City of Carmel v. Steele

• Decision Date: 02 May 2007
• Docket Number: No. 29S02-0604-CV-139.,29S02-0604-CV-139.
• Citation: 865 N.E.2d 612
• Parties: CITY OF CARMEL, Indiana, Appellant (Defendant below), v. Carl Michael STEELE and Victoria A. Russo-Steele, Appellees (Complainants below).
• Court: Indiana Supreme Court

865 N.E.2d 612

CITY OF CARMEL, Indiana, Appellant (Defendant below), v. Carl Michael STEELE and Victoria A. Russo-Steele, Appellees (Complainants below).

No. 29S02-0604-CV-139.

Supreme Court of Indiana.

May 2, 2007.

Nicholas K. Kile, Barnes & Thornburg LLP, Indianapolis, IN, Douglas C. Haney, City of Carmel, Department of Law, Carmel, IN, Attorneys for Appellant.

Brian J. Zaiger, Noblesville, IN, Attorney for Appellees.

On Petition To Transfer from the Indiana Court of Appeals, No. 29A02-0503-CV-245.

RUCKER, Justice.

When a municipality proceeds to annex territory as a result of a petition requesting it to do so, the legal description of the territory as set forth in the annexation ordinance determines whether the territory is contiguous to a municipality's corporate boundaries. Here, the trial court looked beyond the ordinance to the legal description in the petition that inspired the ordinance. We conclude that to do so in this case was beyond the scope of trial court review.

Facts and Procedural History

This case concerns the City of Carmel's efforts at a voluntary annexation of certain territory. The essential facts are these. A Delaware limited liability company known as Landmark on Spring Mill, LLC is the owner of a forty-three-acre tract of land located in Hamilton County, referred to as the AMLI property. Containing an apartment complex, the land is square in shape, bordered on the west by Spring Mill Road and on the south by 146th Street. On August 11, 2004, Landmark filed a petition requesting the City of Carmel to annex AMLI. On September 24, 2004, after a third and final reading, Carmel's common council adopted Ordinance C-265 annexing the property. Among other things the ordinance provided, "To the extent the Annexation Territory includes land contiguous to Spring Mill Road or 146th Street, the Annexation Territory shall include these public highways and their rights-of-way." Appellant's Amended Appendix (hereafter "App.") at 41.

Carl Steele and Victoria Russo-Steele own real estate within one-half mile of the AMLI property. On October 22, 2004 the Steeles filed an appeal in the Hamilton Superior Court challenging Carmel's adoption of Ordinance C-265. The Steeles argued that the ordinance was adopted at the request of a single landowner, that the annexed territory was not contiguous to the City of Carmel, and that Carmel was prohibited from annexing property across or through the 146th Street right-of-way due to an Interlocal Agreement between the City of Carmel, the Town of Westfield, and Hamilton County.

A hearing was conducted on the Steeles' complaint. At the conclusion of which the trial court entered an order declaring among other things that Ordinance C-265 did not annex 146th Street and that the AMLI property Carmel sought to annex was not contiguous with the city's existing boundaries. Accordingly the trial court rendered the ordinance invalid and decreed that the annexation would not take place.

Carmel filed a motion to correct error arguing the trial court was wrong in concluding that Ordinance C-265 did not annex 146th Street. Agreeing that its order needed to be corrected or clarified, the trial court entered a second order concluding in pertinent part, "even though C-265 by its language incorporates the 146th Street right-of-way in the annexation of the proposed annexed territory, the proposed annexed territory was never contiguous with Carmel's existing boundaries to begin with prior to the Ordinance because such territory was separated from Carmel's boundaries by the southern 146th Street right-of-way." App. at 17-18. Carmel appealed, and the Court of Appeals affirmed. See City of Carmel v. Steele, 836 N.E.2d 967 (Ind.Ct.App.2005). Having previously granted transfer, we now reverse the trial court's judgment.

Annexation Procedure and the Standard of Review

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. Rogers v. Mun. City of Elkhart, 688 N.E.2d 1238, 1239 (Ind.1997). Although the applicable statutes have undergone many changes over the years,¹ certain general propositions of law have long applied. For example, the statutes invest exclusive authority to annex territory in the governing body of a municipality, id. (citing City of Aurora v. Bryant, 240 Ind. 492, 165 N.E.2d 141 (1960)), and as a legislative function annexation becomes a question subject to judicial cognizance only upon review as provided by statute. Rogers, 688 N.E.2d at 1239 (citing City of Indianapolis v. Wynn, 239 Ind. 567, 157 N.E.2d 828 (1959)).

