John C. & Maureen G. Osborne v. Town of Long Beach, Indiana

FILED
May 30 2017, 10:24 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEE
Matthew T. Albaugh TOWN OF LONG BEACH,
Shawn M. Doorhy INDIANA1
Faegre Baker Daniels LLP L. Charles Lukmann, III
Indianapolis, Indiana Charles F.G. Parkinson
Julie A. Paulson
Connor H. Nolan
Harris Welsh & Lukmann
Chesterton, Indiana
ATTORNEYS FOR APPELLEE
LONG BEACH COMMUNITY
ALLIANCE, INC.
Kurt R. Earnst
Braje, Nelson & Janes, LLP
Michigan City, Indiana
Patricia F. Sharkey
Environmental Law Counsel,
P.C.
Chicago, Illinois
ATTORNEY FOR APPELLEE
JAMES NEULIEB
Gregory S. Colton
Law Office of Gregory S. Colton
Valparaiso, Indiana
ATTORNEYS FOR AMICUS CURIAE,
INDIANA ASSOCIATION OF CITIES
AND TOWNS AND
1
The attorneys identified as counsel for Town of Long Beach, Indiana also represent the Town Council,
Building Commission, Advisory Plan Commission, Board of Zoning Appeals, and the following people in
their respective official capacities: Jane Starr Neulieb, Peter Byvoets, Robert Lemay, Larry Wall, John Wall,
Joseph Jogmen, Patrick Cannon, Michael Gorman, and Aaron Tomsheck.
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INDIANA MUNICIPAL LAWYERS
ASSOCIATION
Brian W. Welch
Melissa J. Buckley
Bingham Greenebaum Doll LLP
Indianapolis, Indiana
ATTORNEY FOR AMICUS CURIAE
CONSERVATION LAW CENTER
Jeffrey B. Hyman
Conservation Law Center
Bloomington, Indiana
IN THE
COURT OF APPEALS OF INDIANA
John C. & Maureen G. Osborne May 30, 2017
Revocable Family Trust; Court of Appeals Case No.
Timothy J. and Anna Voortman; 46A03-1607-PL-16983
Christopher Lyons; and Appeal from the
Duneland Development, LLC, LaPorte Superior Court
Appellants/Cross-Appellees-Plaintiffs, The Honorable
Richard R. Stalbrink, Jr., Judge
v. Trial Court Cause No.
46D02-1602-PL-204
The Town of Long Beach,
Indiana; The Long Beach,
Indiana Town Council; The
Building Commission of the
Town of Long Beach, Indiana;
The Advisory Plan Commission
3
This appeal was consolidated with Case No. 46A03-1607-PL-1725, a separate appeal filed by The Long
Beach Community Alliance, Inc. and James Neulieb. Following consolidation, this court directed that The
Long Beach Community Alliance and Neulieb would be considered appellees/cross-appellants for purposes
of the appeal.
Court of Appeals of Indiana | Opinion 46A03-1607-PL-1698 | May 30, 2017 Page 2 of 40
of the Town of Long Beach; The
Board of Zoning Appeals of the
The Town of Long Beach,
Indiana; Jane Starr Neulieb;
Peter Byvoets; Robert Lemay;
Larry Wall; John Wall; Joseph
Jogmen; Patrick Cannon;
Michael Gorman; and Aaron
Tomsheck, all in their official
capacities as members of the
Long Beach, Indiana Town
Council, Advisory Plan
Commission, Board of Zoning
Appeals, Building Commission,
and Building Commissioner,2
Appellees/Cross-Appellants-
Defendants,
and
The Long Beach Community
Alliance, Inc., an Indiana not-
for-profit corporation; and
James Neulieb, an Individual,
Appellees/Cross-Appellants-
Defendants.
Kirsch, Judge.
2
Town of Long Beach, its Town Council, its Building Commission, and office of Building Commissioner
filed a Notice of Succession in Office and a Motion to Substitute Party pursuant to Appellate Rule 17(C).
This court accepted the Notice and granted the Motion, ordering that Larry Wall replaced Aaron Tomsheck
as the Building Commissioner and as an Appellee in this case.
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[1] John C. & Maureen G. Osborne Revocable Family Trust, Timothy J. & Anna
Voortman, and Christopher Lyons (together, “Homeowners”) each own a
residence along the Lake Michigan shoreline in Long Beach, Indiana. Each
Homeowner sought to construct a seawall due to concern about a possible
breach of their respective septic systems by Lake Michigan waters. After
building permits were issued to Homeowners for the seawalls, The Long Beach
Community Alliance, Inc. (“LBCA”)4 and James Neulieb5 (“Neulieb”) each
filed an administrative appeal of the building permits with the Board of Zoning
Appeals of the Town of Long Beach (“BZA”), and, thereafter, stop work orders
were issued, which prevented construction on the seawalls from proceeding.
Homeowners and their contractor, Duneland Development, LLC (“Duneland”
and, together with Homeowners, “Plaintiff Owners”) filed in the trial court a
twelve-count complaint for declaratory and injunctive relief (“the Complaint”)
against The Town of Long Beach, Indiana, the Town Council, the Building
Commission, the Advisory Plan Commission, the BZA, certain individuals in
their official capacities as members of the aforementioned municipal entities
(collectively, “Town Defendants”), as well as LBCA and Neulieb. Thereafter,
the Town Defendants, LBCA, and Neulieb each filed a motion to dismiss,
4
LBCA describes itself as “a 501(c)(3) not-for-profit community organization, representing over 400 families
who live and/or own homes in the Town of Long Beach, including some who own property on the lakefront
and/or in close proximity to the proposed seawall locations. LBCA’s mission includes preserving the
character of the Lake Michigan shore in the Town of Long Beach, on behalf of its members.” LBCA Br. at
22.
5
James Neulieb is member of and provides financial support to the LBCA; his wife, Jane Starr Neulieb, also
a named defendant, is a member of the Long Beach Town Council.
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which the trial court denied by orders on April 8 and April 19, 2016 (together,
“the April Orders”). On July 5, 2016, the trial court issued an “Order Denying
[Plaintiff Owners’] Motions for Injunctive Relief and Declaratory Judgment”
(“the July 5 Order”).
[2] On July 29, 2016, Plaintiff Owners filed, pursuant to Indiana Appellate Rule
14(A) or 14(D), an appeal as of right of the July 5 Order, which Plaintiff
Owners view as an interlocutory order. On or near the same time, LBCA and
Neulieb, who view the July 5 Order as a final order that disposed of all claims,
filed an appeal of the April 19 Order that denied their respective motions to
dismiss. This court consolidated LBCA’s and Neulieb’s appeal with Plaintiff
Owners’ appeal.6
[3] Numerous issues are raised by the consolidated appeal. We first address the
following preliminary issue:
I. Whether this court has subject matter jurisdiction to hear the
cross-appeal issues raised by appellees LBCA, Neulieb, and
Town of Long Beach concerning the trial court’s denial of their
respective motions to dismiss in the April Orders.
We next address the following dispositive cross-appeal issue:
6
Following consolidation, Plaintiff Owners filed a motion to dismiss the appeal filed by LBCA and Neulieb,
and LBCA filed a motion to dismiss the appeal filed by Plaintiff Owners. LBCA and Neulieb also filed a
motion for a temporary stay of appellate proceedings and remand for limited purpose. This court denied
both of the motions to dismiss, and it denied the motion for stay of proceedings.
