Aug 28 2015, 9:06 am
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
Arend J. Abel Stephen C. Unger
Cohen & Malad, LLP Andrew M. McNeil
Indianapolis, Indiana Bose McKinney & Evans LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
American Cold Storage NA, et August 28, 2015
al., Court of Appeals Case No.
Appellants-Plaintiffs, 87A01-1502-PL-76
Appeal from the Warrick Superior
v. Court
The Honorable S. Brent Almon,
City of Boonville, Special Judge
Appellee-Defendant Trial Court Cause No.
87D01-0810-PL-452
Baker, Judge.
Court of Appeals of Indiana | Opinion 87A01-1502-PL-76 | August 28, 2015 Page 1 of 19
[1] Boonville seeks to annex an area of over 1,000 acres that is adjacent to the city.
A group of landowners in the annexation area filed a remonstrance petition.
The current appeal is the fourth time this particular annexation ordinance has
reached the appellate courts (it has been twice to the Court of Appeals and once
to our Supreme Court).
[2] Here, the landowners in the annexed area appeal the trial court’s order finding
in favor of Boonville on the remonstrance petition. The landowners argue that
the trial court deferred too much to Boonville’s judgment and that the evidence
does not support a conclusion that Boonville met its statutory burden of
showing either that 60% of the land in the annexed area is “subdivided” or that
the annexed area is needed and can be used by Boonville for development in the
reasonably near future. Finding that the trial court applied the correct standard
and that the evidence is sufficient to support the trial court’s order, we affirm.
Facts
[3] Boonville is a city of just over 6,200 people in Warrick County. Between 2000
and 2010, Boonville’s population dropped by 8.6%. In recent years, multiple
businesses have left Boonville, and others have avoided locating there. There
are multiple vacant commercial buildings in Boonville, some of which are
owned by the City or the County.
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[4] On July 7, 2008, Boonville’s city council passed an ordinance seeking to annex
1,165 acres (the Annexation Territory) of primarily agricultural land1 located to
the west of Boonville. The annexation would increase the geographic size of
Boonville by nearly 65%. Boonville provides fire protection in the Annexation
Territory, and Boonville police patrol the Annexation Territory and are often
the first responders for emergency calls in that area.
[5] Boonville believes that the proposed annexation would reverse its population
decline by providing opportunities for commercial and industrial growth that
are not currently available. Specifically, Boonville notes that within the current
city limits, there are only thirty-six undeveloped acres of land zoned for
commercial, business, or industrial use. All of that acreage is located within a
floodplain. In the Annexation Territory, in contrast, there are a total of 727
undeveloped acres, 227 of which are outside the floodplain and already zoned
for commercial, business, and industrial use.
[6] Boonville has plans for infrastructure improvements to the Annexation
Territory. It has already constructed a new sewer treatment plant in the
Annexation Territory, with plans to extend sewer collection facilities to the
northern, undeveloped portion of the area. There are also plans to improve
upon the roadway infrastructure, including a new bypass that will cross through
the undeveloped area of the Annexation Territory. In 2004, Warrick County
1
Approximately 62% of the Annexation Territory is currently being farmed.
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agreed to Boonville’s request to create an economic development area (EDA)
for the Annexation Territory.2
[7] On October 3, 2008, more than two hundred landowners in the Annexation
Territory (the Landowners) filed a remonstrance petition. Boonville moved to
dismiss the petition based upon alleged failure to comply with relevant statutes,
and the trial court granted the motion. On interlocutory appeal, this Court
reversed and remanded for further consideration by the trial court. City of
Boonville v. Am. Cold Storage, 950 N.E.2d 764 (Ind. Ct. App. 2011) (Boonville I).
[8] On remand, the trial court determined that the Landowners had not met certain
statutory requirements for the remonstrance petition. On appeal, this Court
disagreed and reversed. Am. Cold Storage v. City of Boonville, 977 N.E.2d 19 (Ind.
