                                                                          Jul 02 2015, 8:00 am




ATTORNEYS FOR APPELLANT                                     ATTORNEY FOR APPELLEE
Alex C. Intermill                                           Stephen R. Buschmann
Curtis T. Jones                                             Thrasher Buschmann & Voelkel, P.C.
Jonathan W. Hughes                                          Indianapolis, Indiana
Bose McKinney & Evans LLP
Indianapolis, Indiana



                                             IN THE
    COURT OF APPEALS OF INDIANA

Town of Fortville,                                         July 2, 2015

Appellant-Respondent,                                      Court of Appeals Case No.
                                                           30A01-1410-MI-442
        v.                                                 Appeal from the Hancock Circuit
                                                           Court.
                                                           The Honorable Richard D. Culver,
Certain Fortville Annexation                               Judge.
Territory Landowners,                                      Cause No. 30C01-1310-MI-1832
Appellee-Petitioner




Baker, Judge.




Court of Appeals of Indiana | Opinion 30A01-1410-MI-442 | July 2, 2015                           Page 1 of 10
[1]   The Town of Fortville (Fortville) appeals the trial court’s order denying

      annexation in favor of certain Fortville annexation territory landowners (the

      Remonstrators). Fortville argues that the trial court erred when it failed to

      apply substantial deference to Fortville’s adoption of an annexation

      ordinance—a legislative function delegated to the Fortville Town Council by

      the Indiana General Assembly. Fortville also contends that the trial court erred

      when it found that Fortville had not presented evidence that the area to be

      annexed was needed and can be used for Fortville’s development in the near

      future. Finding that the trial court erred by applying the wrong evidentiary

      standard when analyzing Fortville’s need to annex the area and plans for the

      areas development, we reverse and remand for proceedings consistent with this

      opinion.


                                                       Facts
[2]   On March 28, 2013, Fortville adopted Resolution 2013-3A, which proposed to

      annex 5,944 acres of land adjacent to Fortville. On July 14, 2014, following

      notice and a public hearing on the matter, Fortville adopted Ordinance 2013-

      3A, which proposed to annex a reduced area of 644 acres of land (the

      Annexation). The Annexation was surrounded on three sides by Fortville’s

      boundaries. In addition, Fortville adopted a fiscal plan and policy for the

      Annexation.


[3]   On October 11, 2013, the Remonstrators—who consist of ninety-three percent

      of the owners of the parcels in the Annexation—filed their petition


      Court of Appeals of Indiana | Opinion 30A01-1410-MI-442 | July 2, 2015   Page 2 of 10
      remonstrating against the proposed annexation. On October 30, 2013, Fortville

      filed an answer and affirmative defenses to the petition remonstrating against

      the proposed annexation.


[4]   On July 11, 2014—prior to trial—the parties filed their joint stipulations and

      entry. The parties stipulated as follows:

              1. Fortville is not asserting that the annexation territory meets the
              requirements of Ind. Code § 36-4-3-13(b).
              2. Fortville satisfied the requirements of Ind. Code § 36-4-3-13(c)(1).
              Specifically, the parties stipulate that the annexation territory is at least
              one-fourth (1/4) contiguous to Fortville. Fortville is therefore not
              required to establish the contiguity element at trial.
              3. The parties disagree whether the annexation territory “is needed and
              can be used by the municipality for its development in the reasonably
              near future.” See Ind. Code § 36-4-3-13(c)(2).
              4. Fortville has satisfied the requirements of Ind. Code § 36-4-3-13(d). .
              ..
              5. The Remonstrators are not claiming that Police Protection, Fire
              Protection, and Street and Road Maintenance are adequately
              furnished by a provider other than Fortville. See Ind. Code § 36-4-3-
              13(e)(2)(A)(i)-(ii). Moreover, the Remonstrators are not claiming that
              the annexation will have a significant financial impact on them. See
              Ind. Code § 26-4-3-13(e)(2)(B).
      Appellant’s App. p. 125-127. The above stipulations narrowed the issues at

      trial to a single determination: whether the Annexation is needed and can be

      used by Fortville for its development in the reasonably near future pursuant to

      Indiana Code § 36-4-3-13(c)(2).


[5]   On July 21, 2014, the trial court conducted a bench trial. On September 24,

      2014, it issued its findings of fact and conclusions of law. It determined that—


      Court of Appeals of Indiana | Opinion 30A01-1410-MI-442 | July 2, 2015              Page 3 of 10
      while there was a “long-term inevitability” that the Annexation would be

      annexed—Fortville had failed to demonstrate that the Annexation was needed

      and could be used by the municipality for its development in the reasonably

      near future. Id. at 12. Fortville now appeals.


                                     Discussion and Decision
             I. Annexation Procedure and Standard of Review
[6]   Fortville argues that the trial court erred when it failed to give substantial

      deference to Fortville’s adoption of an annexation ordinance and found that

      Fortville had not presented evidence that the area to be annexed was needed

      and can be used for Fortville’s development in the near future. Our Supreme

      Court, in Rodgers v. Municipal City of Elkhart, has laid out 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

      Court of Appeals of Indiana | Opinion 30A01-1410-MI-442 | July 2, 2015              Page 4 of 10
              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.
              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).


[7]   When 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

      entry. 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.” Oil Supply Co., 726

      N.E.2d at 248. 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.


                                          II. The Annexation
[8]   As noted above, the only issue to be determined at trial and reviewed upon

      appeal, is whether—as required by Indiana Code § 36-4-3-13(c)(2)—Fortville

      had not shown that “the territory sought to be annexed is needed and can be

      used by the municipality for its development in the reasonably near future.”

