Mendenhall v. City of Indianapolis

• Decision Date: 12 October 1999
• Docket Number: No. 49A04-9901-CV-1.,49A04-9901-CV-1.
• Citation: Mendenhall v. City of Indianapolis, 717 N.E.2d 1218 (Ind. App. 1999)
• Parties: Burke H. MENDENHALL, and Plaza-Hill Realty Corporation, Appellants-Plaintiffs, v. CITY OF INDIANAPOLIS, Indiana and Marion County, Indiana, Appellees-Defendants.
• Court: Indiana Appellate Court

717 N.E.2d 1218

Burke H. MENDENHALL, and Plaza-Hill Realty Corporation, Appellants-Plaintiffs, v. CITY OF INDIANAPOLIS, Indiana and Marion County, Indiana, Appellees-Defendants.

No. 49A04-9901-CV-1.

Court of Appeals of Indiana.

October 12, 1999.

John D. Raikos, Indianapolis, Indiana, Attorney for Appellant.

Dale R. Simmons, Office of Corporation Counsel, Indianapolis, Indiana, Attorney for Appellee.

OPINION

ROBB, Judge

Appellants-Plaintiffs, Burke Mendenhall and Plaza-Hill Realty Corporation ("Plaza-Hill"), appeal from the trial court's entry of summary judgment in favor of Appellees-Defendants, City of Indianapolis, Indiana (the "City") and Marion County, Indiana (the "County"), and from denial of Mendenhall's motion for summary judgment on Mendenhall's complaint for damages for inverse condemnation. We affirm, holding that the undisputed material facts show that the actions of which Mendenhall complains were undertaken by an agent and on behalf of the State of Indiana, and thus, the City and the County are entitled to judgment as a matter of law.

Issues

Mendenhall raises the following restated issues for our review:

1. Whether the trial court properly granted summary judgment to the City/County on finding that:

a. The issue of Goldsmith's status as an agent of the State and not of the City/County in prosecuting the civil forfeiture action had been established in a former adjudication and Mendenhall was precluded from relitigating it herein;

b. The City/County is entitled to immunity for the actions of the County Prosecutor and the City Police Department in prosecuting a civil forfeiture action; and

c. An inverse condemnation claim is not the appropriate form of action for redress of the seizure of real property pursuant to a civil forfeiture action.

2. Whether the trial court erred in denying Mendenhall's motion for summary judgment based on these same conclusions of law.

Facts and Procedural History¹

This case comes to us via a lengthy and circuitous route through the state and federal courts. As briefly as possible in order to understand the issues before us, the facts are as follows: Mendenhall owns a building at 4266 West 38th Street in Indianapolis, Indiana. On June 1, 1983, Mendenhall leased a portion of this building to Burton Gorelick, doing business as Plaza Entertainment Center, for a five-year, renewable term. Gorelick took possession on June 11, 1983, and prepared to open an adult bookstore at the location. Gorelick operated adult bookstores at two other locations in the City.

On August 1, 1983, Marion County Prosecutor Stephen Goldsmith filed a civil complaint for injunctive relief against several individual and corporate defendants, including Gorelick, Plaza Entertainment Center, and Mendenhall. The complaint alleged that the defendants had conducted an enterprise through a pattern of racketeering activity through the distribution of obscene books and films at three adult bookstores in violation of Indiana's Racketeer Influenced and Corrupt Organizations (RICO) Act. Ind.Code §§ 35-45-6-1 to -2. The complaint was brought pursuant to Indiana's Civil Remedies for Racketeering Activity (CRRA) Act. Ind.Code §§ 34-4-30.5-1 to -7 (now codified at Ind.Code §§ 34-24-2-1 to -8). The complaint sought forfeiture of all real and personal property "used in the course of, intended for use in the course of, derived from, or realized through" the defendants' racketeering activity. See Ind.Code § 34-24-2-2(a). Goldsmith sought seizure of the property subject to forfeiture through a separate petition. See Ind.Code § 34-24-2-2(b). The seizure petition was accompanied by a probable cause affidavit executed by a detective of the Indianapolis Police Department (IPD) describing the books and films for sale at two of the bookstores that he believed to be obscene. The affidavit included a description by another detective of the bookstore yet to open on Mendenhall's property. After hearing testimony in support of the petition, the trial judge entered an ex parte order finding that there was probable cause to believe that the two existing bookstores had violated Indiana law, and directing IPD to "lock, seal and secure" the bookstore on Mendenhall's property in advance of its opening pursuant to Indiana Code section 34-4-30.5-4 (now Indiana Code section 34-24-2-4). R. 274. On August 3, 1983, IPD officers padlocked Mendenhall's building and denied both him and Gorelick access to the building and its contents.

