old-utica-school-preservation-inc-kenneth-morrison-scott-sandefur-and ( 2015 )

Dec 04 2015, 8:22 am
ATTORNEY FOR APPELLANTS ATTORNEY FOR APPELLEES
Dustin T. White A. David Hutson
White Law Practice Hutson Legal
Jeffersonville, Indiana Jeffersonville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Old Utica School Preservation, December 4, 2015
Inc., Kenneth Morrison, Scott Court of Appeals Case No.
Sandefur, and Pam Sandefur, 10A01-1501-PL-43
Appellants-Petitioners, Appeal from the Clark Circuit
Court
v. The Honorable Glenn Hancock,
Special Judge
Utica Township, John Durbin as Trial Court Cause No.
Township Trustee, Jacob’s Well, 10C04-1210-PL-123
Inc., Kevin Williar, John Posey,
Anthony Glotzback, and Barbara
Williar,
Appellees-Respondents.
May, Judge.
[1] Old Utica School Preservation, Inc.; Kenneth Morrison; Scott Sandefur; and
Pam Sandefur (collectively, “Citizens”) appeal the denial of their Motion for
Declaratory Judgment and Motion for Mandatory Injunction against Utica
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Township; John Durbin as Township Trustee; Jacob’s Well, Inc.; Kevin
Williar; John Posey; Anthony Glotzback; and Barbara Williar (collectively,
“Appellees”). They present three issues for our consideration, which we
consolidate and restate as:
1. Whether the Jacob’s Well use of the property known as
the Old Utica School (“School”) violates the language of the
quitclaim deed conveying the property;
2. Whether the trial court erred when it found Citizens did
not show “demonstrable injury, injury in fact and . . . a causal
connection between the injury in fact and the actions of the
Township and Jacobs [sic] Well.” (Br. of Appellant at 8); and
3. Whether the trial court erred when it determined the
conveyance of the School to Utica Township was a fee simple
with condition subsequent.
[2] We affirm in part, reverse in part, and remand.
Facts and Procedural History
[3] In 2002, the Greater Clark County School Corporation (“GCCSC”) conveyed
the School to Utica Township via quitclaim deed. The quitclaim deed stated
GCCSC conveyed School “subject to the conditions set out in IC 20-4-5-8(b) 1
that said property being transferred shall be used by Utica Township . . . for
1
Ind. Code § 20-4-5-8 was recodified in 2005 as Ind. Code § 20-23-6-9. For the remainder of the opinion, we
will refer to the current designation except for the portion of the opinion discussing the differences between
the two versions of the statute.
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park and recreation purposes.” 2 (App. at 24.) The conveyance included
approximately 3.5 acres of land and the school building, which housed multiple
classrooms, a basement, a cafeteria, and a gymnasium.
[4] Following the conveyance, the School was used as shelter and for storage
during Ohio River floods; for community activities such as auctions, bake sales,
and basketball games; and as a food pantry. By 2011, the building had fallen
into disrepair. Township Trustee John Durbin testified, “Parts of the ceilings
were falling in. There were dead animals in the building. There was human
waste all over the restrooms. . . . there were floors rotting out in the other side
of the building.” (Tr. at 93.) At that time, Utica Township was spending
approximately $35,000.00 per year to maintain the School.
[5] On June 17, 2011, Utica Township leased the School to Jacob’s Well, a non-
profit religious organization with a mission to provide transitional housing to
single mothers and women who receive professional assistance for drug
addiction. The founders of Jacob’s Well, Kevin and Barbara Williar, financed
$300,000.00 to renovate the School. The School has a locked area where the
back classrooms once were. It serves as dormitories for the women receiving
services from Jacob’s Well. The front classrooms are used for classes associated
with Jacob’s Well services, and the cafeteria, gym, and some classrooms are
2
The original quitclaim deed stated the property “shall be used by Utica Township solely for parks and
recreation purposes.” (App. at 24) (emphasis added). The parties stipulated the word ‘solely’ was “a
Scrivener’s [sic] error and should be eliminated for evidentiary purposes.” (Tr. at 9.)
