City of New Albany v. Board of Commissioners of the County of Floyd ( 2020 )

FILED
Mar 23 2020, 11:23 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
IN THE
Indiana Supreme Court
Supreme Court Case No. 19S-MI-674
City of New Albany,
Appellant (Intervenor/Counterclaimant below),
–v–
Board of Commissioners of the County of Floyd,
Appellee (Plaintiff/Counterclaim Defendant below).
Argued: February 20, 2020 | Decided: March 23, 2020
Appeal from the Floyd Superior Court
No. 22D02-1804-MI-598
The Honorable Vicki Carmichael, Special Judge
On Petition to Transfer from the Indiana Court of Appeals
No. 18A-MI-1627
Opinion by Justice David
Chief Justice Rush and Justices Massa, Slaughter, and Goff concur.
David, Justice.
In this dispute about the ownership of a criminal justice center, we hold
that the turn-over provision in the lease between the county and the
building authority is valid and enforceable. Thus, we affirm the trial
court.
Facts and Procedural History
In the 1950s, Floyd County and the City of New Albany formed the
New Albany, Floyd County Indiana Building Authority (“the Building
Authority”) to issue bonds to finance a city-county building. Between 1991
and 1992, the Building Authority again issued bonds in order to finance a
criminal justice center (“The Center”). This Center is adjacent to the City-
County Building and is home to the City’s police department and the
County’s Sheriff’s department and jail. Pursuant to an inter-local
agreement, the Building Authority would own the Center, the County
would lease it and the City would sublease space from the County. The
County would finance the lease by using tax revenues from both the
County and the City.
To that end, in September of 1992, the County and the Building
Authority executed a lease with a fifteen-year term starting in 1993. The
lease terms included a turn-over provision (“the Turn-Over Provision”)
which provided:
In the event [the County] has not exercised its option to
purchase the [Center] in accordance with Section 9 hereof
and has not exercised its option to renew this Lease in
accordance with Section 10 hereof, then, upon expiration of
this Lease and upon full performance by [the County] of its
obligations under this Lease, the [Center] shall become the
absolute property of [the County], and, upon [the County’s]
request, [the Building Authority] shall execute proper
instruments conveying to [the County] all of [the Building
Authority’s] title thereto.
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Appellant’s App. Vol. III at 16–17.
The lease also included a statutory application provision which
provided that:
[the Building Authority] was organized for the purpose of
constructing and erecting the City County Building and
leasing the same to [the County] under the provisions of the
Indiana Code 36-9-13. All provisions herein contained shall
be construed in accordance with the provisions of said
Chapter, and to the extent of inconsistencies, if any, between
the covenants and agreements in this Lease and provisions
of said Chapter, the provisions of said Chapter shall be
deemed to be controlling and binding upon [the Building
Authority] and [the County].
Id. at 18.
The lease expired in September 2008, and thereafter, the City and the
County continued to occupy the Center, splitting the costs proportionally,
based on the amount of space each occupied. In 2015, the County began
negotiations with Building Authority for renovations of the Center. In
2018, the County requested that the Building Authority transfer title of the
Center to the County pursuant to the Turn-Over Provision in the parties’
lease.
The Building Authority declined to transfer title and the County filed
suit in April of 2018, seeking declaratory judgment and specific
performance, among other things. At the county’s request, the trial court
expedited the proceedings. In May 2018, the trial court granted the City of
New Albany’s request to intervene. In June 2018, the trial court entered
declaratory judgment in favor of the County, concluding that the Turn-
Over Provision in the lease was valid pursuant to Indiana Code section 36-
9-13-22(a)(6). It ordered that the title be given to the County and
dismissed all other pending claims.
The City appealed arguing that under Indiana Code section 36-9-13, the
Turn-Over Provision was not valid. The Court of Appeals agreed and
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further held, sua sponte, that the County, as a holdover tenant could still
exercise the purchase option in the lease. City of New Albany v. Bd. of
Comm’rs of Cty. of Floyd, 125 N.E.3d 636, 641 (Ind. Ct. App. 2019), adhered to
on reh'g, 130 N.E.3d 660 (Ind. Ct. App. 2019), and trans. granted, opinion
vacated, 138 N.E.3d 961 (Ind. 2019).
Both parties petitioned for transfer, which we granted. Ind. Appellate
Rule 58(A).
Standard of Review
Matters of statutory interpretation are reviewed de novo. Rodriguez v.
State, 129 N.E.3d 789, 793 (Ind. 2019). This Court “presumes that the
legislature intended for the statutory language to be applied in a logical
manner consistent with the statute's underlying policy and goals.” Nicoson
v. State, 938 N.E.2d 660, 663 (Ind. 2010).