Ct. App. 2012), trans. granted, vacated (Boonville II). Our Supreme Court granted
transfer, agreeing with this Court that the trial court erred, reversing the trial
court’s order, and remanding for further consideration. Am. Cold Storage v. City
of Boonville, 2 N.E.3d 3 (Ind. 2014) (Boonville III).
[9] After the second remand, a bench trial on the remonstrance petition took place
on January 13-16, 2015. Following a motion from the Landowners, the parties
submitted proposed findings and conclusions. On February 23, 2015, the trial
court issued its findings of fact, conclusions of law, and judgment of
2
The purpose of an EDA is to attract development, including the promotion of significant opportunities for
employment and attraction of major new business enterprise. Ind. Code § 36-7-14-41.
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annexation, denying the remonstrance petition and authorizing the annexation.
The Landowners now appeal.
Discussion and Decision
I. Standard of Review
[10] In Rogers v. Municipal City of Elkhart, our Supreme Court described the
framework of Indiana’s annexation procedures as follows:
The framework of Indiana’s annexation laws has long featured
three basic stages: (1) legislative adoption of an ordinance
annexing certain territory and pledging to deliver certain services
within a fixed period; (2) an opportunity for remonstrance by
affected landowners, and (3) judicial review.
Although the applicable statutes have undergone many changes
over the years, certain general propositions of law have long
applied. The statutes invest exclusive authority to annex territory
in the governing body of a municipality. Annexation is a
legislative function and becomes a question subject to judicial
cognizance only upon review as provided by statute.
***
Because the city’s authority to annex territory is defined by
statute, the court’s duty is to determine whether the city exceeded
its authority and met the conditions imposed by the statute. Even
though the burden of pleading is on the remonstrator, the burden
of proof is on the municipality to demonstrate compliance with
the statute. The court sits without a jury and enters judgment on
the question of annexation after receiving evidence and hearing
argument from both parties.
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Once the trial court has decided whether to approve an
annexation ordinance, either the municipality or the
remonstrators may appeal.
688 N.E.2d 1238, 1239-40 (Ind. 1997).
A. Review of Trial Court’s Decision by Court of Appeals
[11] Where, as here, the trial court issues findings and conclusions as provided for in
Indiana Trial Rule 52(A), we apply a two-tiered standard to review the trial
court’s order. Oil Supply Co. v. Hires Parts Serv., Inc., 726 N.E.2d 246, 248 (Ind.
2000). We determine whether the evidence supports the findings and the
findings support the judgment. Id. In deference to the trial court’s proximity to
the issues, “we disturb the judgment only where there is no evidence supporting
the findings or the findings fail to support the judgment.” Id. We do not
reweigh the evidence, but only consider the evidence favorable to the trial
court’s judgment. Id. Thus, challengers labor under a heavy burden, but one
that may be overcome by showing that the trial court’s findings are clearly
erroneous. Id.
[12] The Landowners contend that this appeal presents an issue of statutory
interpretation to be reviewed de novo. We disagree. It is apparent that the true
nature of this appeal is a challenge to the sufficiency of the evidence supporting
the dismissal of the remonstrance petition, and we will review it accordingly.
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B. Review of Proposed Annexation by Trial Court
[13] The parties strongly disagree about the way in which a court should review a
municipality’s annexation determination. The trial court observed that
“[s]ubstantial deference is owed to Boonville’s decision to annex the
Annexation Territory.” Appellants’ App. p. 2. More specifically, the trial court
found and held as follows:
Boonville believes that the best way to proceed is to annex the
territory now, then extend sewer service and develop the area as
a part of Boonville. The evidence supports the City’s decision of
need. This Court will not second guess the City’s decision on how best
to develop the Annexation Territory and extend services. The
City has acted within its legislative discretion and has
demonstrated that the area is needed and can be used for its
development in the reasonably near future.