      Fortville argues that, if the trial court had applied the correct deferential



      Court of Appeals of Indiana | Opinion 30A01-1410-MI-442 | July 2, 2015          Page 5 of 10
       standard of review, it would have found that Fortville had met the requirements

       of Indiana Code § 36-4-3-13(c)(2).


[9]    Here, the trial court determined that the evidence did not establish that the

       Annexation was needed and could be used by Fortville for its development in

       the reasonably near future. In its conclusions of law, it cited Abell v. City of

       Seymour, 150 Ind. App. 163, 167, 275 N.E.2d 547, 550 (Ind. Ct. App. 1971),

       which held that “whether the city’s need for the area [is] in the reasonably near

       future [is] for the trial court to determine.” (internal quotations removed). In

       making this determination, the trial court enumerated the types of evidence that

       could be used to determine whether Fortville satisfied the elements of Indiana

       Code § 36-4-3-13(c)(2): 1) evidence indicating plans for constructing a new

       school in the area in three to five years; 2) plans for the opening and closing of

       streets in the area; 3) evidence showing that residential and business expansion

       from the city surrounds the area on three sides; and 4) evidence to the contrary

       indicating that while the area might be needed in the future, the need was not in

       the near future. Appellant’s App. p. 14.


[10]   In applying these evidentiary considerations, the trial court appears to have

       been seeking evidence that Fortville had plans to implement brick and mortar

       development in the near future. This becomes even clearer when examining its

       further findings supporting its order. The trial court determined that Fortville:

       1) had no plans for development in the Annexation area and had not identified

       any developers interested in developing the area; 2) introduced no evidence of

       any plan for any types of construction in the annexation area in the next three

       Court of Appeals of Indiana | Opinion 30A01-1410-MI-442 | July 2, 2015      Page 6 of 10
       to five years; and 3) introduced no plans to install infrastructure of any type in

       the annexation. Id. It is clear that the trial court was looking for evidence of

       physical construction in the area in the near future to fulfill Fortville’s burden of

       showing that the Annexation was needed and could be used by Fortville for its

       development in the reasonably near future.


[11]   In its conclusions of law, the trial court relied heavily on Abell, one of the few

       cases in which the “needed and can be used by the municipality for its

       development in the reasonably near future” requirement of Indiana Code

       section 36-4-3-13(c)(2) is analyzed. 275 N.E.2d at 547. In that case, a panel of

       this Court affirmed the trial court’s determination that the City of Seymour had

       fulfilled this requirement by providing evidence that the City planned to build a

       school in the area within three to five years and to open and close streets. Id. at

       551.


[12]   However, nowhere in Abell did we give any indication that “development” was

       limited to building brick and mortar buildings and roads within the area to be

       annexed. Id. While there is little case law to guide us in determining what

       evidence is required to show that an annexation fulfills the requirements of

       Indiana Code section 36-4-3-13(c)(2), the case law that does exist suggests that

       the trial court applied the wrong evidentiary standard as a matter of law. In

       Chidester v. City of Hobart, 631 N.E.2d 908, 913 n.6 (Ind. 1994), our Supreme

       Court—in upholding the trial court’s finding that the City of Hobart needed and

       could use the land to be annexed—noted that the trial court found that the City

       needed and could use the land for “transportation linkages with other

       Court of Appeals of Indiana | Opinion 30A01-1410-MI-442 | July 2, 2015     Page 7 of 10
       developing areas, to control adjacent development on its borders, and to

       prevent conflicting land uses.” Therefore, it seems that a municipality need not

       demonstrate immediate plans to build on the annexed land in order to show

       that it needs and can use the land for its development in the reasonably near

       future.


[13]   Here, Fortville provided the following evidence to support its assertion that it

       needed and could use the Annexation for its development in the reasonable

       near future:

               1.       The Annexation currently partakes of Fortville’s water and
                        emergency services. Fortville wishes to annex the territory to
                        square its borders and adequately distribute the cost of city
                        services.
               2.       Fortville intends to expand and continue to develop the
                        municipal services, such as water and emergency services,
                        provided to the Annexation.
               3.       Fortville aspires to protect the future health of the town’s sewer
                        and utility services.
               4.       The areas to the north and west of the Annexation are quickly
                        developing. Fortville wishes to annex the land to prepare for
                        and manage urban growth.
       Appellant’s Br. p. 24-27.


[14]   In its findings, the trial court acknowledged much of this evidence. It found

       that “the proposed annexed territory is surrounded by the existing Fortville

       Town boundaries on three sides. . . .” and that the “[t]erritory just north and

       west of the Annexation Territory has seen growth and development.”

       Appellant’s App. p. 9. In addition, it found that “Fortville’s anticipation that


       Court of Appeals of Indiana | Opinion 30A01-1410-MI-442 | July 2, 2015            Page 8 of 10
       residential growth will occur in Fortville based on the growth in Fishers and

       McCordsville is reasonable.” Id. at 12. The trial court also acknowledged that

       currently—although the Annexation receives town services and has invested

       significant amounts of money in utilities over the past several years—Fortville

       cannot control how the land in the Annexation is used or developed. Id. at 9.

       However, despite this evidence, the trial court determined that “[a]lthough the

       evidence suggest a long-term inevitability to annexation, the evidence does not

       support a conclusion for the need for annexation in the near future.” Id. at 12.


[15]   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).


[16]   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

       Court of Appeals of Indiana | Opinion 30A01-1410-MI-442 | July 2, 2015   Page 9 of 10
       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.


[17]   The judgment of the trial court is reversed and we remand for proceedings

       consistent with this opinion.


       May, J., and Mathias, J., concur.




       Court of Appeals of Indiana | Opinion 30A01-1410-MI-442 | July 2, 2015   Page 10 of 10
