropriated $500, 000 in 2006 for Lawrenceburg's
first payment to Franklin. Lawrenceburg continued to make
annual $500, 000 payments through 2013.According to
Lawrenceburg, in 2013, it decided to stop making payments
because of increased competition from nearby Ohio casinos and
because of a projected 30% loss in its Gaming Tax Revenue for
the following year.
According to Lawrenceburg, Franklin did nothing to earn the
annual payments. It did not provide any services or goods,
nor did it incur any non-trivial expenses in connection with
Franklin explains the reason for the Agreement, as well as
its own obligation, as follows:
In 2006, the issue of the distribution of local riverboat
gaming monies was receiving special scrutiny by the Indiana
Gaming Commission and the Indiana General Assembly. . . .
Lawrenceburg was rightfully concerned with the possibility of
seeing its wagering and admissions taxes lessening or ending
completely, as almost all of its revenue for development
remained at the local level, which conflicted with the
policies of riverboat gaming. In an effort to keep as much
money as possible, to comply with its statutory requirements,
and to avoid potential difficulty with state lawmakers and
governmental regulators, Lawrenceburg approached Franklin
County so it could accurately represent that its economic
development activities were, in fact, regional in scope.
. . . Lawrenceburg identified an opportunity to further the
footprint of its economic development by utilizing adjacent
counties, including Franklin County, and in turn persuade the
legislature to keep the wagering and admissions revenue
flowing. In that effort to ensure that monies kept flowing to
Lawrenceburg, the City of Lawrenceburg and Franklin County
entered into [the Agreement], and a separate grant program,
at Lawrenceburg's invitation. This regional partnership
was shown to and apparently had the intended effect of
appeasing regulators and legislators looking at the issue. In
exchange for the Agreement, Franklin County publicly
supported Lawrenceburg's riverboat revenue program. That
support was effective, as Lawrenceburg kept its revenue.
Br. p. 11-12 (internal citations omitted). In fashioning this
explanation, Franklin does not cite to any specific documents
or evidence related to this case or the Agreement; instead,
it cites statutes and an unrelated case. It does direct our
attention to two letters drafted by Franklin County:
• On January 23, 2006, the Franklin County Board of
Commissioners sent a letter thanking Lawrenceburg for its
"contribution" of $500, 000 and stating that
Franklin supported Lawrenceburg in its "endeavors with
your riverboat revenue." Appellants' App. Vol. II p.
• On January 28, 2006, the president of the Franklin
County Council sent a letter thanking Lawrenceburg for
including Franklin in its Revenue Sharing Program. The letter
acknowledges that the Agreement will remain in effect only so
long as Lawrenceburg "continues to enjoy financial
stability and a steady flow of revenue. We also understand
that this revenue flow would be subject to the decisions made
by the Indiana State Legislature. We, the members of the
County Council pledge to support your endeavor by contacting
the necessary members of the State Legislature and extend to
them how important this Revenue Sharing program is to all of
the 9 surrounding counties included in the agreement."
The letter notes that the "sharing of this revenue with
us and the other counties is truly a wonderful example of a
neighbor helping others." Id. at 145.
On November 18, 2015, Franklin sued Lawrenceburg for breach
of contract. In Lawrenceburg's answer, it did not raise
any affirmative defenses. Franklin moved for summary
judgment, arguing that the Agreement was a valid and
enforceable contract that could be terminated only if there
was a complete failure of Lawrenceburg's Gaming Tax
Revenue stream. Lawrenceburg filed a cross-motion for summary
judgment, arguing that the Agreement was void pursuant to
Indiana Code section 36-4-8-12(b) because it purported to
obligate the city to pay money that had not been
appropriated. It also argued that the Agreement was
unenforceable because it was not supported by consideration
and did not have a finite durational term. Following briefing
and a hearing, the trial court entered summary judgment in
favor of Franklin on August 10, 2018. In pertinent part, it
found and held as follows:
4. The Agreement acknowledges adequate consideration.
9. The Wagering Tax revenue that is shared pursuant to the
Agreement is appropriated to Lawrenceburg by the State of
Indiana. These funds are State money collected pursuant to a
12. Annually, Lawrenceburg has continued to receive wagering
tax revenue in amounts exceeding $500, 000.
13. Franklin County has fully performed under the Agreement.
14. There are no genuine issues of material fact.
15. The Agreement has a sufficient term of duration. The
duration of the Agreement is the period of time that
Lawrenceburg continues to receive Wagering Tax revenue in an
amount sufficient to make the agreed payment to Franklin
16. The Agreement is a valid and enforceable contract.
17. Lawrenceburg has breached the Agreement, and Franklin
County has ...