Id. at 17 (emphasis added). The Landowners contend that the trial court
afforded Boonville too much deference at the expense of its obligation to
conduct judicial review—essentially, they argue that as part of judicial review,
the trial court should have second-guessed Boonville.
[14] The Landowners concede that courts defer to a municipality’s legislative
judgment in determining whether to annex territory. But they argue that “it is
for the Courts to decide whether the statutory requirements are met, and ‘the
municipality bears the burden of showing compliance with the requirements of
the annexation statute.’” Appellants’ Br. p. 27 (quoting Bradley v. City of New
Castle, 764 N.E.2d 212, 216 (Ind. 2002)). While that is accurate, it is well
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established that annexation remonstrances are not regular lawsuits, but are
special proceedings guided by well-established standards and principles.
“‘[A]nnexation is essentially a legislative function.’ Therefore, courts play only
a limited role in annexations and must afford the municipality’s legislative
judgment substantial deference.” In re Annexation of Certain Territory to City of
Muncie, 914 N.E.2d 796, 801 (Ind. Ct. App. 2009) (quoting City of Fort Wayne v.
Certain S.W. Annexation Area Landowners, 764 N.E.2d 221, 224 (Ind. 2002)). In
other words, “[c]ourts are not authorized to dissect the minutiae of what are
essentially legislative decisions.” Fort Wayne, 764 N.E.2d at 229.
[15] Indeed, our Supreme Court has held that the court’s role is limited even where
the municipality bears the burden of proof: “Although the municipality bears
the burden of proof when properly challenged, we afford legislative judgment
considerable deference.” Bradley, 764 N.E.2d at 216. Therefore, a reviewing
court may not examine the municipality’s burden “under too powerful a
microscope.” Fort Wayne, 764 N.E.2d at 225. In sum, we find that the trial
court applied a properly deferential standard when considering the proposed
annexation ordinance.
II. Annexation Requirements
A. Statutory Framework
[16] Indiana Code section 36-4-3-13 provides, in relevant part, that if the
requirements of either section 13(b) or 13(c) are met, the court “shall order a
proposed annexation to take place” unless the landowner-remonstrators are
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able to meet the criteria set forth in section 13(e). 3 I.C. 36-4-3-13(a) (emphasis
added). Sections 13(b) and 13(c) state as follows:
(b) The requirements of this subsection are met if the evidence
establishes the following:
(1) That the territory sought to be annexed is
contiguous to the municipality.
(2) One (1) of the following:
(A) The resident population density of the
territory sought to be annexed is at least three
(3) persons per acre.
(B) Sixty percent (60%) of the territory is
subdivided.
(C) The territory is zoned for commercial,
business, or industrial uses.
(c) The requirements of this subsection are met if the evidence
establishes one (1) of the following:
(1) That the territory sought to be annexed is:
(A) contiguous to the municipality as required by
section 1.5 of this chapter, except that at least
3
If the trial court finds that the municipality has met its statutory burden, the annexation must occur unless
the landowner-remonstrators are able to meet the criteria set forth in section 13(e). In this case, the trial court
found that the Landowners did not meet the section 13(e) criteria, and they do not appeal that determination.
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one-fourth (¼), instead of one-eighth (⅛), of
the aggregate external boundaries of the
territory sought to be annexed must coincide
with the boundaries of the municipality; and
(B) needed and can be used by the municipality
for its development in the reasonably near
future.
(2) This subdivision applies only to an annexation for
which an annexation ordinance is adopted after
December 31, 2016. That the territory sought to be
annexed involves an economic development project
and the requirements of section 11.4 of this chapter
are met.
In this appeal, only two portions of sections 13(b) and (c) are at issue.
Specifically, the Landowners contend that the trial court erred by concluding
that Boonville proved that (1) sixty percent of the Annexation Territory is
subdivided pursuant to section 13(b)(2)(B); and (2) the Annexation territory is
needed and can be used by Boonville for its development in the reasonably near
future pursuant to section 13(c)(1)(B).4
4
The trial court primarily rested its decision on section 13(c), but also found that even if Boonville had not
met the requirements in that section, it had also met the requirements of section 13(b). The Landowners
appeal under both sections 13(b) and 13(c).
