Marion County v. State

• Decision Date: 13 June 2008
• Docket Number: No. 73A01-0705-CV-238.,73A01-0705-CV-238.
• Citation: 888 N.E.2d 292
• Parties: MARION COUNTY, Indiana, ex rel. Bart Peterson, in his official capacity as Executive of Marion County; and St. Joseph County, Indiana, Appellants-Plaintiffs, v. STATE of Indiana; Tim Berry, in his official capacity as Auditor of State; Richard Mourdock, in his official capacity as Treasurer of State; Christopher A. Ruhl, in his official capacity as Director of the State Budget Agency; and J. David Donahue, in his official capacity as Commissioner of the Indiana Department of Correction, Appellees-Defendants.
• Court: Indiana Appellate Court

888 N.E.2d 292

MARION COUNTY, Indiana, ex rel. Bart Peterson, in his official capacity as Executive of Marion County; and St. Joseph County, Indiana, Appellants-Plaintiffs, v. STATE of Indiana; Tim Berry, in his official capacity as Auditor of State; Richard Mourdock, in his official capacity as Treasurer of State; Christopher A. Ruhl, in his official capacity as Director of the State Budget Agency; and J. David Donahue, in his official capacity as Commissioner of the Indiana Department of Correction, Appellees-Defendants.

No. 73A01-0705-CV-238.

Court of Appeals of Indiana.

June 13, 2008.

Geoffrey Slaughter, Taft Stettinius & Hollister LLP, Indianapolis, IN, Attorney for Appellants.

Steve Carter, Attorney General of Indiana, David L. Steiner, Deputy Attorney General, Indianapolis, IN, Attorneys for Appellees.

OPINION

MAY, Judge.

For many years, Indiana counties have been required to pay a portion of the cost of operating juvenile detention facilities. When the State attempted to collect a combined arrearage of approximately $75 million from Marion and St. Joseph Counties, the Counties filed a lawsuit seeking relief from their debts. The trial court entered summary judgment for the State, and we affirm.¹

FACTS AND PROCEDURAL HISTORY

Article 9, Section 2 of the Indiana Constitution provides: "The General Assembly shall provide institutions for the correction and reformation of juvenile offenders." As of 1953, Indiana had two such institutions: the Indiana Boys' School (later renamed Plainfield Juvenile Correctional Facility and hereinafter referred to as "Plainfield"), and the Indiana Girls' School (later renamed Indianapolis Juvenile Correctional Facility and hereinafter referred to as "Indianapolis"). From 1953 to 2005, Ind Code § 4-24-7-2 (or its predecessor) authorized the State to recoup from the counties a portion of its expenses for operating these facilities.

In 2005, the General Assembly enacted legislation requiring counties owing money for the operation of juvenile facilities to agree to a plan for repaying their outstanding balance. Pub.L. No. 246-2005, § 237. If a county did not enter a repayment plan, it would lose property tax replacement credits. Id.

The State determined Marion County had an arrearage of more than $67 million. On July 12, 2005, Marion County filed suit against the State challenging this determination. St. Joseph County, which had an arrearage of approximately $7 million, intervened.

The Counties sought declaratory and injunctive relief and restitution of all their payments since 1995. They argued Art. 9, § 2 requires the State to pay the entire cost of operating juvenile facilities. In the alternative, they argued: (1) Ind.Code § 4-24-7-2 permits the State to charge the Counties only for expenses incurred by Plainfield and Indianapolis; and (2) all the accounts submitted to the Counties since 1995 are invalid because they did not comply with the signature and attestation requirements of Ind.Code § 4-24-7-4. The State argued the Counties lacked standing and their suit is barred by the statute of limitations and the doctrine of laches.

The State and the Counties filed cross-motions for summary judgment. On May 1, 2007, the trial court granted summary judgment for the State. The trial court found the State had established each of its defenses and also found for the State on the merits of the Counties' claims.

DISCUSSION AND DECISION

The Counties raise several issues on appeal:

(1) whether the Counties have standing to bring this suit;

(2) whether the Counties' claims are barred by the statute of limitations;

(3) whether the Counties' claims are barred by the doctrine of laches;

(4) whether Art. 9, § 2 of the Indiana Constitution requires the State to pay all costs of operating juvenile facilities;

(5) whether the State's failure to comply with signature and attestation requirements renders the accounts invalid; and

(6) whether the trial court erred by holding the State could recoup expenses for facilities other than Plainfield and Indianapolis.

In reviewing summary judgment, we apply the same standard as the trial court. Wright v. Am. States Ins. Co., 765 N.E.2d 690, 692 (Ind.Ct.App.2002). Summary judgment is appropriate if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C). "Any doubt as to a fact, or an inference to be drawn, is resolved in favor of the nonmoving party." Sanchez v. Hamara, 534 N.E.2d 756, 757 (Ind.Ct.App.1989), trans. denied. The moving party bears the burden of proving there is no genuine issue of material fact; however, once this burden is sustained, the opponent may not rest on the pleadings, but must set forth specific facts showing there is a genuine issue for trial. T.R. 56(E); Oelling v. Rao, 593 N.E.2d 189, 190 (Ind.1992). We consider only the evidence designated to the trial court. T.R. 56(H); Mangold ex rel. Mangold v. Ind. Dep't of Natural Res., 756 N.E.2d 970, 973 (Ind.2001).

