Bradley v. City of New Castle

• Citation: 764 N.E.2d 212
• Decision Date: 12 March 2002
• Docket Number: No. 33S01-0104-CV-195.,33S01-0104-CV-195.
• Parties: James E. BRADLEY, Kay C. Miller, and Certain Other Persons Owning Property in the Proposed Annexed Territory, Appellants (Plaintiffs Below), v. CITY OF NEW CASTLE, Indiana, Appellee (Defendant Below).
• Court: Supreme Court of Indiana

764 N.E.2d 212

James E. BRADLEY, Kay C. Miller, and Certain Other Persons Owning Property in the Proposed Annexed Territory, Appellants (Plaintiffs Below), v. CITY OF NEW CASTLE, Indiana, Appellee (Defendant Below).

No. 33S01-0104-CV-195.

Supreme Court of Indiana.

March 12, 2002.

George T. Patton, Jr., Kevin S. Smith, Bryan H. Babb, Bose McKinney & Evans, LLP, Indianapolis, IN, E. Edward Dunsmore, Knightstown, IN, Attorneys for Appellants.

John H. Brooke, Casey D. Cloyd, Brooke & Cloyd, P.C., Muncie, IN, Attorneys

for Amici Curiae Citizens Opposing Annexation, et. al.

Kevin W. Dogan, Indianapolis, IN, David L. Copenhaver, R. Scott Hayes, Hayes, Copenhaver & Crider, New Castle, IN, R. Thomas Bodkin, Jason P. Lueking, Douglas A. Welp, Bamberger, Foreman, Oswald & Hahn, LLP, Evansville, IN, Attorneys for Appellees.

Nana Quay-Smith, Karl L. Mulvaney, Bingham Summers Welsh & Spilman, Indianapolis, IN, Attorneys for Amicus Curiae Indiana Municipal Lawyers Association.

SHEPARD, Chief Justice.

In 1992, the City of New Castle annexed some 750 acres in Henry County with an estimated population of 1,700 residents.

The trial court rejected all the Remonstrators' challenges to the annexation. The Court of Appeals reversed, faulting the City Council on a variety of procedural points (although the Remonstrators make no claim that their substantive rights were violated) and faulting the trial court for allowing the City to supply additional evidence in support of the adequacy of the Fiscal Plan. Annexation is essentially a legislative process, and courts should not micromanage it.

We affirm the trial court.

Facts and Procedural History

On October 19, 1992, the Common Council of the City of New Castle held a public information hearing on proposed Ordinance No. 2892, to annex four contiguous areas: Elmwood Addition (Area 1); Blue River Valley Addition (Area 2); McGrew Addition (Area 3); and Wildwood Estates (Area 4).

The Council followed a "three readings" approach. On November 2nd, it adopted a written Fiscal Plan for implementing the annexation and voted in favor of the Ordinance on first reading. On November 16th, the Council amended the Ordinance to eliminate a twenty-four acre tract from Area 4, thereby splitting that Area into 4 East and 4 West, and also amended the Plan. It then passed the Amended Ordinance on second reading. On December 7th, the Council again amended the Plan and passed the Amended Ordinance on final reading.

In February 1993, certain property owners residing in the annexed areas filed a Petition for Declaratory Judgment and a Petition for Remonstrance. These Remonstrators claimed that the Council failed to observe some statutorily required procedures in passing the Ordinance. They also challenged the sufficiency of the Fiscal Plan as adopted at the time of the Ordinance's passage.

In May 1994, Remonstrators filed a Third Amended Petition for Declaratory Judgment and Remonstrance. Judge John Kellam treated the City's response as a motion for summary judgment and, in July 1995, granted summary judgment in favor of the City on the petition for declaratory judgment and on portions of the petition for remonstrance.¹

The hearing on the remaining portions of the petition for remonstrance began in November 1995. Remonstrators requested a continuance after the City changed its theory of annexation on Area 2 to reflect an intervening Court of Appeals decision. The trial court granted the continuance and the hearing resumed in July 1996. During the hearing, the court allowed the City to present evidence revising and supplementing the Fiscal Plan that the Council adopted in 1992.

On March 3, 1997, the City filed a motion under Ind. Trial Rule 53.2, and on April 8 this Court appointed Judge Barbara A. Harcourt to replace Judge Kellam. On June 17, 1998, Special Judge Harcourt issued a judgment in the City's favor, supported by findings of fact and conclusions of law.

Remonstrators appealed. The Court of Appeals held that the trial court erred in granting partial summary judgment on the petition for remonstrance and in allowing the City to make significant changes to its Fiscal Plan during the remonstrance hearing. Bradley v. City of New Castle, 730 N.E.2d 771, 787 (Ind.Ct.App.2000). We granted transfer. 753 N.E.2d 10 (Ind. 2001).

