Town of Fortville v. Certain Fortville Annexation Territory Landowners

• Decision Date: 28 April 2016
• Docket Number: No. 30S01–1510–MI–626.,30S01–1510–MI–626.
• Parties: TOWN OF FORTVILLE, Appellant (Respondent below), v. CERTAIN FORTVILLE ANNEXATION TERRITORY LANDOWNERS, Appellees (Petitioners below).
• Court: Indiana Supreme Court

51 N.E.3d 1195

TOWN OF FORTVILLE, Appellant (Respondent below)

v.CERTAIN FORTVILLE ANNEXATION TERRITORY LANDOWNERS, Appellees (Petitioners below).

No. 30S01–1510–MI–626.

Supreme Court of Indiana.

April 28, 2016.

Alex C. Intermill, Curtis T. Jones, Bryan H. Babb, Jonathan W. Hughes, Bose McKinney & Evans LLP, Indianapolis, IN, Attorneys for Appellant.

Stephen R. Buschmann, Thrasher Buschmann & Voelkel, P.C., Indianapolis, IN, Attorney for Appellees.

On Petition To Transfer from the Indiana Court of Appeals, No. 30A01–1410–MI–442

RUCKER

, Justice.

In this involuntary annexation case the trial court determined, after a bench trial, that a statutory requirement for annexation had not been met. Because the trial court's judgment is not clearly erroneous, we affirm.

Facts and Procedural History

On March 28, 2013 the Town of Fortville (“Fortville”) adopted Resolution 2013–3A proposing to annex 5,944 acres of land adjacent to the municipality. In July 2014, following notice and public hearings, Fortville adopted Ordinance 2013–3A and Resolution 2013–7A annexing a reduced area of 644 acres (the “Annexation Territory”). In the meantime a number of landowners (“Remonstrators”) comprising ninety-three (93) percent of the owners of parcels within the affected area filed a petition challenging the proposed annexation. Prior to a hearing on the petition, the parties entered various stipulations which had the effect of narrowing the issues for trial to a single determination, namely: whether the Annexation Territory is needed and can be used by the municipality for its development in the reasonably near future. After a hearing the trial court entered judgment in favor of the Remonstrators ordering that Fortville's annexation shall not take place. In essence the trial court concluded the evidence did not support Fortville's contention that it needed the Annexation Territory for its development in the reasonably near future. In support of its judgment the trial court issued detailed findings of fact and conclusions of law.

Fortville appealed contending: (1) the trial court erred as a matter of law by not giving substantial deference to the municipality's decision to proceed with annexation, and (2) there was sufficient evidence to demonstrate the Annexation Territory was needed and can be used for Fortville's development in the reasonably near future. Focusing primarily on this latter claim, the Court of Appeals reversed the trial court's judgment concluding the trial court failed to apply the proper legal standard in assessing whether Fortville needed and could use the Annexation Territory in the reasonably near future. See Town of Fortville v. Certain Fortville Annexation Territory Landowners, 36 N.E.3d 1176, 1179 (Ind.Ct.App.2015)

, vacated. Having previously granted transfer we now affirm the judgment of the trial court. Additional facts are set forth below.

Annexation Procedure and the Standard of Review

“The framework of Indiana's annexation laws has long featured three basic stages: (1) legislative adoption of an ordinance annexing certain territory and pledging to deliver certain services within a fixed period of time; (2) an opportunity for remonstrance by affected landowners; and (3) judicial review.” City of Carmel v. Steele, 865 N.E.2d 612, 615 (Ind.2007)

(citation omitted). Although the applicable statutes have undergone several revisions over the years,¹ certain general propositions of law have long applied. Id. at 615–16. For instance, annexation statutes invest in the governing body of a municipality the exclusive authority to annex territory. Id. at 616. And as a legislative function annexation becomes a question subject to judicial intervention only upon review as provided by statute. Id.

Because a municipality's authority to annex territory is defined by statute, the court's role is to determine whether the municipality has exceeded its statutory authority, and whether it has met the conditions imposed by the statute. Rogers v. Mun. City of Elkhart, 688 N.E.2d 1238, 1239–40 (Ind.1997)

. Although the burden of pleading is on the landowner, “the burden of proof is on the municipality to demonstrate compliance with the statute.” Id. The court sits without a jury and enters judgment on the question of annexation after receiving evidence and hearing argument from both sides. Ind.Code § 36–4–3–12.

