City of Charlestown v. Charlestown Pleasant Ridge Neighborhood Ass'n Corp., Court of Appeals Case No. 10A01-1712-CT-2896

• Decision Date: 10 September 2018
• Docket Number: Court of Appeals Case No. 10A01-1712-CT-2896
• Citation: 111 N.E.3d 199
• Parties: CITY OF CHARLESTOWN, Indiana, and Charlestown Board of Public Works and Safety, Appellants-Defendants/Cross-Appellees, v. CHARLESTOWN PLEASANT RIDGE NEIGHBORHOOD ASSOCIATION CORPORATION, Joshua Craven, Tina Barnes, David and Ellen Keith, and Bolder Properties, LLC, Appellees-Plaintiffs/Cross-Appellants
• Court: Indiana Appellate Court

111 N.E.3d 199

CITY OF CHARLESTOWN, Indiana, and Charlestown Board of Public Works and Safety, Appellants-Defendants/Cross-Appellees,

v.CHARLESTOWN PLEASANT RIDGE NEIGHBORHOOD ASSOCIATION CORPORATION, Joshua Craven, Tina Barnes, David and Ellen Keith, and Bolder Properties, LLC, Appellees-Plaintiffs/Cross-Appellants

Court of Appeals Case No. 10A01-1712-CT-2896

Court of Appeals of Indiana.

FILED September 10, 2018

Attorneys for Appellants: Bart A. Karwath, Mark J. Crandley, Barnes & Thornburg LLP, Indianapolis, Indiana, Michael Allen Gillenwater, Gillenwater Law Offices, Jeffersonville, Indiana

Attorneys for Appellees: Jeffrey T. Rowes, Institute for Justice, Austin, Texas, Jeffrey H. Redfern, Institute for Justice, Arlington, Virginia, Keith E. Diggs, Institute for Justice, Tempe, Arizona, Stephen W. Voelker, Voelker Law Office, Jeffersonville, Indiana, Anthony B. Sanders, Institute for Justice, Minneapolis, Minnesota

Attorneys for amici curiae NOW!, Inc.: J. David Agnew, Lorch Naville Ward LLC, New Albany, Indiana

The Goldwater Institute : F. Bradford Johnson, Indianapolis, Indiana, Matthew R. Miller, The Scharf-Norton Center for Constitutional Litigation at the Goldwater Institute, Phoenix, Arizona

F & J Apartments, LLC, Brown Rental Properties, LLC, Cooley Property Management, LLC, Gregory Development, LLC, Josh Gregory, Greg Yeager, Kenneth T. Westmoreland, Jr., Michelle R. Westmoreland, Matthew Shultz, Lisa Shultz, Dale May, Maria Sanchez, and Manuel Hernandez: J. David Agnew, Lorch Naville Ward LLC, New Albany, Indiana, George A. Budd, V, Schad & Schad, P.C., New Albany, Indiana

Crone, Judge.

Case Summary

[1] Charlestown Pleasant Ridge Neighborhood Association Corporation, Joshua Craven, Tina Barnes, David Keith, Ellen Keith, and Bolder Properties, LLC (collectively "the Homeowners"), filed a motion for preliminary injunction against the City of Charlestown, Indiana, and the Charlestown Board of Public Works and Safety (collectively "the City") with respect to the City's practice of enforcing its Property Maintenance Code ("PMC"). In support of their motion for a preliminary injunction, the Homeowners alleged that the City enforced the PMC in a manner that violated (1) Indiana Code Chapter 36-7-9, also known as the Indiana Unsafe Building Law ("UBL"), (2) the PMC itself, (3) the United States Constitution's Equal Protection Clause, and (4) the Indiana Constitution's Privileges and Immunities Clause. As to the first claim, the trial court found that the City is not required to follow either the UBL or the PMC exclusively. Because the trial court found that the City is not required to follow the UBL, the trial court concluded that the Homeowners are unlikely to succeed on their claim that the City's manner of enforcing the PMC violates the UBL. However, the trial court also concluded that the Homeowners are likely to succeed on their remaining claims. Accordingly, the trial court issued findings of fact and conclusions thereon ("the Appealed Order") and a separate order granting the preliminary injunction.¹

[2] The City appeals, arguing that the trial court clearly erred in concluding that the Homeowners are likely to succeed on their claims that the City's manner of enforcing the PMC violates the PMC, the Equal Protection Clause, and the Privileges and Immunities Clause. The Homeowners cross-appeal, arguing that the trial court clearly erred in concluding that they are unlikely to succeed on their claim that the City's manner of enforcing the PMC violates the UBL.

