City of Gary v. Major

Attorney for Appellants Attorney for Appellees
Michael J. Rappa Michael C. Dovellos
Johnson & Rappa, LLC Merrillville, Indiana
Merrillville, Indiana

____________________________________________________________________________
__

In the
Indiana Supreme Court
_________________________________

No. 45S04-0401-CV-10

The City of Gary and Mayor Scott
KING, IN HIS OFFICIAL CAPACITY, AND THE
CITY OF GARY COMMON COUNCIL,
CONSISTING OF ROY PRATT, MARILYN
KRUSAS, ROBERT WHITE, MARY BROWN,
CAROLYN ROGER, JEROME PRINCE, ALEX
CHERRY, CHARLES HUGHES, AND KYLE
ALLEN, SR., IN THEIR OFFICIAL CAPACITY,
APPELLANTS (DEFENDANTS BELOW),

v.

Ronnie Major d/b/a Affordable Towing
and Associates, James Mako, Jr., d/b/a
Mako’s Towing, and Hewlin Major
d/b/a Hugh’s Towing,
Appellees (Plaintifffs below).
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Appeal from the Lake Superior Court, Room Number Three, No. 45D03-0009-CP-
2366
The Honorable James D. Danikolas, Judge
_________________________________

On Petition To Transfer from the Indiana Court of Appeals, No. 45A04-0207-
CV-357
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February 10, 2005

Rucker, Justice.
The City of Gary, the Mayor of Gary, and members of the Gary City
Council appeal a trial court finding of contempt and a corresponding award
of monetary damages. We affirm the contempt finding but reverse the award
of damages.

Facts and Procedural History

Over the veto of then Mayor Thomas V. Barnes, the legislative body of
the City of Gary, the Gary City Council (“City Council”), passed an
ordinance in 1989 concerning the award of contracts for towing illegally
parked vehicles. The ordinance provided in pertinent part: “In order to
facilitate the removal of vehicles or parts, the City, with authorization
from the Common Council may employ personnel and acquire equipment,
property and facilities and/or enter into towing contracts as necessary . .
. .” Appellants’ App. at 33. Apparently a compromise was reached between
the legislative and executive branches of government and the ordinance lay
dormant for a number of years. Then, in 2000, the City Council established
a “Towing Committee”, a subcommittee of the City Council, that assumed the
responsibility of awarding towing contracts. Before the Committee was
established, Ronnie Major doing business as Affordable Towing & Associates,
James Mako, Jr. doing business as Mako’s Towing, and Hewlin Major doing
business as Hugh’s Towing (“Towing Companies”) had been performing towing
services under contracts negotiated with the executive branch of the City
of Gary. After the Committee was established the City Council cancelled
existing contracts with various private tow truck operators, including
those of the Towing Companies, and awarded the towing contracts to other
businesses.

On September 7, 2000, the Towing Companies filed a complaint for
declaratory and injunctive relief against the City of Gary, Scott King—the
Mayor of Gary—and members of the Gary City Council (referred to
collectively as “City”). Alleging damages in the amount of $100,000 for
each plaintiff, the complaint sought a declaration that the towing
ordinance violated an alleged statutory separation of powers.[1] More
specifically, according to the complaint, entering contracts on behalf of a
municipality is a function of the executive rather than the legislative
branch of city government. After conducting a hearing, the trial court
agreed with the Towing Companies and entered an order on January 17, 2001
declaring null and void all towing contracts entered by the City Council.
The trial court’s order also declared:

[T]he Executive Branch of Government of the City of Gary is
hereby ordered to establish a fair and equitable procedure for
the bidding and awarding of towing contracts to qualified towing
entities for the police ordered towing of vehicles in the City
of Gary with in [sic] which the [Towing Companies] shall
participate.

