Cunningham v. Hiles
| Decision Date | 30 August 1982 |
| Docket Number | No. 3-977A234,3-977A234 |
| Citation | 439 N.E.2d 669 |
| Parties | James D. CUNNINGHAM, Fred M. Lutgen, Jr. and Ross Haller, Appellants (Plaintiffs Below), v. Doug HILES, Al Gomez, Jr., Arthur C. and Sarah Clouser, Town of Schererville Plan Commission and Town of Schererville, Indiana, A Municipal Corporation, Appellees (Defendants Below). |
| Court | Indiana Appellate Court |
Defendant-appellee Doug Hiles (Hiles) petitions for rehearing of an opinion in which we reversed the Lake Circuit Court and ordered it to cite him for contempt in view of his refusal to obey an injunction enforcing a restrictive land covenant. Cunningham v. Hiles, (1982) Ind.App., 435 N.E.2d 49. Hiles protests on rehearing that our opinion (1) contains inaccuracies, (2) exceeds the scope of appellate jurisdiction, (3) weighs the evidence, and (4) misapplies the law.
Our reexamination of the record leaves us even more firmly convinced that our previous opinion must stand.
Because there are overtones of perjury, contempt, and obstruction of justice involved in this case, we now supplement our previous opinion by first restating pertinent facts.
This litigation began over five years ago when adjacent landowners learned that Hiles planned to construct a music store on land he and his wife Kathy Hiles (Kathy) intended to purchase. In a complaint filed on September 14, 1976, adjacent landowners alleged that establishment of a commercial business on the real estate would violate certain restrictive covenants; on March 11 and April 4, 1977, a hearing was held on a second amended complaint to determine whether an injunction would lie. Individual defendants Hiles, Al Gomez (Hiles's contractor), and Arthur and Sarah Clouser (sellers of the real estate) were represented at the hearing by attorney Gilbert F. Blackmun. Representing the Town of Schererville and its Plan Commission was attorney Kenneth D. Reed.
Hiles's testimony at the 1977 injunction hearing merits close scrutiny. His uncontradicted testimony on cross-examination by defense counsel shows that, at the time of the injunction hearing, Hiles already owned a music store at a different location:
"Q What is your occupation, Mr. Hiles ?
A I am supervisor of Data Processing installation, Wyman Gordon Data Processing Installation, and owner of Sherwood Music.
Q What was that employer's name?
A Wyman Gordon.
Q And where is he located?
A In Harvey, Illinois.
Q And how long have you owned this other business ?
A Three years in June [, 1977].
Q And where is that located ?
A Route 30 and Cline.
Q And what do you have there at Route 30 and Cline ?
A Music studio.
* * *
Q And what type of business do you conduct there? What do you do there?
A We sell accessories and have a music studio.
Q Also do you give any instructions?
A Yes.
Q How many instructors do you have there?
A I believe like six during the day.
Q And how many hours a day could you spend there?
A I spend the evening hours after work there, and on Saturdays.
Q Do you play a musical instrument?
A Yes.
Q And do you give instructions?
A Yes, I do.
Q What type of instructions do you give?
A Guitar.
A Spanish.
Q Do you have a partner in there--
A No, sir.
Q None whatsoever ?
A No, sir.
Q Well, why did Mr. Gomez petition with you before the Schererville Town Board and Plan Commission Town Board ?
A Mr. Gomez is my builder.
Q So he proposes or, you have contracted with him to build this--
A Yes.
Q Is your contract with Mr. Clouser, is that conditioned, or was it conditioned on rezoning?
A Yes, sir."
Record at B386-88 (emphasis added).
Other testimony revealed that a new location was needed due to business growth. The property now in dispute was found suitable for a new location, which is about one mile from the old store. Not only did Hiles and Kathy contract with the Clousers for purchase of the land (contingent on rezoning), Hiles individually contracted with a builder based on detailed plans drawn by Hiles's architect. Our earlier opinion summarized evidence of Hiles's involvement with the proposed music store:
"he described the parking arrangements; types of materials for the walls, roof, and exterior; anticipated number of students per hour; number of instructors; type of instruments to be sold; and the type of lessons which would be given."