Discussion and Decision
At issue is whether the Turn-Over Provision in the lease is valid. The
County argues that it is, and the City argues it is not. The disagreement
hinges on whether the Turn-Over Provision is consistent with Indiana
Code section 36-9-13 et seq. as the lease states that:
[the Building Authority] was organized for the purpose of
constructing and erecting the City County Building and
leasing the same to [the County] under the provisions of the
Indiana Code 36-9-13. All provisions herein contained shall
be construed in accordance with the provisions of said
Chapter, and to the extent of inconsistencies, if any, between
the covenants and agreements in this Lease and provisions
of said Chapter, the provisions of said Chapter shall be
deemed to be controlling and binding upon [the Building
Authority] and [the County].
Appellant’s App. Vol. III at 18.
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Indiana Code Section 36-9-13-22 provides a list of various powers
specifically given to the board of directors of building authorities. The
only power listed therein related to the transfer of property provides that
a building authority “may … acquire real or personal property by gift,
devise, or bequest and hold, use, or dispose of that property for the
purposes authorized by this chapter.” Ind. Code. § 36-9-13-22(a)(6).
Our Court of Appeals held and the City argues that use of the word
“that” meant that only property gifted, devised or bequested could be
disposed (or in this case, turned over). However, the County argues that
Indiana Code section 36-1-11-8 provides for a transfer to the government:
A transfer or exchange of property may be made with a
governmental entity upon terms and conditions agreed upon
by the entities as evidenced by adoption of a substantially
identical resolution by each entity. Such a transfer may be
made for any amount of real property, cash, or other personal
property, as agreed upon by the entities.
The Court of Appeals majority found that Indiana Code section 36-9-13-
22(a)(6) and Indiana Code section 36-1-11-8 are in “irreconcilable conflict”
and further, that the “more specific” statute, Indiana Code chapter 36-9-
13, applied. City of New Albany, 125 N.E.3d at 641. Judge Brown dissented,
believing that the statutes were not in conflict and that the County should
be able to rely upon section 36-1-11-8, a section that governs transfers
specifically to governmental entities. Id. at 642 (Brown, J., concurring in
part, dissenting in part).
We agree with Judge Brown that there is no conflict between the two
statutes. While Indiana Code section 36-9-13-22 sets forth various specific
powers of the board of directors of a building authority, it does not by its
plain language limit a building authority’s ability to transfer property.
Instead, it provides, among other things, for a building authority to
receive gifts, devises or bequests of property and then once received, for
the ability to dispose of that property. Ind. Code § 36-9-13-22(a)(6). There
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is nothing in section 22 to suggest that these are the only powers granted
to a building authority or that this section provides the sole manner for
disposing of property belonging to a building authority.
Indiana Code section 36-1-11-8 provides more broadly that
governmental agencies, including but not limited to municipal
corporations like a building authority, may transfer or exchange property.
(See Ind. Code section 36-1-11-1, listing the chapter’s applicable entities for
the purposes of property disposal.) The fact that there are multiple code
sections that give a building authority the ability to transfer property does
not, by itself, mean that that the statutes are inconsistent absent some
language that indicates as much. See Ind. Alcohol & Tobacco Comm’n v.
Spirited Sales, LLC, 79 N.E.3d 371, 376 (Ind. 2017) (citation omitted) (“We
may not add new words to a statute which are not the expressed intent of
the legislature.”). Because these two statutes can operate under their own
separate requirements that do not conflict, both can and should be given
meaning and effect without overriding one another. Rodriguez, 129 N.E.3d
at 796.
Additionally, as the County notes, the General Assembly adopted the
statutes during the same legislative session. See 1981 Ind. Acts 763-819
(Ind. Code section 36-1-11-1 et seq.); 1981 Ind. Acts 2762-64 (Indiana Code
section 36-9-13-22). Thus, neither statute is supplemental to, or
overwritten by the other. “Statutes passed during the same legislative
session should be interpreted as harmonious, so as to give effect to each.”
Ware v. State, 441 N.E.2d 20, 22 (Ind. Ct. App. 1982) (citations omitted).
Accordingly, there is no indication that the two statutes are in conflict and
we will not read them as such when they both can stand independent of
one another.
Conclusion
Because the Turn-Over Provision in the lease is valid, we affirm the
trial court.
Rush, C.J., and Massa, Slaughter, and Goff, JJ., concur.
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ATTORNEYS FOR APPELLANT
Brian J. Paul
Anne K. Ricchiuto
Jane Dall Wilson
Stephanie L. Gutwein
Faegre Drinker Biddle & Reath LLP
Indianapolis, Indiana
Shane L. Gibson
New Albany, Indiana
ATTORNEYS FOR APPELLEE
Richard R. Fox
Kristi L. Fox
Fox Law Offices
New Albany, Indiana
Bart A. Karwath
Mark J. Crandley
Barnes & Thornburg, LLP
Indianapolis, Indiana
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