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II. Whether the trial court erred when it denied the motions to
dismiss filed, separately, by Town Defendants, LBCA, and
Neulieb, each of which asserted that the trial court lacked subject
matter jurisdiction because Plaintiff Owners failed to exhaust
their administrative remedies.
[4] We reverse the trial court’s April 8 Order that denied the motions to dismiss
filed by Town Defendants, LBCA, and Neulieb.
Facts and Procedural History
[5] This litigation stems from Homeowners’ desire to build a seawall on each of
their respective lakefront residential lots, which are located on Lake Shore
Drive in the Town of Long Beach, at the southern shore of Lake Michigan.7
Homeowners maintain that storms and waves have damaged their properties
and have put their septic systems in imminent peril of being breached; they
assert that construction of the seawalls is necessary to avoid discharge of septic
contents onto the beach and into Lake Michigan and to protect their properties.
Homeowners also claim that, without the seawalls, their homes could be
damaged to the point of being uninhabitable, and no new septic field could be
constructed given the size of their lots. Before applying for building permits,
the Homeowners filed applications in May and July, 2015 with the BZA, asking
for a variance from the view protection ordinance found in the Town Code at
7
The John C. and Maureen G. Osborne Revocable Family Trust owns 2822 Lakeshore Drive, Timothy J.
and Anna Voortman own 2826 Lakeshore Drive, and Christopher Lyons owns 2900 Lakeshore Drive, all in
the Town of Long Beach, Indiana.
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154.060.8 The BZA held public hearings on the proposed development
standards variances on August 13, October 13, November 10, November 24,
and December 8, 2015.
[6] During the public hearings, Homeowners presented testimony from a
contractor, a surveyor, an engineer, and an appraiser regarding Homeowners’
claim that there was an urgent need for the seawalls. Neulieb and LBCA,
among others, posed oral and written objections to the seawalls asserting,
among other things, that the seawalls would be located in fragile dune and
floodplain locations and could accelerate or cause beach erosion of Lake
Michigan beaches and dunes that, according to LBCA, “are held in trust for
Long Beach residents as members of the public by the State of Indiana and as
Long Beach homeowners by the Town of Long Beach,” as well as those
beaches and dunes “which are owned by neighboring private property owners,
including LBCA members.” LBCA Br. at 22-23; LBCA Addendum at 30. In
November 2015, Homeowners’ engineer, in response to the erosion concerns,
wrote a letter to the BZA stating that “[t]he seawalls as proposed will not
adversely affect the surrounding areas” and “do not present [] erosion risks[.]”
Appellants’ App. Vol. II at 89-90. At the conclusion of the December 8, 2015
hearing, the BZA granted Homeowners’ requested variance from the view
8
Section 154.060 prohibits the placement or erection of a “dwelling, accessory use, building, or structure”
beyond a “view protection line” that lies 106.60 feet north of the northern boundary of the public right-of-
way for Lake Shore Drive.
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protection ordinance, Long Beach Ordinance 154.060.9 Id. at 56. The BZA’s
December 8, 2015 decision included findings that “construction of the proposed
seawall[s] is an absolute necessity to avoid discharge of septic contents . . . as
well as to protect the [Homeowners’] propert[ies]” and that “[t]he proposed
design of the seawall[s] is the minimum design (size, location, height, etc.)
necessary to prevent a septic discharge and other property damage.” Id. at 97-
98, 104-05, 111-12. No party appealed that decision.
[7] On December 14, 2015, each of the three Homeowners filed an application
with the Building Commission for a building permit for a proposed seawall. On
December 30, 2016, the then-Building Commissioner, Aaron Tomsheck,
approved the applications and issued a building permit to each of the three
Homeowners (“Building Permits”). The next day, Homeowners commenced
construction efforts, which continued for the next month and included bringing
in equipment, purchasing steel sheet piling, excavating, and driving sheet piles
into the ground.
9
At the November 24, 2015 hearing, counsel for Homeowners confirmed that “the ordinance for which
we’re asking a variance is the view protection ordinance. It’s not the beach protection ordinance or the sand
erosion ordinance. It’s designed to protect . . .the views from adjacent properties of the lake. Nothing else.”
LBCA Br. at 23 (citing to LBCA Addendum at 8 (transcript of Nov. 24, 2015 BZA hearing)); see also Neulieb
App. at 139, 192.
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[8] On January 25, 2016, LBCA filed administrative appeals to the BZA, pursuant
to Indiana Code section 36-7-4-918.110 and Long Beach Ordinance 154.15311
challenging the legality of the three Building Permits issued on December 30,
2015. LBCA challenged the legality of the issuance of the three Building
Permits on the basis that not all Long Beach ordinances had been complied
with and Homeowners had not obtained all needed variances including those to
comply with the following Long Beach Ordinances: 154.072 regarding
accessory uses and structures; 154.112 regarding changes in dune topography;
154.091 regarding special BZA approval of construction within a regulated
floodplain; Chapter 155 governing construction in floodplains, including
specifically the requirements to obtain a floodplain permit and comply with the
10
Indiana Code section 36-7-4-918.1 provides, in part:
The board of zoning appeals shall hear appeals from and determine appeals from and
review: (1) any order, requirement, decision, or determination made by an administrative
official, hearing officer, or staff member under the zoning ordinance; . . . (3) any order,
requirement, decision, or determination made by an administrative board or other body
except a plan commission in relation to the enforcement of an ordinance adopted under
this chapter requiring the procurement of an improvement in relation to location or
occupancy permit.
11
Long Beach Ordinance 154.153(A)(1) states:
The Board of Zoning Appeals shall have the following powers and it shall be its duty to . .
. hear and determine appeals from and review any order, requirement, decision, or
determination made by an administrative official or staff member made in relation to the
enforcement of the zoning ordinance, subdivision ordinance, and the enforcement of the
building and occupancy permits as adopted under IC 36-7 et seq. and all sections therein
applicable.
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General Standards in 155.50; and Chapter 156 governing storm water
management planning to avoid diversion of floodwater onto neighboring
properties, acceleration of erosion, and sediment transport and disposition.
Appellants’ App. Vol. II at 174-215.
[9] The same day, Neulieb also filed an administrative appeal challenging the three
building permits, asserting that the permits were issued in violation of the side-
yard setback requirement of Long Beach Ordinance 154.077, which requires
that structures be placed no closer than six feet from the side property lines; the
Homeowners’ building plans indicated that their proposed seawalls would be
built within one foot of the side property lines, contrary to the ordinance. Id. at
217-18.
[10] On January 26, 2016, the then-Building Commissioner Aaron Tomsheck
(“Tomsheck”) issued a stop work order for each of the building permits
pursuant to automatic stay provisions of Indiana Code section 36-7-4-1001(a)
triggered by the filing of the administrative appeals.12
[11] On February 2, 2016, Plaintiff Owners filed the Complaint in the trial court
against the Town Defendants, LBCA, and Neulieb (together, “the
12
Indiana Code section 36-7-4-1001(a) states, in relevant part: When an appeal from the decision of an
official or board has been filed with the BZA, proceedings and work on the premises affected shall be stayed
unless the official or board certifies to the BZA that, by reason of the facts stated in the certificate, a stay
would cause imminent peril to life or property.
