MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be FILED
regarded as precedent or cited before any Mar 02 2020, 9:19 am
court except for the purpose of establishing CLERK
the defense of res judicata, collateral Indiana Supreme Court
Court of Appeals
and Tax Court
estoppel, or the law of the case.
ATTORNEY FOR APPELLANTS ATTORNEYS FOR APPELLEE
Peter S. Kovacs Jeffrey M. Bellamy
Peter Kovacs Law PC Stephen R. Donham
Fishers, Indiana Thrasher Buschmann & Voelkel PC
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Craig D. Severance and March 2, 2020
Catherine Severance, Court of Appeals Case No.
Appellants-Defendants, 19A-PL-1347
Appeal from the Hamilton
v. Superior Court
The Honorable Jonathan M.
The Pleasant View Brown, Judge
Homeowners’ Association, Inc., Trial Court Cause No.
Appellee-Plaintiff. 29D02-1504-PL-2764
Shepard, Senior Judge.
[1] Craig D. Severance and Catherine Severance appeal the trial court’s order
permanently enjoining them from parking commercial vehicles on their
residential lot or in the streets of their subdivision. We affirm.
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Facts and Procedural History
[2] The underlying facts, as stated in the Severances’ first appeal, are as follows:
The Pleasant View Homeowners Association, Inc. (“the HOA”),
filed a complaint to enjoin Craig and Catherine Severance from
using their residential lot in a manner inconsistent with Pleasant
View subdivision’s covenants and restrictions by parking
commercial vehicles, limousines, on their lot or in the street in
front of and adjacent to their home located in the subdivision.
Following an evidentiary hearing, the trial court issued a
preliminary injunction prohibiting the Severances from
continuing to park the vehicles in such a manner. However, the
trial court subsequently declined to enter a permanent injunction
based upon the Severances’ affirmative defense that the HOA
lacked the authority to sue the Severances for an injunction
because the HOA’s board of directors was not properly
constituted or operating in accordance with its own rules of
corporate governance. The court set a future date for a hearing
on the Severances’ claimed damages.
Prior to the trial court’s entry of a final judgment, the HOA
directed the trial court to the passage of new statutory law
regarding the governance of Indiana homeowners associations.
The HOA claimed that the new law nullified the Severances’
affirmative defense regarding the HOA’s authority to seek an
injunction. The trial court held a hearing and thereafter entered
its final judgment determining that it could not reconsider its
prior denial of the permanent injunction and that the Severances
were entitled to no damages.
Severance v. Pleasant View Homeowners’ Ass’n, Inc., 94 N.E.3d 345, 346 (Ind. Ct.
App. 2018), trans. denied (“Severance I”). The Severances appealed the trial
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court’s denial of their request for damages, and the HOA cross-appealed the
denial of its request for a permanent injunction.
[3] On appeal, this Court explained that “[b]ecause much of the trial court’s
resolution of this case appears to be hinged on its mistaken belief that it was
precluded from considering the merits of its prior order denying the permanent
injunction, the appropriate remedy is to reverse the trial court’s judgment and
remand this case for an evidentiary hearing to consider the merits of issuing a
permanent injunction against the Severances based on the facts and
circumstances as they stand today and pursuant to current Indiana law.” Id. at
349. In Severance I, we further specifically directed the trial court to consider
Indiana Code section 32-25.5-3-11, the new law cited by the HOA. We noted
that Section 32-25.5-3-11 was effective upon passage on April 12, 2017 and that
it “protects the authority of homeowners associations by preventing collateral
attacks based upon specific board irregularities and nullifying affirmative
defenses to covenant violations under certain circumstances.” Id. at 349 n.5.
Accordingly, the case was reversed and remanded to the trial court for further
proceedings consistent with this Court’s opinion.
[4] On remand, the trial court held an evidentiary hearing at which it considered
Section 32-25.5-3-11 and entered a permanent injunction against the
Severances. In addition, the court ordered the Severances to pay the HOA’s
attorney fees in the amount of $43,261.58.