Appellants’ App. at 25. As for the Towing Companies’ request for damages,
the trial court’s order provided, “[t]his cause shall be set for hearing on
the issue of whether or not the Plaintiff’s [sic] are entitled to damages
because of the illegal and unlawful actions of the City of Gary Council
Towing Committee. . . .” Id. at 24-25. Apparently no such hearing was
ever conducted and the City did not appeal the trial court’s order.

Several months later, contending that the City had refused to comply
with the order, the Towing Companies filed a motion to find the City in
contempt of court and also asked the trial court to impose damages for
contempt in the amount of $150,000. While the contempt action was pending,
the Mayor of Gary issued an executive order that provided in pertinent
part:

Effective November 1, 2001 the City of Gary’s administrative
policy regarding the oversight of the licensing and conduct of
towing businesses in the City of Gary shall be as follows:

1. Oversight of the licensing and the conduct of towing
businesses within the City of Gary shall be conducted by the
designated Chairman of the Towing Committee as established by
ordinance of the Gary Common Council.

2. Said Chairman shall report in writing to the Office of the
Mayor on a quarterly basis commencing January 1, 2002 as to
the status of such licensing and conduct of said businesses.

Id. at 67. After a hearing on June 12, 2002, the trial court found the
City in contempt and ordered the City to pay the Towing Companies $150,000
in damages.

The City appealed arguing in part: (i) the trial court should not have
found it in contempt because the order of January 17, 2001 was unclear and
thus the City was not in willful disobedience of the order, and (ii) the
trial court erred in awarding damages because no evidence was introduced to
support the award. Finding the January 17, 2001 order unlawful, the Court
of Appeals reversed the judgment of the trial court. See City of Gary v.
Major, 792 N.E.2d 962 (Ind. Ct. App. 2003). Having previously granted the
Towing Companies’ petition to transfer, we now affirm in part and reverse
in part the trial court’s judgment.

Discussion
I.

Indiana Code § 34-47-3-1 provides in relevant part: “A person who is
guilty of any willful disobedience of any process, or any order lawfully
issued: (1) by any court of record . . . is guilty of an indirect contempt
of the court that issued the process or order” (emphasis added).
Consistent with this statutory provision, our courts have long held that
“[i]ndirect contempt is the willful disobedience of any lawfully entered
court order of which the offender has notice.” Andrews v. State, 505
N.E.2d 815, 830 (Ind. Ct. App. 1987) (emphasis added) (citing I.C. § 34-4-7-
3, the predecessor to I.C. § 34-47-3-1). See also Mitchell v. Mitchell,
785 N.E.2d 1194, 1198 (Ind. Ct. App. 2003); Packer v. State, 777 N.E.2d
733, 738 (Ind. Ct. App. 2002); Macintosh v. Macintosh, 749 N.E.2d 626, 629
(Ind. Ct. App. 2001), trans. denied; Myer v. Wolvos, 707 N.E.2d 1029, 1031
(Ind. Ct. App. 1999), trans. denied; Hanson v. Spolnik, 685 N.E.2d 71, 82
(Ind. Ct. App. 1997), trans. denied. In this case, according to the Court
of Appeals, the trial court’s order was not “lawfully entered” and
consequently not enforceable by means of contempt. This was so because the
City had no duty to “establish a fair and equitable procedure for the
bidding and awarding of towing contracts.” Major, 792 N.E.2d at 966. Our
understanding of a “lawfully entered” order in the context of a contempt
finding is slightly different from that of our colleagues.

In general, contempt of court involves disobedience of a court which
undermines the court’s authority, justice, and dignity. Hopping v. State,
637 N.E.2d 1294, 1297 (Ind. 1994). But the authority of a court to
sanction a party for contempt is not a matter of legislative grace.
Rather, among the inherent powers of a court is that of maintaining its
dignity, securing obedience to its process and rules, rebuking interference
with the conduct of business, and punishing unseemly behavior. State v.
Shumaker, 200 Ind. 623, 157 N.E. 769, 775 (1927). Viewed in this light, the
statutory definition of indirect contempt is merely a legislative
recognition of our courts’ inherent power to cite and punish for contempt.
See In re Contempt of Crenshaw, 708 N.E.2d 859, 861 (Ind. 1999); Skolnick
v. State, 180 Ind. App. 253, 388 N.E.2d 1156, 1162 (1979).

