City of Gary v. Major

• Decision Date: 10 February 2005
• Docket Number: No. 45S04-0401-CV-10.,45S04-0401-CV-10.
• Citation: 822 N.E.2d 165
• Parties: The CITY OF GARY and Mayor Scott King, in his official capacity, and The City of Gary Common Council, consisting of Roy Pratt, Marilyn Krusas, Robert White, Mary Brown, Carolyn Roger, Jerome Prince, Alex Cherry, Charles Hughes, and Kyle Allen, Sr., in their official capacity, Appellants (Defendants below), v. Ronnie MAJOR d/b/a Affordable Towing and Associates, James Mako, Jr., d/b/a Mako's Towing, and Hewlin Major d/b/a Hugh's Towing, Appellees (Plaintifffs below).
• Court: Indiana Supreme Court

822 N.E.2d 165

The CITY OF GARY and Mayor Scott King, in his official capacity, and The City of Gary Common Council, consisting of Roy Pratt, Marilyn Krusas, Robert White, Mary Brown, Carolyn Roger, Jerome Prince, Alex Cherry, Charles Hughes, and Kyle Allen, Sr., in their official capacity, Appellants (Defendants below), v. Ronnie MAJOR d/b/a Affordable Towing and Associates, James Mako, Jr., d/b/a Mako's Towing, and Hewlin Major d/b/a Hugh's Towing, Appellees (Plaintifffs below).

No. 45S04-0401-CV-10.

Supreme Court of Indiana.

February 10, 2005.

Michael J. Rappa, Johnson & Rappa, LLC, Merrillville, IN, Attorney for Appellants.

Michael C. Dovellos, Merrillville, IN, Attorney for Appellees.

RUCKER, Justice.

The City of Gary, the Mayor of Gary, and members of the Gary City Council appeal a trial court finding of contempt and a corresponding award of monetary damages. We affirm the contempt finding but reverse the award of damages.

Facts and Procedural History

Over the veto of then Mayor Thomas V. Barnes, the legislative body of the City of Gary, the Gary City Council ("City Council"), passed an ordinance in 1989 concerning the award of contracts for towing illegally parked vehicles. The ordinance provided in pertinent part: "In order to facilitate the removal of vehicles or parts, the City, with authorization from the Common Council may employ personnel and acquire equipment, property and facilities and/or enter into towing contracts as necessary...." Appellants' App. at 33. Apparently a compromise was reached between the legislative and executive branches of government and the ordinance lay dormant for a number of years. Then, in 2000, the City Council established a "Towing Committee", a subcommittee of the City Council, that assumed the responsibility of awarding towing contracts. Before the Committee was established, Ronnie Major doing business as Affordable Towing & Associates, James Mako, Jr. doing business as Mako's Towing, and Hewlin Major doing business as Hugh's Towing ("Towing Companies") had been performing towing services under contracts negotiated with the executive branch of the City of Gary. After the Committee was established the City Council cancelled existing contracts with various private tow truck operators, including those of the Towing Companies, and awarded the towing contracts to other businesses.

On September 7, 2000, the Towing Companies filed a complaint for declaratory and injunctive relief against the City of Gary, Scott King — the Mayor of Gary — and members of the Gary City Council (referred to collectively as "City"). Alleging damages in the amount of $100,000 for each plaintiff, the complaint sought a declaration that the towing ordinance violated an alleged statutory separation of powers.¹ More specifically, according to the complaint, entering contracts on behalf of a municipality is a function of the executive rather than the legislative branch of city government. After conducting a hearing, the trial court agreed with the Towing Companies and entered an order on January 17, 2001 declaring null and void all towing contracts entered by the City Council. The trial court's order also declared:

[T]he Executive Branch of Government of the City of Gary is hereby ordered to establish a fair and equitable procedure for the bidding and awarding of towing contracts to qualified towing entities for the police ordered towing of vehicles in the City of Gary with in [sic] which the [Towing Companies] shall participate.

Appellants' App. at 25. As for the Towing Companies' request for damages, the trial court's order provided, "[t]his cause shall be set for hearing on the issue of whether or not the Plaintiff's [sic] are entitled to damages because of the illegal and unlawful actions of the City of Gary Council Towing Committee...." Id. at 24-25. Apparently no such hearing was ever conducted and the City did not appeal the trial court's order.

Several months later, contending that the City had refused to comply with the order, the Towing Companies filed a motion to find the City in contempt of court and also asked the trial court to impose damages for contempt in the amount of $150,000. While the contempt action was pending, the Mayor of Gary issued an executive order that provided in pertinent part:

Effective November 1, 2001 the City of Gary's administrative policy regarding the oversight of the licensing and conduct of towing businesses in the City of Gary shall be as follows:

1. Oversight of the licensing and the conduct of towing businesses within the City of Gary shall be conducted by the designated Chairman of the Towing Committee as established by ordinance of the Gary Common Council.

2. Said Chairman shall report in writing to the Office of the Mayor on a quarterly basis commencing January 1, 2002 as to the status of such licensing and conduct of said businesses.