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available for use by the public. The Williars live in an apartment they built on
the site.
[6] On October 25, 2012, Citizens filed a Verified Complaint for Declaratory
Judgment and Petition for Mandatory Injunction Issued Under Trial Rule 65
and an Indiana Trial Rule 52 Motion for Findings of Fact and Conclusions of
Law. Citizens argued Appellees’ use of the School was “contrary to the
restrictive covenant contained in the School’s Deed and contrary to State Law,”
(App. at 27), and requested:
[T]he Court declare that the restrictive covenant does, in fact, run
with the land, is enforceable, the actions of Utica Township by
failing to abide by the restrictive covenant in the School’s Deed
and executing a lease with Jacobs [sic] Well, Inc. for purposes
other than park and recreation and actions of Jacobs [sic] Well,
Inc., specifically, using the School as a residence and
constructing multiple temporary and/or multiple permanent
housing units in the School, to be contrary to State Law and that
said Lease with Jacobs [sic] Well, Inc. is void.
(Id. at 27-28.) Citizens asked the trial court to enjoin Utica Township and
Jacob’s Well from further violating the alleged restrictive covenant. (Id. at 28.)
[7] The trial court granted Citizens’ T.R. 52 request for findings on October 31,
2012. On November 1, 2012, Appellees answered Citizens’ complaint and
moved to dismiss it, arguing Citizens did not have standing to pursue a claim
against Appellees. On December 7, 2012, Appellees filed a motion for
summary judgment and a memorandum, and they designated evidence in
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support. On January 9, 2013, Citizens responded, and a special judge was
appointed.
[8] After a hearing, the trial court granted Appellees’ motion for summary
judgment, wherein the Appellees argued the Citizens did not have standing to
bring a declaratory action. The trial court concluded “the language of said deed
relating to specific use is a Restrictive Covenant satisfying the requirements of
the grant statute,” (id. at 11), and Citizens did not have standing to bring a
claim against Appellees. The trial court denied Citizens’ motion to correct
error.
[9] Citizens appealed, and we reversed and remanded, holding Citizens had
standing based on the public standing doctrine. Old Utica School Preservation, Inc.
v. Utica Twp., 7 N.E.3d 327, 333 (Ind. Ct. App. 2014), trans. denied (“Utica I”).
On remand, the trial court denied Citizens’ Request for Declaratory Judgment
and Mandatory Judgment, finding and concluding:
3. That the [language of the deed from GCCSC to Utica
Township] is a fee simple conveyance with a condition
subsequent and The Township has used the property accordingly,
on occasion, as conditions have allowed.
4. That the Township’s lease of February 15, 2011 does not
violate said terms as it allows the Township the right “to have
access to the gym and cafeteria for community events” and there
was testimony that the property has been used for such purposes.
5. That the condition subsequent is not an exclusive use. The
original conveyance contained the word “solely” which both
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parties have stipulated is a scrivener’s error. At no time has the
Township government renovated the building or grounds for
park or recreational purposes and it could be argued that a vacant
building and unimproved property was not a park or recreational
use. Further the property had been used for other purposes,
although well intentioned and in the face of emergency,
nonetheless nonpark [sic] and recreational purposes.
6. That a mandatory injunction is an extraordinary equitable
remedy that should be granted with caution. Campbell, 617 N.E.
2d 580
7. That [Citizens] carries the burden of demonstrating injury
which is certain and irreparable if the injunction is denied.
[Citizens] has not met such burden as there has been no denial of
use for the stated purpose and harm, if any, would be greatly
outweighed by the public interest of not restoring the Old School
to its previous state of disrepair.
(App. at 8-9.)