The law in Indiana is well settled that a person cannot be held in
contempt of court for failure to obey an order if the issuing court had no
jurisdiction to give the order. State ex rel. Leffingwell v. Super. Ct.
No. 2 of Grant County, 262 Ind. 574, 321 N.E.2d 568, 576 (1974). Such an
order is void and unenforceable. See, e.g., State ex rel. Taylor v. Cir.
Ct. of Marion County, 240 Ind. 94, 162 N.E.2d 90, 92 (1959) (order
declaring striking workers in contempt of court void and unenforceable
because a specific statutory provision declared trial courts lack
jurisdiction to issue a restraining order involving a labor dispute).
However, an order that is void because the court lacks jurisdiction to
enter it is distinguished from an order that is otherwise invalid. Thus,
“[a]lthough a defendant cannot be held in contempt of a void order, a
defendant may be held in contempt of an erroneous order . . . .
Accordingly, a defendant may not challenge a contempt finding based upon
the prior order’s non-jurisdictional irregularities. A party must follow
an erroneous order. The only remedy from an erroneous order is appeal and
disobedience thereto is contempt.” Carson v. Ross, 509 N.E.2d 239, 243
(Ind. Ct. App. 1987) (citations omitted), trans. denied; accord Crowl v.
Berryhill, 678 N.E.2d 828, 830 (Ind. Ct. App. 1997) (“A party’s remedy for
an erroneous order is appeal and disobedience of the order is contempt.”).

Jurisdiction is comprised of three elements: (1) jurisdiction of the
subject matter; (2) jurisdiction of the person; and (3) jurisdiction of
the particular case. Troxel v. Troxel, 737 N.E.2d 745, 749 (Ind. 2000).
In our view an order is not “lawfully entered” in the context of a contempt
finding only where the court lacks one of these three elements. Neither
before the Court of Appeals nor before this Court has the City alleged the
trial court lacked jurisdiction to enter its order of January 2001.[2] At
most, the order was erroneous. However, “[t]he only remedy from an
erroneous order is appeal . . . .” Carson, 509 N.E.2d at 243. We
emphasize that the City did not appeal the trial court’s original order of
January 17 and so we are not presented with any question about the merits
of the order or whether it was correct. The only issue is whether there
was sufficient evidence before the trial court to demonstrate that the City
was in willful disobedience of the trial court’s order.

II.

The City contends the trial court abused its discretion in entering
its order of contempt. The City’s argument in this regard is not entirely
consistent. On the one hand the City argues that the order was vague and
unclear, and thus the City did not know what was expected of it. On the
other hand the City argues the Mayor’s executive order did exactly what the
court ordered (thus undermining the assertion that the City was unaware of
what it was ordered to do).

In order to be held in contempt for failure to follow the court’s
order, a party must have willfully disobeyed the court order. Ind. High
School Athletic Ass’n v. Martin, 765 N.E.2d 1238, 1241 (Ind. 2002). The
order must have been so clear and certain that there could be no question
as to what the party must do, or not do, and so there could be no question
regarding whether the order is violated. Id. A party may not be held in
contempt for failing to comply with an ambiguous or indefinite order.
Otherwise, a party could be held in contempt for obeying an ambiguous order
in good faith. Bowyer v. Ind. Dep’t of Natural Resources, 798 N.E.2d 912,
918 (Ind. Ct. App. 2003). The determination of whether a party is in
contempt of court is a matter left to the discretion of the trial court.
Hancz v. City of South Bend, 691 N.E.2d 1322, 1324 (Ind. Ct. App. 1998).
We will reverse a trial court’s finding of contempt only if there is no
evidence or inference therefrom to support the finding. Id.