Id. at 67. After a hearing on June 12, 2002, the trial court found the City in contempt and ordered the City to pay the Towing Companies $150,000 in damages.

The City appealed arguing in part: (i) the trial court should not have found it in contempt because the order of January 17, 2001 was unclear and thus the City was not in willful disobedience of the order, and (ii) the trial court erred in awarding damages because no evidence was introduced to support the award. Finding the January 17, 2001 order unlawful, the Court of Appeals reversed the judgment of the trial court. See City of Gary v. Major, 792 N.E.2d 962 (Ind.Ct.App.2003)

. Having previously granted the Towing Companies' petition to transfer, we now affirm in part and reverse in part the trial court's judgment.

Discussion

I.

Indiana Code § 34-47-3-1 provides in relevant part: "A person who is guilty of any willful disobedience of any process, or any order lawfully issued: (1) by any court of record ... is guilty of an indirect contempt of the court that issued the process or order" (emphasis added). Consistent with this statutory provision, our courts have long held that "[i]ndirect contempt is the willful disobedience of any lawfully entered court order of which the offender has notice." Andrews v. State, 505 N.E.2d 815, 830 (Ind.Ct.App.1987) (emphasis added) (citing I.C. § 34-4-7-3, the predecessor to I.C. § 34-47-3-1). See also Mitchell v. Mitchell, 785 N.E.2d 1194, 1198 (Ind.Ct.App.2003)

; Packer v. State, 777 N.E.2d 733, 738 (Ind.Ct.App.2002); MacIntosh v. MacIntosh, 749 N.E.2d 626, 629 (Ind.Ct.App.2001),

trans. denied; Meyer v. Wolvos, 707 N.E.2d 1029, 1031 (Ind.Ct.App.1999),

trans. denied; Hanson v. Spolnik, 685 N.E.2d 71, 82 (Ind.Ct.App.1997),

trans. denied. In this case, according to the Court of Appeals, the trial court's order was not "lawfully entered" and consequently not enforceable by means of contempt. This was so because the City had no duty to "establish a fair and equitable procedure for the bidding and awarding of towing contracts." Major, 792 N.E.2d at 966. Our understanding of a "lawfully entered" order in the context of a contempt finding is slightly different from that of our colleagues.

In general, contempt of court involves disobedience of a court which undermines the court's authority, justice, and dignity. Hopping v. State, 637 N.E.2d 1294, 1297 (Ind.1994). But the authority of a court to sanction a party for contempt is not a matter of legislative grace. Rather, among the inherent powers of a court is that of maintaining its dignity, securing obedience to its process and rules, rebuking interference with the conduct of business, and punishing unseemly behavior. State v. Shumaker, 200 Ind. 623, 157 N.E. 769, 775 (1927). Viewed in this light, the statutory definition of indirect contempt is merely a legislative recognition of our courts' inherent power to cite and punish for contempt. See In re Contempt of Crenshaw, 708 N.E.2d 859, 861 (Ind.1999)

; Skolnick v. State, 180 Ind.App. 253, 388 N.E.2d 1156, 1162 (1979).

The law in Indiana is well settled that a person cannot be held in contempt of court for failure to obey an order if the issuing court had no jurisdiction to give the order. State ex rel. Leffingwell v.Super. Ct. No. 2 of Grant County, 262 Ind. 574, 576, 321 N.E.2d 568, 569 (1974). Such an order is void and unenforceable. See, e.g., State ex rel. Taylor v. Circuit Ct. of Marion County, 240 Ind. 94, 162 N.E.2d 90, 92 (1959)

(order declaring striking workers in contempt of court void and unenforceable because a specific statutory provision declared trial courts lack jurisdiction to issue a restraining order involving a labor dispute). However, an order that is void because the court lacks jurisdiction to enter it is distinguished from an order that is otherwise invalid. Thus, "[a]lthough a defendant cannot be held in contempt of a void order, a defendant may be held in contempt of an erroneous order.... Accordingly, a defendant may not challenge a contempt finding based upon the prior order's non-jurisdictional irregularities.

A party must follow an erroneous order. The only remedy from an erroneous order is appeal and disobedience thereto is contempt." Carson v. Ross, 509 N.E.2d 239, 243 (Ind.Ct.App.1987) (citations omitted), trans. denied; accord Crowl v. Berryhill, 678 N.E.2d 828, 830 (Ind.Ct.App.1997) ("A party's remedy for an erroneous order is appeal and disobedience of the order is contempt.").

Jurisdiction is comprised of three elements: (1) jurisdiction of the subject matter; (2) jurisdiction of the person; and (3) jurisdiction of the particular case. Troxel v. Troxel, 737 N.E.2d 745, 749 (Ind.2000). In our view an order is not "lawfully entered" in the context of a contempt finding only where the court lacks one of these three elements. Neither before the Court of Appeals nor before this Court has the City alleged the trial court lacked jurisdiction to enter its order of January 2001.² At most, the order was erroneous. However, "[t]he only remedy from an erroneous order is appeal...." Carson, 509...