Noble County v. Rogers

• Decision Date: 27 March 2001
• Docket Number: No. 57S03-0003-CV-218.,57S03-0003-CV-218.
• Citation: 745 N.E.2d 194
• Parties: NOBLE COUNTY et al., Appellants (Plaintiffs below), v. Crystal ROGERS, Appellee (Defendant below).
• Court: Indiana Supreme Court

745 N.E.2d 194

NOBLE COUNTY et al., Appellants (Plaintiffs below), v. Crystal ROGERS, Appellee (Defendant below).

No. 57S03-0003-CV-218.

Supreme Court of Indiana.

March 27, 2001.

Phillip A. Renz, Diana C. Bauer, Miller, Carson, Boxberger & Murphy, Fort Wayne, IN, Attorneys for Appellant.

Jeffrey A. Modisett, Attorney General of Indiana, Jon Laramore, Deputy Attorney General, Indianapolis, IN, Attorneys for Amicus Curiae State of Indiana.

Crystal Rogers, Cromwell, IN, Pro Se.

ON PETITION TO TRANSFER

SULLIVAN, Justice.

After a court overturned a restraining order that a county building inspector had obtained against Crystal Rogers, she sought damages under a trial rule that awards costs and damages to those wrongfully enjoined by governmental entities. Both the trial court and the Court of Appeals held that Rogers could recover under the trial rule despite the immunity provisions of the Indiana Tort Claims Act. We hold that Rogers is not entitled to damages because the county's conduct was not wrongful for purposes of the trial rule.

Background

In November, 1996, Crystal Rogers began a renovation project on a house that she owned in an unincorporated area of Noble County. Rogers had hoped to add a second story to the home. However, a Noble County building inspector issued a stop work order on November 12, 1996, asserting that the project violated the Noble County Building Code because Rogers had not obtained a building permit. Rogers continued construction until the county obtained a temporary restraining order.

Rogers appealed the trial court's decision to the Court of Appeals, which reversed and dissolved the temporary restraining order. Rogers v. Noble County By and Through the Noble County Bd. of Comm'rs, 679 N.E.2d 158 (Ind.Ct.App. 1997),transfer denied. The court first held that the pertinent Noble County ordinances amounted to a "building code" under Indiana Code § 36-7-8-3 and not a "housing code" under Indiana Code § 36-7-8-4. It then dissolved the temporary restraining order because such "building codes" do not apply to "private homes that are built by individuals and used for their own occupancy." Ind.Code § 36-7-8-3(d) (1998).

On remand, Rogers asserted that she was entitled to damages under Indiana Trial Rule 65(C). Her counterclaim sought compensation for the cost of finding another place to live while the restraining order was in place and for damage to the house caused by exposure to the elements. Noble County moved for summary judgment on the counterclaim, arguing that the Indiana Tort Claims Act precluded her recovery. The trial court denied summary judgment, but certified its order for interlocutory appeal.

The Court of Appeals held that Trial Rule 65 is procedural in nature and therefore trumped the conflicting provisions of the Tort Claims Act. Noble County ex rel. Noble County Bd. of Comm'rs v. Rogers, 717 N.E.2d 591, 596 (Ind.Ct.App.1999). We granted transfer, thereby vacating the Court of Appeals decision. Noble County v. Rogers, 735 N.E.2d 227 (Ind.2000) (table).

Discussion

Rogers's primary contention in this appeal is that she is entitled to "costs and damages" under Indiana Trial Rule 65(C), which reads:

No restraining order or preliminary injunction shall issue except upon the giving of security by the applicant, in such sum as the court deems proper, for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained. No such security shall be required of a governmental organization, but such governmental organization shall be responsible for costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained.

(emphasis added). Rogers argues that because the restraining order was lifted after her first appeal, Trial Rule 65(C) requires Noble County to pay for the costs and damages she incurred while the restraining order was in effect.

Noble County contends that the Trial Rule conflicts with the immunity granted to governmental entities by the Indiana Tort Claims Act ("ITCA"). See Ind.Code §§ 34-13-3-1 to § 34-13-3-25 (1998). Noble County argues that two of the specific immunity provisions of Indiana Code § 34-13-3-3 preclude the damages Rogers sought in her counterclaim:

A governmental entity or an employee acting within the scope of the employee's employment is not liable if a loss results from:

...

