American Cold Storage v. The City of Boonville

FOR PUBLICATION
ATTORNEYS FOR APPELLANTS: ATTORNEYS FOR APPELLEE:
LESLIE C. SHIVELY JAMES L. PETERSEN
Shively & Associates, P.C. TIMOTHY E. OCHS
Evansville, Indiana BRIAN J. PAUL
Ice Miller LLP
JON LARAMORE Indianapolis, Indiana
Faegre Baker Daniels LLP
Indianapolis, Indiana FILED
Oct 09 2012, 9:25 am
IN THE CLERK
of the supreme court,
court of appeals and
COURT OF APPEALS OF INDIANA tax court
AMERICAN COLD STORAGE, et al., )
)
Appellants-Plaintiffs, )
)
vs. ) No. 87A01-1112-PL-610
)
THE CITY OF BOONVILLE, )
)
Appellee-Defendant. )
APPEAL FROM THE WARRICK SUPERIOR COURT
The Honorable S. Brent Almon, Special Judge
Cause No. 87D01-0810-PL-452
October 9, 2012
OPINION – FOR PUBLICATION
BAKER, Judge
In this case, a city passed an ordinance annexing additional territory, which a
group of landowners vigorously oppose. Indeed, this is the second time that these
litigants have been before a panel of this Court. The issue presented to us this time is
how to count State-owned parcels of land that now form State-owned right of ways. The
trial court concluded that the parcels should be counted individually. We conclude that
this was error, inasmuch as it undermines the General Assembly’s intent to provide a
mechanism for landowners to oppose annexation.
Appellants-plaintiffs American Cold Storage et al., (collectively, “the
Landowners”) appeal the trial court’s ruling dismissing their challenge to an annexation
by the appellee-defendant City of Boonville (Boonville) for lack of subject matter
jurisdiction. Specifically, the Landowners argue that the trial court erred by individually
counting the State-owned parcels that are now State Road 62 rather than counting State
Road 62 as a single piece of real estate. According to the Landowners, counting each
individual parcel that is now part of a state highway diluted the percentage of signatures
necessary to oppose the annexation.
Boonville cross-appeals arguing that the Landowners have waived this issue
because it was available to them during the first appeal and they failed to raise it.
Declining to find waiver and concluding that the trial court erred by counting each
individual parcel that was acquired to build what is now State Road 62, we reverse and
remand for further proceedings consistent with this opinion.
2
FACTS
Boonville is a municipal corporation and political subdivision located in Warrick
County. On July 7, 2008, Boonville passed Ordinance 2008-2, which annexed 1,165
acres of real estate located west of Boonville’s geographic limits. Public highways
border two sections of the proposed annexed territory. The Landowners are 230
individuals, trusts, and corporate entities who oppose the annexation.1
On October 3, 2008, the Landowners filed their written remonstrance2 and verified
complaint for declaratory relief. Regarding the remonstrance in Count I, the Landowners
objected to Ordinance 2008-2, asserting that the annexation should not occur for
numerous reasons, including an inadequate fiscal plan; non-capital services such as
police, fire, and street and road maintenance services were already adequately provided
for; capital services such as street construction and lighting, sewer and water facilities,
and storm drainage facilities were already adequately provided for; the annexation would
have a detrimental financial impact on the real estate owners in the affected territory; and
the annexation would not be in the best interests of the landowners in the territory
proposed to be annexed. For the Landowners to have standing, the remonstrance must be
1
For illustrative purposes only, attached to the end of this opinion are two figures. The first figure
illustrates parcels of property owned solely by private landowners. The second figure illustrates the
increase in the number of parcels resulting from the State acquiring portions of the landowners’ parcels to
accommodate a state highway. Additionally, the second figure shows the state highway encompassing
the added parcels. Note, however, that the figures are not actual representations of the factual
circumstances in this case but are provided to assist the reader in understanding the arguments and our
analysis of the issues presented.
2
According to Black’s Law Dictionary, a remonstrance is “[a] presentation of reasons for opposition or
grievance.” 1298 (7th ed. 1999).
3
signed by at least 65% of the owners of land in the annexed territory (65% Rule). Ind.
Code § 36-4-3-11(a)(1). In the Landowners’ claim for declaratory relief in Count II, the
Landowners incorporated their remonstrance grievances and alleged statutory
deficiencies.
On November 26, 2008, Boonville filed a motion to dismiss for lack of subject
matter jurisdiction under Indiana Trial Rule 12(B)(1). On March 11, 2010, the trial court
entered its order denying Boonville’s motion to dismiss.