I. Standard of Review for Annexation Challenges

A. The Nature of Annexation. For much of Indiana history, aggrieved property owners had virtually no recourse to protest annexation.² Over a century ago we said:

[N]o property is taken from the owner, by annexation, no private right of the owner is affected; the act simply changes the property and its owner, in their civil relation to certain public authority. This power the State has the right to exercise, directly or indirectly, within constitutional limits, at any time. Stilz v. City of Indianapolis, 55 Ind. 515, 523 (1877).

In short, "annexation of territory to a city is not a taking of the property, nor does it deprive any person of his property." Taggart v. Claypool, 145 Ind. 590, 596, 44 N.E. 18, 20 (1896). Property owners therefore have no vested interest in the maintenance of municipal boundaries at any particular location. Forks v. City of Warsaw, 257 Ind. 237, 273 N.E.2d 856 (1971), cert. denied, 409 U.S. 841, 93 S.Ct. 39, 34 L.Ed.2d 80 (1972).

B. The Trial Court's Role. Annexation is an essentially legislative function. Rogers v. Mun. City of Elkhart, 688 N.E.2d at 1239 (citing City of Indianapolis v. Wynn, 239 Ind. 567, 157 N.E.2d 828 (1959)). It is subject to judicial review only as provided by statute, and "[t]he larger object of the annexation statute is, as it always has been, to permit annexation of adjacent urban territory." Id. at 1242.

Therefore, a remonstrator's challenge to annexation is not a regular lawsuit, but rather a special proceeding the General Assembly may control. See Thorn v. Silver, 174 Ind. 504, 510, 89 N.E. 943, 946 (1909) (action by remonstrators challenging a drain construction assessment). Indiana Code §§ 36-4-3-11 through 13 establish requirements for remonstrances;³ give trial courts authority to hear and enter judgment on remonstrances;⁴ and direct courts to order annexation provided that the city meets specified requirements on matters such as contiguity and has adopted a fiscal plan showing that it will provide municipal services to the annexed area that are equivalent to those enjoyed by residents in similar areas of the municipality.⁵

The trial court's role is to decide whether the municipality has operated within its authority and satisfied the statutory conditions for annexation. Rogers, 688 N.E.2d at 1239-40. At the remonstrance hearing, the municipality bears the burden of showing compliance with the requirements of the annexation statute. Id.

Although the municipality bears the burden of proof when properly challenged, we afford legislative judgment considerable deference. It is well-established that we avoid scrutinizing legislative processes, even those that are constitutionally mandated. See State ex rel. Masariu v. Marion Superior Court No. 1, 621 N.E.2d 1097, 1098 (Ind.1993)

("[T]his Court has held repeatedly that courts should not intermeddle with the internal functions of either the Executive or Legislative branches of Government."); see also Roeschlein v. Thomas, 258 Ind. 16, 280 N.E.2d 581 (1972).

The General Assembly has delegated part of its power to re-establish and change governmental unit boundaries to local legislatures. See Perry Township v. Indianapolis Power & Light Co., 224 Ind. 59, 64 N.E.2d 296 (1946). We do not abandon our deferential approach simply because the state legislature has delegated a legislative function to subordinate agents, the municipalities. See City of Valparaiso v. Gardner, 97 Ind. 1, 3 (1884) ("[C]ourts will not interfere with mere matters of municipal legislation....").

Therefore, a trial court hearing a remonstrance is not an examiner conducting an audit of a challenged fiscal plan. Rather, it should focus on whether that plan represents a credible commitment by the municipality to provide the annexed area with comparable capital and non-capital services.

B. The Appellate Court's Role. When a trial court enters special findings, as it did here, we review issues of fact for sufficiency of the evidence and look to the record only for evidence favorable to the judgment. Ind. Trial Rule 52; Rogers, 688 N.E.2d at 1240. We do not set aside findings and judgments unless they are clearly erroneous. T.R. 52. We review questions of law de novo. Rogers, 688 N.E.2d at 1240

(citation omitted).

II. Scope of Review for Annexation Remonstrances

Remonstrators argue that the City exceeded its authority by violating certain statutory directives concerning the passage of ordinances. (Appellants' Br. at 57.) Some of these directives appear in Indiana Code Chapter 36-4-3, Municipal Annexation and Disannexation, although not in the sections that deal specifically with remonstrance proceedings.⁶ (Appellants' Br. at 57, 65.) Others appear elsewhere in the Code. (Appellants' Br. at 62, 67.) Remonstrators do not argue that any of these violations impaired their substantial rights or caused them specific harm.

For example, Remonstrators point to the requirement in Ind.Code § 36-4-3-3 that says, "The legislative body of a municipality may, by an ordinance defining the corporate boundaries of the municipality, annex territory...." Remonstrators argue that this statute requires a legal description and, because the City did not prove that the annexation ordinance (which referred to City boundaries generally) had a map attached to define the City's legal boundaries, the annexation fails. They do not claim that they were misled or disadvantaged in any way by this approach.⁷

As another example, Remonstrators point to Ind.Code § 36-4-6-13, which says: "A two-thirds (2/3) vote of all the elected members, after unanimous consent of the members...