Girl Scouts of S. Ill. v. Vincennes Ind. Girls, Inc.

• Decision Date: 14 May 2013
• Docket Number: No. 42S00–1210–PL–597.,42S00–1210–PL–597.
• Citation: 988 N.E.2d 250
• Parties: GIRL SCOUTS OF SOUTHERN ILLINOIS, Appellant (Defendant below), v. VINCENNES INDIANA GIRLS, INC., Appellee (Plaintiff below).
• Court: Indiana Supreme Court

988 N.E.2d 250

GIRL SCOUTS OF SOUTHERN ILLINOIS, Appellant (Defendant below),

v.VINCENNES INDIANA GIRLS, INC., Appellee (Plaintiff below).

No. 42S00–1210–PL–597.

Supreme Court of Indiana.

May 14, 2013.

Unconstitutional as Applied

West's A.I.C. 32–17–10–2.

Chad Michael Smith, Evansville, IN, Attorney for Appellant.

Brent Stuckey, Jill Doggett, Katie Kotter, Vincennes, IN, Attorneys for Appellee.

Gregory F. Zoeller, Attorney General of Indiana, Thomas M. Fisher, Solicitor General, Ashley Tatman Harwel, Heather Hagan McVeigh, Deputy Attorneys General, Indianapolis, IN, Attorneys for Amicus Curiae State of Indiana.

RUSH, Justice.

The Contracts Clause of the Indiana Constitution protects vested contract rights, including agreed contractual restrictions on land use, against retroactive impairment. Here, one Scouting organization deeded its campground to another on the condition that the Scouting use continue for 49 years, with the deed providing that ownership of the campground would revert to the original owner (the grantor) if the Scouting-use condition was breached during that time. We conclude that the Contracts Clause of the Indiana Constitution protects the enforceability of this 49–year land use limitation despite a subsequently enacted statute, Indiana Code section 32–17–10–2, that purports to limit reversionary clauses in land transactions to a maximum of 30 years.

Facts and Procedural History

In 1946, Vincennes University donated Camp Wildwood to Vincennes Indiana Girls, Inc. (“VIG”)—then known as Vincennes Indiana Girl Scout Council, Inc.—for use as a Girl Scout facility for the local troops. Then in 1965, the national Girl Scouts reorganized, and required VIG's local organization to be absorbed into a predecessor entity of Girl Scouts of Southern Illinois, Inc. (“GSSI”). That reorganization also required VIG to convey Camp Wildwood to GSSI's predecessor for continued use as a camping facility for Girl Scouts in GSSI's region.

VIG deeded Camp Wildwood as demanded, but on the condition that it be used for Scouting purposes for 49 years, enforced by a 49–year possibility of reverter to VIG, and a prohibition on “the grantor” (which, as the parties acknowledged, would be nonsensical unless it was a scrivener's error for “grantee”) selling or conveying the Camp during that time. Substituting the current parties' proper names for clarity, the deed provided:

[T]he conveyance of which real estate ... shall be upon and subject to the condition that such real estate ... shall revert to [VIG] if the same are not used for and as a Girl Scouts camping site and facilities for a period of forty-nine years from and after the date of such conveyance and transfer, which reversion shall automatically occur upon such failure of use as aforesaid; provided, however, that ... for the period aforesaid no rights shall exist in [GSSI] to convey, sell or dispose of said real estate in any fashion whatsoever or its use destroyed or terminated during the aforesaid forty-nine year period except as hereinbefore permitted; ... provided further [,] however[,] that if [VIG]'s existence is terminated or corporate charter surrendered, reversionary rights automatically terminate.

Both before and after the transfer, about 25 Vincennes-area Girl Scout troops used Camp Wildwood for their weekly meetings, summer day camps, singalongs and overnight camping, special events like “Boo Bash,” “Daisy Tea,” “Birthday Bash,” “Brownie Fest,” and “Egg Hunt.” The camp also hosted other community events.

That use continued for 44 years—until January 2009, when GSSI ceased using Camp Wildwood as a Girl Scout facility and decided to sell. It notified VIG of its intent to sell the camp, instructed VIG to remove its belongings within 30 days, and locked Vincennes-area troops out of the camp. VIG later discovered that it had been administratively dissolved in April 2004 for failure to pay annual fees to the Secretary of State, but was reinstated in August 2009.

In May 2010, VIG sued to quiet title to Camp Wildwood and enjoin GSSI from selling the camp until the 49–year period had expired, alleging that an Indiana statute limiting the duration of reversionary interests to 30 years was unconstitutional as applied, as a retroactive impairment of its contract rights. GSSI counterclaimed to quiet title, alleging that VIG's reversionary interest expired by operation of the statute in 1995, or by the terms of the deed when VIG was administratively dissolved in 2004.

