Naked City, Inc. v. Aregood

• Decision Date: 21 August 1987
• Docket Number: No. L 87-56.,L 87-56.
• Parties: NAKED CITY, INC., Dick Drost, Melinda Bohanon, Florence Gay Slater, Plaintiffs, v. Greg AREGOOD, et al., Defendants.
• Court: U.S. District Court — Northern District of Indiana

667 F. Supp. 1246

NAKED CITY, INC., Dick Drost, Melinda Bohanon, Florence Gay Slater, Plaintiffs, v. Greg AREGOOD, et al., Defendants.

No. L 87-56.

United States District Court, N.D. Indiana, South Bend Division.

August 21, 1987.

Douglas Palaschak, Ventura, Cal., for plaintiffs.

Kathryn B. O'Neall, Remington, Ind., Anthon S. Benton, Lafayette, Ind., Harry J. Jennings, Merillville, Ind., Jason L. Horn, Highland, Ind., Daniel C. Blaney, John T. Casey, Morocco, Ind., David A. Arthur, Deputy Atty. Gen., Indianapolis, Ind., for defendants.

MEMORANDUM AND ORDER

ALLEN SHARP, Chief Judge.

I.

This case is before the court on the plaintiffs', Naked City, Inc., Dick Drost, and Florence Gay Slater, request for preliminary injunctive relief. The complaint was filed on May 22, 1987. On June 18, 1987, the plaintiffs requested a preliminary injunction. On June 22, 1987, the court scheduled an evidentiary hearing for July 10, 1987, and that hearing was rescheduled for July 30, 1987. A subsequent request for a temporary restraining order was filed on July 17, 1987. Some of the thirty-seven named defendants filed a response on July 24, 1987. In addition, two defendants filed an answer and alleged that the plaintiffs failed to state a claim upon which relief could be granted. This memorandum is limited solely to the issue of preliminary injunctive relief and is not intended to make any final determination of the merits of any of the plaintiffs' claims.

The facts relevant to the requested preliminary injunction are derived solely from the verified complaint, sworn affidavits, and certified copies of a plea agreement and orders entered in several state court proceedings. None of the parties called any witnesses or presented evidence during the July 30, 1987, hearing.¹ During that hearing the plaintiffs' counsel stated that he believed that the facts could be stipulated to, but no such stipulation was entered or made orally.

The record in this case discloses the following facts relevant to the issue of preliminary injunctive relief. The county and state police, through the alleged use of undercover investigators, "raided" the three hundred and sixty acre tract of land in Newton County referred to as Naked City several times. The plaintiffs allege that personal property in the form of tapes and equipment have been taken during the "raids". Specifically the plaintiffs allege Seventy-five Thousand Dollars ($75,000) worth of equipment was taken on April 14, 1980. In addition, the "joint" affidavit alleges that a friend of a friend of the plaintiffs said that the sheriff sold the plaintiffs' equipment. The plaintiffs complain that they did not receive notice of the sale. As a result of those "raids" and investigations, the plaintiffs, Richard Drost and Naked City, Inc., were charged with several violations of Indiana Criminal Statutes under cause numbers SPRS 81-77, SPRS 81-78, SPRS 85-58, SPRS 85-81 and SPRS 86-43. On January 13, 1982, each defendant entered a guilty plea to certain misdemeanor charges and one Class D felony charge under cause numbers SPRS 81-77 and SPRS 81-78. The defendants were sentenced on February 16, 1982. The defendants appealed seeking modification of the sentence. See, Naked City, Inc. v. State of Indiana, 460 N.E.2d 151 (Ind.App. 3 Dist. 1984). The Indiana Court of Appeals affirmed the convictions but reversed and remanded for resentencing. Subsequently, the defendant, Drost, filed a petition for post-conviction relief which was granted on November 26, 1984. On March 24, 1986, a plea agreement was filed in the Newton County Superior Court under cause numbers SPRS 81-77, SPRS 81-78, SPRS 85-58 and SPRS 85-81. That plea agreement was signed by Richard Drost individually and as agent for Naked City, Inc., as well as Richard Drost's attorneys, Frederick Cohn, Patricia Riley and John B. Wilson. In addition, the prosecuting attorney R. Steven Ryan signed the plea agreement. Paragraphs nineteen (19), twenty-three (23) and twenty-four (24) of the plea agreement state:

19. That defendant hereby states that at the time of the execution of this agreement, he is not under the influence of intoxicating liquors, drugs, or medication which might effect (sic) his comprehension and understanding of the terms herein stated.