We affirm summary judgment on any legal basis supported by the designated evidence. Bernstein v. Glavin, 725 N.E.2d 455, 458-59 (Ind.Ct.App.2000), trans. denied 741 N.E.2d 1248 (Ind.2000). The appellant bears the burden of persuading us the grant of summary judgment was erroneous. Bank One Trust No. 386 v. Zem, Inc., 809 N.E.2d 873, 878 (Ind.Ct.App. 2004), trans. denied 822 N.E.2d 975 (Ind. 2004). That the parties made cross-motions for summary judgment does not alter our standard of review. Green Tree Servicing, LLC v. Random Antics, LLC, 869 N.E.2d 464, 467-68 (Ind.Ct.App.2007). We consider each motion separately to determine whether the moving party is entitled to judgment as a matter of law. Id. at 468.

1. Standing

The Counties have standing. Standing is a limit on the court's jurisdiction. Pence v. State, 652 N.E.2d 486, 488 (Ind.1995), reh'g denied. Standing "focuses on whether the complaining party is the proper person to invoke the court's power." State ex rel. Cittadine v. Ind. Dep't of Transp., 790 N.E.2d 978, 979 (Ind.2003). Only persons "who have a personal stake in the outcome of the litigation and who show that they have suffered or were in immediate danger of suffering a direct injury as a result of the complained-of conduct will be found to have standing." Id. The standing requirement is designed to ensure "litigation will be actively and vigorously contested." State ex rel. State Bd. of Tax Comm'rs v. Marion Superior Court, 271 Ind. 374, 392 N.E.2d 1161, 1164 (1979) (quoting Ind. Educ. Employment Relations Bd. v. Benton Comty. Sch., 266 Ind. 491, 365 N.E.2d 752, 754 (1977)). It "mandates that courts act in real cases and refrain when called to engage in abstract speculation." Schulz v. State, 731 N.E.2d 1041, 1044 (Ind.Ct.App.2000), trans. denied 741 N.E.2d 1259 (Ind.2000).

The State asserts that, "with rare exceptions, a county and its government have no standing and are powerless to challenge the constitutionality of a state statute," and cites Bd. of Comm'rs of Howard County v. Kokomo City Plan Comm'n, 263 Ind. 282, 330 N.E.2d 92 (1975). Howard County does not hold a county may not seek to invalidate a statute; rather, a county cannot do so in the absence of any injury to the county itself. See Howard County, 330 N.E.2d at 101; compare Ind. Dep't of Natural Resources v. Newton County, 802 N.E.2d 430, 433 (Ind.2004) (county had standing to challenge constitutionality of state statute because it demonstrated it had an interest in enforcing its ordinances).²

The State also argues the Counties are attempting to assert the claims of their residents. See Howard County, 330 N.E.2d at 101 (counties cannot act as parens patriae). The State compares the case before us to Shoemaker v. Bd. of Comm'rs of Grant County, 36 Ind. 175 (1871), wherein Grant County sued the State Auditor to collect an overpayment of its residents' property taxes. Our Supreme Court held the county did not have standing because the money belonged to the residents, and the county had no interest in the money. Id. at 183. The State argues Shoemaker controls because the Counties are seeking to collect money paid by their resident taxpayers.

Shoemaker is distinguishable. Even if a county has no interest in taxes its residents pay to the State, it does have an interest in funds paid out of its own treasury. It is the Counties, and not individual citizens, that are charged with paying a portion of the costs of incarcerating juveniles and that were required to enter repayment plans to avoid the loss of property tax replacement credits.

Counties and their officials "possess standing to challenge an interpretation or application of a statute if it can be demonstrated that the party is seeking the resolution of a legitimate controversy surrounding the operation of the statute." Marion Superior Court, 392 N.E.2d at 1164. "It would be anomalous indeed for us to hold that a county or its officials cannot resolve in a court of law a bona fide dispute with a state agency over the application of a state statute." Id. at 1165. The Counties have a stake in the $75 million at issue in this case. This sum represents a bona fide dispute between adverse parties. Therefore, we conclude the trial court erred by holding the Counties lacked standing.

2. Statute of Limitations

The trial court held the Counties' constitutional claim was barred by the statute of limitations. It also held their claim they were required to pay only for Plainfield and Indianapolis was time-barred.³

The State characterizes the Counties' claims as facial challenges and argues a facial challenge accrues when the statute is enacted. The State relies primarily on three decisions from other jurisdictions: Kuhnle Brothers, Inc. v. County of Geauga, 103 F.3d 516 (6th Cir.1997); De Anza Properties X, Ltd. v. County of Santa Cruz, 936 F.2d 1084 (9th Cir.1991); and Williams v. Blue Cross Blue Shield of North Carolina, 357 N.C. 170, 581 S.E.2d...