The defendants moved to dismiss the complaint and to vacate the seizure order on the ground that Indiana's RICO and CRRA statutes violated their First and Fourteenth Amendment rights. The trial court denied the motion, but certified its ruling for interlocutory appeal to the Indiana Court of Appeals. The case, 4447 Corp. v. Goldsmith, was consolidated on appeal with Fort Wayne Books, Inc. v. Indiana, a case arising out of Allen County, Indiana and raising the same constitutional issues. Mendenhall was not a party to the appeal.

On February 2, 1984, the Court of Appeals issued an order modifying the trial court's seizure order pending appeal and ordering that IPD "unlock, unseal and release" Mendenhall's property, and further ordering the defendants to "preserve all property" at that location. R. 275-76. Mendenhall regained possession of his building, and on March 15, 1984, transferred title to the property to Plaza-Hill, an Indiana corporation of which he is the president and sole shareholder.²

On June 12, 1985, the Court of Appeals issued its opinion holding that Indiana's RICO/CRRA statutory scheme violated the First Amendment in that its injunctive remedies operated as a prior restraint in its application to the predicate offense of obscenity. 4447 Corp. v. Goldsmith, 479 N.E.2d 578, 585 (Ind.Ct.App.1985). Thereafter, Mendenhall filed a complaint in federal court alleging violation of his civil rights and damages from inverse condemnation. However, his federal action was stayed pending final resolution of the appeal in state court. On March 2, 1987, the Indiana Supreme Court granted transfer, vacated the Court of Appeals opinion, and held that the inclusion of obscenity as a predicate offense did not render Indiana's RICO and CRRA statutes unconstitutional. 4447 Corp. v. Goldsmith, 504 N.E.2d 559, 566 (Ind.1987). The supreme court further upheld the pre-trial seizure of the bookstores' contents. Id. at 567.

While the appeals of this matter were pending, Gorelick defaulted on his lease agreement with Mendenhall, and Mendenhall relet the premises to Video & Gift Center, Inc. Video & Gift Center took possession of the premises on August 1, 1987, and prepared to open an adult bookstore at the location. However, on that same day and at the direction of Goldsmith, IPD reseized and repadlocked the property pursuant to the original seizure order.

Following the Indiana Supreme Court's ruling, certiorari was granted by the United States Supreme Court in Fort Wayne Books, Inc. v. Indiana, 485 U.S. 933, 108 S.Ct. 1106, 99 L.Ed.2d 268 (1988). 4447 Corporation did not seek certiorari, and took no part in the proceedings before the Supreme Court. Fort Wayne Books, Inc. v. Indiana, 489 U.S. 46, 52 n. 3, 109 S.Ct. 916, 103 L.Ed.2d 34 (1989). On February 21, 1989, the Supreme Court held that Indiana's RICO/CRRA statutory scheme was not unconstitutional for its use of obscenity as a predicate offense, but that the pre-trial seizure of the bookstores' contents was unconstitutional as a prior restraint on expression in violation of the First Amendment. Id. at 58, 66-67, 109 S.Ct. 916.

In April 1989, Mendenhall reached a settlement in the state court litigation. Goldsmith, by his deputy prosecuting attorney Philip Blowers, offered to dismiss the RICO/CRRA action still pending against Mendenhall in exchange for his promise not to use his property for an "adult use." R. 196-97. Mendenhall signed a letter agreeing to these terms, r. 207-08, and his property was once again released to him. Mendenhall was then dismissed with prejudice from the RICO action. R. 209.

The stay in the federal court proceedings was subsequently lifted. Upon motion by Goldsmith and the City of Indianapolis, the District Court dismissed Mendenhall's complaint for federal civil rights violations, and elected not to continue to exercise pendent jurisdiction over the state inverse condemnation cause of action. R. 132-43, 277. The District Court's decision was affirmed by the Seventh Circuit Court of Appeals. Mendenhall v. Goldsmith, 59 F.3d 685, 692 (7th Cir.1995), cert. denied, 516 U.S. 1011, 116 S.Ct. 568, 133 L.Ed.2d 492 (1995).³

Thus, we come to the proceedings before us. On December 22, 1995, Mendenhall filed the instant complaint for damages from inverse condemnation in Marion County Superior Court against the City and the County. The City and the County were jointly represented. All parties moved for summary judgment. Following a hearing, the trial court entered findings and conclusions granting the City/County's motion for summary judgment, denying Mendenhall's motion for summary judgment, and entering judgment in favor of the City/County and against Mendenhall. Mendenhall filed a motion to correct error, which was denied. This appeal followed.

Discussion and Decision

I. Standard of Review

This case comes to us on both a grant and denial of summary judgment. Our standard of review of a summary judgment order is well-settled: summary judgment is appropriate if the "designated evidentiary matter shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Ind. Trial Rule 56(C). Relying on specifically designated evidence, the moving party bears the burden of showing prima facie that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. Estate of Pflanz v. Davis, 678 N.E.2d 1148, 1150 (Ind.Ct.App. 1997)....