                                                                                  FILED
                                                                          Jan 31 2020, 8:36 am

                                                                                  CLERK
                                                                              Indiana Supreme Court
                                                                                 Court of Appeals
                                                                                   and Tax Court




ATTORNEYS FOR APPELLANTS                                   ATTORNEYS FOR APPELLEE
R. Brock Jordan                                            SHERYLL (DURBIN) NOVICKI
Christopher M. Trapp                                       Dennis F. McCrosson
Katz Korin Cunningham PC                                   Stephen R. Donham
Indianapolis, Indiana                                      Thrasher Buschmann & Voelkel, P.C.
                                                           Indianapolis, Indiana

                                                           ATTORNEY FOR APPELLEE
                                                           THE BOARD OF DIRECTORS OF
                                                           THE CORDRY-SWEETWATER
                                                           CONSERVANCY DISTRICT

                                                           Roger A. Young
                                                           Young and Young
                                                           Franklin, Indiana


                                              IN THE
      COURT OF APPEALS OF INDIANA

Daniel L. Hess and Leanna S.                               January 31, 2020
Hess,                                                      Court of Appeals Case No.
Appellants-Plaintiffs,                                     19A-CT-1416
                                                           Interlocutory Appeal from the Brown
        v.                                                 Circuit Court
                                                           The Honorable Mary Wertz, Judge
Sheryll (Durbin) Novicki,                                  Trial Court Cause No.
Appellee-Defendant,                                        07C01-0906-CT-349
and




Court of Appeals of Indiana | Opinion 19A-CT-1416 | January 31, 2020                              Page 1 of 12
      The Board of Directors of the
      Cordry-Sweetwater Conservancy
      District,
      Appellee-Intervenor




      Crone, Judge.


                                               Case Summary
[1]   This interlocutory appeal involves circumstances in which a trial court’s

      continuing equitable authority over injunctions clashes with freedom of

      contract principles. The limited issue to be resolved is whether the trial court

      has the legal authority to rule on the merits of an Indiana Trial Rule 60(B)

      motion to supplement/modify an agreed permanent injunction entered by the

      parties to a boundary dispute and approved by the court. The trial court

      concluded that it possesses such authority, and we affirm.


                                  Facts and Procedural History
[2]   Cordry Lake is a private lake owned and governed by the Cordry-Sweetwater

      Conservancy District (“CSCD”), through its board of directors (“the Board”).

      The Board has the authority to regulate the use of the lake and the construction

      of any structures in the inlets. Daniel L. Hess and Leanna S. Hess own a lake-

      front tract adjacent to the lake-front tract owned by Sheryll (Durbin) Novicki.


      Court of Appeals of Indiana | Opinion 19A-CT-1416 | January 31, 2020     Page 2 of 12
      A narrow inlet lies between their tracts. Per CSCD rules, each tract owner is

      entitled to unobstructed use of their half of the inlet, as determined by the use of

      a midpoint. In 2009, CSCD rules measured the midpoint of each inlet by using

      an imaginary line extending from the shore. At that time, Novicki sought to

      construct a dock/lift in the inlet. The Hesses filed an action against Novicki,

      seeking declaratory and injunctive relief concerning her construction of her

      dock and use of the inlet in a manner that allegedly encroached on their half of

      the inlet. They also named the Board as a defendant in their complaint.


[3]   In 2015, Novicki and the Hesses entered mediation. In 2016, they executed an

      agreed permanent injunction that reads, in relevant part,


              4. Neither party shall encroach by improvement or the regular
              parking of watercraft across an imaginary line that represents
              one-half of the width of the inlet on which their properties are
              located. However, this shall not be construed to be a grant of
              permission by either party to allow the other to encroach up to
              this imaginary line if the same is not permitted by CSCD rules in
              effect at the time.


      Appealed Order at 2; Appellants’ App. Vol. 2 at 54. The Board was not a party

      to the agreement and was subsequently dismissed from the action by stipulation

      of the parties.