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B. Section 13(b): Sixty Percent Subdivided
[17] The parties’ primary disagreement with respect to section 13(b) surrounds the
definition of the term “subdivided.” The Landowners contend that this term,
which is not defined in the statute, must be considered in light of the overall
purpose of the statute, which is “to permit annexation of adjacent urban
territory.” Rogers v. Elkhart, 688 N.E.2d 1238, 1242 (Ind. 1997). They insist
that the Annexation Territory is “far from urban,” noting that “[t]he unzoned
land, and the land zoned agricultural, recreation and conservancy, or
floodplain, make up nearly half of the [A]nnexation [T]erritory.” Appellants’
Br. p. 18.
[18] At trial, Boonville’s expert testified that in his opinion, more than 60% of the
Annexation Territory is subdivided. He reasoned that, although many of the
parcels were divided long ago, before the county’s subdivision control
ordinance was enacted, they “would be required to go through the subdivision
control ordinance if they were done today because of where they’re zoned.”
Appellants’ App. p. 83. The Landowners argue that this analysis is faulty
because it “erroneously applied the Warrick County subdivision control
ordinance to any land that had ever been divided, regardless of when, and
erroneously overlooked the fact that several of the parcels that he asserted were
‘subdivided’ were in fact aggregated.” Appellants’ Br. p. 19 (emphasis original).
[19] The Landowners observe that virtually all land in the United States has been
divided at some point. Without evidence regarding the dates on which the
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parcels were divided, “Boonville’s expert’s definition of ‘subdivision’ might
apply to land divided more than a century ago, when one farmer sold some
land to another.” Id. The Landowners argue that this approach is inconsistent
with the statutory purpose of urbanization.
[20] We cannot agree with the Landowners’ overly narrow definition of the term
“subdivided.” Indeed, our Supreme Court has rejected precisely such a narrow
definition. In rejecting the remonstrators’ assertion that to meet section
13(b)(2)(B), “the City must demonstrate that 60% of the land became
subdivided through the local subdivision approval process,” our Supreme Court
reasoned as follows:
This assertion asks courts to add too much to statutes that
consign decision-making power to legislators, local and state.
The theme of Indiana annexation law has long been that
adjoining territory of an urbanizing character was subject to
annexation. As counsel for the Remonstrators observe,
“Generally speaking, land next to a city has already begun taking
on attributes of urbanization or it reflects the immediate
likelihood of such urbanization.”
Rogers, 688 N.E.2d at 1241. The Court then outlined the evolution of the
urbanization question, which historically “permitted annexation of land
‘whether platted or not’” and annexations for areas that are “an economic and
social part of the annexing city.” Id. The Rogers Court explained that
“[i]nasmuch as the present statute contains no definition of ‘subdivided,’ the
trial court might well have looked in several directions if it perceived the need
for greater definition.” Id. at 1241-42. Our Supreme Court emphasized that
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“the definition a municipality uses for these purposes is one yardstick a court
may employ, though there may be others not suggested to us by the parties to
the case,” and the remonstrators’ limited definition “demands far more than the
straightforward language of the code provides.” Id. at 1242.
[21] In light of Rogers, we find that the trial court properly refused to limit the
definition of “subdivided” to parcels of land that have actually gone through the
process set forth by the county subdivision control ordinance. Boonville’s
expert testified that, based on the definition of “subdivision” in that ordinance,
61.5% of the Annexation Territory would have been required to follow the
procedures set forth by that ordinance and would constitute a subdivision
today, had the ordinance been in place when the parcels were divided.