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Defendants”). Appellants’ App. Vol. II at 46-82. The Complaint contained six
counts for declaratory judgment and six counts for injunctive relief:
Count I: Declaratory judgment that the BZA lacked authority to
consider LBCA’s January 26, 2016 administrative appeal
regarding the propriety of the building permits issued to
Homeowners;
Count II: Declaratory judgment that LBCA lacked standing to
file its administrative appeals;
Count III: Injunction to enjoin the BZA from taking any action
on LBCA’s administrative appeal;
Count IV: Declaratory judgment that the BZA lacked authority
to consider Neulieb’s January 26, 2016 administrative appeal
regarding the propriety of the building permits issued to
Homeowners;
Count V: Declaratory judgment that Neulieb lacked standing to
file his administrative appeal;
Count VI: Injunction to enjoin the BZA from taking any action
on Neulieb’s administrative appeal;
Count VII: Declaratory judgment that the stop work orders
(issued pursuant to Indiana Code section 36-7-4-1001(a) upon the
filing of the administrative appeals) were invalid;
Count VIII: Injunction to enjoin Town Defendants from
enforcing allegedly invalid stop work orders;
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Count IX: Declaratory judgment that certain individually named
defendants (Jane Starr Neulieb, Larry Wall, John Wall, Peter
Byvoets, Robert Lemay, Patrick Cannon, Joseph Jogmen, and
Michael Gorman) each had conflicts of interest with the Plaintiffs
due to association with LBCA and were disqualified from
participating in municipal activities relating to Plaintiffs’
construction of their seawalls, including participating in BZA,
APC, and Town Council proceedings related to the
administrative appeals;
Count X: Injunction to enjoin defendants Jane Starr Neulieb
Larry Wall, John Wall, Peter Byvoets, Robert Lemay, Patrick
Cannon, Joseph Jogmen, and Michael Gorman, from
participating in their official capacities in any municipal activities
relating to Plaintiffs’ construction of their seawalls, including
participating in the administrative appeals or the appointment of
new or replacement members on the BZA;
Count XI: Injunction to enjoin the Defendants from
communicating with the BZA regarding proceedings related to
the construction of seawalls or to the building permits, if
communications would violate Town of Long Beach Zoning
Ordinance § 154.153(B); and
Count XII: Injunction to enjoin the Defendants from unlawfully
interfering with the construction of Homeowners’ seawalls.
See Appellants’ Br. at 34-35 (summarizing counts). The next day, Plaintiff
Owners filed an Application for Temporary Restraining Order and Preliminary
Injunction (“Application”).
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[12] At the BZA’s February 9, 2016 meeting, three members13 of the BZA recused
themselves from considering the administrative decision appeals filed by
LBCA, citing a possible conflict of interest pursuant to Indiana Code section
36-7-4-909(A)(1). Appellants’ App. Vol IX at 89-93 (transcript reflecting that
Michael Gorman, John Kocher, and Meg Kanyer recused themselves); see also
LBCA Addendum at 24. In March 2016, individuals were appointed to replace
those who had recused themselves, pursuant to Indiana Code section 36-7-4-
907 and -909 and Long Beach Ordinance 154.153. Id. at 157.
[13] On February 26, 2016, LBCA filed with the trial court a motion to dismiss,
asserting that the Plaintiff Owners’ lawsuit sought to prevent LBCA and its
members from exercising their constitutionally protected rights to petition for
review of the building permits, and, therefore, it constituted a Strategic Lawsuit
Against Public Participation (“SLAPP”) brought to deter public opposition to
the proposed seawalls. LBCA asked the trial court to dismiss the Complaint
pursuant to Indiana’s Anti-SLAPP statutes, Indiana Code chapter 34-7-7.
LBCA’s motion to dismiss also sought dismissal of the Complaint (1) pursuant
to Trial Rule 12(b)(6) for failure to state an actionable claim against LBCA or
any other defendant and (2) for lack of jurisdiction due to the Plaintiff Owners’
“attempt to circumvent [the] pending administrative proceeding” and failure to
13
It appears that, at some point, John Wall also recused himself, for a total of four recusals. Appellants’ App.
Vol. IX at 157 (March 21, 2016 Town Council minutes reflecting that John Wall also previously recused).
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exhaust administrative remedies as required by Indiana Code 36-7-4-1604 and
36-7-4-1016(a). LBCA App. Vol. III at 2.
[14] Neulieb also filed a motion to dismiss the Complaint, similar in substance to
that filed by LBCA, asking the trial court to dismiss the Complaint pursuant to
Indiana’s Anti-SLAPP statutes and alleging that the trial court lacked
jurisdiction over the subject matter due to Homeowners’ failure to exhaust
administrative remedies.
[15] On March 14, 2016, the Town Defendants filed a motion to dismiss pursuant to
Indiana Trial Rule 12(B)(1) and 12(B)(6). With regard to T.R. 12(B)(1), Town
Defendants argued that the trial court lacked subject matter jurisdiction because
the Homeowners had failed to exhaust their administrative remedies. Town’s
App. Vol. II at 7-9, 14-17. With regard to T.R. 12(B)(6), the Town Defendants
argued that the Complaint failed to state a cause of action against certain Town
Defendants, including the Town Council, the Advisory Plan Commission, Jane
Starr Neulieb, and Patrick Cannon. Id. at 8-9, 17-20.
[16] Meanwhile, in the BZA proceedings, Tomsheck issued on March 16, 2016,
Certificates of Imminent Peril and rescinded the stop work orders, but the next
day, Tomsheck issued a second set of stop work orders, one for each property,
on the basis that “the plans submitted for the seawall[s] do not comply with the
6 ft. side yard setbacks required in the R-2 zone[,]” and the seawalls required an
additional variance from the side-yard setback regulations found in Town Code
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section 154.057. 14 Neulieb App. Vol. II 83-85; Appellants’ App. Vol. VI at 108-
110.
[17] On March 24, 2016, the Homeowners filed with the trial court an Emergency
Application for Immediate Entry to Temporary Restraining Order Without a
Hearing, which sought temporary injunctive relief to resume construction of the
seawalls, asserting that relief was necessary to avoid irreparable harm to
Homeowners and their properties.
[18] On April 8, 2016, the trial court entered an Order Denying Motion to Dismiss
for Lack of Subject Matter Jurisdiction (“April 8 Order”), which concerned the
arguments that Plaintiff Owners failed to exhaust administrative remedies
before filing their Complaint. Thereafter, on April 19, 2016, the trial court
entered an Order Denying LBCA’s and Neulieb’s Motions to Dismiss Relating
to the Indiana Anti-SLAPP Statute. LBCA and Neulieb asked the trial court to
certify the April 19 Order for appeal.
[19] The trial court held evidentiary hearings on March 18, April 8, May 2, and
June 2-3 on the pending motions. On July 5, 2016, the trial court entered
three separate orders, two of which are pertinent to this appeal. One was
the July 5 Order, titled “Order Denying Plaintiffs’ Motions for Injunctive
14
Plaintiff Owners state that Tomsheck disagreed with the application of the setback ordinance to seawalls,
and that Tomsheck issued statements to Homeowners and to the Town’s Advisory Plan Commission that the
setback requirement had not been applied in the past to seawalls in the Town of Long Beach and this
interpretation would not be consistent with the manner in which the ordinance had been applied to other
landowners. Appellants’ Br. at 38.
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Relief and Declaratory Judgment,” which addressed claims in the
Complaint and denied the declaratory and injunctive relief sought.