On March 17, 2010, Boonville filed its motion to certify for interlocutory appeal
the trial court’s order denying Boonville’s motion to dismiss, which the trial court and
this Court granted. On June 13, 2011, a panel of this Court issued its decision holding
that tax-exempt parcels should be included in determining the total number of parcels in
the proposed annexation area. City of Boonville v. Am. Cold Storage, et al., 950 N.E.2d
764, 769 (Ind. Ct. App. 2011), reh’g denied (Boonville I). The panel also concluded that
the Landowners lacked standing to seek declaratory relief and rejected their argument
that parcels abutting public roadways should be counted in determining whether the
remonstrance satisfied the 65% Rule. Id. at 771. The panel remanded for further
proceedings consistent with its opinion. Id. at 772.
On October 26, 2011, the Landowners filed their brief in support of their position
regarding how the State Road 62 parcels should be counted and motion requesting a
hearing for a determination of the sufficiency of the remonstrance. Boonville opposed
the motion.
4
On December 19, 2011, the trial court dismissed the complaint. The Landowners
filed their notice of appeal on December 21, 2011. Then, on January 17, 2012, the
Landowners filed a motion to correct error, which prompted this Court to remand once
again. On March 23, 2012, after receiving briefs and hearing argument from both sides,
the trial court denied the Landowners’ motion to correct error. This Court resumed
jurisdiction on April 3, 2012.
DISCUSSION AND DECISION
The Landowners argue that the trial court erred in dismissing their remonstrance
for lack of subject matter jurisdiction. More particularly, the Landowners contend that
the trial court should not have included the parcels that were acquired by the State to
construct what is now State Road 62.
I. Waiver
As an initial matter, Boonville maintains that the Landowners have waived their
argument by failing to raise it in the first appeal. As stated in the FACTS, the main issue
in the first appeal was whether tax-exempt parcels should be included in determining the
total number of parcels in the proposed annexation area. See Boonville I, 950 N.E.2d at
767-69.
Boonville points out that of the 109 tax-exempt parcels within the annexed
territory, by the Landowners’ calculations, eighty-eight of them are State right-of-way
properties and that the Landowners understood this at the time of the first appeal. In
5
support of this assertion, Boonville directs us to the Landowners’ 2009 brief that they
filed with the trial court in which they made the following argument:
The parcels in the name of the State of Indiana are in fact parts of one
public right-of-way which is S.R. 62. Under Indiana law these parcels
would constitute only one parcel and owner and are not available to be
counted as properties of remonstration owners.
Appellee’s App. p. 19. Nevertheless, according to Boonville, the Landowners failed to
pursue this related question during the first appeal.
An issue that was known and available but not raised in the first appeal is waived
as a basis for relief in subsequent proceedings. Citizens Action Coal. of Ind. Inc., v. N.
Ind. Pub. Serv. Co., 582 N.E.2d 387, 391-92 (Ind. Ct. App. 1991). In other words, all
questions presented by the record from a final judgment must be presented on the first
appeal. Id.Here, the precise question presented to this Court is the total number of parcels in
the proposed annexation territory. More precisely, the dispositive legal issue is how to
count the parcels that now comprise State Road 62. This question encompasses whether
a state highway is multiple parcels or a single parcel for purposes of the remonstrance
statute.
By contrast, before the trial court issued its ruling that was the subject of the first
appeal to this Court, it requested briefing on four specific legal issues, including the three
presented on the first appeal, namely, whether to include tax-exempt parcels in
determining whether the 65% Rule had been met, whether the Landowners had standing
6
to bring a declaratory judgment, and whether to include parcels that abut public
roadways.3 Boonville I, 950 N.E.2d at 767. These are different questions from whether a
State highway is one parcel or multiple parcels for purposes of the 65% Rule. Lastly,
“we prefer to decide a case upon the merits whenever possible.” United Farm Family
Mut. Ins. Co. v. Michalski, 814 N.E.2d 1060, 1067 (Ind. Ct. App. 2004). Consequently,
we decline to find that the Landowners have waived this issue.
II. How to Count the Parcels Comprising State Road 62
A. Standard of Review
The Landowners argue that the parcels acquired by the State for building a state
highway should be counted as one parcel for purposes of the 65% Rule contained in
Indiana Code section 36-4-3-11 (Remonstrance Statute) . This argument presents a legal
question, which this Court reviews de novo. Sun Life Assurance Co. of Can. v. Ind.
Dep’t of Ins., 868 N.E.2d 50, 55 (Ind. Ct. App. 2007).