Because a municipality's authority to annex territory is defined by statute, the court's duty is to determine whether the city has exceeded its authority and met the conditions imposed by the statute. Rogers, 688 N.E.2d at 1239-40. Although the burden of pleading is on the landowner, the burden of proof is on the municipality to demonstrate compliance with the statute. The court sits without a jury and enters judgment on the question of annexation after receiving evidence and hearing argument from both parties. Ind.Code § 36-4-3-15.5(c).

Once the trial court has decided whether to approve an annexation ordinance, either the municipality or the landowner may seek appellate review. Where, as here, the trial court upon its own motion enters special findings, we apply the standard of review set forth in Indiana Trial Rule 52. Chidester v. City of Hobart, 631 N.E.2d 908, 909 (Ind.1994). We review issues of fact for sufficiency of the evidence and look to the record only for inferences favorable to the judgment. Id. at 910. We will not set aside findings and judgments unless they are clearly erroneous. And we review questions of law de novo. Rogers, 688 N.E.2d at 1240.

Discussion

I.

At the heart of the dispute in this case is a one-half strip of public road known as 146th Street. There is no question that the southern border of the AMLI property extends only to the middle of 146th Street. See W. Union Tele. Co. v. Krueger, 36 Ind.App. 348, 74 N.E. 25, 26 (1905) (declaring that the conveyance of property bounded by a public highway conveys to the grantee title to the center of the highway). And there is no question that before the adoption of Ordinance C-265 the northern border of Carmel's municipal boundaries abutted but did not include 146th Street.² Rather, at issue here is the significance of Ordinance C-265 with its inclusion of this public roadway as a part of Carmel's boundaries.

Agreeing with the trial court, the Court of Appeals determined that it is was not relevant that Ordinance C-265 made the AMLI property contiguous with Carmel by annexing 146th Street. According to the Court, "Carmel's burden was to show that at the time [Landmark] filed its petition requesting annexation, its property was contiguous with Carmel's borders." Steele, 836 N.E.2d at 978 (emphasis added). The underlying rationale for this view is that the relevant statute dictates that a petition for annexation must include a request for "an ordinance annexing the area described in the petition." I.C. § 36-4-3-5.1(a)(1). Thus, because the AMLI property described in the petition did not and could not extend to the southern border of 146th Street, the resulting ordinance was essentially rendered a nullity.

We first observe that the Legislature has afforded municipalities several ways to annex territory. For example, a municipality may annex contiguous territory by re-defining its entire corporate boundaries, I.C. § 36-4-3-3 ("section 3"); a municipality may annex contiguous territory (and sometimes non-contiguous territory) by describing particular property to be added, I.C. § 36-4-3-4 ("section 4"); a municipality may annex contiguous territory by accepting a petition submitted by less than all of the landowners residing in the territory, I.C. § 36-4-3-5 ("section 5"); or, as here, a municipality may annex contiguous territory by accepting a petition submitted by one hundred percent (100%) of the landowners residing in the territory, I.C. § 36-4-3-5.1 ("section 5.1"). Sections 3 and 4 are commonly referred to as "involuntary" annexation statutes. Under this regime a municipality may annex territory on its own initiative and may prevail in its efforts even over the objection of affected remonstrators provided statutory provisions are met. See I.C. § 36-4-3-11 to -13. Sections 5 and 5.1 are commonly referred to as "voluntary" annexation statutes. Under this regime a municipality may annex territory when requested to do so by landowners of contiguous property. Tying together these alternative methods is the municipality's adoption of an annexation ordinance.³ We will return to this point momentarily. We pause here to delineate additional aspects of the voluntary annexation statutes.

Indiana Code sections 36-4-3-5 and 36-4-3-5.1 provide in relevant part that owners of land located outside of but contiguous to a municipality may file a petition requesting the municipality to annex property described in the petition. See I.C. § 36-4-3-5; I.C. § 36-4-3-5.1. The municipality then may adopt an ordinance annexing the property. Id. An owner of land located within one-half mile of the territory "proposed to be annexed" may appeal the annexation in court on grounds that the territory "sought to be annexed" is not contiguous to the municipality's existing borders. I.C. § 36-4-3-15.5(a)-(b). If the parties' evidence shows the territory "sought to be annexed" is contiguous to the annexing municipality, then the court "shall deny the appeal and dismiss the proceeding." I.C. § 36-4-3-15.5(c). But if the evidence does not establish contiguity then "the court shall issue an order to prevent the proposed annexation from taking effect." Id. "[T]...