Smdfund v. Fort Wayne-Allen Cty. Airport

• Decision Date: 02 August 2005
• Docket Number: No. 02S00-0409-CV-410.,02S00-0409-CV-410.
• Citation: 831 N.E.2d 725
• Parties: SMDFUND, INC., et al., Appellants (Plaintiffs below), v. FORT WAYNE-ALLEN COUNTY AIRPORT AUTHORITY, et al., Appellees (Defendants below).
• Court: Indiana Supreme Court

831 N.E.2d 725

SMDFUND, INC., et al., Appellants (Plaintiffs below), v. FORT WAYNE-ALLEN COUNTY AIRPORT AUTHORITY, et al., Appellees (Defendants below).

No. 02S00-0409-CV-410.

Supreme Court of Indiana.

August 2, 2005.

COPYRIGHT MATERIAL OMITTED

Charles R. Shedlak, Susan R. Hanson, Edward P. Benchik, Ethan C. McKinney, South Bend, for Appellants.

Kathryn A. Brogan, F.L. Dennis Logan, Christopher M. Forrest, Fort Wayne, for Appellees.

Timothy A. Manges, Carol Smith, Fort Wayne, for City of Fort Wayne.

G. William Fishering, Fort Wayne, for Allen County.

Thomas K. Downs, Karen L. Arland, Michael J. Lewinski, Hilary G. Buttrick, Indianapolis, Amici Curiae the Indiana Association of Cities and Towns.

BOEHM, Justice.

The plaintiffs challenge the constitutionality of the statute creating the Fort Wayne-Allen County Airport Authority. The Authority was created in 1985 pursuant to a statute the plaintiffs now contend violates the prohibition in the Indiana Constitution against special legislation. We hold that laches bars this claim.

Factual and Procedural Background

The Local Airport Authorities Act, Indiana Code section 8-22-3-1 et. seq. (2004), was first enacted in 1959. That act provides a means by which any county, city, town, or other municipal corporation may establish an airport authority. Under the act, the entity wishing to establish an airport authority adopts a resolution or ordinance establishing the authority. I.C. § 8-22-3-1. The registered voters of the district are then provided an opportunity to remonstrate against the establishment of the authority. I.C. § 8-22-3-2. Neither the City of Fort Wayne nor Allen County ever successfully established an airport authority under this statute.

The 1985 General Assembly amended the Local Airport Authorities Act to establish directly a joint city-county airport authority in any county having a population of more than 300,000 but less than 400,000. 1985 Ind. Acts 100, § 1; I.C. § 8-22-3-1.1. The bill created an airport authority to be known as "(name of second class city)-(name of county) Airport Authority." Allen County was and still is the only county that falls within this population parameter, and Ft. Wayne is the only city of the second class in Allen County. As a result, the Fort Wayne-Allen County Airport Authority was formed.

In June, 1985, the City of Fort Wayne and two Fort Wayne citizens filed a complaint for declaratory judgment in the Allen Superior Court contesting the validity of the 1985 legislation. The defendants were the Governor and Attorney General, both state officials. The plaintiffs alleged, among other things, that the legislation was unconstitutional special legislation in violation of Article IV, Section 23 of the Indiana Constitution. Seven days after the suit was filed, the court granted the plaintiffs' motion to dismiss the claim voluntarily with prejudice.

In February, 2003, SMDfund, Inc., Joseph Tocci, and Scott Noble, concerned that the Airport Authority planned to close Smith Field, filed a complaint in Allen Circuit Court against the Airport Authority, the City, and the County seeking a declaratory judgment that the Authority has no legal control over Smith Field, that the statute creating the Authority is unconstitutional special legislation, and that the City, not the Authority, holds legal title to Smith Field. The plaintiffs also sought an injunction preventing the Authority from closing, altering, or destroying Smith Field. The Authority moved to dismiss the complaint and the trial court granted that motion on the ground of mootness. In October 2003, the plaintiffs filed an amended complaint, and the Authority responded with a motion to certify the case as a public lawsuit governed by Indiana Code section 34-6-2-124. The trial court granted that motion. The City and the Authority then filed for summary judgment, arguing that the plaintiffs' claims are barred by the statute of limitations and by the equitable doctrine of laches, and that the Public Lawsuit Act deprives the court of jurisdiction over the plaintiffs' claims. The trial court granted the defendants' motions to dismiss based on the statute of limitations. The plaintiffs appealed and sought transfer to this Court, bypassing the Court of Appeals pursuant to Indiana Rule of Appellate Procedure 56(A). This Court granted transfer.

I. Laches

"On appeal, the standard of review of a summary judgment ruling is the same as that used in the trial court: summary judgment is appropriate only where the evidence shows there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law." Gunkel v. Renovations, Inc., 822 N.E.2d 150, 152 (Ind.2005). This Court can affirm a grant of summary judgment on any grounds as to which the designated evidence establishes no genuine issue of material fact. See Douglass v. Irvin, 549 N.E.2d 368, 371 (Ind.1990).