[3] The issue raised in the Homeowners' cross-appeal is dispositive at this stage of the proceedings. As to that issue, we conclude that the trial court clearly erred in finding that the City is not required to follow the UBL. Specifically, we conclude that because the City has adopted the UBL, the City is required to act in accordance with its provisions. That does not mean that the PMC is without legal force, but rather that the City is precluded from enforcing the PMC in a manner that is inconsistent with the UBL. Because the trial court found that the City was not required to follow the UBL, the trial court did not address how the UBL impacts the City's enforcement of the PMC. Some of the provisions in the UBL are permissive, others are mandatory. Some provisions of the PMC may conflict with the UBL, some PMC provisions will be compatible with the UBL, and many PMC provisions will address subject matter not covered by the UBL. Therefore, we remand for the trial court to consider how the UBL and the PMC work together in light of our conclusion that the PMC must work within the confines and strictures of the UBL, and to reconsider the Homeowners' claim that the City's enforcement of the PMC violates the UBL. Further, because the trial court decided the Homeowners' remaining three claims based on the erroneous premise that the City was not required to follow the UBL, those claims, if the Homeowners choose to pursue them, will need to be reexamined. Accordingly, we reverse the Appealed Order and the order granting the preliminary injunction and remand for further proceedings consistent with this opinion.

Facts and Procedural History

[4] The undisputed facts show that Pleasant Ridge is a neighborhood within the City of Charlestown.² Appealed Order at 3 (finding # 8). The City believes that Pleasant Ridge needs redevelopment. Id. at 4 (# 13). The Association is a nonprofit corporation with approximately fifty members, all of whom are Pleasant Ridge property owners, and the Association itself owns and rents a duplex in Pleasant Ridge. Id. at 2 (# 1). Joshua Craven, Tina Barnes, David Keith, and Ellen Keith are Pleasant Ridge residents and homeowners. Id. (# 2-4). Craven is the president of the Association. Barnes is a member of the Charlestown City Council ("the City Council").³ Bolder Properties owns four duplexes in Pleasant Ridge. Id. (# 5).

[5] In 2001, the City Council passed an ordinance adopting the UBL pursuant to Indiana Code Section 36-7-9-3. Id. at 19 (# 85).⁴ The UBL provides local governments with procedures to address unsafe buildings and premises but does not set forth specific building safety standards. The UBL defines an "unsafe building" in relevant part as one that is "dangerous to a person or property because of a violation of a statute or ordinance concerning building condition or maintenance." Ind. Code § 36-7-9-4. An "unsafe premises" is an unsafe building and the property it is located on. Id. The UBL authorizes local governments to issue orders to property owners "requiring action relative to any unsafe premises," including "repair or rehabilitation of an unsafe building to bring it into compliance with standards for building condition or maintenance required for human habitation, occupancy, or use by a statute, a rule adopted under IC 4-22-2, or an ordinance." Ind. Code § 36-7-9-5(a)(5). The UBL provides procedural protections for property owners who receive an order to repair or rehabilitate an unsafe building, such as requirements as to the information to be included in an order, a "sufficient time" of ten to sixty days to make repairs before a fine may be imposed, a ten-day period to appeal the order, and limits on the civil penalty for noncompliance with an order to $2500 and on the accrual of such a civil penalty to not more than $1000 every ninety days. Ind. Code §§ 36-7-9-5(b) - (c), -7(a), -7.5(b)-(c).

[6] In 2008, the City Council enacted the PMC, which establishes "minimum requirements and standards" for existing residential and nonresidential structures and premises "to insure public health, safety, and welfare." Ex. Vol. 4 at 6.⁵ In addition, the PMC contains provisions to enforce its safety requirements and standards, many of which address the same subject matter as the enforcement provisions in the UBL, such as provisions which govern orders and notice, the imposition of penalties, and the appeals process. Id. at 8-9, 11. However, many PMC enforcement provisions differ from those in the UBL. For example, the PMC allows twenty days to appeal an order rather than the ten days provided by the UBL. Id. at 11 (§ 111.1). Also, the PMC provides, "This ordinance does not supersede Federal or State laws, statutes or regulations, except as allowed." Id. at 26.

[7] In February 2016, the City Council enacted an ordinance that established an inspection program. Appealed Order at 5 (# 22). In August 2016, the City began inspecting Pleasant Ridge rental properties for PMC violations and issuing citations. The citations imposed a separate fine for each violation, the fines were imposed as of the date the violation was discovered, and the fines began accumulating daily. Id. at 9 (# 42). In addition, the citations did not provide any grace period to allow property owners to make repairs during which fines would not be imposed. Id. The citations cite both the UBL and the PMC and are confusing as to which provisions the City was intending to operate under. Id. at 20 (# 91-92). The citations explain that an appeal of the order and fine may be made to the "hearing authority," which is the term used in the UBL. Id. (# 91); Ex. Vol. 8 at 187, 192. The citations indicate that the appeal period is ten days, which is from the UBL, rather than twenty days as provided in the PMC. Appealed Order at 20 (# 91) (citing Ind. Code § 36-7-9-7(a) and PMC § 111.1); Ex. Vol. 8 at 187, 192. During the inspection process, the City sought a search warrant to conduct an interior inspection, which was issued pursuant to the UBL. Appealed Order at 20 (# 91) (citing Ind. Code § 36-7-9-16 ).

[8] In January 2017, the Association filed an eleven-count complaint against the City, which was subsequently amended to add the remaining appellees. In February 2017, the Homeowners moved for a preliminary injunction, asking the trial court to enjoin the City from continuing its practice of "imposing ruinous fines that can be waived only by selling to the developer or tearing...