Once the trial court has decided whether to approve an annexation ordinance, either the municipality or the landowner may seek appellate review. Where, as here, the trial court upon its own motion enters special findings of fact and conclusions of law, we apply the standard of review set forth in Indiana Trial Rule 52

. Chidester v. City of Hobart, 631 N.E.2d 908, 909 (Ind.1994). We review issues of fact for sufficiency of the evidence and look to the record only for inferences favorable to the judgment. Id. at 910. We will not set aside findings or judgments unless clearly erroneous. “Findings are clearly erroneous only when the record contains no facts to support them either directly or by inference.” Yanoff v. Muncy, 688 N.E.2d 1259, 1262 (Ind.1997) (quotation and citation omitted). And a “judgment is clearly erroneous if it applies the wrong legal standard to properly found facts.” Id. (citation omitted). In order to determine that a finding or conclusion is clearly erroneous, an appellate court's review of the evidence must leave it with the firm conviction that a mistake has been made. Id. (citation omitted). This case does not meet that standard.

Discussion

I.

Fortville first contends the trial court erred as a matter of law because it failed to give substantial deference to Fortville's decision to annex. We of course recognize that “annexation ‘is essentially a legislative function’ ” and that “courts play only a limited role in annexations and must afford the municipality's legislative judgment substantial deference.” In re Annexation of Certain Territory to City of Muncie, 914 N.E.2d 796, 801 (Ind.Ct.App.2009)

(citing City of Fort Wayne v. Certain Southwest Annexation Area Landowners, 764 N.E.2d 221, 224 (Ind.2002) ). But that does not mean a trial court's role is to sustain blindly an annexation decision simply because it is the product of legislative decision-making. Rather, the court is obligated to ensure the annexing municipality has “not exceeded its authority and that the statutory conditions for annexation have been satisfied.” Chidester, 631 N.E.2d at 910 ; accord

Bradley v. City of New Castle, 764 N.E.2d 212, 216 (Ind.2002) (“The trial court's role is to decide whether the municipality has operated within its authority and satisfied the statutory conditions for annexation.”); City of Aurora, 165 N.E.2d at 145 (“The court is ... simply given the power to determine, in the event there is a remonstrance filed, whether certain conditions imposed by the statute are met.”). The judgment of the court simply establishes the fact that the conditions of the statute necessary to overcome a remonstrance have or have not been met; and if they have met the statutory requirements then the trial court is bound to approve annexation of the affected territory. Chidester, 631 N.E.2d at 910.

Based on our review of the record, we are satisfied the trial court fulfilled its obligation to consider only whether the statutory conditions for annexation have been satisfied. We thus turn to Fortville's second contention.

II.

Indiana Code section 36–4–3–13

outlines in detail the various requirements that must be satisfied before a proposed annexation may take place. As indicated earlier, prior to trial the parties entered into various stipulations concerning the statutory requirements leaving but one for the trial court's determination: “[t]hat the territory sought to be annexed is ... needed and can be used by the municipality for its development in the reasonably near future.” I.C. § 36–4–3–13(c)(2) (2013).

The trial court determined Fortville's “evidence does not support a conclusion for the need for annexation in the near future.” Order at 7, ¶ R. Disagreeing with the trial court, the Court of Appeals was of the view that in reaching its determination “the trial court was looking for evidence of physical construction in the area in the near future to fulfill Fortville's burden of showing that the Annexation was needed and could be used by Fortville for its development in the reasonably near future.” Town of Fortville, 36 N.E.3d at 1179

(emphasis added). In reversing the trial court's judgment, the Court of Appeals relied on a footnote from this Court's opinion in Chidester, 631 N.E.2d at 913 n. 6, to conclude:

our Supreme Court—in upholding the trial court's finding that the City of Hobart needed and could use the land to be annexed—noted that the trial court found that the City needed and could use the land for “transportation linkages with other developing areas, to control adjacent development on its borders, and to prevent conflicting land uses.” Therefore, it seems that a municipality need not demonstrate immediate plans to build on the annexed land in order to show that it needs and can use the land for its development in the reasonably near future.

Town of Fortville, 36 N.E.3d at 1180

.

Our colleagues read the Chidester footnote too broadly. At stake in that case was a portion of the statute that required “a city's annexation plan show that the city will promptly provide the annexed territory with municipal services equivalent to those it already provides in similar areas of the existing city.” 631 N.E.2d at 910

. After examining the evidence we noted the trial court “concluded that the fiscal plan and the evidence established that Hobart will provide equivalent capital and non-capital services to like areas of the annexed territory.” Id. at 911. In a footnote in a section addressing the challengers' waived constitutional claims—one being that the annexation constituted a taking without just compensation under the Fifth and Fourteenth...