Discussion and Decision
[10] The trial court entered Trial Rule 52 findings and conclusions. When a trial
court does so we review whether the evidence supports the findings of fact and
whether the findings support the conclusions of law. Crider v. Crider, 15 N.E.3d
1042, 1052 (Ind. Ct. App. 2014), trans. denied. We will set aside findings of fact
only if they are clearly erroneous, which occurs if the record contains no facts to
support a finding either directly or by inference. Id. We defer to the trial
court’s ability to assess the credibility of witnesses and will not reweigh the
evidence, and we must consider only the evidence most favorable to the
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judgment along with all reasonable inferences drawn in favor of the judgment.
Id. It is not enough that the evidence might support some other conclusion; it
must positively require the conclusion contended for by appellant before there is
a basis for reversal. Id. A judgment also is clearly erroneous if it relies on an
incorrect legal standard, and we do not defer to a trial court’s legal conclusions.
Id.
Park and Recreational Use
[11] The Quitclaim Deed from GCCSC to Utica Township stated the conveyance of
the School was “subject to the conditions set out in IC [20-23-6-9] that said
property being transferred shall be used by Utica Township [ ] 3 for park and
recreation purposes.” (App. at 24) (footnotes added). Citizens argue the
School was not used for park and recreation purposes after Utica Township
entered into the lease with Jacob’s Well because a portion of the School is
utilized as dormitories for those receiving services from Jacob’s Well.
[12] “Park purposes” are “establishment, equipment, and operation of parks,
boulevards, pleasure drives, parkways, wheelways, park boulevards,
bridlepaths, playgrounds, playfields, bathhouses, comfort stations, swimming
pools, community centers, recreation centers, other recreational facilities, and
recreational programs.” Ind. Code § 35-10-1-2. Ind. Code § 36-10-7.5-20(a)
3
As noted above, the word “solely” was in the deed but the parties stipulated it was a scrivener’s error.
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requires “[p]ark and recreation facilities and programs shall be made available
to the public free of charge as far as possible.”
[13] Appellees presented evidence the School had been used for park purposes:
Q: Has anybody used the gym?
A: Yes, we have had some little league softball teams from
the Methodist Baptist [sic] church, they’ve come up and used that
a couple of times for practice when it was too cold outside.
We’ve had some, we’ve had a basketball team come and use it
about three or four times for practices there. And then we’ve had
a birthday party.
[14] (Tr. at 164-65.) Citizens’ argument is an invitation for us to reweigh the
evidence, which we cannot do. See Crider, 15 N.E.3d at 1052 (appellate court
cannot reweigh evidence on appeal).
Demonstrable Injury
[15] The trial court concluded Citizens were not entitled to a permanent injunction
because they had not demonstrated a “certain or irreparable” injury, finding
“there has been no denial of use for the stated purpose and harm, if any, would
be greatly outweighed by the public interest of not restoring the Old School to
its previous state of disrepair.” (App. at 9.)
[16] “A mandatory injunction is an extraordinary equitable remedy which should be
granted with caution.” Campbell v. Spade, 617 N.E.2d 580, 583 (Ind. Ct. App.
1993). The grant or denial of injunctive relief will not be overturned “unless it is
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arbitrary or amounts to an abuse of discretion.” Id. In making this decision,
the trial court must weigh whether the plaintiff “has an adequate remedy at
law” and “whether an injunction is in the public interest.” Id. “The plaintiff
carries the burden of demonstrating injury which [sic] is certain and irreparable
if the injunction is denied.” Id.
[17] Citizens argue they have done so:
Since the lease was executed, until recently, the Citizens have
been prevented from engaging in the aforementioned activities.
This was one injury in fact. The fact that Kevin and Barbara
William [sic] already use the School as a residence and that up to
three (3) people have temporarily used the School for residential
purposes, one person being an ex-offender, are additional injuries
in fact. Similarly, the fact that an apartment and dorms have
been build [sic] in the School are certain and irreparable injuries.