The issue presented requires us to interpret the Remonstrance Statute. If a statute
is unambiguous, we must give the statute its clear and plain meaning; however, if a
statute is ambiguous, we must ascertain the legislature’s intent and interpret the statute to
effectuate that intent. Robinson v. Gazvoda, 783 N.E.2d 1245, 1249-50 (Ind. Ct. App.
2003). A statute is ambiguous if it is susceptible to more than one reasonable
interpretation. Id. at 1250.
3
The fourth issue that was briefed but not considered on appeal in Boonville I was whether the signatures
of parcel owners who executed City of Boonville Sewer Applications containing a waiver of the right to
remonstrate against annexation should be counted in determining whether the 65% Rule had been
satisfied. Appellee’s App. p. 19-20.
7
The Remonstrance Statute provides, in relevant part:
(a) . . . whenever territory is annexed by a municipality under this chapter,
the annexation may be appealed by filing with the circuit or superior
court of a county in which the annexed territory is located a written
remonstrance signed by:
(1) at least sixty-five percent (65%) of the owners of land in the annexed
territory; or
(2) the owners of more than seventy-five (75%) in assessed valuation of
the land in the annexed territory.
B. Precedent Interpreting Remonstrance Statute
Boonville contends that precedent interpreting the Remonstrance Statute has made
clear that all property is to be counted in determining whether the 65% Rule has been
met. Boonville points out that if the phrase “owners of land” contained in Section (a)(1)
of the Remonstrance Statute is broad and general enough to include owners of tax-
exempt land, as a panel of this Court concluded in Boonville I, 950 N.E.2d at 769, it is
broad and general enough to include owners of right-of-way land.
Panels of this Court and our Supreme Court have previously interpreted the
Remonstrance Statute in similar contexts. For instance, in City of Fort Wayne v. Certain
Northeast Annexation Area Landowners, 564 N.E.2d 297, 298 (Ind. Ct. App. 1990), a
panel of this Court concluded that for calculating the number of remonstrators that
“multiple owners of a single parcel are to be counted as only one owner. A single owner
of multiple parcels, on the other hand, counts as an owner for each parcel.”
8
Then, in Arnold v. City of Terre Haute, 725 N.E.2d 869, 870 (Ind. 2000), our
Supreme Court elected “to follow the method outlined in City of Ft. Wayne v.
Landowners as representing relatively settled and simpler law.” The Arnold Court
reasoned that, like the City of Fort Wayne panel, it thought that Subsection 11(b) of the
Remonstrance Statute, which states in relevant part that “[o]nly one (1) person having an
interest in each single property, as evidenced by the tax duplicate, is considered a
landowner for purposes of this section,” “suggests an interpretation better described as
‘one-parcel-one-vote’ than as ‘one-owner-one-vote.’” Id. at 870.
Finally, in Boonville I, a panel of this Court determined that the landowners had
misinterpreted the Remonstrance Statute by arguing that tax-exempt parcels should not
be counted for purposes of the 65% Rule. 950 N.E.2d at 768. The panel reasoned that
tax-exempt parcels have an assessed value and are listed on a tax duplicate. Id. The
panel also explained that the Remonstrance Statute does not limit the phrase “owners of
land” under the 65% Rule with the modifier “taxable” before the word “land.” Id. at 769.
C. Application to the Instant Case
At first blush, these cases seem to support Boonville’s position that each parcel
which now comprises State Road 62 should be counted individually. However, as the
Landowners point out, the state highway parcels do not have a tax-assessed value and
9
have been removed from the tax duplicate.4 Appellants’ App. p. 160. Accordingly, at
least a portion of the reasoning in Boonville I is no longer persuasive.
Additionally, in Boonville I, a panel of this Court concluded that parcels adjacent
to public roads but not included in the annexed territory should not be counted in
determining whether the 65% Rule had been satisfied. 950 N.E.2d at 772. Specifically,
the panel stated that “the State – not the adjacent property owners – controls and owns
Highway 62 and Millersburg Road.” Id. Indeed, it is well established that the State owns
state highways and that a state highway is referred to as a single entity rather than as
separate parcels. See S. Ind. Gas & Elec. Co. v. Dep’t of Highways, 533 N.E.2d 1289,
1293 (Ind. Ct. App. 1989) (stating that “in the absence of a statutory provision to the
contrary, ownership of public ways lies in the State”).
Likewise, Indiana Code section 36-4-3-2.5, which defines “public highway” for
purposes of municipal annexation under Indiana Code section 9-25-2-4 as “a street, an
alley, a road, a highway, or a thoroughfare in Indiana, including a privately owned
business parking lot and drive, that is used by the public or open to use by the public.”
