Clem v. Christole, Inc.

• Decision Date: 17 January 1990
• Docket Number: No. 53A04-8712-CV-393,53A04-8712-CV-393
• Court: Indiana Appellate Court
• Parties: Tim & Judy CLEM, et al.; James M. Richards, et al., Appellants (Plaintiffs Below), v. CHRISTOLE, INC.; Hopewell Center, Inc., Appellees (Defendants Below).

Page 1180

548 N.E.2d 1180

Tim & Judy CLEM, et al.; James M. Richards, et al., Appellants (Plaintiffs Below), v. CHRISTOLE, INC.; Hopewell Center, Inc., Appellees (Defendants Below).

No. 53A04-8712-CV-393.

Court of Appeals of Indiana,

Fourth District.

Jan. 17, 1990.

Len E. Bunger, Philip C. Hill, Bloomington, for appellants Tim & Judy Clem, et al.

Michael R. Withers, Anderson, for James M. Richards, et al.

Thomas N. Olvey, Schnorr, Good & Olvey, Indianapolis, Gary J. Clendening, Harrell, Clendening & Coyne, Bloomington, for appellees Christole, Inc.

Ernest M. Beal, Jr., Fort Wayne, for amicus curiae.

Scott Webb, Anderson, for Hopewell Center, Inc.

CONOVER, Judge.

This is a consolidated appeal. ¹ Plaintiffs-Appellants, property owners in Fairwood Terrace subdivision in Monroe County, Indiana, and Mustin Manor subdivision in Madison County, Indiana, (Residents), appeal their trial courts' grant of summary judgments in favor of Defendants-Appellees Christole, Inc. (Christole) and Hopewell Center, Inc. (Hopewell) (collectively, developers). Those judgments permit developers to operate group homes for developmentally disabled persons in the residents' single family residential subdivisions.

We reverse.

The residents present several issues for our review which we restate as one, namely, whether the 1988 amendment of a statute authorizing the location of group homes for developmentally disabled and mentally ill persons in single family residential subdivisions constitutes a valid retroactive exercise of the state's police power.

Before 1988, developer Christole purchased a single family residence in Fairwood Terrace subdivision for use as a group home for the care of five unrelated developmentally disabled autistic children to be supervised by thirteen full and part-time staff members. All these developmentally disabled persons' immediate families live elsewhere.

In 1988, Hopewell purchased a single family residence in Mustin Manor subdivision in which it proposed to care for unrelated developmentally disabled persons who also would be supervised by full and part-time staff members. The residents filed a petition for injunctive relief alleging these group homes violated restrictive covenants applicable to the lots in their subdivisions.

The residents of Fairwood Terrace assert Christole's group home violates the following restrictive covenants applicable to their subdivision:

USE: No building, or any part thereof, erected or maintained in this subdivision shall be used for business or commercial purposes of any kind ...

BUILDINGS: Only one (1) single family dwelling may be erected or maintained on each lot in this addition ...

The residents of Mustin Manor maintain Hopewell's group house violates two of their subdivision's restrictive covenants, as follows:

1. LAND USE AND BUILDING TYPE. No lot shall be used except for residential purposes. No building shall be erected, altered, placed or permitted to remain on any lot, other than one detached single family dwelling not to exceed two (2) stories in height and a private attached garage for not more than two (2) cars. No building unattached to dwelling shall be permitted. No lot shall be replatted or subdivided.

. . . . .

5. NUISANCES. No offensive or noxious activity shall be carried on upon any lot nor shall anything be done thereon which may be or may become an annoyance or nuisance to the neighborhood....

The trial court enjoined Christole from violating the applicable covenants. An injunction was not issued against Hopewell because an agreement was reached between Hopewell and the residents providing the subject building would not be modified to accommodate developmentally disabled residents until the lawsuit was heard on its merits.

Thereafter, at its 1988 session, the Indiana legislature amended I.C. 16-13-21-14 and created a new section, 16-13-21-14.1. The legislature's 1988 amendment to Sec. 14 reads:

Sec. 14. (a) This section applies to each restriction, reservation, condition, exception, or covenant that is created before April 1, 1988, in any subdivision plat, deed, or other instrument of, or pertaining to, the transfer, sale, lease, or use of property.

(b) A restriction, reservation, condition, exception, or covenant in a subdivision plat, deed, or other instrument of, or pertaining to, the transfer, sale, lease, or use of property that would permit the residential use of property but prohibit the use of that property as a residential facility for developmentally disabled or mentally ill persons:

(2) on the ground that the persons residing in the residential facility are not related; or

(3) for any other reason;

is, to the extent of the prohibition, void as against the public policy of the state.