Lastly, [Utica Township] has a public duty to use the School for
park and recreation purposes. By allowing Kevin Williar and
Barbara Williar to live in the School, and by allowing temporary
residents to stay in the School’s dorms, [the Township Trustee] is
violating that duty and causing injury to the Citizens who seek to
have the court require his duty be upheld.
[18] (Br. of Appellant at 8-9) (citations to the record omitted). There is no evidence
in the record of any injury the Citizens have suffered. Appellees presented
evidence the School has been open for public use, including the use of the
Citizens, and the Citizens have declined to use it, opting instead to hold
community events elsewhere. Regarding the temporary residents using Jacob’s
Well services, Appellees presented evidence the residents are screened before
they are allowed to stay at the School, and they are monitored throughout their
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time at the School. Citizens’ argument is an invitation for us to reweigh the
evidence, which we cannot do. See Crider, 15 N.E.3d at 1052 (appellate court
cannot reweigh evidence on appeal).
Type of Conveyance
[19] The Citizens asked for a declaratory judgment regarding the status of the
conveyance.
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.
[20] Ind. Code § 34-14-1-1. When considering a motion for declaratory judgment,
the test to be applied is “whether the issuance of a declaratory judgment will
effectively solve the problem, whether it will serve a useful purpose, and
whether or not another remedy is more effective or efficient.” Mid-Century Ins.
Co. v. Estate of Morris ex rel. Morris, 966 N.E.2d 681, 688 (Ind. Ct. App. 2012),
trans. denied. The determinative factor is “whether the declaratory action will
result in a just and more expeditious and economical determination of the
entire controversy.” Id.
[21] As part of its summary judgment for Appellees, the trial court determined the
School was conveyed with a restrictive covenant requiring the School, “subject
to the conditions set out by IC [20-23-6-9] . . . shall be used by Utica Township
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[ ] for park and recreation purposes.” (App. at 24.) We reversed because the
trial court erred when it determined the Citizens did not have standing. Old
Utica, 7 N.E.3d at 333. On remand, the trial court decided the conveyance of
the School was not a restrictive covenant but instead a fee simple with
condition subsequent. The Citizens argue, without citation to legal authority,
the trial court erred in making this determination because “[t]here is simply no
conditional language in the deed.” (Br. of Appellant at 8.)
[22] There is no Indiana precedent addressing the distinction between a restrictive
covenant and a fee simple with condition subsequent. The law pertaining to
restrictive covenants is well settled:
A restrictive covenant is an agreement between a grantor and a
grantee in which the latter agrees to refrain from using his
property in a particular manner. One purpose of restrictive
covenants is to maintain or enhance the value of land by
controlling the nature and use of lands subject to a covenant’s
provisions. Because covenants are a form of express contract, we
apply the same rules of construction. Construction of the terms
of a written contract is a pure question of law for the court and
we conduct a de novo review of the trial court’s conclusions in
that regard.
Johnson v. Dawson, 856 N.E.2d 769, 772 (Ind. Ct. App. 2006) (citations
omitted).
Covenants are favored by the law, and a court will construe a
recital as a covenant, rather than a condition, whenever such a
construction is possible. If the deed does not express an intention
that the property conveyed is subject to a condition subsequent
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and forfeiture, we will generally hold that the language creates a
covenant. Lastly, just as it is axiomatic in basic contract law, the
intent of the parties will govern the resolution of whether or not a
covenant is created. Therefore, a covenant will be found where
(1) the parties intended to create a species of express contract, (2)
the terms impose a duty on one party to do or not do a particular
act, and (3) the language used does not disclose a clear intent to
burden the estate with a condition subsequent.
Homemakers Finance Service, Inc. v. Ellsworth, 177 Ind. App. 640, 642-43, 380
N.E.2d 1285, 1287 (1978). A mandatory injunction, while an extreme remedy,
is appropriate when a party violates a restrictive covenant. Depeyster v. Town of
Santa Claus, 79 N.E.2d 183, 190-91 (Ind. Ct. App. 2000).
