Pepinsky v. Monroe County Council

• Decision Date: 04 April 1984
• Docket Number: No. 384,384
• Citation: 461 N.E.2d 128
• Parties: Harold E. PEPINSKY, Roberta McCloskey, Appellants, v. The MONROE COUNTY COUNCIL, Appellee. S 80.
• Court: Indiana Supreme Court

Page 128

461 N.E.2d 128

Harold E. PEPINSKY, Roberta McCloskey, Appellants, v. The MONROE COUNTY COUNCIL, Appellee.

No. 384 S 80.

Supreme Court of Indiana.

April 4, 1984.

Guy R. Loftman, Colman & Loftman, Professional Corporation, Bloomington, for appellants.

James R. Trulock, County Atty., Robert D. Mann, Richard S. Harrison, Cotner, Mann & Chapman, Bloomington, for appellee.

PIVARNIK, Justice.

This case involves an appeal from an interlocutory order entered by Special Judge Samuel R. Rosen in the Monroe Superior Court. The trial court determined that the matter raised by the plaintiffs, Harold E. Pepinsky and Roberta McCloskey, involved a public lawsuit and that the plaintiffs were unlikely to prevail on the open door law issue they raised in the complaint. The trial court required the plaintiffs to post a bond of $715,000.00 within ten days or suffer dismissal of the suit. When the deadline passed without any bond being filed, the trial court ordered the suit dismissed. The plaintiffs originally perfected an appeal from the interlocutory order to the Court of Appeals under No. 1-284 A 51, but the appeal was transferred to this Court pursuant to Ind.R.App.P. 4(A)(10) as a result of both parties' Verified Petitions and the granting thereof on March 8, 1984. The cause is docketed in this Court under No. 384 S 80.

The three issues presented for our consideration are:

1. whether the trial court erred in finding that this lawsuit constitutes a public lawsuit within the meaning of Ind.Code Sec. 34-4-17-1(b) (Burns Supp.1983);

2. whether the trial court's decision that the Monroe County Council had complied with the notice provisions of the Indiana Open Door Law Act, Ind.Code Sec. 5-14-1.5-1 et seq. (Burns Repl.1983), is contrary to the law in light of the evidence presented; and,

3. whether the provisions of Ind.Code Sec. 34-4-17-5 (Burns Supp.1983), requiring appeal to the Supreme Court in the same manner as is provided in a petition for mandate or prohibition within ten (10) days of the trial court's order, is constitutional.

Plaintiffs Pepinsky and McCloskey brought this action in the Monroe Superior Court seeking redress under the Indiana Open Door Law Act, Ind.Code Sec. 5-14-1.5-1 et seq. The controversy stems from the proposed construction of the "Justice Building" which would house a new jail, the various courts of Monroe County, and offices of the law enforcement officials and court employees. In order to finance and construct the Justice Building, the Monroe County Board of Commissioners and the Board of Public Works for the City of Bloomington each tentatively approved a lease between themselves, as lessees, and the Monroe County Jail, Law Enforcement and Governmental Space Building Corporation (Building Corporation), as lessor. The Daily Herald-Telephone published a news article reporting the tentative approval of the lease and stated that the Monroe County Council would conduct a public hearing on the project on November 17, 1983. The Monroe County Council was named as defendant in this suit because the plaintiffs alleged that the meeting held on November 17 was in violation of the Open Door Law Act. Specifically, Pepinsky and McCloskey alleged that proper notice of the date, time, place, and agenda of the meeting were not given. Pepinsky and McCloskey are opposed to the number of jail cells to be built in the Justice Building and disagree with other aspects of the financing and construction of the building. Pepinsky publicly stated that he hoped the lawsuit would delay construction of the building and that the process would be subjected to a new round of public hearings. Pepinsky attended the meeting on November 17 and spoke against the plans for the Justice Building. Unlike Pepinsky, McCloskey did not attend the November 17th meeting nor did she attend any other public meeting concerning the Justice Building prior to the filing of this lawsuit.

The trial court granted a change of venue from the county upon the request of the plaintiffs and the parties selected Greene County as a result of the striking process. Shortly thereafter the Monroe County Council filed a Motion to Reconsider and Resume Jurisdiction, asking the Monroe Superior Court to decide whether the matter was truly a public lawsuit. The trial court decided that the suit was indeed a public lawsuit and resumed jurisdiction.

