Redevelopment Comm'n of Munster v. Ind. State Bd. of Accounts

• Decision Date: 16 March 2015
• Docket Number: No. 45A04–1408–PL–404.,45A04–1408–PL–404.
• Citation: 28 N.E.3d 272
• Parties: REDEVELOPMENT COMMISSION OF the TOWN OF MUNSTER, Indiana, Appellant–Petitioner, v. INDIANA STATE BOARD OF ACCOUNTS and Paul D. Joyce, State Examiner of State Board of Accounts, Appellee–Respondent.
• Court: Indiana Appellate Court

28 N.E.3d 272

REDEVELOPMENT COMMISSION OF the TOWN OF MUNSTER, Indiana, Appellant–Petitioner

v.INDIANA STATE BOARD OF ACCOUNTS and Paul D. Joyce, State Examiner of State Board of Accounts, Appellee–Respondent.

No. 45A04–1408–PL–404.

Court of Appeals of Indiana.

March 16, 2015.

Eugene M. Feingold, Steven P. Kennedy, Law Offices of Eugene M. Feingold, Munster, IN, Attorney for Appellant.

Gregory Zoeller, Attorney General of Indiana, Kathy Bradley, Deputy Attorney General, Indianapolis, IN, Attorney for Appellee.

Opinion

MATHIAS, Judge.

[1] The Munster Redevelopment Commission (“the Commission”) appeals the Lake Circuit Court's order entering summary judgment in favor of the Indiana State Board of Accounts¹ (“the Board”) in which the trial court determined that Indiana Code section 36–7–14–28 does not permit the Commission to use tax incremental financing funds to pay for the ongoing maintenance of redeveloped properties.

[2] We affirm.

Facts and Procedural History

[3] In February 2006, the Commission initiated a project to redevelop a designated area in Munster, which included the Munster Centennial Park and the Munster Community Park. The Commission financed the parks' improvements, in part, using funds acquired through tax allocation financing, also known as tax increment financing² (“TIF”). After the redevelopment of the parks was completed, ownership of the parks was transferred from the Commission to the Munster Municipal Center Corporation and Parks Department (“the town”). The town allocated in its annual budget a portion of TIF funds to pay for the ongoing maintenance of the parks.

[4] At some point, the town learned that the Board did not consider maintenance of redeveloped properties to be proper use of TIF funds. The town consulted its legal counsel as to whether it was permissible for the town to use TIF funds to maintain the two parks. On May 16, 2013, the town's counsel wrote: “It is our view that the statutes authorize activities of this nature when those activities are in conjunction with the overall redevelopment purposes of the Town.” Appellant's App. p. 38. Counsel's memo also stated:

[I]f the Redevelopment Commission is utilizing the tax levy for general expenses to fulfill [its duty to use the land in the manner that best serves the town] and has concluded that it ought to promote this use of parks and cooperate with the Town, its decision fits squarely within the statutory framework and intent and is certainly incident to its statutory powers and duties.

Id.

[5] The town also sought the opinion of the Board. On August 22, 2013, the town received a letter from the Board, which provided:

The legislature has provided that the expenditure of redevelopment funds for maintenance is to occur only to maintain buildings in the situation where the redevelopment commission has determined that demolition of those buildings is not considered necessary to carry out the redevelopment plan. Such funds cannot be used to maintain park land. This should not be construed as a legal opinion but represents the position we would take in an audit of the Town's records.

Appellant's App. p. 37.

[6] On October 7, 2013, the Commission filed a complaint against the Board seeking declaratory relief. Specifically, the Commission alleged that “[d]isallowing the use of TIF funds for maintenance of a TIF financed redevelopment project ... will create a substantial additional tax expense to its property owners” and that “[f]ailure to comply with the notification of the State Board of Accounts would place the Town of Munster and its Redevelopment Commission at risk of fines, penalties, and other punitive actions ... taken by ... the State Board of Accounts.” Appellant's App. p. 3.

[7] On June 2, 2014, the Commission filed a motion for summary judgment. The trial court denied the Commission's motion on August 1, 2014, and granted summary judgment in favor of the Board, finding that that the language in the relevant statutes shows that “the legislature [did not intend] to allow TIF funds to be used for the continued maintenance of properties acquired and improved through the use of TIF funds.” Appellant's App. p. 8. The court also noted that the parks in question were now owned by the town, not by the Commission, and that “this is not a matter that falls within I.C. § 36–7–14–22.5 where maintenance of real property owned by the commission can be maintained by [the] commission with TIF funds.” Id. [8] The Commission now appeals. The Board cross-appeals.