[23] In contrast, a conveyance determined to be fee simple subject to condition
subsequent is “created by any limitation which, in an otherwise effective
conveyance of land, (a) creates an estate in fee simple; and (b) provides that
upon the occurrence of a stated event the conveyor or his successor in interest
shall have the power to terminate the estate so created.” Restatement of the
Law – Property § 45.
“When a transferor, having an estate in fee simple absolute
transfers an estate in fee simple subject to a condition subsequent,
the transferee is regarded as having received the entire estate of
the transferor, who, by virtue of his reserved power of
termination has the power to regain his former estate, if and
when there is a breach of the condition subsequent.”
Id. at Comment a.
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[24] The quitclaim deed conveys the School to Utica Township “subject to the
conditions set out in IC 20-23-6-9 that said property being transferred shall be
used by Utica Township . . . for park and recreation purposes.” (App. at 24.)
Ind. Code § 20-4-5-8(b), in effect at the time of the quitclaim deed, states,
regarding the transfer of school property no longer in use by the school
corporation:
This subsection applies whenever the consolidated school board
of a consolidated school corporation decides that property
acquired under subsection (a) from a township is no longer
needed for school purposes. The school board shall offer the
property as a gift for park and recreation purposes to the
township that owned the property before the school was
consolidated. If the township board accepts the offer, the school
board shall give the township a quitclaim deed to the property.
This deed must state that the township is required to use the
property for park and recreation purposes. If the township board
refuses the offer, the school board may sell the property in the
manner provided in subsection (c).
While the statute provides for action should the township reject the school
board’s offer, there is no provision addressing the status of the property should
the township cease using the property for park and recreation purposes. The
current version of the statute, Ind. Code § 20-23-6-9, does not include the
requirement the land be used for park and recreation purposes. As we noted in
Utica I:
[T]he statutory language provides no guidance as to what
townships are to do with the school property in situations such as
Utica Township faced here in which it is no longer feasible to
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maintain the school property for park and recreation purposes.
In adopting Indiana Code section 20-23-6-9, the legislature did
not provide what should happen to school property when, or if, it
is no longer used for park and recreation purposes in the future.
It is unclear whether the property must be used for park and
recreation purposes in perpetuity or if it reverts back to the school
corporation when it is no longer used for those purposes or if the
township can lease the property 4 for uses that may or may not be
exclusively for park and recreation purposes.
7 N.E.3d at 333 (footnote added).
[25] Although construction of a written contract is a question of law, “where the
intent of the parties cannot be determined within the four corners of the
document, a factual determination is necessary to give effect to the parties’
reasonable expectations.” Campbell, 617 N.E.2d at 584. Here, it is not clear
whether GCCSC intended the transfer to be a restrictive covenant or a fee
simple estate subject to condition subsequent. However, the deed does not
indicate the School would revert to GCCSC if it is not used for park and
recreation purposes, nor does the statute under which the School was conveyed
indicate such. Absent such statutory language, and in light of the deed’s
language that the property “shall be used by Utica Township . . . for park and
recreation purposes,” (App. at 24), we conclude the conveyance was a
restrictive covenant.
4
Regarding to whom the township can lease the School, Ind. Code § 20-23-6-9 now provides, effective July
1, 2015, “The township may sell or lease the property to an Indiana nonprofit corporation that is exempt
from federal income taxation under Section 501 of the Internal Revenue Code.”
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Conclusion
[26] The trial court correctly determined the School was used for park and
recreation purposes as required by the deed because portions of the building
were available to the general public and used for recreational purposes. The
trial court also correctly determined the Citizens did not demonstrate an
irreparable injury that would make a mandatory injunction appropriate.
However, the trial court erred when it determined the School was conveyed in
fee simple subject to condition subsequent. We therefore affirm in part, reverse
in part, and remand for correction of the declaratory judgment to indicate the
property was conveyed with a restrictive covenant.
[27] Affirmed in part, reversed in part, and remanded.
Crone, J., and Bradford, J., concur.
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