The plaintiffs sought declaratory and injunctive relief. The defendants argue that the claim is barred by the ten-year general statute of limitations and by laches. The laches claim is dispositive. Laches is an equitable doctrine. State ex rel. Attorney General v. Lake Superior Court, 820 N.E.2d 1240, 1256 (Ind.2005). A declaratory judgment is not necessarily either equitable or legal. Rather, it "is a statutory creation, and by its nature is neither fish nor fowl, neither legal nor equitable." American Safety Equip. Corp. v. J.P. Maguire & Co., 391 F.2d 821, 824 (2d Cir.1968). It was however, "born under equitable auspices and having preponderantly equitable affiliations. . . . it is probably less frequently employed on the law than on the equity side." Edwin Borchard, Declaratory Judgments 347 (2d ed.1941). The status of a declaratory judgment as legal or equitable is determined by the nature of the suit. Manning v. United States, 146 F.3d 808, 812 (10th Cir.1998); Davidson v. Van Lengen, 266 N.W.2d 436, 438 (Iowa 1978); Coffee-Rich, Inc. v. Mich. Dep't of Agriculture, 1 Mich.App. 225, 135 N.W.2d 594, 595 (1965); Lone Cedar Ranches v. Jandebeur, 246 Neb. 769, 523 N.W.2d 364, 367 (1994); International Health & Life Ins. Co. v. Lewis, 271 Or. 35, 530 P.2d 517, 518 (1975). 22A Am.Jur.2d Declaratory Judgments § 2 (2003). "The test is whether, in the absence of a prayer for declaratory judgment, the issues presented should be properly disposed of in an equitable as opposed to a legal action." 22A Am.Jur.2d Declaratory Judgments § 2. Here, the plaintiffs seek a declaration that the Fort Wayne-Allen County Airport Authority is invalid and has no control over the airports in Fort Wayne. This is the functional equivalent of an injunction against the Authority's operation as an established airport authority. The plaintiffs also seek an injunction preventing the Authority from closing Smith Field. We think both claims are grounded in equity. See Employers Ins. of Wausau v. Shell Oil Co., 820 F.2d 898, 900 (7th Cir.1987); Boyles v. Hausmann, 246 Neb. 181, 517 N.W.2d 610, 614 (1994) (action to declare a restrictive covenant invalid is an equitable action); Restatement (Second) of Judgments, § 33 cmt. a (1980) (historically, a suit in equity might be taken to determine the rights of the parties); 42 Am Jur.2d Injunctions § 1 (2000) ("Injunction is an equitable remedy.").

Because this action is equitable, laches may operate to bar the claim. The general doctrine is well established and long recognized: "Independently of any statute of limitation, courts of equity uniformly decline to assist a person who has slept upon his rights and shows no excuse for his laches in asserting them." Penn Mutual Life Ins. Co. v. Austin, 168 U.S. 685, 698, 18 S.Ct. 223, 42 L.Ed. 626 (1898) (quoting Speidel v. Henrici, 120 U.S. 377, 387, 7 S.Ct. 610, 30 L.Ed. 718 (1887)). Laches requires: "(1) inexcusable delay in asserting a known right; (2) an implied waiver arising from knowing acquiescence in existing conditions; and (3) a change in circumstances causing prejudice to the adverse party." Shafer v. Lambie, 667 N.E.2d 226, 231 (Ind.Ct.App.1996). The first element is easily satisfied. The statute at issue was enacted in 1985, more than seventeen years before the plaintiffs brought this suit. The plaintiffs argue that they did not delay in exercising a known right because they brought suit only a few months after the Airport Authority voted to close Smith Field. We do not agree. Since 1985, the plaintiffs have been aware of the creation of the Authority, its public funding, and its operation of Smith Field. If they were unaware, they are nonetheless charged with notice of these activities by virtue of their public nature. See Simon v. Auburn, Bd. of Zoning Appeals, 519 N.E.2d 205, 215 (Ind.Ct.App.1988) (plaintiff is charged with knowledge of the law, so laches barred attack on zoning ordinance); Hutter v. Weiss, 132 Ind.App. 244, 259, 177 N.E.2d 339, 346 (1961) (if circumstances should have put the plaintiff on inquiry and the plaintiff could have easily learned the truth the neglect of failure to make such inquiry will make the plaintiff guilty of laches just as if the facts were known to the plaintiff); See generally 12 Ind. Law Encyclopedia, Equity § 28, at 272 (2001).

The time to bring a claim that the Authority was improperly constituted started with the formation of the Authority. The plaintiffs' contention is that the Authority was created improperly. If the plaintiffs are correct, their claim accrued at the time of the creation of the Authority or at the latest when it began collecting taxes. In State ex rel. Attorney General v. Lake Superior Court, 820 N.E.2d 1240, 1256 (Ind.2005), this Court addressed a claim that a statute providing special procedures for reassessment of property in Lake County was unconstitutional, but found that laches would bar the claim. We explained: "As early as 1996, the need for reassessment was obvious. . . . The county's taxing authorities are now dependent on the...