(5) the initiation of a judicial or an administrative proceeding;

(6) the performance of a discretionary function; ...¹

The parties ask us to resolve this apparent conflict by applying either the Trial Rule or the ITCA to the exclusion of the other.² This posture puts into tension the powers of coordinate branches of our state government by asking us to ignore the pronouncement of one such branch. However, we have long held that "[i]f an act admits of two reasonable interpretations, one of which is constitutional and the other not, we choose that path which permits upholding the act." Price v. State, 622 N.E.2d 954, 963 (Ind.1993),reh'g denied.³See also A Woman's Choice-East Side Women's Clinic v. Newman, 671 N.E.2d 104, 111 (Ind.1996) (Dickson, J., concurring in result)

(discussing "our overriding obligation to construe our statutes in such a way as to render them constitutional if reasonably possible"), reh'g denied; Baldwin v. Reagan, 715 N.E.2d 332, 338 (Ind.1999) ("If there is more than one reasonable interpretation of a statute, at least one of which is constitutional, we will choose that path which permits upholding the act.").

To this end, a proper construction of the word "wrongfully" in the Trial Rule resolves the conflict between the rule and the statute. We have never had the opportunity to determine the scope of wrongful conduct for governmental actors under T.R. 65(C). We now hold that their conduct is wrongful only to the extent that they have acted with such bad faith and malice that their actions undermine the authority of the court issuing the restraining order or injunction.⁴

This construction harmonizes the immunity provisions of the ITCA with our inherent power to sanction litigants for improper or untoward behavior in judicial proceedings. The ITCA expresses a legislative policy to protect the State's finances while ensuring "`that public employees can exercise their independent judgment necessary to carry out their duties without threat of harassment by litigation or threats of litigation over decisions made within the scope of their employment.'" Celebration Fireworks, Inc. v. Smith, 727 N.E.2d 450, 452 (Ind.2000) (quoting Indiana Dep't. of Corr. v. Stagg, 556 N.E.2d 1338, 1343 (Ind.Ct.App.1990),

transfer denied). To achieve these goals, the Legislature placed 20 categories of substantive behavior beyond the reach of tort suits. See Ind.Code § 34-13-3-3 (1998).

The Legislature's ability to immunize government actions knows few limits, but those limits are reached when immunity impinges upon the judiciary's constitutional sphere. That is, while the Legislature may shield the State from substantive tort liabilities, it may not immunize the State from our power to sanction the attorneys and parties appearing before us. See State v. Kuespert, 411 N.E.2d 435, 438-39 (Ind.Ct.App.1980)

(upholding power of the trial court to issue monetary sanctions against the State for discovery violations under Trial Rule 37). Cf. Ind. Const. art. VII, § 1 ("The judicial power of the State shall be vested in one Supreme Court, one Court of Appeals, Circuit Courts, and such other courts as the General Assembly may establish.") (emphasis added); State ex rel. Indianapolis-Marion County Bldg. Auth. v. Superior Court of Marion County, Room No. 1, 264 Ind. 313, 317, 344 N.E.2d 61, 64 (1976) ("Over the years, this Court, in its opinions, has circumscribed a segment of judicial authority and called it inherent and incidental. Courts are vested with an inherent power to order, in emergency situations, the removal of obstacles to the due administration of justice in the court.").⁵ This power to sanction is a necessary precondition to the exercise of our independent judicial power:

To deny a court the power to enforce obedience to its lawful orders against parties who have been subjected properly to its jurisdiction in the first instance, is to nullify its effectiveness as an independent branch of our government. The power of a court to enforce compliance with its orders and decrees duly entered is inherent. No statutory sanction is needed. In both equity and law a court would be powerless to give effective relief were its arms tied by such requirements as relator asserts are necessary.

State ex rel. Brubaker v. Pritchard, 236 Ind. 222, 226-27, 138 N.E.2d 233, 235 (1956). See also O'Conner v. State, 178 Ind.App. 415, 382 N.E.2d 994, 998 (1978)

("In protecting this discovery process, the trial court has the inherent power to impose sanctions...."), aff'd, 272 Ind. 460, 399 N.E.2d 364 (1980). To protect the proper functioning of judicial proceedings, we also have imbedded this power in numerous court rules. See, e.g., Ind.Trial Rule 11, Ind.Trial Rule 37, Zwiebel v. Zwiebel, 689 N.E.2d 746, 750 (Ind.Ct.App. 1997) ("[Under Trial Rule 11], the trial court has the discretion to impose sanctions where it determines that the verified motion contains information that the attorney knows to be false."), transfer denied. Similarly, the judicial power encompasses the ability to hold a litigant in contempt. See, e.g., Meyer v. Wolvos, 707 N.E.2d 1029, 1031 (Ind.Ct.App.1999) ("We have recognized the inherent judicial power to deal with contempt. No statutory sanction is needed as a court's power to enforce compliance with its orders and decrees duly entered is inherent."), transfer denied; Crowl v. Berryhill, 678 N.E.2d 828, 831 (Ind.Ct.App.1997) ("Time and time again, Indiana appellate courts have recognized the inherent judicial power to deal...