I. The Commission's Standing

[9] In its cross-appeal, the Board argues that the Commission did not have standing to bring an action for declaratory judgment because “there is no real or actual controversy.” Appellee's Br. at 7. Specifically, the Board contends that the Commission has “shown no injury based on the [Board's] letter stating that the position of the [Board] is that TIF funds may not be used for park maintenance.” Id. at 8. The Board argues that the Commission's claims that prohibiting the use of TIF funds for the maintenance of the parks will increase property owners' tax obligations and place the Commission at risk of punitive actions are “purely speculative.” Id.

[10] Standing is defined as having a “sufficient stake in an otherwise justiciable controversy.” Ind. Civil Rights Comm'n v. Indianapolis Newspapers, Inc., 716 N.E.2d 943, 945 (Ind.1999). The point of the standing requirement is to ensure that the party before the court has a substantive right to enforce the claim that is being made in the litigation. Pence v. State, 652 N.E.2d 486, 487 (Ind.1995). Standing is “a significant restraint on the ability of Indiana courts to act, as it denies the courts any jurisdiction absent an actual injured party participating in the case.” Id. at 488.

[11] The standing requirement obligates courts to act only in real cases and shun action when called upon to engage only in abstract speculation. Id. An actual dispute involving those harmed is what confers jurisdiction upon the judiciary:

For the disposition of cases and controversies, the Court requires adverse parties before it. Standing focuses generally upon the question whether the complaining party is the proper person to invoke the Court's power. However, more fundamentally, standing is a restraint upon this Court's exercise of its jurisdiction in that we cannot proceed where there is no demonstrable injury to the complainant before us.

Id. (quotation omitted). Put simply, in order to have standing, the challenging party must show adequate injury or the immediate danger of sustaining some injury. Ind. Civil Rights Comm'n, 716 N.E.2d at 945.

[12] In its complaint, the Commission sought declaratory relief allowing it to use TIF funds to maintain the redeveloped parks. Indiana Code section 34–14–1–2 defines a person who may obtain declaratory judgment:

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 of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder.

[13] “In order to obtain declaratory relief, the person bringing the action must have a substantial present interest in the relief sought.” Hibler v. Conseco, Inc., 744 N.E.2d 1012, 1023 (Ind.Ct.App.2001). “The basis of jurisdiction under the Declaratory Judgment Act is a justiciable controversy or question, which is clearly defined and affects the legal right, the legal status, or the legal relationship of parties having adverse interests.” Little Beverage Co., Inc. v. DePrez, 777 N.E.2d 74, 83 (Ind.Ct.App.2002).

[14] In the instant case, the Commission asked the trial court to enter a declaratory judgment to determine its authority to use TIF funds to pay for the maintenance of the parks it redeveloped. Because the Commission had already budgeted and utilized TIF funds to pay the maintenance expenses of the parks, and in light of the position the Board took in its letter to the Commission, the Commission has shown that it had a substantial interest in determining whether its use of the TIF funds was proper as well as the immediate danger of injury. See Ad Craft, Inc. v. Area Plan Comm'n of Evansville & Vanderburgh Cnty., 716 N.E.2d 6 (Ind.Ct.App.1999) (uncertain zoning status of a vacated right-of-way upon which a billboard had been built was a controversy which an area plan commission could seek to resolve via a declaratory judgment action, particularly considering the intricacies of the various zoning and permit issues involved and the legal and economic necessity of a prompt resolution thereof); Lutheran Hosp. of Ft. Wayne, Inc. v. Dep't of Pub. Welfare of Allen Cnty., 397 N.E.2d 638 (Ind.Ct.App.1979) (hospitals had standing to bring action for declaratory judgment whether they were entitled to reimbursement from county department of public welfare for emergency medical treatment rendered to indigents in light of fact that the expenditures incurred by hospitals in treating the indigents approximated $450,000). We therefore conclude that the Commission had standing to bring its claim for declaratory relief.

II. Use of TIF Funds

[15] The Commission argues that the trial court erred when it granted the Board's motion for summary judgment. Our standard of review of summary judgment appeals is well established:

When reviewing a grant of summary judgment, our standard of review is the same as that of the trial court. Considering only those facts that the parties designated to the trial court, we must determine whether there is a “genuine issue as to any material fact” and whether “the moving party is entitled to a judgment as a matter of law.” In answering these questions, the reviewing court construes all factual inferences in the non-moving party's favor and

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