In this case the trial court’s order required the executive branch of
government of the City of Gary “to establish a fair and equitable procedure
for the bidding and awarding of towing contracts to qualified towing
entities for the police ordered towing of vehicles in the City of Gary with
in [sic] which the [Towing Companies] shall participate.” Appellants’ App.
at 25. Contrary to the City’s contention, the order appears to us to be
decidedly unambiguous. The language is direct, declarative, and includes
no conflicting terms or provisions. In fact at the contempt hearing the
City made no assertion that the order was unclear or that it did not know
what the order required it to do. Rather, the City argued that the Mayor’s
executive order represented compliance with the trial court’s order. See
Tr. at 5-8. The City made this same claim before the Court of Appeals.
See Br. of Appellants at 7-8.

Although apparently motivated by the trial court’s order of January
17, 2001, the Mayor’s executive order fell far short of compliance with the
trial court’s order. Indeed a review of the hearing transcript and the
City’s brief reveals that the heart of the City’s argument was not so much
that the executive order complied with the trial court’s directive, but
rather the City addressed the underlying justification for the trial
court’s order, namely: that the authority to award contracts was an
executive function rather than a legislative one. Apparently conceding
that this was an executive function,[3] the City argued, for example:

The Executive Order established a valid and legal process for
the awarding of towing contracts within the City of Gary, in
which the the [sic] power to enter into towing contracts
remained with the Executive Branch of the City of Gary, and did
not violate the Indiana Statutes with regard to the separation
of powers. The Executive Order made clear that the authority to
enter into towing contracts rests with the Mayor—this authority
has not been delegated to the Common Council or the Towing
Committee.

Id. at 5. The City also argued, “[T]he executive order makes clear that
the authority to make a contract is still with the mayor. There’s nothing
in this Executive Order No. 4 that says that he’s going to delegate the
contracting authority to the council.” Tr. at 5-6.

These arguments miss the mark. It is not enough to say that the Mayor
of Gary has retained and not delegated an executive branch function.
Rather, the question is whether the executive branch of the government of
the City of Gary “establish[ed] a fair and equitable procedure for the
bidding and awarding of towing contracts” as ordered by the trial court.
Clearly it did not, and the City makes no credible claim to the contrary.

The only evidence the City presented to demonstrate compliance with
the trial court’s order of January 17, 2001 was the Mayor’s executive
order. This was not sufficient. The trial court therefore did not abuse
its discretion in finding the City in contempt of court.[4] We have a
different view however on the question of damages.

III.

Once a party has been found in contempt of court, monetary damages may
be awarded to compensate the other party for injuries incurred as a result
of the contempt. Cowart v. White, 711 N.E.2d 523, 532 (Ind. 1999). In
determining an amount of damages the trial court may take into account “the
inconvenience and frustration suffered by the aggrieved party . . . .” Id.
at 532 (quoting Thomas v. Woollen, 255 Ind. 612, 266 N.E.2d 20, 22 (1971)).
The determination of damages in a contempt proceeding is within the trial
court’s discretion, and we will reverse an award of damages only if there
is no evidence to support the award. Meade v. Levett, 671 N.E.2d 1172,
1181 (Ind. Ct. App. 1996).

The trial court awarded the Towing Companies $150,000 in damages for
the City’s contemptuous conduct. The City complains the trial court abused
its discretion in doing so because there was no evidence submitted to
support the award.

The record shows that in their motion for contempt, the Towing
Companies sought damages in the amount of $150,000. No supporting
documents were included with the motion to justify damages in any amount.
And at the contempt hearing, no evidence was introduced or argument made to
support an award of damages. Rather, the written order finding the City in
contempt declared, “[t]here being no argument presented by the Defendants
to contradict the damages requested, the Court now orders damages in the
amount of $150,000.00.” Appellants’ App. at 10.