Although Christole had already filed an appeal, we ordered the case remanded to the trial court for further consideration in light of these amendments as a matter of judicial economy. After considering the 1988 amendment to I.C. 16-13-21-14, the trial court vacated its former judgment and entered summary judgment for Christole.

In the Mustin Manor case, Hopewell filed a motion and the residents a cross-motion for summary judgment. The trial court granted Hopewell's motion and denied the residents' cross-motion. It found under amended Sec. 14, the covenants were void as against public policy. In Christole, the trial court opined the 1988 amendment of I.C. 16-13-21-14 and new section 16-13-21-14.1 ² were directed at the holding in Adult Group Properties, Ltd. v. Imler (1987), Ind.App., 505 N.E.2d 459, and it no longer stated the law. The trial court entered summary judgment for Christole.

The residents appeal.

I. The Police Power.

The state has the inherent power to enact laws, within constitutional limits, which promote order, safety, health, morals and the general welfare of society. Zahm v. Peare (1985), Ind.App., 502 N.E.2d 490, 494. This power is known as the state's police power. Legislation will be sustained as within the authority of the legislature if it is a proper exercise thereof. Johnson v. St. Vincent Hospital, Inc. (1980), 273 Ind. 374, 404 N.E.2d 585, 599; Steup v. Indiana Housing Finance Authority (1980), 273 Ind. 72, 402 N.E.2d 1215, 1217, 1220-1221. It has been said

The police power of a State is recognized by the courts to be one of wide sweep. It is exercised by the state in order to promote the health, safety, comfort, morals, and welfare of the public. The right to exercise this power is said to be inherent in the people of every free government. It is not a grant, derived from or under any written constitution. It is not, however, without limitation, and it cannot be invoked so as to invade the fundamental rights of a citizen. (Emphasis supplied).

State v. Gerhardt (1896), 145 Ind. 439, 44 N.E. 469, 473. See also Blue v. Beach (1900), 155 Ind. 121, 56 N.E. 89, 92. Although it is the legislature's prerogative to determine when the state's police power should be invoked, it is the judiciary's duty to determine in specific cases whether the police power has been invoked upon a subject which is subordinate to it. Blue, 56 N.E. at 92; Gerhardt, 44 N.E. at 473. The fundamental issue in such cases is whether the statute in question has a tendency to promote either the order, safety, health, morals or general welfare of society. Bruck v. State ex rel. Money (1950), 228 Ind. 189, 91 N.E.2d 349.

A statute is accorded every reasonable presumption supporting is validity and constitutionality. Miller v. State (1987), Ind., 517 N.E.2d 64, 71; Imler, supra, at 464. The burden is upon the challenger to rebut this presumption. Miller, supra. The challenger's burden is to clearly and convincingly demonstrate the unconstitutionality of the statute. A court cannot question the wisdom or desirability of the legislation and substitute its judgment or opinion on the matter for that of the legislature. Dague v. Piper Aircraft Corp. (1981), 275 Ind. 520, 418 N.E.2d 207, 212. When a statute may be construed so as to support its constitutionality, we must adopt such a construction. Imler, supra, at 464.

II. Property Owners' Rights.

While property rights are not absolute and may be restricted by government action which constitutes a proper exercise of police power, Dept. of Financial Institutions v. Holt (1952), 231 Ind. 293, 108 N.E.2d 629, 633; Zahm, 502 N.E.2d at 494, property cannot arbitrarily be taken or confiscated under the guise of the police power. Holt, supra, 108 N.E.2d at 634; School Town of Andrews v. Heiney (1912), 178 Ind. 1, 7, 98 N.E. 628, 630. Property is more than the physical object a person owns. It includes the right to acquire, possess, use and dispose of it without control or diminution. Holt, supra, 108 N.E.2d at 634. Therefore, any law restricting such rights must not be arbitrary, unreasonable, or beyond the necessities of the case. Holt, supra, 108 N.E.2d at 634; City of Muncie v. Pizza Hut of Muncie, Inc. (1976), 171 Ind.App. 397, 357 N.E.2d 735, 737. The legislature may not, under the guise of protecting public interests, impose unnecessary restrictions upon lawful occupations or arbitrarily interfere with private rights. Holt, supra, 108 N.E.2d at 634. If the law prohibits something harmless, is unreasonable and purely arbitrary, or does not promote the health, safety, morality, comfort or welfare of society in general, it is an unauthorized exercise of police power. Id. Government action constitutes a proper exercise of police power when the collective benefit to the general public outweighs the restraint imposed. Zahm, supra, 502 N.E.2d at 494.

Christole contends I.C. 16-13-22-1 et seq., of which amended Sec. 14 is a part, reflects the legislature's determination that integrating, or "mainstreaming", the developmentally disabled into normal residential surroundings is an important purpose which provides qualified residents of group homes a measure of independent living in traditional homes as...