[4]   In March 2017, the trial court approved the agreed permanent injunction and

      issued an order to that effect. In November 2017, the Board amended the

      CSCD rules to include a new formula for determining the midpoints of all inlets

      based on property lines, not on shorelines. As a result, Novicki filed an Indiana

      Court of Appeals of Indiana | Opinion 19A-CT-1416 | January 31, 2020      Page 3 of 12
Trial Rule 60(B) motion to supplement/modify the permanent injunction to

reflect the CSCD’s amended rules concerning these boundaries. The Board re-

entered the action as an intervenor, pursuant to Indiana Trial Rule 24. In the

first phase of bifurcated proceedings, the trial court heard oral argument and

limited its determination to resolving the issue of “whether the Court may [as a

matter of law] modify or supplement an injunction issued pursuant to the

agreement of the parties due to an allegation by one party that the agreed

injunction is not [sic] longer equitable.” Appealed Order at 3. At the hearing,

the Board explained its rule change and argued the importance of applying its

amended rule even where the parties have entered the injunction by agreement:


        [T]he agreed injunction is flawed, incomplete and unenforceable.
        The injunction acknowledges the existence of an imaginary line
        but does not describe its location at all.… [T]he old method of
        determining where the center line was, was to measure from the
        water’s edge and find a midpoint and a point equal distance from
        the shoreline, that was deemed to be the centerline of the cove.
        However, and this would work great if the shoreline and property
        line always precisely coincided.… The new method uses the
        property line as the beginning measuring point.… The use of any
        other method in our opinion would result in a functional repeal
        of CSCD’s rules and two freeholders can’t agree that the rules
        don’t apply to them. And also keep in mind, that d[ue] to
        changing circumstances CSCD could in the future again change
        the method of determining the centerline. And any judicial or
        agreed judgment that purports to establish the centerline must
        always acknowledge CSCD’S continuing authority to relocate
        that line. That’s our position.


Tr. Vol. 2 at 19, 21-22.


Court of Appeals of Indiana | Opinion 19A-CT-1416 | January 31, 2020    Page 4 of 12
[5]   Following the hearing, the trial court issued an interlocutory order concluding

      that “when a judgment, including an agreed judgment, has prospective

      application or effect, the Court must have the power to act to avoid an

      inequitable result that is caused by a change in circumstances that was not

      reasonably foreseeable at the time the judgment was entered.” Appealed Order

      at 4. Having thus concluded, the court ruled that Novicki was not precluded

      from pursuing relief pursuant to Trial Rule 60(B).


[6]   The Hesses filed a motion to reconsider, which the trial court denied. They

      sought and were granted certification of the trial court’s order for interlocutory

      appeal, and we accepted jurisdiction. Additional facts will be provided as

      necessary.


                                      Discussion and Decision
[7]   In framing the nature of the dispute below, we note that Novicki filed a motion

      for relief from the 2017 agreed injunction that she entered with the Hesses.

      Trial Rule 60(B)(7) allows relief from judgment where “it is no longer equitable

      that the judgment should have prospective application[.]” “[T]o establish that it

      is no longer equitable for a final judgment to have prospective application under

      Rule 60(B)(7), the movant must show that there has been a change in

      circumstances since the entry of the original judgment and that the change of

      circumstances was not reasonably foreseeable at the time of entry of the original

      judgment.” City of Indianapolis v. Tichy, 122 N.E.3d 841, 845 (Ind. Ct. App.

      2019).


      Court of Appeals of Indiana | Opinion 19A-CT-1416 | January 31, 2020      Page 5 of 12
[8]   In this interlocutory appeal, the Hesses claim that the trial court erred in

      declaring that it possesses the legal authority to grant Novicki’s motion to

      supplement/modify the agreed permanent injunction should Novicki meet her

      burden under Trial Rule 60(B)(7) and in denying their motion to reconsider.

      Ordinarily, we apply an abuse of discretion standard to appeals involving the

      trial court’s denial of a motion to reconsider or its ruling on a Trial Rule 60(B)

      motion. Celadon Trucking Servs., Inc. v. United Equip. Leasing, LLC, 10 N.E.3d 91,

      94 (Ind. Ct. App. 2014) (ruling on motion to reconsider), trans. denied (2015);

      TacCo Falcon Point, Inc. v. Atlantic Ltd. P’ship XII, 937 N.E.2d 1212, 1218 (Ind.

      Ct. App. 2010) (ruling on Rule 60(B) motion). Here, however, our review

      involves only the preliminary question of whether the trial court has the legal

      authority to address the merits of Novicki’s Rule 60(B)(7) claim; as such, we are

      faced with a pure question of law, which we review de novo. Siwinski v. Town of

      Ogden Dunes, 949 N.E.2d 825, 828 (Ind. 2011).


[9]   The Hesses assert that because the injunction was entered as an agreed

      judgment, it is a matter of contract, not subject to modification by the trial

      court. We acknowledge the well-established principle that “[a]fter entering an

      agreed judgment, the trial court has no authority to modify or change the




      Court of Appeals of Indiana | Opinion 19A-CT-1416 | January 31, 2020       Page 6 of 12
       judgment in any essential or material manner.” Evans v. Evans, 946 N.E.2d

       1200, 1204 (Ind. Ct. App. 2011). 1


[10]   In contrast, Novicki contends that this action must be resolved by application of

       injunction law rather than contract law. “An injunction is a judgment of

       prospective application subject to the issuing court’s continuing supervision.”