The language of this statute along with Boonville I indicates that State Highway 62 is a
single asset or property rather than multiple parcels of land.
4
Boonville directs us to the affidavit of Jeffrey A. Volz, the Director of Operations and Data Analysis
with the Indiana Department of Local Government Finance. In his affidavit, Director Volz stated that he
had access to tax duplicate data and attached a tax duplicate with the State-owned parcels for 2007-2008.
We note that the Landowners’ 2011 affidavit from the auditor of Warrick County stating that State-owned
parcels did not have an assessed value and had not been issued a tax duplicate is more recent. Appellants’
App. p. 160.
10
Perhaps most compelling, including each individual parcel that was acquired for a
public highway when counting the total number of parcels in a proposed annexation area
would include many parcels that would neither support nor oppose annexation. There is
no authority which permits the State to take a position one way or the other on any local
annexation. Consequently, under these circumstances all public highway parcels would
be silent as to the numerator portion of the 65% Rule equation; however, they would be
counted in the denominator.
Even assuming solely for argument’s sake that the State may take a position and
has an interest in doing so because of various fees it might have to pay or regulations to
which it might be subjected, this point does not support giving the State multiple votes
based on the arbitrary number of parcels that it had acquired for a state right-of-way
when the State is simply another landowner. In any event, under either scenario, if each
parcel of a public highway is counted separately, the remonstrance process is distorted.
To be sure, in some cases, including each parcel that the State acquired to build a
state right-of-way would make it impossible for remonstrators to garner enough
signatures to satisfy the 65% Rule because the state right-of-way could represent more
than 35% of the parcels in a proposed annexation area. We think that such a result
undermines the intent of the General Assembly to provide a mechanism for remonstrators
to challenge a municipality’s annexation plan. See State ex rel. Ind. State Police v.
Arnold, 906 N.E.2d 167, 170 (Ind. 2009) (stating that the primary goal of statutory
construction is to ascertain and effect the intent of the legislature); Gardner v. Prochno,
11
963 N.E.2d 620, 624 (Ind. Ct. App. 2012) (observing that “[w]e presume the legislature
intended the language used in the statute to be applied logically, consistent with the
statute’s underlying policy and goals, and not in a manner that would bring about an
unjust or absurd result”).
Consequently, we conclude that the trial court erred, insofar as it counted the
separate parcels that were acquired by the State to build State Road 62 rather than
counting State Road 62 as a single parcel under the Remonstrance Statute. Accordingly,
we reverse the decision of the trial court and remand for further proceedings consistent
with this opinion.
Reversed and remanded.
ROBB, C.J., concurs.
BRADFORD, J., dissents with opinion.
12
13
IN THE
COURT OF APPEALS OF INDIANA
AMERICAN COLD STORAGE, et al., )
)
Appellants-Plaintiffs, )
)
vs. ) No. 87A01-1112-PL-610
)
THE CITY OF BOONVILLE, )
)
Appellee-Defendant. )
BRADFORD, Judge, dissenting
First, I would accept Boonville’s argument that the question of how the State-
owned parcels should be counted has been waived. Second, I would conclude that the
parcels owned by the State should be treated no differently than any other parcel for
purposes of the 65% rule of the remonstrance statute. Consequently, I respectfully
dissent.
I. Waiver
I would not address the Landowners’ argument regarding how the State-owned
parcels should be treated because it was not raised before the first appeal. “The law is
well-established that an issue is waived if it was available on the first appeal but was not
14
presented.” Citizens Action Coal. of Ind., Inc. v. N. Ind. Pub. Serv. Co., 582 N.E.2d 387,
391 (Ind. Ct. App. 1991). The Landowners point out that the precise question at issue in
this appeal was not available in the first appeal in this case because it had not been
litigated yet in the trial court. While this is true, in my view it is beside the point. The
Landowners do not offer any explanation for their failure to raise this issue before the
first appeal, and now its litigation has given rise to another appeal. “A case cannot be
strung out indefinitely by bringing one issue after another before a court in piecemeal
fashion at the option and with the delays which a [party] may see fit to use.” Callahan v.
State, 247 Ind. 350, 356, 214 N.E.2d 648, 652 (1966). “Judicial procedure would have
no orderliness, but in fact, it would be chaotic if we were to recognize the contention that
a party is not bound to use diligence and act promptly in presenting his side of a law
suit.” Id. Although there is no reason to believe that the Landowners are attempting to
“string out” this case, I am concerned that allowing this claim to proceed will encourage
such behavior in the future.
