City of Hobart v. Chidester

• Decision Date: 06 August 1992
• Docket Number: No. 45S04-9208-CV-610,45S04-9208-CV-610
• Citation: City of Hobart v. Chidester, 596 N.E.2d 1374 (Ind. 1992)
• Parties: CITY OF HOBART, INDIANA, Appellant (Defendant Below), v. Jeffrey L. CHIDESTER, et al., Appellee (Plaintiffs Below).
• Court: Indiana Supreme Court

Page 1374

596 N.E.2d 1374

CITY OF HOBART, INDIANA, Appellant (Defendant Below), v. Jeffrey L. CHIDESTER, et al., Appellee (Plaintiffs Below).

No. 45S04-9208-CV-610.

Supreme Court of Indiana.

Aug. 6, 1992.

Rehearing Denied Nov. 4, 1992.

Debra Lynch Dubovich, Highland, James A. Greco, Merrillville, for appellant.

Jo Angela Woods, President, Indiana Mun. Lawyers Ass'n, Virgil L. Beeler, Baker & Daniels, Indianapolis, Richard L. Hill, Paul J. Peralta, Baker & Daniels, South Bend, for amicus curiae Indiana Mun. Lawyers Ass'n.

Richard Mayer, Merrillville, for Appellee.

ON CIVIL PETITION TO TRANSFER

SHEPARD, Chief Justice.

This appeal presents questions about what evidence a trial court may consider in proceedings contesting municipal annexations. It has been about twenty years since this Court last spoke on the subject. ¹ During these decades, both the statutes and case law in this area have continued to evolve. We grant transfer to address certain issues of statutory interpretation which have developed since our last visit.

I. Case History

This case arose after the City of Hobart adopted ordinances to annex certain adjacent and contiguous portions of Ross Township. Jeffrey L. Chidester and a number of landowners from the annexed area objected to the annexation and filed a complaint against the annexation ordinance. The trial court heard ten days of evidence and arguments in May and June 1990. On July 11, 1990, the trial court entered findings of fact and conclusions of law. It found for the city on some of the points in contention but sustained the remonstrance on grounds that the city's fiscal plan did not set out which areas in the city were similar in topography, patterns of land use, and population density to the annexed area. While there was extensive evidence offered during trial about these comparisons, the trial court apparently felt obliged by Drake v. City of Fort Wayne (1989), Ind.App., 543 N.E.2d 1145, to decide the case without reference to that evidence. The trial court's findings did not indicate whether the evidence presented at the hearing was insufficient to show these comparisons, or whether the services proposed for the annexed territory would not be equivalent to services provided in Hobart. The Court of Appeals affirmed. City of Hobart v. Chidester (1991), Ind.App., 582 N.E.2d 457.

II. Evolution of Indiana Annexation Law

The framework of Indiana's annexation law has long featured three basic stages: (1) legislative adoption of an ordinance annexing of certain territory and pledging to deliver certain services within a fixed period, (2) an opportunity for remonstrance by affected landowners, and (3) judicial review. Earlier versions of the statute did not require the city to set out in writing its plan for providing services; it was sufficient that the city present evidence at the trial court's hearing on remonstrance to show that the statutory preconditions to annexation (sometimes called the primary determinants) had been met. See, e.g. Burns' Ind.Stat.Ann. Sec. 48-702 (1963) ²; Burns' Ind.Stat.Ann. Sec. 48-722 (Supp.1974), Ind.Code Sec. 18-5-10-25. ³

The courts which were hearing annexation remonstrances, however, began to feel the need for a more tangible description showing what measures the annexing city intended to initiate to provide the required services. In Harris v. City of Muncie (1975), 163 Ind.App. 522, 325 N.E.2d 208, the Court of Appeals considered whether a city must adopt a written plan. Not quite willing to say that the statute so required, the Court held that the city should have "some observable and reviewable program for providing the required services." Id. 325 N.E.2d at 213. To satisfy this requirement, evidence showing the adequacy of the city's fiscal plan (of factor (c), the predecessor of present (d)(4) and (5)), must be "sufficiently specific to enable court to determine whether the proposed schedule is reasonable and whether it would enable the city to provide services as required." Id. at 214. In 1979, the General Assembly amended the statute by adding a requirement that the city develop a written fiscal plan showing that the primary determinants were met. Ind.Code Ann. Sec. 18-5-10-25 (Burns Supp.1980). That same year the Court of Appeals finally held that the former statute required city to offer into evidence at the remonstrance hearing written records reflecting its fiscal plan. Stallard v. Town of St. John (1979), Ind.App., 397 N.E.2d 648.