The trial court granted summary judgment quieting title in VIG, and GSSI appealed. The appeal was initially filed in the Court of Appeals, but because the trial court's judgment declared a state statute unconstitutional, Appellate Rule 4(A)(1)(b) gives this Court mandatory and exclusive jurisdiction over the appeal. The case was therefore transferred to this Court under Appellate Rule 6, and proceeded as a direct appeal.

Standard of Review

In reviewing summary judgment rulings, we apply the same standard as the trial court: “summary judgment is appropriate only where the evidence shows there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law.” Tom–Wat, Inc. v. Fink, 741 N.E.2d 343, 346 (Ind.2001). In reviewing cross-motions for summary judgment, we consider each motion separately to make that determination. Keaton & Keaton v. Keaton, 842 N.E.2d 816, 819 (Ind.2006). But here, the parties disagree only as to the appropriate legal conclusions, without controverting the other's facts—and so both motions present pure questions of law. See Tom–Wat, 741 N.E.2d at 346 (“[B]oth Fink's and Tom–Wat's motions for summary judgment “present[ ] a question of law because ... the affidavits filed by the parties do not raise any factual disputes. Rather, to the extent they conflict, they do so only as to legal conclusions.”).

Discussion

On appeal, GSSI argues that possibilities of reverter are not protected against retroactive impairment, because Indiana does not recognize them as vested rights—and thus, Indiana Code section 32–17–10–2, which voids reversionary interests after 30 years, is constitutional. It also argues in the alternative that VIG's reversionary interest in Camp Wildwood terminated by the terms of the deed when VIG was administratively dissolved in 2004. VIG argues that its reverter is just one part of a larger vested right to enforce the deed's requirement that Camp Wildwood be used as a Scout camp for 49 years; and that under the relevant statute, its corporate existence continued through its administrative dissolution and was reinstated retroactively as if the dissolution never happened. We address the administrative dissolution issue first, because we generally avoid addressing constitutional questions if a case can be resolved on other grounds. Ind. Wholesale Wine & Liquor Co., Inc. v. State ex rel. Ind. Alc. Bev. Comm'n, 695 N.E.2d 99, 106 (Ind.1998); Citizens Nat. Bank of Evansville v. Foster, 668 N.E.2d 1236, 1241 (Ind.1996).

I. VIG's Administrative Dissolution and Reinstatement.

GSSI's non-constitutional argument relies on the deed's provision that “if [VIG]'s existence is terminated or corporate charter surrendered, reversionary rights automatically terminate.” GSSI argues that when VIG was administratively dissolved by the Indiana Secretary of State in 2004, its existence—and thus, its reverter—terminated as the deed contemplates; and that because GSSI closed Camp Wildwood in January 2009, VIG's August 2009 reinstatement came eight months too late to exercise the reverter. Based on the controlling statutes, we disagree.

First, Indiana Code section 23–17–23–2(c) provides in relevant part that an administratively dissolved non-profit corporation “ continues [its] corporate existence but may not carry on any activities except those necessary to wind up and liquidate [its] affairs under IC 23–17–22–5” (emphasis added). We cannot conclude that VIG's existence was “terminated” in terms of the deed, when the controlling statute expressly provides that its existence “continue [d].” And though GSSI also argues that VIG “surrendered its charter,” we find the ordinary sense of “surrender” connotes a voluntary act. See Black's Law Dictionary 1581 (9th ed. 2009) (“2. The giving up of a right or claim.”) Here, GSSI has designated nothing to controvert VIG's evidence that the failure to pay fees that caused its dissolution was involuntary, following the death of its corporate secretary who had handled those matters in the past.

Second, Indiana Code section 23–17–23–3(c) expressly provides that “the reinstatement relates back to and takes effect as of the effective date of the administrative dissolution and the corporation resumes carrying on the corporation's activities as if the administrative dissolution had never occurred.” (Emphasis added.) We are bound to enforce that statute by its terms. GSSI urges us to “hold [VIG] accountable for its mistakes” by creating an exception that “rights and assets of which the corporation was divested prior to the revival” cannot be reinstated. Appellant's Br. at 22, citing Arnold Developer, Inc. v. Collins, 318 Md. 259, 567 A.2d 949, 952 (1990). But Arnold reached that conclusion because the controlling Maryland statute expressly provides that “[a]ll the assets and rights of the corporation [are restored], except those sold or those of which it was otherwise divested while the charter was void.” 567 A.2d at 952,quoting Md.Code Ann., Corps. & Ass'ns § 3–512(2) (LexisNexis 1989) (emphasis added). Our Code has no comparable provision, and we will not invent one.

In sum, VIG's corporate existence continued (albeit in a limited capacity) even while it was administratively dissolved, and its reinstatement was retroactive “as if the ... dissolution had never occurred.” Accordingly, the dissolution did not terminate VIG's existence or surrender its charter, and so its reversionary rights did not terminate by...