Regarding the Plaintiff Owners’ requests for declaratory relief, the trial
court concluded that “because Defendants have a clear vested right to
appeal ‘[a]ny decision of the Building Commission concerning the issuance
of an improvement location permit . . . when the decision in question[]
involves a permit issued in conflict with another existing provision of the
Zoning Code . . .’ pursuant to Long Beach Ordinance Section 151.04, this
Court cannot grant declaratory judgment.” Appellants’ App. Vol. II at 41. It
further stated that granting declaratory judgment would “abridge
Defendants’ right to appeal to the BZA” and granting the Plaintiff Owners’
requested relief “would be unjust[.]” Id. at 42.
[20] With regard to the injunctive relief sought by Plaintiff Owners, the trial court
addressed the requests for injunctive relief in the Complaint and stated,
“Nothing presented precludes the Defendants from exercising their right to
appeal the decision of a Building Commissioner concerning the issuance of a
permit that is in conflict with another existing provision of the zoning
ordinance.” Id. at 44. It explained that it would not grant injunctive relief
because:
(1) Plaintiffs’ remedies at law are adequate because they have a
chance to litigate the issues to the BZA and to subsequently file
for judicial review of the BZA’s findings of the Appeals if the
findings are not in their favor; (2) Plaintiffs cannot currently
demonstrate a reasonable likelihood of success on the merits as
this Court has not been presented with the full and complete
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facts, namely the findings of the pending BZA hearing of the
Appeals; (3) the threatened injury to the Plaintiffs does not
outweigh the threatened harm a grant of relief would occasion
upon the defendant [sic], namely the harm resulting from
abridging the Defendants’ right to appeal; and (4) the public
interest would be disserved because granting injunctive relief is
not in the public interest to deny the Defendants’ right to appeal.
Id. at 44-45.
[21] The trial court also issued the second pertinent order titled, “Order Denying
Long Beach Community Alliance’s and James Neulieb’s Respective
Motions to Request Certification for Interlocutory Appeal” (“Order
Denying Certification”), which denied LBCA and Neulieb’s request for
certification of the trial court’s April 19 order that denied their respective
motions to dismiss. LBCA and Neulieb had requested certification
primarily on the issue of the trial court’s rejection of their claim that the
Complaint constitutes a SLAPP lawsuit and should be dismissed under
Indiana’s Anti-SLAPP statutes. In the Order Denying Certification, the
trial court rejected LBCA’s and Neulieb’s claims that (1) if the April 19
order was not certified, each would suffer substantial expense and damage,
and (2) the April 19 order involves a substantial question of law. The trial
court stated that because its July Order “renders the Interlocutory Appeal
request irrelevant[,]” “the remedy by appeal is not otherwise inadequate.”
Town’s App. Vol. II at 94.
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[22] Meanwhile, as proceedings on Plaintiff Owners’ Complaint progressed in the
trial court, including discovery and briefing and hearings on various motions,
the BZA continued to move forward with LBCA’s and Neulieb’s administrative
appeals. Hearings were held, and the parties presented argument, evidence,
and testimony. On June 29, 2016, the BZA entered an Order with specific
Findings and Decisions rescinding the Building Commissioner’s issuance of the
three Building Permits on the basis of failure to demonstrate compliance with
Long Beach Ordinances 154.191 and 154.112. Appellants’ App. Vol. IX at 122-
46. In July 2016, Homeowners filed a petition for judicial review of the BZA’s
June 29 Findings and Decision.15 Id. at 2-27.
[23] On July 29, 2016, Plaintiff Owners filed with this court their notice of appeal,
identified as an interlocutory appeal as of right pursuant to Trial Rule 14(A) or
14(D), appealing the trial court’s July Order that denied injunctive and
declaratory relief. LBCA and Neulieb each filed with this court a notice of
appeal, on July 28 and August 3, 2016, respectively, appealing the April 19
15
Initially, the Plaintiff Owners filed their petition for judicial review in the trial court under the same cause
number as their Complaint; however, in August 2016, they filed “a separate but virtual[ly] identical” petition
for judicial review under a new cause number, in response to objections that it could not be filed in the
ongoing trial court cause. Appellants’ Br. at 42. At an August 25, 2016 hearing on pending motions
(including Plaintiff Owners’ motion to reconsider the July 5 Order), counsel for James Neulieb voiced
opposition to “being brought into” the petition for judicial review case, because Neulieb had withdrawn his
administrative appeal and was not a necessary party and because it possibly could have delayed his appeal of
the anti-SLAPP issues. Appellants’ Suppl. App. Vol. VI at 193-94; Appellants’ App. Vol. X at 39-40, 51. The
record reflects that Neulieb withdrew his administrative appeal on June 14, 2016. Appellants’ App. Vol. VIII
at 202. On September 13, 2016, Plaintiff Owners filed an Indiana Trial Rule 41(A)(2) Motion to Dismiss
James Neulieb, which the trial court granted the next day. Appellants’ Suppl. App. Vol. VI at 197-98.
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Order that denied their Anti-SLAPP motions to dismiss the Plaintiff Owners’
Complaint. They maintain that the April Order was rendered a final order (and
was no longer interlocutory) by virtue of the trial court’s July Order and the
Order Denying Certification. This court consolidated the appeals.
Discussion and Decision
Overview of Parties’ Positions
[24] Appellants/Plaintiff Owners (Homeowners and Duneland) and the three
Appellees (Town Defendants, LBCA, and Neulieb), together, raise a number of
issues and cross-issues.16 Very generally summarized, the claims of the various
parties are as follows: Plaintiff Owners assert that they “had no choice but to
seek a declaration . . . [and] narrowly tailored injunctive relief . . . to prevent
immediate irreparable harm” and that the trial court erred when, in the July
Order, it denied their request for injunctive and declaratory relief. Appellants’
Reply Br. at 17. In support of their claims, the Plaintiff Owners also raise and
address related issues of standing, res judicata, and conflicts of interest. The
Town of Long Beach, LBCA, and Neulieb contend that the trial court erred
when, in the April Orders, it denied their respective motions to dismiss the
Complaint, which sought dismissal on various bases, including that (1) Plaintiff
Owners failed to exhaust administrative remedies when they filed their
16
We note the extensive volume of the appellate record in this case. Between all the parties, a combined ten
briefs, totaling approximately 420 pages, and twenty-seven appendices were filed, in addition to exhibits and
transcripts.
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Complaint and, therefore, the trial court lacked subject matter jurisdiction, (2)
the Complaint violated Indiana’s prohibition against lawsuits that are Strategic
Lawsuits Against Public Participation, and (3) Plaintiff Owners failed to state a
cause of action against some of the named defendants.
[25] Amicus Curiae Indiana Association of Cities and Towns (“IACT”) and Indiana
Municipal Lawyers Association (“IMLA”) filed a brief in support of Appellee
Town Defendants. IACT and IMLA asserted that they an interest in the
outcome of the present case, not particularly because of the subject seawalls, but
because of the presence of zoning issues and procedures that IACT and IMLA
membership regularly encounter. IACT and IMLA argue that the trial court
erred when, in its April 8 Order, it denied the Town Defendants’ motion to
dismiss that alleged that Plaintiff Owners’ failed to exhaust administrative
remedies. IACT and IMLA urge that Plaintiff Owners “filed suit for
declaratory judgment and sought preliminary injunctive relief before the
administrative process was complete” and that, by doing so, Plaintiff Owners
attempted to circumvent Indiana’s “orderly, statutorily prescribed [zoning]
process.” IACT and IMLA Br. at 6. Alternatively, IACT and IMLA request
that we affirm the trial court’s July 5 Order that declined to grant the requested
injunctive or declaratory relief to Plaintiff Owners. Amicus Curiae
Conservation Law Center filed a brief in support of Appellee LBCA,
maintaining that the Plaintiff Owners’ Complaint constitutes a SLAPP suit and
that the trial court should have granted LBCA’s motion to dismiss under
Indiana’s Anti-SLAPP statute.
