Marsym Development Corp. v. Winchester Economic Development Com'n

• Decision Date: 03 January 1984
• Docket Number: No. 1-682A152,1-682A152
• Citation: 457 N.E.2d 542
• Parties: MARSYM DEVELOPMENT CORP., Appellant (Plaintiff below), v. WINCHESTER ECONOMIC DEVELOPMENT COMMISSION; Gene Gulley, Member; Bill Geyer, Member; Robert Pugh, Member; Richard Walker, Member; Garl Walker, Member; Common Council of the City of Winchester, Indiana; Arthur P. Cassidy, Councilman; Charles W. Wolf, Councilman; Robert Baker, Councilman; James Blansett, Councilman; Helen Segraves, Councilman; City of Winchester, Indiana; Jack Fowler, Mayor of the City of Winchester, Indiana; Marsh Supermarkets, Inc., Appellees (Defendants below).
• Court: Indiana Supreme Court

Page 542

457 N.E.2d 542

MARSYM DEVELOPMENT CORP., Appellant (Plaintiff below), v. WINCHESTER ECONOMIC DEVELOPMENT COMMISSION; Gene Gulley Member; Bill Geyer, Member; Robert Pugh, Member; Richard Walker, Member; Garl Walker, Member; Common Council of the City of Winchester, Indiana; Arthur P. Cassidy, Councilman Charles W. Wolf, Councilman; Robert Baker, Councilman James Blansett, Councilman; Helen Segraves, Councilman City of Winchester, Indiana; Jack Fowler, Mayor of the City of Winchester, Indiana; Marsh Supermarkets, Inc., Appellees (Defendants below).

No. 1-682A152.

Supreme Court of Indiana.

Jan. 3, 1984.

William A. Waddick, Willis K. Kunz, Kunz & Kunz, Indianapolis, for appellant.

George F. Daly, Daly & Daly, Winchester, for appellees, Winchester Economic Development Com'n and members.

Michael C. Williams, Winchester, for appellees, City of Winchester, Common Council and mayor.

G. Daniel Kelley, Jr., Jeffrey O. Lewis, Stephen M. Terrell, Ice, Miller, Donadio & Ryan, Indianapolis, for appellee, Marsh Supermarket.

ON PETITION TO TRANSFER

Transfer denied.

Opinion below: (1983) 447 N.E.2d 1138.

HUNTER, Justice, dissenting to denial of transfer.

I respectfully dissent to the denial of the petition to transfer from the Court of Appeals' decision in Marsym Dev. Corp. v. Winchester Economic Dev. Comm'n, (1983) Ind.App., 447 N.E.2d 1138. The defendants in this case, The Economic Development Commission (EDC), The Winchester City Council, The City of Winchester, and Marsh Supermarkets, Inc., seek review of the Court of Appeals' reversal of a summary judgment in favor of the defendants. The plaintiff, Marsym Development Corporation (Marsym) filed a complaint for declaratory judgment, and sought a construction of Ind.Code Sec. 18-6-4.5-1 et seq. (recodified at Ind.Code Sec. 36-7-12-1 et. seq. (Burns 1981 Repl.)). The trial court granted the defendants' motion for summary judgment on the ground that Marsym lacked standing. The Court of Appeals reversed and held that there were sufficient grounds for standing. I would grant transfer, vacate the Court of Appeals' decision, and affirm the trial court.

Marsh was for several years the major tenant in a shopping center owned by Marsym. Although the lease did not expire until the end of 1982, Marsh decided in 1980 to build a larger store at another location. In order to do so, Marsh applied to the EDC for financing. The EDC granted preliminary approval for the project. Marsym then filed a complaint for declaratory judgment against the EDC. Marsym later filed a second complaint against the City Council and its members after the Council passed an ordinance approving the sale of the economic development bonds. Marsh was allowed to intervene as a party defendant, and Marsym was allowed to amend its complaint accordingly. Further procedural aspects of the case are set out in detail in the Court of Appeals' decision and need not be repeated here. It is sufficient to note that the trial court eventually granted a summary judgment in favor of the defendants on the ground that Marsym lacked standing.

Standing is a prudential limitation on the ability of individuals to seek redress in our courts. Cablevision of Chicago v. Colby Cable Corp., (1981) Ind.App., 417 N.E.2d 348. In the case of a declaratory judgment, the requirements for standing are contained in Ind.Code Sec. 34-4-10-2 (Burns 1973):

"Any person interested under a deed, will, written contract or other writings constituting a contract, or whose rights, status or other legal relations are affected by a statute, municipal ordinance, contract or franchise, may have determined any question or construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status or other legal relations thereunder."

The essence of standing is that the plaintiff must demonstrate a direct and substantial injury, Lutheran Hosp. of Ft. Wayne, Inc. v. Department of Pub. Welfare, (1979) Ind.App., 397 N.E.2d 638, and this rule applies to declaratory judgment actions brought under the above section. The plaintiff in a declaratory judgment action must also show injury distinct or different in time from that of the general public and demonstrate a substantial present interest in the relief sought. Lutheran Hosp. of Ft. Wayne v. Department of Pub. Welfare; Burridge v. City of Mishawaka, (1948) 225 Ind. 613, 77 N.E.2d 297.

The Court of Appeals found that the standing requirement was satisfied in two ways. The first was that the bond proceedings would affect Marsym's contractual relationship with Marsh. The Court of Appeals reasoned that because Marsh would be able to borrow money at a lower rate of interest, there was "a causal relationship, a nexus, between the bond proceedings and Marsh's decision to relocate ...." 447 N.E.2d at 1143. I believe that a closer examination of the issue, however, shows that the bond proceedings do not directly affect Marsym's contractual relationship with Marsh under the lease. Marsym's complaint in this action is essentially contractual, dealing with interpretations of a lease and alleged violations of it by Marsh. This lease is the "legal relation" that stands to be affected by the bond proceedings. See Ind.Code Sec. 34-4-10-2. The bond proceedings add nothing to the ultimate issue of whether, under the terms of the lease, Marsh could move from its existing store. True, lower interest rates may have persuaded Marsh to go forward with their decision to move and to expand. Marsym contends it will be affected by this move because of the rent it will lose. But it is not the bond proceedings that cause the lost rents, it is Marsh's move. Whether Marsh had the right to make the move, in light of their lease with Marsym, existed without regard to whether Marsh could borrow under an economic development project. The effect of the bond proceedings on the "legal relation" is indirect at best, and it is not sufficient to confer standing. See Sendak v. Allen, (1975) 164 Ind.App. 589, 330 N.E.2d 333. Furthermore, the Court's judgment in this matter, if rendered, would not change or affect the contractual relations, and the judgment would not effectively solve the problem. See Volkswagenwerk, A.G. v. Watson, (1979) Ind.App., 390 N.E.2d 1082; BORCHARD, DECLARATORY JUDGMENTS 75 (2d ed. 1941). As such, the bond proceeding and its relationship to the lease was not a sufficient basis to find standing existed. Since no legal relation was directly affected, Marsym did not have a right to have the construction or validity of the statute decided.

The Court of Appeals also held that a second ground existed for finding standing. This ground was Ind.Code Sec. 18-6-4.5-14 (recodified at Ind.Code Sec. 36-7-12-21 (Burns 1981 Repl.)). The Court of Appeals stated summarily that, if Marsym's interpretation of this section were correct, Marsym had shown potential injuries apart from the lease with Marsh. The court then accepted Marsym's interpretation, holding that the EDC was required to consider the adverse competitive effect of the proposed economic development facilities on existing facilities. The Court of Appeals further held that the...