624 Broadway, LLC v. Gary Hous. Auth.
| Decision Date | 27 December 2021 |
| Docket Number | Court of Appeals Case No. 21A-CT-653 |
| Parties | 624 BROADWAY, LLC, Appellant-Plaintiff, v. GARY HOUSING AUTHORITY, Appellee-Defendant. |
| Court | Indiana Appellate Court |
Attorneys for Appellant: Robert A. Welsh, Connor H. Nolan, Harris Welsh & Lukmann Chesterton, Indiana
Attorneys for Appellee: Tramel R. Raggs, Harris Law Firm, P.C., Crown Point, Indiana
[1] 624 Broadway, LLC appeals the trial court's entry of summary judgment for the Gary Housing Authority on 624 Broadway's complaint for damages relating to the Gary Housing Authority's exercise of eminent domain over real property owned by 624 Broadway. 624 Broadway raises four issues for our review, which we restate as follows:
We affirm in part, reverse in part, and remand with instructions.
[2] The Gary Housing Authority is a municipal corporation established by the Gary Common Council. The Gary Housing Authority receives substantial funds from HUD pursuant to annual contribution agreements, which agreements require the Gary Housing Authority to meet certain affordable housing standards. Those same agreements recite HUD's federal statutory authority to take over the Gary Housing Authority in the event HUD were to find the Gary Housing Authority in substantial default of the contribution agreements.
[3] In 2013, HUD designated the Gary Housing Authority as "troubled" under federal housing law, and, based on that designation, HUD concluded that the Gary Housing Authority was in substantial default of its contribution agreements. Appellant's App. Vol. IV p. 206. Accordingly, HUD entered into a Cooperative Endeavor Agreement with the City of Gary. Pursuant to the Cooperative Endeavor Agreement,1 the City of Gary dissolved the Gary Housing Authority's Board of Commissioners, and, in their place, the Secretary of HUD appointed a HUD employee as an administrator over the Gary Housing Authority. The Cooperative Endeavor Agreement made clear that the HUD administrator's role was "to serve as [the Gary Housing Authority's] Board of Commissioners" and, in that capacity, to "t[ake] possession of [the Gary Housing Authority's] assets, projects, and programs" in order to "correct the conditions that led to [the Gary Housing Authority's] troubled status and recover [the Gary Housing Authority's] performance." Id. at 228.
[4] In 2017, the Gary Housing Authority "sought to acquire all of the properties within the western 600 block of Broadway [Avenue] for the purpose of building a block long mixed-use development, inclusive of affordable housing." Appellant's App. Vol. II p. 178. At that time, HTO Investments, LLC, owned the real property located at 624 Broadway Avenue ("the property"). The Gary Housing Authority then proceeded to exercise the power of eminent domain as provided under Indiana Code sections 32-24-1-1 to -17 ("Chapter 1"), and it ordered an appraisal of the property in late 2017 and again in late 2018. Both appraisals valued the property at $24,000.
[5] On January 11, 2019, the Gary Housing Authority offered to purchase the property from HTO Investments for $24,000. However, on January 15, HTO Investments instead sold the property for $25,000 to 624 Broadway. In March, the Gary Housing Authority performed an updated title search for the property, which reflected 624 Broadway as the fee simple title holder. The Gary Housing Authority then filed a complaint against 624 Broadway to acquire the property through eminent domain. 624 Broadway filed various objections and alleged that the Gary Housing Authority had failed to follow the proper procedures under Chapter 1. In May, the Gary Housing Authority moved to dismiss its complaint, which the trial court granted.
[6] On August 15, the Gary Housing Authority re-initiated eminent domain proceedings against the property, this time as an administrative taking under Indiana Code sections 32-24-2-1 to -17 ("Chapter 2").2 Pursuant to Chapter 2, the HUD administrator, acting as the Board of Commissioners of the Gary Housing Authority, adopted a resolution declaring a necessity and desire for the Gary Housing Authority to acquire the property through eminent domain. The August 15 resolution set a September 19 hearing date for remonstrances against the condemnation of the property. The Gary Housing Authority then published notice of the resolution in newspapers of general circulation in the municipality on August 21 and August 28. The Gary Housing Authority did not mail notice of its resolution to 624 Broadway's registered agent, John Allen.