Although the annexation statutes have gone through many changes over the years, certain general propositions of law continue to apply. The statutes invest exclusive authority to annex territory in the governing body of a municipality. City of Aurora v. Bryant (1960), 240 Ind. 492, 165 N.E.2d 141. Annexation is a legislative function and becomes a question subject to judicial cognizance only upon review as provided by statute. City of Indianapolis v. Wynn (1959) 239 Ind. 567, 157 N.E.2d 828. Indeed, to the extent annexation statutes have seemed to require courts to make determinations of a non-judicial nature, courts have refused, finding themselves to be without the power to do so under the separation of powers clause of the Indiana Constitution, Art. 3, Sec. 1. See, e.g., In re City of Mishawaka (1972), 259 Ind. 530, 289 N.E.2d 510. The court is not authorized to act unless a remonstrance is filed; if a remonstrance is not filed, the annexation becomes effective. Wynn, 239 Ind. 567, 157 N.E.2d 828. The effect of filing a remonstrance is to abate the culmination of the annexation pending review in the courts, where the burden is on the municipality to sustain the annexation by showing that it has complied with the requirements of the statute. Id. Because the city's authority to annex territory is limited by statute, the court's duty is to determine whether the city has exceeded its authority and met the conditions imposed by the statute. King v. City of Bloomington (1959), 239 Ind. 548, 159 N.E.2d 563; Bryant, 165 N.E.2d at 147.

III. The Present Requirements for Fiscal Plans

Municipal annexation is today governed by Indiana Code Ann. Secs. 36-4-3-1--36-4-3-22 (West 1983 & Supp.1991). The focus of this litigation has been on the interpretation of Ind.Code Sec. 36-4-3-13(d) which states:

The requirements of this subsection are met if the evidence establishes that the municipality has developed a written fiscal plan and has established a definite policy, by resolution of the legislative body, as of the date of passage of the annexation ordinance. The resolution must show:

(1) the cost estimates of planned services to be furnished to the territory to be annexed;

(2) the method or methods of financing the planned services;

(3) the plan for the organization and extension of services;

(4) that the planned services of a noncapital nature, including police protection, fire protection, street and road maintenance, and other noncapital services normally provided within the corporate boundaries, will be provided to the annexed territory within one (1) year after the effective date of annexation, and that they will be provided in a manner equivalent in standard and scope to those noncapital services provided to areas within the corporate boundaries that have similar topography, pattern of land use, and population density;

(5) that services of a capital nature, including street construction, street lighting, sewer facilities, water facilities, and storm water drainage facilities, will be provided to the annexed territory within three (3) years after the effective date of the annexation, in the same manner as those services are provided to areas within the corporate boundaries that have similar topography, patterns of land use, and population density, and in the same manner consistent with federal, state, and local laws, procedures, and planning criteria;

(6) the plan for hiring the employees of other governmental entities whose jobs will be eliminated by the proposed annexation, although the municipality is not required to hire any employees.

This controversy centers around the language in subsections (d)(4) and (5) requiring that services provided to the annexed area be like services "provided to areas within the corporate boundaries that have similar topography, patterns of land use, and population density". Ind.Code Sec. 36-4-3-13(d)(4),(5). Plainly, the statute requires the city to spell out what services it plans to provide to the annexed area. The issue is whether the comparisons between the annexed area and areas of the city with similar topography, patterns of land use, and population density must be set out in the plan and resolution ⁴, or whether it is sufficient to prove at trial that such comparisons were made. The city argues that the statute requires only that it set out a definitive policy to provide equivalent services and that the comparisons may be shown at trial. The remonstrators argue that such an interpretation would permit a resolution to be found sufficient if it merely recites the statutory language.

We assess the legislature's requirement of a written fiscal plan as having three purposes. First, the publication of a written plan permits landowners to make an intelligent decision about whether to accept annexation or remonstrate. Second, requiring a written plan makes the opportunity for remonstrance and judicial review more realistic. As a practical matter, more than vague promises are needed for a court to test a city's ability to provide like services to the annexed territory. Third, a fiscal plan needs to be in writing to protect the right of landowners to institute proceedings to force an annexing city to provide the services promised under the plan. Sedlak v. Town of St. John (1980), Ind.App., 403 N.E.2d 1126. ⁵ If a written plan were not required, a landowner could be faced with attempting to establish the failure of a plan whose existence he might be incapable of proving in the...