The Monroe County Council then requested that the trial court decide whether it was appropriate for the plaintiffs to file a bond in order to pursue the lawsuit and if so, to determine an appropriate amount for that bond. After a lengthy hearing, the Monroe Superior Court, Special Judge Rosen presiding, decided that the matter was a public lawsuit and that a reasonable bond to be filed by the plaintiffs to cover the defendant's damage and costs pursuant to Ind.Code Sec. 34-4-17-5 was $715,000.00. The plaintiffs were ordered to file the bond with sufficient surety within ten (10) days of the date of the order, February 6, 1984. On February 17, 1984, no bond having been filed, the trial court dismissed the lawsuit.

I

Appellants, plaintiffs below, first argue that the trial court erred when it decided that this cause of action was a public lawsuit. Ind.Code Sec. 34-4-17-1 et seq. is entitled "Public Lawsuits--Testing Public Improvements." Section 1(b) reads as follows:

"Public lawsuit" shall mean any action whereby the validity, location, wisdom, feasibility, extent or character or construction, financing or leasing of any public improvement by any municipal corporation is questioned directly or indirectly, including but not limited to suits for declaratory judgments or injunctions to declare invalid or to enjoin such construction, financing or leasing, and shall mean any action to declare invalid or enjoin the creation, organization or formation of any municipal corporation. This definition, as used in this chapter, shall not be construed to broaden any right of action as is now validly limited by applicable law.

Section 5 reads as follows:

INTERLOCUTORY HEARING.--At any time prior to the final hearing in public lawsuit, the defendant may petition for an order of the court that the cause be dismissed unless the plaintiff shall post a bond with surety to be approved by the court payable to defendant for the payment of all damages and costs which may accrue by reason of the filing of the lawsuit in the event the defendant prevails. A hearing shall be had on such petition in the same manner as the hearing on temporary injunctions under IC 34-1 [34-1-1-1--34-1-67-4]. If at the hearing the court determines that the plaintiff cannot establish facts which would entitle him to a temporary injunction, the court shall set the amount of bond to be filed by the plaintiff in an amount found by the judge to cover all damage and costs which may accrue to the defendants by reason of the pendency of the public lawsuit in the event the defendant prevails. In the event such bond is not filed by the plaintiff with sureties approved by the court within ten days after such order is entered the suit shall be dismissed. Either plaintiff or defendant may appeal such order to the Indiana supreme court within such ten day period by notice of appeal and a statement of error in the same manner as is provided in a petition for mandate or prohibition. The supreme court may stay the lower court order pending its own decision, may set a bond to be filed by the plaintiff in connection therewith, may modify the order of the lower court, or may enter its order as a final order in a case. In the event no bond is filed as provided in this section, the public lawsuit shall be dismissed and no court shall have further jurisdiction of the public lawsuit or any other public lawsuit involving any issue which was or could have been raised therein. Provided, that nothing in this section is intended to create nor shall it be construed as creating, any additional cause of action on the part of any municipal corporation, person, partnership, or corporation, unless the defendant is required to and does post bond.

It is well established that the purpose of the public lawsuit statute and its implementation is "to protect the public against a 'flood of harassing litigation' which obstructs and delays public improvement at prohibitive costs and from the 'financial damage of completely nonmeritorious litigation.' " Johnson v. Tipton Community School Corp., (1970) 253 Ind. 460, 464, 255 N.E.2d 92, 94, quoting State ex rel. Haberkorn v. DeKalb Circuit Court, (1968) 251 Ind. 283, 241 N.E.2d 62. In Johnson, Justice DeBruler pointed out for this Court that "[t]he requirement that the plaintiff must introduce evidence sufficient to show the trial court that there is a substantial question to be tried accomplishes those purposes adequately by eliminating merely harassing suits or completely non-meritorious litigation." 253 Ind. at 465, 255 N.E.2d at 94. Similarly, in Haberkorn, supra, a per curiam decision, this Court wrote:

It is true under the state law prior to adoption of [34-4-17-1 et seq.] a determined plaintiff could keep a suit in being from two to six years; and in many cases the mere filing of the action delayed beyond saving the intricate planning of the project regardless of the merits of the action.

If litigation is filed and a legal opinion cannot be given, bonds will remain unsold or undelivered. If this persists for any project for more than six months to a year, construction contractors in inflationary times cannot stand by their bids, and the project as planned and the litigation opposing it became moot. In the meantime taxpayers, in those cases where the endeavor is legally correct, have suffered substantially by increased construction costs.

251 Ind. at 289, 241 N.E.2d at 66.

There is a valid reason for requiring the party bringing the public lawsuit action to file a bond to cover the defendant's damages and costs. Justice Hunter,...