[22] As for whether the Annexation Territory has begun taking on the attributes of
urbanization, the trial court heard all of the evidence and found that, while
parts of the Annexation Territory are undeveloped, “it is also apparent that
large portions of the Annexation Territory are already developed and have
become urbanized in the general sense.” Appellants’ App. p. 8. The trial court
relied on the development along the highway access of State Road 62, where
there are numerous restaurants, auto dealerships, office buildings, two
industrial parks, and several residential neighborhoods. This evidence suffices
to support the trial court’s finding that the Annexation Territory has already
begun taking on attributes of urbanization. We find that the trial court applied
a proper definition of the term “subdivided” and did not err by concluding that
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over 60% of the Annexation Territory is subdivided for the purpose of Section
13(b).
C. Section 13(c): Needed and Can Be Used
[23] Given that we have found that Boonville met the conditions set forth in section
13(b), we need not also consider section 13(c). But because these types of issues
recur frequently, we will consider the application of 13(c) to this case.
[24] To meet its burden under the relevant portion of section 13(c), Boonville was
required to show that the Annexation Territory was both “needed” and “can be
used” for Boonville’s development “in the reasonably near future.”
1. Recent Cases
[25] This Court has issued two opinions recently relating to section 13(c). In Town
of Fortville v. Certain Fortville Annexation Territory Landowners, a group of
remonstrators challenged Fortville’s attempted annexation of land adjacent to
the town. No. 30A01-1410-MI-442 (Ind. Ct. App. July 2, 2015), trans. pending.
In Fortville, the trial court found that the town had failed to meet its burden that
the annexed area was needed and could be used for development in the
reasonably near future. This Court noted that “the trial court appears to have
been seeking evidence that Fortville had plans to implement brick and mortar
development in the near future.” Id. at *3. We found that this standard was
overly limited and held that, to comply with section 13(c), “a municipality need
not demonstrate immediate plans to build on the annexed land . . . .” Id. at *4.
This Court reasoned as follows:
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To allow the trial court’s order to stand would be to hold that a
city—if it does not have impending plans to build on land that it
seeks to annex—must sit and watch the land be used and
developed in ways that might harm or impede its future plans for
urban management of the land, until the “long-term inevitability”
of annexation takes place. This result would be bad policy and
likely harm both the area to be annexed and the municipality that
seeks to annex it. Thus, we determine that the trial court should
not have limited its analysis to evidence of physical construction
or development in determining whether Fortville fulfilled the
requirements of Indiana Code section 36–4–3–13(c)(2).
Therefore, we hold that the trial court applied the wrong
evidentiary standard as a matter of law and find that, in
determining whether a municipality fulfills the requirements of
Indiana Code section 36–4–3–13(c)(2), a trial court may, and
should, consider non-physical brick and mortar development uses, such as
those—using annexed territory for “transportation linkages with other
developing areas, to control adjacent development on its borders, and to
prevent conflicting land uses”—noted by our Supreme Court in
Hobart. 631 N.E.2d at 913 n.6. We reverse and remand with
instructions that the trial court apply the correct standard and
reconsider its judgment.
Id. at *4-5 (citing Chidester v. City of Hobart, 631 N.E.2d 908, 913 n.6 (Ind. 1994))
(emphasis added).
[26] Not long after Fortville was handed down, this Court considered a similar case
in Town of Whitestown v. Rural Perry Township Landowners, No. 29A05-1409-MI-
437 (Ind. Ct. App. July 29, 2015), not yet certified. In Whitestown, the town
enacted an annexation ordinance that sought to annex acreage located in an
unincorporated portion of Perry Township. A number of landowner-
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remonstrators filed a remonstrance petition, and the trial court found in their
favor. Among other things, the trial court found that Whitestown had failed to
meet its burden under section 13(c). This Court noted that “there was ample
testimony concerning the town’s rapid growth and the efforts Whitestown put
into encouraging, predicting, and planning that growth—and how the
Annexation Area could be used for those ends.” Id. at *9.