       Ballard v. Harman, 737 N.E.2d 411, 417 (Ind. Ct. App. 2000). A permanent

       injunction is “limited to prohibiting injurious interference with rights and must

       be narrowly tailored so that its scope is not more extensive than is reasonably

       necessary to protect the interests of the party in whose favor it is granted.”

       Liter’s of Indiana, Inc. v. Bennett, 51 N.E.3d 285, 299 (Ind. Ct. App. 2016), trans.

       denied. “[I]f an injunction is overbroad or if it becomes an instrument of wrong

       through changed circumstances, it is subject to modification through the court’s

       continuing equity jurisdiction.” Ballard, 737 N.E.2d at 417.


[11]   In support of their argument that the trial court lacks authority to modify or

       supplement the agreed injunction, the Hesses rely on Ingoglia v. Fogelson Cos.,

       Inc., 530 N.E.2d 1190, 1192 (Ind. Ct. App 1988). In Ingoglia, two homeowners

       experienced flooding during heavy storms and filed separate actions (in Porter

       and Jasper Counties) against the developer and designer of the storm drainage

       and water retention systems for money damages due to the flooding and for an




       1
         To the extent that Novicki points to the Hesses’ December 2017 motion to modify the agreed injunction as
       evidence that the trial court has the authority to modify an agreed order, we note that the previous
       modification, by nunc pro tunc order, was not material but was entered merely to correct a scrivener’s error.

       Court of Appeals of Indiana | Opinion 19A-CT-1416 | January 31, 2020                             Page 7 of 12
       injunction to take corrective measures to prevent future flooding. Id. The two

       homeowners, the developer, and the designer entered an agreed judgment for

       money damages and the construction of an operational retention pond. The

       two trial courts approved the settlement agreement and entered judgment

       accordingly. Thereafter, the money judgment was paid in full, but the cost of

       the remedial work on the retention pond, a matter not addressed in the agreed

       judgment, remained in dispute. The homeowners filed separate petitions to

       enforce judgment, and evidence was reopened. The Jasper County court

       transferred its case to the Porter County court, which assumed jurisdiction and

       denied the homeowners’ motion to enforce, finding that the developer had met

       all its responsibilities under the agreed judgment. The homeowners appealed,

       claiming that the Porter County court lacked the authority to modify the agreed

       judgment. 2


[12]   The Ingoglia court explained that an agreed judgment is, by nature, both a

       contract between the parties and a judicial act in the form of an entry of

       judgment. Id. at 1199. Citing United States v. Swift & Co., 286 U.S. 106, 114-15

       (1932) (court has equitable power to modify agreed injunction even though

       entered by consent and absent contract term allowing such) and State v.

       Martinsville Development Co., 174 Ind. App. 157, 163, 366 N.E.2d 681, 685

       (1977) (money judgment in condemnation proceeding lacked prospective




       2
         They also claimed that the Jasper and Porter County courts lacked jurisdiction to confer and assume
       jurisdiction, respectively, and this Court agreed. Ingoglia, 530 N.E.2d at 1197-98.

       Court of Appeals of Indiana | Opinion 19A-CT-1416 | January 31, 2020                           Page 8 of 12
       application), the Ingoglia court drew the distinction between an agreed judgment

       over a matter of prospective application and an agreed judgment concerning a

       matter that serves merely to rectify past wrongs:


               Swift recognized a court of equity’s inherent power to modify a
               judgment (whether by consent or after litigation) when changed
               circumstances make its prospective application inequitable. The
               threshold question to be determined in deciding if a consent
               judgment may be modified because of changed circumstances is
               whether the judgment has prospective application. Justice
               Cardozo, writing for the Swift Court, stated: “The distinction is
               between restraints that give protection to rights fully accrued
               upon facts so nearly permanent as to be substantially impervious
               to change, and those that involve the supervision of changing
               conduct or conditions and are thus provisional and tentative.”


               In [Martinsville Development], the court stated a judgment has
               prospective application “when a person’s right to do or not to do
               some act is continuously affected by the operation of the
               judgment in the future; or, the judgment is specifically directed
               toward some event which is to take place in the future and does
               not simply serve to remedy past wrongs.” (Emphasis in original).


       Id. at 1199-1200 (citations and footnote omitted).


[13]   In holding that the trial court lacked the authority to modify the agreed

       judgment, the Ingoglia court emphasized that the agreed judgment in that case

       “served only to remedy past wrongs” and was not prospective in application.