Even though she subsequently would seek a major role in litigation, Kathy was not a witness in this injunction hearing. Indeed, the only context in which her name was mentioned was as potential co-owner, with Hiles, of the real estate in question. Although the term "we" was employed occasionally by Hiles in describing the planned operation of the business, the remaining party constituting the "we" was never identified. The only evidence was that Hiles was sole owner of the business at the old store which he was moving to the new location. (Likewise, no evidence suggested that Kathy owned any part, or would own any part, of the business.) This fact became part of the law of the case.
The Lake Circuit Court on April 4, 1977, determined that the restrictive covenant was unenforceable, and an appeal was taken by adjacent landowners. At this point in the proceedings, the defendant-appellees switched legal counsel: Attorney Reed undertook representation of the individual defendants--an endeavor he has continued. The Third District of this Court on October 24, 1979, reversed the trial court's decision and ordered the issuance of a permanent injunction prohibiting construction of the music store. Cunningham v. Hiles, (1979) Ind.App., 395 N.E.2d 851.
A petition for rehearing was filed following the Third District's decision in which Hiles stated that "the Defendants-Appellees constructed the music store," during the pendency of the appeal and "it is in existence today." Kathy was not a defendant-appellee. As in the original hearing, the only reference to her remained as co-owner of the real estate. (Attorney Reed had prepared the deed in May 1977 transferring ownership from the Clousers to Hiles and Kathy).
Hiles proposed that construction of the store had rendered the appeal moot. Judge Staton, writing for a unanimous Third District, rejected the mootness argument; instead, Hiles had "tardily-raised" the issue by failing to place the issue before the court by way of available "petitions, motions, or challenges by verified pleadings." The issue was waived; "Hiles built the music store at his own peril." Cunningham v. Hiles, (1980) Ind.App., 402 N.E.2d 17, 20-22. The petition for rehearing was denied, but the Third District did modify its mandate by directing the trial court to enjoin "the use of the structure for any purpose which violates the terms of the restrictive covenant." Id. at 22. A second petition for rehearing and a petition to transfer to the Indiana Supreme Court were both denied without opinion on July 24, 1980.
Discovering that transfer had been denied, adjacent landowners filed a motion with the trial court on August 5, 1980, requesting that a hearing be held for issuance of the permanent injunction; the hearing date set was October 1, 1980. Numerous pleadings and delays followed the request, including another surprise: On October 1, a petition for leave to intervene was filed by attorneys Reed and Blackmun on behalf of Kathy. Despite the fact that Kathy's name had not been mentioned with respect to ownership of the music store business at the original injunction hearing held 2 1/2 years earlier, and despite the fact that her name never had been referred to when Hiles petitioned for rehearing and transfer alleging that "the Defendants-Appellees constructed the music store," Kathy sought to intervene "individually and doing business as Sherwood Music Center." Record at 42.
An injunction finally was entered by the trial court on November 20, 1980, after adjacent landowners had filed with this court a Verified Application for Writ of Mandate in Aid of Appellate Jurisdiction. The injunction as entered was short-lived. On December 10, the parties appeared in court, where Hiles moved to set aside the injunction and adjacent landowners filed a Petition for Citation and Rule to Show Cause. Also, the trial court denied Kathy's petition to intervene. In apparent response to the denial of intervention, Kathy filed a Certificate of Assumed Business Name on December 16, the day before the trial court entered an amended injunction on December 17 as part of a scheduled hearing. The injunction as amended reads:
The next day, December 18, 1980, Hiles for the first time alleged that he at one time had owned an interest in the music store business, but that he no longer owned any interest in the business. In response to the Petition for Citation and Rule to Show Cause filed on December 10, Hiles alleged:
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