[27] Although there was no evidence of ongoing, confirmed projects in the
annexation area, this Court emphasized that “the test prescribed under [section
13(c)] is not whether the annexing municipality can make do without the
territory it seeks to annex.” Id. Citing to Fortville, the Whitestown Court held
that the trial court erred by finding that Whitestown had failed to carry its
burden of proof. The Court also sought to “remind trial courts of . . . the
deferential standard accorded to annexing municipalities[.]” Id. at *10. In the
end, the Whitestown Court reversed the trial court and instructed that judgment
be entered in favor of Whitestown on the remonstrators’ petition.
2. Boonville Annexation
[28] As for the case before us, we agree with Boonville that what a municipality
needs and can use “is first and foremost a legislative determination.”
Appellees’ Br. p. 33. A court should not substitute its judgment for what a
municipality determines is needed to accomplish its purposes. State v. Collom,
727 N.E.2d 737, 741 (Ind. Ct. App. 1999) (holding that questions of
government necessity and expediency are understood to be exclusively for the
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legislature). Additionally, we observe that necessity “is not limited to the
‘absolute or indispensable needs of [the municipality], but is considered to be
that which is reasonably proper and useful for the purpose sought.” Collom, 720
N.E.2d at 741. Boonville was not required to put forth specific development
projects planned for the Annexation Territory. Instead, it merely needed to
show that the land was needed and can be used, rather than “a concrete ‘will’
be used.” Appellees’ Br. p. 36.
[29] The evidence supporting Boonville’s assertion that the Annexation Territory is
needed and can be used is as follows:
Boonville has run out of room and needs the Annexation Territory to be
able to grow and attract new business and industry.
The city currently has zero acres outside of the floodplain that are
available for commercial, business, or industrial development. The
Annexation Territory would add 227 such acres to Boonville.
Boonville has plans for bringing new development to the Annexation
Territory, including sewer services and a major transportation linkage.
Boonville has already constructed a new Sewer Treatment plant in the
Annexation Territory.
Boonville provides fire protection and police patrols to the Annexation
Territory.
Being mindful of our deferential standard of review, we find that this evidence
supports the trial court’s conclusion that Boonville met its burden under section
13(c). While there is no evidence of ongoing, confirmed projects in the
Annexation Territory, Boonville is not required to make such a showing. It has
offered evidence establishing a need for the Annexation Territory, as well as its
outlined hopes for development, including business, transportation, and sewer
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services, in that area. This evidence is sufficient to show that the Annexation
Territory is needed and can be used by Boonville in the reasonably near future.
[30] The Landowners contend that the proposed annexation is a mere tax grab,
pointing to a media interview in which Boonville’s mayor allegedly stated “that
she was not going to give anything to the annexed area, and all she wanted was
their money.” Appellants’ App. p. 97. This media report was not, itself, put
into evidence at the trial. Instead, one of the remonstrators claimed that he had
seen the television news report nearly seven years before the trial. At trial, the
mayor testified that the reason for the annexation was because the city needed it
for development. Furthermore, a government fiscal expert testified that the
City may actually see less tax revenue from the annexation than the estimated
cost of providing services to the area. In other words, the expert testified that
the annexation “doesn’t make sense” if it is “some kind of a money grab.” Tr.
p. 367.
[31] The testimony of the mayor and the government fiscal expert was sufficient
evidence to support the trial court’s conclusion that the annexation is not a
mere tax grab. The Landowners’ arguments to the contrary amount to a
request that we assess witness credibility and reweigh evidence, which we
decline to do.
[32] In sum, we find as follows: (1) the trial court applied a properly deferential
standard of review to the annexation ordinance; (2) the trial court did not err by
concluding that Boonville established that over 60% of the Annexation
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Territory is subdivided; and (3) the trial court did not err by concluding that
Boonville established that the Annexation Territory is needed and can be used
for development in the reasonably near future.
[33] The judgment of the trial court is affirmed.
Brown, J., concurs, and Riley, J., concurs in result.
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