       Id. at 1200. Given these circumstances, the court concluded that “modification

       was proper only if contract principles [such as the intent of the parties and

       interpretation of the language] were correctly applied.” Id.

       Court of Appeals of Indiana | Opinion 19A-CT-1416 | January 31, 2020        Page 9 of 12
[14]   We believe that the circumstances here are more closely analogous to those in

       Swift. 3 There, the government took action to dissolve a monopoly of meat

       packers pursuant to 15 U.S.C. § 4 (The Sherman Anti-Trust Act). 286 U.S. at

       111. The parties entered an agreed judgment enjoining the meat packers from

       maintaining a monopoly and from engaging in various acts restraining trade

       and competition. Two of the meat packers sought to modify the agreed

       injunction, claiming that the restraints in it had become useless and oppressive

       due to changes in the industry. Id. at 113. Modification was granted below

       with respect to certain limited aspects of the original agreed injunction, and the

       action made its way to the United States Supreme Court. The high court

       analyzed the action by determining first whether the court possessed the power

       to modify the agreed injunction and then whether the modification was justified

       under the evidence. Id. at 114-15. With respect to the court’s power to modify,

       the Swift court issued a strong statement, “We are not doubtful of the power of

       a court of equity to modify an injunction in adaptation to changed conditions,

       though it was entered by consent.… A continuing decree of injunction directed

       to events to come is subject always to adaptation as events may shape the

       need.” Id. at 114.




       3
          We acknowledge the Hesses’ claim that Swift is inapplicable because it was decided under federal law,
       which is more amenable to treating agreed judgments as judicial acts subject to the continuing equitable
       authority of the trial court. That said, like the Ingoglia court, we find instructive the U.S. Supreme Court’s
       analysis of agreed injunctions, specifically with respect to its distinction between circumstances involving
       rights fully accrued and impervious to change and those involving prospective application and changes in
       conditions.

       Court of Appeals of Indiana | Opinion 19A-CT-1416 | January 31, 2020                               Page 10 of 12
[15]   Here, our charge is to answer only the first question, that is, whether the trial

       court possesses the legal authority to modify the agreed injunction. The dispute

       between Novicki and the Hesses is not limited to remedial matters such as the

       payment of money damages for a past wrong. The agreed injunction concerns

       prospective matters such as the positioning of the parties’ docks/lifts and the

       continued navigation of their respective watercrafts within the inlet, all of which

       must be considered in conjunction with the rules and regulations promulgated

       by the CSCD, the owners and regulators of the lake. Even when viewed from a

       purely contractual standpoint, the agreement’s terms suggest that the parties

       may have anticipated potential future judicial intervention. See Appellants’

       App. Vol. 2 at 54 (paragraph 4: “if the same is not permitted by CSCD rules in

       effect at the time.”). Like the Swift court, we have no doubt that this injunction,

       though entered by consent, is subject to the trial court’s continuing equitable

       authority. 286 U.S. at 114.


[16]   This is not to say that Novicki is entitled to such modification. 4 See id., at 114-

       15 (concluding that court undoubtedly has equitable authority to modify

       injunction, even though entered by consent, to adapt to changed conditions, yet

       holding evidence insufficient to justify court’s exercise of power to modify).

       That question will be considered and resolved during the second phase of the

       proceedings, under a more complete factual record. Should Novicki present



       4
         Without knowing the full extent of the evidence to be presented during the second phase of the
       proceedings, we are mindful that the encroachment restrictions imposed by the new CSCD regulations may
       prove more or less stringent than those in force when the Hesses and Novicki entered their agreed injunction.

       Court of Appeals of Indiana | Opinion 19A-CT-1416 | January 31, 2020                            Page 11 of 12
       sufficient evidence establishing that the agreed injunction has become an

       instrument of wrong due to changed circumstances and thus is no longer

       equitable, the trial court, in its discretion, may grant her relief under Trial Rule

       60(B)(7). Ballard, 737 N.E.2d at 417. If she fails to meet her burden of proving

       an unforeseeable change in circumstances rendering the injunction inequitable,

       the trial court will nevertheless retain the authority to interpret and apply the

       language of the agreed judgment according to contract principles to determine

       whether an ambiguity exists and to ascertain the intent of the parties. Ingoglia,

       530 N.E.2d at 1200. Accordingly, we affirm.


[17]   Affirmed.


       May, J., and Pyle, J., concur.




       Court of Appeals of Indiana | Opinion 19A-CT-1416 | January 31, 2020       Page 12 of 12