II. How the State-Owned Parcels Should be Counted
Moreover, if I were to reach the merits of the Landowners’ claim, I would conclude
that all of the State-owned parcels should be counted individually for purposes of the
65% rule. The remonstrance process is purely statutory, and, as such, is governed by
the rules of statutory interpretation. “The interpretation of a statute is a question of
law reserved for the courts.” Scott v. Irmeger, 859 N.E.2d 1238, 1239 (Ind. Ct. App.
2007).
15
A statute should be construed so as to ascertain and give effect to the
intention of the legislature as expressed in the statute. In so doing, the
objects and purposes of the statute in question must be considered as well
as the effect and consequences of such interpretation. When interpreting
the words of a single section of a statute, this court must construe them with
due regard for all other sections of the act and with regard for the legislative
intent to carry out the spirit and purpose of the act. We presume that the
legislature intended its language to be applied in a logical manner
consistent with the statute’s underlying policy and goals. Rupert v. State,
717 N.E.2d 1209, 1210 (Ind. Ct. App. 1999).
Fuller v. State, 752 N.E.2d 235, 237-38 (Ind. Ct. App. 2001).
In my view, the Indiana Supreme Court’s 2000 holding in Arnold, which
interpreted the remonstrance statute and adopted a “‘one-parcel-one-vote’” regime,
controls. The Landowners argue that a distinction between “land” and “public highways”
can be inferred from the annexation statutes, from which it can further be inferred that the
exclusion of the term “public highway” from the remonstrance statute indicates that it
should be only counted as one parcel. First, the statutes in question certainly make no
clear distinction between “land” and “public highways,” most importantly by failing to
define “land” as anything other than all land. Quite simply, “public highway” is a subset
of “land”–not a different concept. The most reasonable reading of the remonstrance
statute is therefore that all land is to the treated the same for purposes of the 65% rule.
“‘It is the function of this court to ascertain and implement the legislature’s intent and the
legislature’s intent must be primarily determined by giving effect to the ordinary and
plain meaning of the language used in the statute.’” Henricks v. Fletcher Chrysler
Prods., Inc., 570 N.E.2d 115, 116 (Ind. Ct. App. 1991) (quoting Irmscher v. McCue, 504
16
N.E.2d 1034, 1036. (Ind. Ct. App. 1987)), trans. denied. The General Assembly has had
twelve years to alter the Indiana Supreme Court’s “one-parcel-one-vote” interpretation,
which I take as strong support for the proposition that it represents legislative intent. “[I]t
is well-established that a judicial interpretation of a statute, particularly by the Indiana
Supreme Court, accompanied by substantial legislative inaction for a considerable time,
may be understood to signify the General Assembly’s acquiescence and agreement with
the judicial interpretation.” Fraley v. Minger, 829 N.E.2d 476, 492 (Ind. 2005). In any
event, if we were to accept the Landowners’ argument that “land” and “public highway”
are two different concepts, it would follow that the State-owned land would not be
counted at all, not that it would be counted once, as the Landowners assert. Absent
explicit language to that effect that “land” and “public highway” are to be counted
differently, I would conclude that we remain bound by Arnold.
The Landowners also argue that individually counting the State-owned parcels that
make up Highway 62 distorts the remonstrance process in this case and “might make an
effective remonstrance literally impossible” in other cases. Appellant’s Reply Br. at 5.
While I agree that counting the State-owned parcels individually might make it more
difficult, or even impossible, to reach the 65% threshold, I cannot conclude that the
process is “distorted.” After all, the statutory framework itself clearly contemplates that
opponents of annexation may be thwarted by other landowners who either desire
annexation or simply do not care. For example, very few, if any, would consider the
remonstrance process distorted where the owner of many rental properties in a tract of
17
land desires annexation and refuses to support remonstrance. The General Assembly has
provided a process for challenging annexation, and if we conclude that the process is
distorted in this case simply because it does not seem that the Landowners will be able to
remonstrate, I have a difficult time seeing how we could avoid reaching the same
conclusion in any case where the challengers are unable to reach the statutory thresholds.5
I respectfully dissent.
5
I would note that the Landowners could also have sought remonstrance under Indiana Code section 36-
4-3-11(a)(2)’s “75% rule,” but apparently did not. Subsection (2) allows appeal from annexation by a
remonstrance signed by “the owners of more than seventy-five percent (75%) in assessed valuation of the
land in the annexed territory.” Indeed, application of the 75% rule would greatly favor the Landowners in
this case, because the State-owned land at issue no longer has any assessed value and would not be
counted under subsection (2).
18