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Issue
[5] The sole issue we decide is whether the trial court erred by entering a
permanent injunction against the Severances on the basis of a newly-enacted
statute.
Discussion and Decision
[6] The Severances challenge the entry of the permanent injunction based on the
trial court’s application of Indiana Code section 32-25.5-3-11, which became
effective several years after the events giving rise to this case. The Severances
argue that Section 32-25.5-3-11 is not retroactive.
[7] The grant of an injunction is discretionary, and we will not reverse unless the
trial court’s action was arbitrary or constituted a clear abuse of discretion. Cty.
of Lake v. Pahl, 28 N.E.3d 1092 (Ind. Ct. App. 2015), trans. denied. An abuse of
discretion occurs when the trial court’s decision is clearly against the logic and
effect of the facts and circumstances or if the trial court misinterprets the law.
Id.
[8] Generally, statutes are to be given prospective effect only, unless the legislature
unequivocally and unambiguously intended retrospective effect as well. Ind.
Bureau of Motor Vehicles v. Watson, 70 N.E.3d 380 (Ind. Ct. App. 2017). An
exception to this rule exists for procedural statutes—they are not required to be,
but they may be, applied retroactively. Id. Procedural law is law that prescribes
the method of enforcing a right or obtaining redress for invasion of that right.
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Hayden v. State, 771 N.E.2d 100 (Ind. Ct. App. 2002), trans. denied. Conversely,
substantive law creates, defines and regulates rights. Id.
[9] Section 32-25.5-3-11 provides:
(a) If:
(1) a meeting of a homeowners association is called in
accordance with the requirements of the homeowners
association’s governing documents, regardless of whether the
meeting is:
(A) an annual meeting;
(B) a special meeting; or
(C) any other meeting called by the board or the members;
(2) a purpose of the meeting is the election or appointment of
members of the board of directors of the homeowners
association; and
(3) the number of members of the homeowners association in
attendance at the meeting does not constitute a quorum as
defined in the governing documents of the homeowners
association;
the members of the board of directors at the time of the meeting
may continue to serve until their successors are selected and
qualified, regardless of the length of any member’s term or the
number of terms the member has served.
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(b) The failure of a homeowners association to achieve a quorum
at a meeting described in subsection (a) does not exempt any
member from, or create an affirmative defense for any member
with respect to:
(1) the member’s obligations under the homeowners association’s
governing documents; or
(2) the member’s obligations to otherwise abide by covenants
regulating:
(A) the use of real estate; or
(B) the payment of assessments.
(c) If a homeowners association’s governing documents permit
both the homeowners association and members of the
homeowners association to enforce provisions of the governing
documents, the homeowners association has authority both:
(1) as a corporation or an entity; and
(2) as derived from the members of the homeowners association’s
board;
to enforce the governing documents of the homeowners
association.
[10] The statute is procedural in nature—it relates to corporate procedures in the
absence of a quorum. It does not, however, deprive the Severances or other
members of the homeowners association of a right to seek redress for violations
of the association agreement or covenants. Rather, the statute merely prescribes
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the manner by which homeowners associations may remain functional to
enforce substantive rights under association agreements when a quorum is
lacking.
[11] As a procedural statute, Section 32-25.5-3-11 may be applied retroactively. See
Ind. Bureau of Motor Vehicles, 70 N.E.3d 380. Indeed, our Supreme Court long
ago noted, “it appears that the great weight of authority is that a statute
regulating or modifying procedure in actions operates retrospectively so far as
to control proceedings in cases pending at the time the act took effect.”
Evansville & T. H. R. Co. v. City of Terre Haute, 161 Ind. 26, 67 N.E. 686, 690
(1903).
Conclusion
[12] The trial court did not err when it retroactively applied Section 32-25.5-3-11 to
the Severances’ dispute with the HOA and entered a permanent injunction.
[13] Affirmed.
Najam, J., and Tavitas, J., concur.
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