We disagree with the trial court on this point. The City’s silence on
the question of damages is of no moment. Absent some evidence in the
record demonstrating that the Towing Companies suffered injury as a result
of the City’s contemptuous conduct, there was simply no basis to enter an
award of damages. On this issue the judgment of the trial court is
reversed.[5]

Conclusion

The judgment of the trial court is affirmed in part and reversed in
part. This cause is remanded for further proceedings not inconsistent with
this opinion.

Shepard, C.J., and Dickson, Sullivan and Boehm, JJ., concur.

-----------------------
[1] As authority for this proposition, the Towing Companies relied on three
statutes, which read in pertinent part:

The powers of a city are divided between the executive and legislative
branches of its government.

Ind. Code § 36-4-4-2(a).

a) All powers and duties of a city that are executive or
administrative in nature shall be exercised or performed by the
city executive, another city officer, or a city department.
b) An ordinance of the city legislative body requiring an executive or
administrative function to be performed may:
(1) Designate the department that is to perform that function . .
. .

I.C. § 36-4-4-3.

The legislative power of a city is vested in its legislative body.
All powers and duties of a city that are legislative in nature shall
be exercised or performed by its legislative body.

I.C. § 36-4-4-4(a).

[2] Responding to the Towing Companies’ complaint for declaratory and
injunctive relief, the City filed a motion to dismiss under Indiana Trial
Rule 12(B)(6), which the trial court denied. In its supporting memorandum
the City argued, among other things, that pursuant to Indiana Code section
36-4-4-5 this cause should be heard by the Lake Superior Court sitting en
banc. The Statute provides in pertinent part:

(a) If uncertainty exists or a dispute arises concerning the
executive or legislative nature of a power or duty exercised or
proposed to be exercised by a branch, officer, department, or
agency of the government of a municipality, a petition may be
filed in the circuit court of the county in which the
municipality is located by . . . any person who alleges and
establishes to the satisfaction of the court that he is or would
be adversely affected by the exercise of the power; however, in
a county having a superior court that has three (3) or more
judges, the petition shall be filed in the superior court and
shall be heard and determined by the court sitting en banc.

Although the City did not say so in express terms, its argument could
be viewed as a challenge to the trial court’s jurisdiction. However, after
receiving an adverse ruling on its motion to dismiss, the City did not
advance this argument any further. We express no view on the merits of the
City’s now apparently abandoned claim.
[3] We do not resolve in this opinion whether, as a matter of law, awarding
municipal contracts is an executive versus a legislative function. We do
observe however that the long established rule in this jurisdiction is that
municipal officers have no power to enter contracts except where that
authority is expressly granted by statute; and municipal officers must
pursue and exercise such authority in strict compliance with the mode
prescribed by statute. Contracts made by officers without following the
prescribed mode are void and unenforceable. Bd. of Commissioners of Henry
County v. Gilles, 138 Ind. 667, 38 N.E. 40, 42 (1894); State ex rel. Keith
v. Common Council of Michigan City, 138 Ind. 455, 37 N.E. 1041, 1044
(1894); Platter v. Bd. of Commissioners of Elkhart County, 103 Ind. 360, 2
N.E. 544, 554 (1885).

[4] We observe that the trial court actually found the “Defendants” to be
in contempt. Appellants’ App. at 10. However, as a purely technical
matter, no named defendant was ordered by the trial court to do anything.
And that is especially so with regard to the City Council and its members.
Rather, it was the “Executive Branch” of government which the trial court
ordered to establish a fair and equitable procedure for bidding and
awarding towing contracts. Id. at 25. Mayor Scott King, as head of the
executive branch of government in the City of Gary, is thus the only
defendant to whom the trial court’s contempt finding applied.
[5] We express no opinion on whether the Towing Companies are entitled to
damages on their original complaint. That issue is not before us.