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I. Jurisdiction and the July Order
[26] We first address whether we possess subject matter jurisdiction over the cross-
appeal issues that challenge the trial court’s April Orders that denied
Defendants’ respective motions to dismiss.
[27] Subject matter jurisdiction is “‘the power to hear and determine cases of the
general class to which any particular proceeding belongs.’” HRC Hotels, LLC v.
Metro. Bd. of Zoning Appeals Div. II of Marion Cty., 8 N.E.3d 203, 206 (Ind. Ct.
App. 2014) (quoting K.S. v. State, 849 N.E.2d 538, 540 (Ind. 2006)). The
authority of our appellate courts to exercise jurisdiction is generally limited to
appeals from final judgments. Ind. Appellate Rules 4(A)(1), 5(A); Ramsey v.
Moore, 959 N.E.2d 246, 253 (Ind. 2012). “Whether the order was a final
judgment governs the appellate courts’ subject matter jurisdiction[.]” Georgos v.
Jackson, 790 N.E.2d 448, 451 (Ind. 2003).
[28] Plaintiff Owners assert that there has been no final judgment, and, therefore,
this court does not have subject matter jurisdiction over the cross-appeal issues
raised by Town Defendants, LBCA, and Neulieb, which challenge the trial
court’s April Orders that denied their respective motions to dismiss. Plaintiff
Owners maintain that the July 5 Order is an interlocutory order, and thus Town
Defendants, LBCA, and Neulieb cannot appeal the prior, interlocutory and
uncertified April Orders. LBCA, Neulieb, and Town Defendants each assert,
separately from each other but in similar fashion, that the July 5 Order is a final
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judgment, and therefore, they may appeal the trial court’s earlier April 8 and
April 19 orders that denied their respective motions to dismiss.17
[29] We note that the issue of whether this court has jurisdiction over the cross-
appeals of Town Defendants, LBCA, and Neulieb has been presented to this
court, when after filing the appeal, but before briefing, the Plaintiff Owners
moved to dismiss the appeal filed by LBCA and Neulieb. Plaintiff Owners
asserted that the July 5 Order was interlocutory, not final, and LBCA and
Neulieb could not appeal the prior, April 19 uncertified order. The motions
panel of this court denied the Plaintiff Owners’ motion to dismiss.
[30] As we have recognized, “‘It is well established that we may reconsider a ruling
by the motions panel.’” Miller v. Hague Ins. Agency, Inc., 871 N.E.2d 406, 407
(Ind. Ct. App. 2007) (quoting Cincinnati Ins. Co. v. Young, 852 N.E.2d 8, 12 (Ind.
Ct. App. 2006), trans. denied). Thus, “Even though our motions panel has
already ruled on this issue,” Plaintiff Owners are “not precluded from
presenting [their] arguments to us.” Id. Although we are reluctant to overrule
orders decided by the motions panel, we have inherent authority to reconsider
any decision while an appeal remains in fieri. Id.17
We note that during the pendency of this appeal, Town Defendants, LBCA, and Neulieb filed a Joint
Motion for Temporary Stay of Appeal Proceedings and Remand to Trial Court for Limited Purpose, to
remand for the limited purpose of clarifying whether the July 5 Order was or was not a final judgment that
disposed of all relief requested by Plaintiff Owners. The motions panel of this court denied the Joint Motion.
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[31] “Succinctly stated, a final judgment ‘disposes of all issues as to all parties
thereby ending the particular case’” and “[i]t leaves nothing for future
determination.” Georgos, 790 N.E.2d at 451 (quoting Doperalski v. City of
Michigan City, 619 N.E.2d 584, 585 (Ind. Ct. App. 1993)). “This doctrine is
now formalized in Indiana Rule of Appellate Procedure 2(H), which provides
that a judgment is final if, “it disposes of all claims as to all parties[.]” Id.(citing Ind. Appellate Rule 2(H)).
[32] In support of their position that we do not have subject matter jurisdiction over
the cross-appeal issues concerning the April Orders, Plaintiff Owners assert
that, here, the July 5 Order stated that it was denying a motion, it used a
preliminary (not permanent) injunction standard, and it did not enter final
judgment. Appellants’ App. Vol. II at 31-45. Plaintiff Owners also argue that the
July 5 Order did not dispose of all claims, as it made no findings regarding the
claim that LBCA lacked standing or regarding conflicts of interest of and
disqualification of certain defendants.
[33] LBCA, Neulieb, and the Town Defendants maintain that the July 5 Order,
although captioned as a denial of motions for injunctive and declaratory relief,
was a final order and should be considered a final judgment under Indiana
Appellate Rule 2(H), which lists four different types of final judgments, along
with a “catch-all” provision for “all judgments otherwise deemed final by law.”
They further assert that, although Plaintiff Owners characterize the July 5
Order as denying their Application for temporary injunctive relief, the July
Order never even mentions the Application; rather, it expressly and repeatedly
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references the Complaint, expressly walks through the counts of the Complaint,
and denies the relief requested. They point out that the trial court’s “Analysis”
tracks the Complaint claims and is divided into a section titled “A. Declaratory
Judgment” and a section titled “B. Injunctive Relief.” Id. In the “Declaratory
Judgment” section of the July 5 Order, the trial court paraphrased the
declaratory relief sought in Counts I, II, IV, V, VII and IX of the Complaint.
After doing so, it stated:
32. This Court finds that . . . because Defendants have a clear
vested right to appeal “[a]ny decision of the Building
Commission concerning the issuance of an improvement location
permit. . . when the decision in question[] involves a permit
issued in conflict with another existing provision of the Zoning
Code[]” pursuant to Long Beach Ordinance Section 151.04, this
Court cannot grant declaratory judgment.
....
34. Moreover, “[t]he determinative factor of this [granting
declaratory judgment] is whether the declaratory judgment will
result in a just and more expeditious and economical
determination of the entire controversy.” . . . Since granting
declaratory judgment would abridge Defendants’ right to appeal
to the BZA, this Court believes that granting Plaintiff [Owners]’
requested relief would be unjust, regardless of how expeditious or
economic.
Appellants’ App. Vol. II at 41-42.
[34] Then the July Order paraphrased the language in Counts III, VI, VIII, X, XI,
and XII of the Complaint for injunctive relief and stated:
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41. This Court echoes its findings above. Nothing presented
precludes the Defendants from exercising their right to appeal the
decision of a Building Commissioner concerning the issuance of
a permit that is in conflict with another existing provision of the
zoning ordinance.
Id. at 44. The trial court determined that Plaintiff Owners failed to meet any of
the four factors necessary to obtain injunctive relief, concluding, “This Court
will not grant injunctive relief.” Id. Town Defendants, LBCA, and Neulieb
argue that, considering the trial court’s manner of analysis and reference to the
Complaint, the July Order “disposes of all claims as to all parties” and is a final
judgment as defined under Appellate Rule 2(H)(1).
[35] They urge that their “final order” interpretation is supported by the Order
Denying Certification, also issued on July 5, which denied LBCA’s and
Neulieb’s request asking the trial court to certify the April 19 Order that denied
their anti-SLAPP motions to dismiss. The Order Denying Certification stated
that the July Order rendered their request for certification “irrelevant[.]” LBCA
App. Vol. V at 16. “The only way to interpret that statement is that the trial
court considered its July 5 Judgment Order to be final.” Town Defendants’ Br. at
21. That is, Defendants contend, certification was no longer necessary in order
for LBCA and Neulieb to bring their Anti-SLAPP appeals.