[7] However, Allen did learn of the September 19 hearing, attended it, and spoke at it. At the conclusion of the hearing, the Gary Housing Authority confirmed the August 15 resolution. The Gary Housing Authority then adopted a second resolution that listed 624 Broadway as the only affected property owner of the condemnation and established a damage award of $75,000 for the taking of the property. The September 19 resolution set a hearing date of October 17 for any remonstrances against the damage award. The Gary Housing Authority published notice of the resolution in newspapers of general circulation in the municipality on September 21, September 28, and October 5. Again, however, the Gary Housing Authority did not provide written notice of its resolution to Allen.
[8] Nonetheless, Allen learned of the October 17 hearing date, and 624 Broadway hired an appraiser to assess the property. 624 Broadway then requested that the Gary Housing Authority continue the October 17 hearing date for 624 Broadway's appraiser to complete his valuation, but the Gary Housing Authority denied the request. On October 16, 624 Broadway filed its complaint against the Gary Housing Authority seeking injunctive relief based on the Gary Housing Authority's alleged denial of 624 Broadway's procedural rights. 624 Broadway subsequently amended its complaint to more specifically allege a violation of its constitutional and statutory procedural rights and to add a request for damages.3 Meanwhile, on October 17, the Gary Housing Authority confirmed the September 19 resolution and issued a check to 624 Broadway in the amount of $75,000. On October 28, 624 Broadway's appraiser completed his valuation of the property and determined that the property had a fair market value of $325,000.
[9] In June 2020, the Gary Housing Authority filed is motion for summary judgment on 624 Broadway's amended complaint. 624 Broadway responded and also moved for summary judgment. In relevant part, 624 Broadway asserted that the Gary Housing Authority unlawfully exercised the power of eminent domain. 624 Broadway further asserted numerous constitutional and statutory procedural violations based on the manner in which the Gary Housing Authority exercised eminent domain. The Gary Housing Authority responded that 624 Broadway's arguments were preempted by federal law or otherwise were not supported by the law and the facts. After a hearing, the trial court granted the Gary Housing Authority's motion for summary judgment, denied 624 Broadway's motion, and entered its order as a final judgment. This appeal ensued.
[10] 624 Broadway appeals the trial court's entry of summary judgment for the Gary Housing Authority as well as the court's denial of 624 Broadway's motion for summary judgment. Our standard of review in summary judgment appeals is well established. As our Supreme Court has made clear, "[w]e review summary judgment de novo , applying the same standard as the trial court." G&G Oil Co. v. Cont'l W. Ins. Co. , 165 N.E.3d 82, 86 (Ind. 2021).
[11] "Indiana's distinctive summary judgment standard imposes a heavy factual burden on the movant." Siner v. Kindred Hosp. Ltd. P'ship , 51 N.E.3d 1184, 1187 (Ind. 2016). We draw all reasonable inferences in favor of the non-moving party and affirm summary judgment only "if the designated evidentiary matter shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Id. (quoting Ind. Trial Rule 56(C) ). And we "give careful scrutiny to assure that the losing party is not improperly prevented from having its day in court." Id. (quoting Tankersley v. Parkview Hosp., Inc. , 791 N.E.2d 201, 203 (Ind. 2003) ). Further, "[p]arties filing cross-motions for summary judgment neither alters" our standard of review "nor changes our analysis—we consider each motion separately to determine whether the moving party is entitled to judgment as a matter of law." G&G Oil Co. , 165 N.E.3d at 86 (quoting Erie Indem. Co. v. Estate of Harris , 99 N.E.3d 625, 629 (Ind. 2018) ).
[12] Here, the parties’ arguments on summary judgment broadly fall into two categories: whether the Gary Housing Authority had the lawful ability to exercise eminent domain on these facts, and whether the manner in which the Gary Housing Authority exercised that ability was consistent with constitutional and statutory procedural guarantees....
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624 Broadway, LLC v. Gary Hous. Auth.
...the notice was constitutionally deficient because it "was not reasonably calculated to reach Allen." 624 Broadway, LLC v. Gary Hous. Auth. , 181 N.E.3d 1013, 1024 (Ind. Ct. App. 2021). And this deficient notice was not harmless error because it "contributed to 624 Broadway's inability to ob......