23. The defendant hereby acknowledges that this plea agreement is entered into knowingly, voluntarily, intelligently, and that no threats or promises other than those contained herein have been made to him to force him to do so; that he has full knowledge of its consequences and has been advised by counsel of his constitutional right; to trial by Court or jury, presumption of innocence, to have the charges to be proved against him beyond a reasonable doubt, to the right to remain silent, to see and hear the witnesses against him and to cross-examine them, the right to subpoena witnesses on his behalf, the right to assistance of counsel at all important stages, including appeal, if convicted by trial, and the right to pauper counsel if he cannot afford one, all said rights being guaranteed to the defendant in regard to each and every charge.

24. The defendant and his counsel state that they have fully and completely discussed the alternatives to trial and that their decision to enter into this plea agreement is made by the defendant of his own free will, without duress or coercion and with the advise (sic) and assistance of his attorneys.

On the same day the same parties signed and filed in open court an "Addendum to Plea Agreement". Subsequently, Permanent Pro Tem Judge, Stephen Bower, entered an Order on April 1, 1986, which is consistent with the plea agreement. That Order sentenced the defendants, Richard Drost and Naked City, Inc., to a period of confinement of "one (1) year in each of the above ten (10) charges. The sentences of imprisonment shall be served consecutively." Further, that Order held that "said sentences were suspended and the defendant is placed on probation for said period of time upon the following terms and conditions." The terms and conditions which are alleged to be relevant in this case are:

8. That the business known as Naked City, Inc., in Roselawn, Newton County, Indiana, be closed instanter. The big sign in front shall be painted off by Monday evening, March 31, 1986.

9. That the Defendant offer for sale and sell either at public or private sale all real estate owned personally by Richard Drost or Naked City, Inc. and any other business or businesses within the State of Indiana in which he is the sole proprietor or controlling stockholder.

10. Further, the Defendant, Richard Drost, voluntarily agrees to remain out of the State of Indiana for a period of Ten (10) years from the date of this sentence, as a condition of probation. Provided, that in an emergency situation and upon prior approval of the Newton Superior Court, the Defendant may return to the State of Indiana for a reasonable period of time as directed by said Court.

Apparently, Judge Bower's Order, sentence and probation have never been appealed in the state courts of Indiana although appellate remedies are readily available.

The plaintiffs premise their request for preliminary injunctive relief upon "the 41 page complaint filed 22 May 1987," a "joint" affidavit of plaintiffs Dick Drost and Florence Slater, an affidavit of an individual named Donald Penden which was accompanied by photographs of unknown origin, and "evidence and testimony to be presented at the hearing." However, there was no evidence or testimony presented at the hearing. A brief summary of the counts which remain² in the forty-one (41) page complaint is attached as Appendix A. The "joint" affidavit which the plaintiffs submitted is attached as Appendix B. It is readily apparent from examination of Appendices A and B that a substantial portion of the allegations in the complaint and statements in the affidavit are either hearsay or conclusory statements unsupported by fact.

In response to the plaintiffs' allegations and affidavits, some of the defendants³ filed certified copies of court orders and opinions, and affidavits. Two of the defendants filed a thorough answer denying the plaintiffs' allegations and raising the following defenses: failure to state a claim pursuant to 12(b)(6); federal and state statute of limitations; these two defendants were not acting under color of state law; laches; improper venue; these two defendants acted in good faith and in lawful exercise of their rights under the First Amendment of the United States Constitution; and that the plaintiffs' complaint is without merit, frivolous, vexatious and constitutes harassment against these two defendants.

The relief sought, as expressed by plaintiffs' counsel during the evidentiary hearing and in the proposed order submitted with the request for a preliminary injunction is as follows:

a. that the Sheriff, the Indiana State Police, all persons who purchased property at the June 1987 sale or otherwise received property seized from Naked City during the last 7 years return the property (including video tapes and equipment valued at approximately $50,000) to Naked City within 3 days of receipt of notice of this order;

b. that the Sheriff of Newton County account in writing to Attorney Douglas Palaschak within 4 days for all property seized from Naked City in the last 7 years;

c. that the Sheriff and Indiana State Police refrain from entering Naked City (Naked City meaning the approximately 300 acres in section 15, township 31 North, Range 8 West of the 2nd principal meridian in Lincoln Township, Newton County Indiana) without a constitutionally sound search warrant;

d. that the Sheriff and Indiana Police treat Naked City as private property respecting the 4th amendment rights of owners and guests of Naked City;

e. that the Sheriff and Indiana Police refrain from interfering with the exhibition of commercially available pornography to consenting adults at Naked

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