[36] We agree with LBCA, Neulieb, and Town Defendants that the July 5 Order
“disposes of all claims as to all parties” and thus constitutes a final judgment as
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defined under Appellate Rule 2(H)(1).18 We are not persuaded by the Plaintiff
Owners’ arguments, including that, because the trial court referred in the July 5
Order to a preliminary injunction standard of review, the trial court only ruled
on Plaintiff Owners’ Application for injunctive relief. The language of the July
5 Order, along with the accompanying Order Denying Certification, indicate
that the trial court intended to address and deny the claims of the Complaint,
not the relief sought in the Application, and that the Defendants had the right to
appeal the issuance of the permits to the BZA.19 Accordingly, we find that we
have subject matter jurisdiction to hear the cross-appeal issues concerning the
trial court’s April Orders that denied the motions to dismiss filed by LBCA,
Neulieb, and Town Defendants.20
18
Alternatively, Town Defendants assert that the July Order is final and appealable pursuant to section 1 of
Indiana’s Uniform Declaratory Judgment Act, which states:
Courts of record within their respective jurisdictions have the power to declare rights,
status, and other legal relations whether or not further relief is or could be claimed. No
action or proceeding is open to objection on the ground that a declaratory judgment or
decree is prayed for. The declaration may be either affirmative or negative in form and
effect. The declaration has the force and effect of a final judgment or decree.
Ind. Code § 34-14-1-1. See Town Defendants’ Br. at 20. Because we resolve the issue under Appellate Rule
2(H)(1), we do not reach the UDJA argument.
19
To the extent that Plaintiff Owners argue that the trial court, without notice, improperly converted a
preliminary injunction hearing to a hearing on the merits and that they were thereby denied due process, we
find that the trial court conducted at least five hearings on the matter of injunctive and declaratory relief and
that the Plaintiff Owners were not denied due process.
20
LBCA asserts that, if we determine that the July 5 Order is a final order, then we should dismiss Plaintiff
Owners’ appeal, given that they sought appeal of the July 5 Order pursuant to Indiana Appellate Rule 14(A),
an appeal as of right from an interlocutory order denying preliminary injunctive relief. Our motions panel
denied to dismiss LBCA’s motion to dismiss Plaintiff Owners’ appeal on this basis, as do we.
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II. Orders Denying Cross-Appellants’ Motions to Dismiss
[37] Having found that this court has jurisdiction, we next address the trial court’s
April Orders ruling on the motions to dismiss.21 The Town Defendants’ motion
to dismiss alleged that the trial court lacked subject matter jurisdiction because
Plaintiff Owners failed to exhaust administrative remedies before filing their
Complaint for declaratory and injunctive relief in the trial court, and it asked
the trial court to dismiss Plaintiff Owners’ Complaint under Trial Rule 12(B)(1).
LBCA’s and Neulieb’s respective motions to dismiss argued primarily that
Plaintiff Owners’ Complaint should be dismissed because it constituted a
SLAPP lawsuit and should be dismissed on that basis, but argued, alternatively,
that the Complaint should be dismissed for Plaintiff Owners’ failure to exhaust
administrative remedies.
[38] In their motion, Town Defendants argued that Plaintiff Owners’ Complaint
was filed “in a clear attempt to usurp the BZA’s statutory authority.” Town
Defendants’ App. Vol. II at 14-15 (citing Advantage Home Health Care, Inc. v. State
Dept. of Health, 829 N.E.2d 499, 503 (Ind. 2005)). They urged that it was not
appropriate for Plaintiff Owners to seek declaratory and injunctive relief in the
trial court at that stage of the proceedings, and rather, the “correct procedure”
21
Town Defendants suggest that, before addressing the propriety of the trial court’s denial of LBCA’s and
Neulieb’s anti-SLAPP claims of their motions to dismiss, and before addressing the Plaintiff Owners’
allegations of error concerning the denial of injunctive and declaratory relief, this court should, in the interest
of judicial economy, first address the cross-appeal issues asserting that Plaintiff Owners failed to exhaust
administrative remedies “because resolution of the preliminary jurisdictional issues will . . . conserve judicial
resources.” Town Br. at 21. We agree.
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was for Plaintiff Owners to have the BZA consider the administrative appeals
that had been filed by LBCA and Neulieb:
Plaintiff [Owner]s are entitled to make all of their arguments
regarding the deficiencies of the administrative appeals they have
enumerated in their Verified Complaint directly to the BZA.
While the Plaintiff [Owner]s claim that the administrative
appeals contain various defects, those claimed defects must be
first considered by the BZA. After the BZA has made a final
decision on the administrative appeals, if the Plaintiff [Owner]s
disagree with the decisions at that time they would be entitled to
file a petition for judicial review of the decision pursuant to Ind.
Code 36-7-4-1604(a).
Id. at 16 (Town Defendants’ memorandum of law in support of motion to
dismiss).
[39] On April 8, the trial court issued its Order Denying Motion to Dismiss for Lack
of Subject Matter Jurisdiction and denied the three motions to dismiss with
regard to the allegations that the trial court lacked jurisdiction because Plaintiff
Owners had failed to exhaust administrative remedies.22 In its decision, the trial
court relied on Plaintiff Owners’ arguments that: (1) the variance that they
applied for and received was for them to build a seawall; (2) the BZA
considered Plaintiff Owners’ plans and applications and granted the variance on
December 8, 2015; (3) and because none of the Defendants appealed the
22
The April 8 Order addressed only the failure to exhaust arguments, and not the anti-SLAPP arguments
that had been raised by LBCA and Neulieb; the trial court denied the anti-SLAPP claims by separate order
on April 19.
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December 8, 2015 findings, those findings are res judicata and cannot be
attacked by LBCA’s and Neulieb’s administrative appeals. See Appellants’ App.
Vol. V at 193; LBCA App. Vol. IV at 67. Plaintiff Owners argued that “requiring
them to return to the processes of the BZA would be allowing an ultra vires
action.” Appellant’s App. Vol. V at 193. In the April 8 Order, the trial court
reasoned that it possessed jurisdiction because Plaintiff Owners’ Complaint was
challenging the BZA’s authority to act on the administrative appeals, citing to
Indiana Department of Environmental Management v Twin Eagle LLC, 798
N.E.2d 839 (Ind. 2003), where our Supreme Court had carved out an
exception to the exhaustion requirement “if an action is brought upon the
theory that [an] agency lacks the jurisdiction to act in a particular area.” Id.
at 844; Town Defendants’ App. Vol. II at 4.
[40] The standard of appellate review of a trial court’s grant or denial of a motion to
dismiss pursuant to Trial Rule 12(B)(1) is a function of what occurred in the
trial court. Cmty. Hosp. v. Avant, 790 N.E.2d 585, 586 (Ind. Ct. App. 2003).
The standard of appellate review is dependent upon whether the trial court
resolved disputed facts. Id. If the facts before the trial court are not in dispute,
then the question of subject matter jurisdiction is purely one of law, and no
deference is afforded to the trial court’s conclusion. Id. Where, as here, the
relevant facts are not in dispute, we review the trial court’s April 8 Order and its
determination regarding subject matter jurisdiction de novo.
[41] On appeal, Town Defendants argue that the trial court erred in denying their
motion to dismiss because Indiana law required Plaintiff Owners to fully
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participate in the BZA’s administrative decision appeal process before asking
for declaratory and injunctive relief via the Complaint: “[Plaintiff Owners’]
proper course was to participate in the BZA hearing, receive a decision, and
then file a petition for judicial review of any adverse decision[.]” Town
Defendants’ Br. at 22-23. Town Defendants assert, “Ultimately, the trial court
recognized this” in the subsequent July 5 Order, but “it was error to deny the
[Motions] to Dismiss.” Town Defendants’ Reply Br. at 8-9.
[42] Amicus IACT and IMLA maintain that Plaintiff Owners’ Complaint was an
attempt to circumvent Indiana’s zoning laws. They urge, “The existing zoning
statutes have been enacted to promote uniformity among planning and zoning
powers in Indiana in addressing the myriad issues which arise” and that
allowing an end-run around the zoning administrative process would
“undermine[] the zoning administrative process upon which municipal
governments throughout this State rely and invites parties wary of presenting an
appeal before a [BZA] to directly sue municipalities to attain the outcome
desired.” Amicus IACT and IMLA Br. at 9, 16-17.
[43] Under Indiana law, “It is well-established that, if an administrative remedy is
available, it must be pursued before a claimant is allowed access to the courts,”
as “failure to exhaust administrative remedies deprives the trial court of subject
matter jurisdiction.” Town Council of New Harmony v. Parker, 726 N.E.2d 1217,
1224 (Ind. 2000). As stated by the Indiana Supreme Court in Twin Eagle:
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We have repeatedly emphasized the value of completing
administrative proceedings before resorting to judicial review.
The reasons for this requirement are well established:
(1) premature litigation may be avoided; (2) an adequate
record for judicial review may be compiled; and (3) agencies
retain the opportunity and autonomy to correct their own
errors. Even if the ground of the complaint is the
unconstitutionality of the statute, which may be beyond the
agency’s power to resolve, exhaustion of administrative
remedies may still be required because administrative action
may resolve the case on other grounds without confronting
broader legal issues.
798 N.E.2d at 844 (citations omitted).
[44] Town Defendants, LBCA, and Neulieb, as well as Amicus IACT and IMLA,
argue that Indiana Code section 36-7-4-918.1 (“Section 918.1”) and Long
Beach Ordinance 154.153(A)(1) not only authorized but also required the BZA
to review the administrative appeals. Section 918.1 states:
[A] board of zoning appeals shall hear and determine appeals
from and review:
(1) any order, requirements, decision, or determination
made by an administrative official, hearing officer, or staff
member under the zoning ordinance;
(2) any order, requirement, decision, or determination
made by an administrative board or other body except a plan
commission in relation to the enforcement of the zoning
ordinance; or
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(3) any order, requirement, decision, or determination
made by an administrative board or other body except a plan
commission in relation to the enforcement of an ordinance
adopted under this chapter requiring the procurement of an
improvement location or occupancy permit.
Long Beach Ordinance 154.153(A)(1) similarly provides:
The Board of Zoning Appeals shall have the following powers
and it shall be its duty to: (1) hear and determine appeals from
and review any order, requirements, decision, or determination
made by an administrative official or staff member made in
relation to the enforcement of the zoning ordinance, subdivision
ordinance, and the enforcement of the building and occupancy
permits as adopted under IC 36-7 et seq. and all sections therein
applicable.
Neulieb App. Vol. II at 67.
[45] They further contend that Indiana Code sections 37-7-4-1600 through -1616,
sometimes referred to as the “1600 series,” provide the method for appealing
decisions of zoning boards. Indiana Code section 37-7-4-1601(a) states that it
“establishes the exclusive means for judicial review of zoning decisions[.]” Ind.
Code § 36-7-4-1601(a). Under section 1605, a petitioner must challenge a final
zoning decision within thirty days of the zoning decision. I.C. § 36-7-4-1605.
“[Failure] to timely object to a zoning decision or timely petition for review of a
zoning decision within [30 days] waives the person’s right to judicial review[.]”
I.C. § 36-7-4-1604.
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[46] Both sides of the divide – Plaintiff Owners on one side and Town Defendants,
LBCA, and Neulieb on the other– cite to the 1600 series as providing an orderly
review of zoning decisions, alleging that the other failed to follow it. Plaintiff
Owners claim that seawall objectors, including LBCA and Neulieb, filed
administrative appeals of the issuance of building permits rather than properly
appealing the December 8, 2015 final order of the BZA that approved the view
variance. According to Plaintiff Owners, the time to challenge the BZA’s
December 8, 2015 decision expired on January 7, 2016, which Defendants
failed to do so, and, thus, the December 8 decision is res judicata and cannot be
relitigated; Plaintiff Owners characterize the administrative appeals as
“collateral attacks” on the “final” December 2015 BZA decision. See Appellants’
Br. at 10, 27, 44.
[47] Town Defendants, LBCA, and Neulieb maintain, however, that the December
2015 BZA decision approved only a view variance for each property and that
none of the Defendants opposes the grant of the view variance. Hence, they did
not appeal it. Rather, their challenge is to the subsequently-issued building
permits on the basis that the permits were required to, but did not, comply with
all Long Beach ordinances, and administrative appeals of Building Permit
decisions to local BZAs are authorized by Section 918.1 and Long Beach
Ordinance 154.153(A)(1). They argue that their administrative appeals address
entirely different ordinances than those addressed by the December 2015
variance and, thus, are not “collateral attacks” on a previously issued variance.
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[48] Furthermore, Town Defendants, LBCA, and Neulieb argue, and Amicus IACT
and IMLA agree, Plaintiff Owners should have, but did not, follow the 1600
series to appeal the issuance of stop work orders and, instead, filed the
Complaint. That is, on March 17, 2016, the Building Commissioner issued a
second set of stop work orders, which prevented the construction of a
“structure” in the area of the side-yard setback, and Plaintiff Owners did not file
an administrative decision appeal of the stop work orders or apply for a
developmental standards variance, which are remedies that Town Defendants
maintain should have been exhausted before filing the Complaint. Amicus
IACT and IMLA contend, “[Plaintiff Owners] filed suit for declaratory
judgment and sought preliminary injunctive relief before the administrative
process was complete and entirely outside of [the] orderly, statutorily prescribed
process[,]” and by doing so, they “attempt[ed] to circumvent the process
required by Indiana’s zoning scheme — a process administered in one fashion
or another by virtually every municipal government in Indiana with planning
and zoning jurisdiction.” IACT and IMLA Br. at 6. Therefore, they argue,
Plaintiff Owners’ Complaint should have been dismissed.
[49] Town Defendants suggest to us that a case “squarely on point,” and in support
of their position, is Barnette v. U.S. Architects LLP, 15 N.E.3d 1 (Ind. Ct. App.
2014). Town Defendants’ Br. at 23. In Barnette, homeowners Albert and Julie
Bowen hired U.S. Architects to design what the Carmel Department of
Community Services (“the Department”) called an “accessory building” on
their residential property in Carmel, Indiana. Barnette, 15 N.E.3d at 3. U.S.
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Architects designed the building and submitted plans for a building permit, and
the Department issued a building permit in February 2010.23 The Bowens
constructed the accessory building, and in October 2010, the Department issued
a certificate of occupancy. Id. at 4. After construction was complete, the
Barnettes, who were the next-door neighbors of the Bowens, complained to the
Department about the height of the building because they believed it was too
tall in violation of the zoning code ordinance applicable to accessory buildings.
Id. at 4-5. The Department reviewed the complaint and sent the Bowens a letter
in March 2011 that read in part, “Upon review, it has come to our attention this
complaint is valid. We believe the original building permit was issued in error.
According to the building permit plans that were submitted the structure is eight
feet taller than is permitted. In order to comply . . . it will be necessary for you
to file an application for a Developmental Standards Variance.” Id. at 5. The
Bowens applied for a variance with the BZA, and after a public hearing, the
BZA denied the variance request. Id. The Bowens did not administratively
appeal the Department’s March 2011 determination that their building was too
tall nor did they appeal the BZA’s April 2011 denial of a variance. In June
2011, the Department notified the Bowens that their building violated the
23
The building permit contained the following language: “THE BUILDING OFFICIAL IS PERMITTED
TO SUSPEND OR REVOKE THIS CERTIFICATE OF OCCUPANCY BASED ON ANY OF THE
FOLLOWING: 1. WHEN THE CERTIFICATE HAS BEEN ISSUED IN ERROR; 2. WHEN THE
INCORRECT INFORMATION IS SUPPLIED; 3. WHEN THE BUILDING IS IN VIOLATION OF
THE CODE.” Barnette v. U.S. Architects, LLP, 15 N.E.3d 1, 4 (Ind. Ct. App. 2014).
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height ordinance and that the Department would be withdrawing the certificate
of occupancy. The Bowens did not appeal that decision.
[50] In September 2011, the Bowens and U.S. Architects filed a complaint for
declaratory relief against the Department and the BZA (together, “the City of
Carmel”), seeking an interpretation of the ordinance at issue and a
determination that their building complied with it. Id. at 6. The City of Carmel
filed a motion for judgment on the pleadings, asserting, among other things,
that the Bowens failed to exhaust administrative remedies; the Barnettes
intervened and joined the City of Carmel’s motion. The Bowens and U.S.
Architects filed a motion for summary judgment.
[51] The trial court denied the City of Carmel’s motion for judgment on the
pleadings, and it granted the Bowens’ requested relief, finding that the
Department violated their due process rights and that the Department should be
estopped from revoking the certificate of occupancy. Id. at 7. The trial court
ordered the City of Carmel to immediately reissue the Certificate of Occupancy
or to provide just compensation because of the due process violation. Id.
[52] The Barnettes appealed and asserted that the declaratory judgment action
should be dismissed for lack of subject matter jurisdiction because the Bowens
failed to exhaust their administrative remedies. This court agreed. After noting
that, instead of filing a motion for judgment on the evidence, “[T]he City
should have filed a motion to dismiss for lack of subject matter jurisdiction
pursuant to Indiana Trial Rule 12(B)(1)” the Barnette court held that the trial
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court should have dismissed the Bowens’ declaratory judgment complaint
because they failed to exhaust their administrative remedies. Id. at 8. In doing
so, the Barnette court stated, “[T]he Bowens had two opportunities to appeal
from and be heard on the [Department]’s determination that their accessory
building is too tall and an opportunity to appeal from and be heard on the
BZA’s denial of a variance, and they failed to take advantage of any of those
opportunities.” Id. at 11.
[53] In this appeal, Town Defendants maintain that, “consistent with this [c]ourt’s
holding in Barnette,” the Plaintiff Owners’ “failure to exhaust administrative
remedies should have resulted in a dismissal under Trial Rule 12(B)(1).” Town
Defendants’ Br. at 26. We agree and find it was error for the trial court in the
present case not to dismiss Plaintiff Owners’ Complaint on this basis.
[54] Plaintiff Owners do not dispute the exhaustion doctrine, but argue that they
should nevertheless be excused from exhausting their administrative remedies
based on limited exceptions to the exhaustion doctrine. For instance, Plaintiff
Owners maintain that the trial court, when determining in its April 8 Order that
it had jurisdiction, properly referred to and relied upon Twin Eagle, which
carved out an exception to the exhaustion requirement. The Twin Eagle Court
determined that “[t]o the extent the issue turns on statutory construction,
whether an agency possesses jurisdiction over a matter is a question of law
for the courts[,]” and “[I]f an action is brought upon the theory that the agency
lacks the jurisdiction to act in a particular area, exhaustion of remedies is not
required.” 798 N.E.2d at 844. We disagree that, pursuant to Twin Eagle,
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Plaintiff Owners were not required to exhaust administrative remedies. In Twin
Eagle, the trial court was asked a pure question of statutory construction,
namely whether IDEM possessed authority to regulate the types of waters at
issue; here, there was no issue of statutory construction, and, in fact, Section
918.1 grants the BZA the power and duty to hear administrative appeals
and the 1600 series provide the method for appealing decisions of zoning
boards. We therefore find that Twin Eagle is distinguishable and not
controlling of our decision.
[55] Plaintiff Owners also contend that exhaustion of administrative remedies
was excused because it would have been futile for them to resort to the
administrative process. See Johnson v. Celebration Fireworks, Inc., 829 N.E.2d
979, 984 (Ind. 2005) (exhaustion of administrative remedies may be excused
if the exercise would be futile, which requires showing that “administrative
agency was powerless to affect a remedy or that it would have been
impossible or fruitless and of no value under the circumstances”). Plaintiff
Owners’ claim, among other things, is that participating in the BZA
administrative process would have been futile because the BZA is
comprised of or includes members that are biased against it due to conflicts
of interest. Whether conflicts exist is a fact-sensitive matter, to be brought
to the attention of the BZA and, in the face of an adverse decision, taken up
on judicial review. See New Trend Beauty Sch. v. Ind. State Bd. of Beauty Culturist
Exam’rs, 518 N.E.2d 1101, 1105 (Ind. Ct. App. 1988) (remedy for claims of bias
is to proceed before administrative body and make a record, which will give
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agency opportunity to correct or prevent error, without judicial interference).
To the extent that Plaintiff Owners’ claim is that they are sure the BZA would
rule against them, “[T]he mere fact that an administrative agency might refuse
to provide the relief requested does not amount to futility.” Johnson, 829
N.E.2d at 984.
[56] As the Barnette court observed, “‘[w]here an administrative remedy is readily
available, filing a declaratory judgment action is not a suitable alternative.’”
Barnette, 15 N.E.3d at 9 (quoting Carter v. Nugent Sand Co., 925 N.E.2d 356, 360
(Ind. 2010)). Similarly, Indiana courts have recognized that a trial court has no
jurisdiction to enter a preliminary injunction where a party has failed to exhaust
his or her administrative remedies. See Lake Cty. Sheriff’s Corr. Merit Bd. v. Peron,
756 N.E.2d 1025, 1029 (Ind. Ct. App. 2001) (trial court lacked subject matter
jurisdiction to issue preliminary injunction where parties failed to exhaust
administrative remedies).
[57] We conclude that Plaintiff Owners failed to exhaust their administrative
remedies before filing their Complaint for declaratory and injunctive relief, and,
therefore, we reverse the trial court’s April 8 Order that denied the motions to
dismiss.24
24
Because we find that the trial court lacked subject matter jurisdiction, we do not reach LBCA’s and
Neulieb’s other cross appeal issues asserting that the trial court should have dismissed the Complaint under
Indiana’s anti-SLAPP statutes, nor do we reach Plaintiff Owners’ appellate claims challenging the July 5
Order denying injunctive and declaratory relief.
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[58] Reversed.
[59] Robb, J., and Barnes, J., concur.
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