                                                                             FILED
                                                                       Apr 16 2019, 10:11 am

                                                                             CLERK
                                                                        Indiana Supreme Court
                                                                           Court of Appeals
                                                                             and Tax Court




ATTORNEYS FOR APPELLANTS                                    ATTORNEYS FOR APPELLEE
Clifford R. Courtney                                        James J. Ammeen, Jr.
Indianapolis, Indiana                                       Mark J. Liechty
                                                            Ammeen Valenzuela Associates,
Frederic C. Sipe                                            LLP
Indianapolis, Indiana                                       Indianapolis, Indiana

Robert A. Smith                                             Deborah L. Law
SmithWade, LLC                                              Donald E. Morgan
Noblesville, Indiana                                        Office of Corporation Counsel
                                                            Indianapolis, Indiana



                                             IN THE
    COURT OF APPEALS OF INDIANA

Towne & Terrace Corporation;                                April 16, 2019
Glen Timmons, in his capacity                               Court of Appeals Case No.
as President of the Towne &                                 18A-OV-2310
Terrace Corporation Board of                                Appeal from the Marion Superior
Directors; Darren Kirkland, in                              Court
his Capacity as a Member of the                             The Honorable Cynthia J. Ayers,
Towne & Terrace Corporation                                 Judge
Board of Directors; Jacqueline                              Trial Court Cause No.
Timmons, in her Capacity as a                               49D04-1311-OV-42187
Member of the Towne & Terrace
Corporation Board of Directors;
and Ella Means, in her Capacity
as a Member of the Towne &
Terrace Corporation Board of
Directors,
Appellants-Defendants and Counter-
Claimants,

Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019                              Page 1 of 24
              v.

      City of Indianapolis,
      Appellee-Plaintiff and Counter-
      Defendant.




      Najam, Judge.


                                         Statement of the Case
[1]   Towne & Terrace Corporation; Glen Timmons, in his capacity as President of

      the Towne & Terrace Corporation Board of Directors; Darren Kirkland, in his

      Capacity as a Member of the Towne & Terrace Corporation Board of Directors;

      Jacqueline Timmons, in her Capacity as a Member of the Towne & Terrace

      Corporation Board of Directors; and Ella Means, in her Capacity as a Member

      of the Towne & Terrace Corporation Board of Directors (collectively “T&T”), 1

      appeal the trial court’s order granting an unverified motion filed by the City of

      Indianapolis (“the City”) for the appointment of a receiver over T&T. T&T

      presents several issues for our review, which we consolidate and restate as

      whether the trial court abused its discretion when it appointed a receiver to

      “have control over all of [T&T]’s assets, both real property and the common




      1
       For ease of discussion, “T&T” will be used to describe the Appellants, collectively, and “Town & Terrace”
      will be used to describe the physical complex.

      Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019                            Page 2 of 24
      areas, real property owned by individual board members, and if found to be

      unsafe, all other privately-owned properties.” Appellants’ App. Vol. III at 13.


[2]   The City cross-appeals and contends that the trial court abused its discretion

      when it granted T&T’s verified motion to appoint a receiver over the City-

      owned properties located in the Towne & Terrace complex.


[3]   We affirm in part and reverse in part.


                                   Facts and Procedural History
[4]   We set out some of the relevant facts and procedural history in a prior appeal:


              Towne & Terrace is a residential complex near the intersection of
              East 42nd Street and Post Road in Indianapolis, Indiana.
              Incorporated in 1964 for the purpose of owning and maintaining
              the common areas of the condominium development, [T&T] is a
              private, nonprofit Indiana corporation with volunteer
              directors. . . . As of 2017, the City owned at least 49[ 2] units in
              Towne & Terrace. Thirteen of the units were acquired as part of
              a settlement in an unrelated nuisance action. The remainder of
              the units became the City’s possession after they were not
              purchased at tax sales. Since being acquired, each of the City’s homes
              in Towne & Terrace has been left vacant and boarded up.

              Over the years, the East side of Marion County has suffered a
              major crime wave. In 2015, the Federal Bureau of Investigation,
              the United States Attorney’s Office, the Indiana State Police, the
              Marion County Sheriff, and [the] Indianapolis Metropolitan
              Police Department conducted raids throughout Indianapolis,



      2
       The City currently owns “between Forty-Nine (49) and Seventy (70) properties” in Towne & Terrace.
      Appellants’ App. Vol. III at 3.

      Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019                          Page 3 of 24
        leading to the arrest of thirty-five criminals—the vast majority on
        the East side.

        On December 16, 2014, the City filed an Amended Complaint
        against [T&T] and four members of its board in their
        representative capacities, alleging that [T&T] “failed to provide,
        maintain, and ensure that all common areas of the [] residential
        complex are safe from hazardous conditions, including but not
        limited to general lawlessness and the threat of reasonably
        foreseeable criminal intrusions.” Specifically, the City noted that
        “[s]ince January 1, 2008, there have been at least excessive [sic]
        police runs and numerous reports filed by the Indianapolis
        Metropolitan Police Department at the [] residential complex
        involving crimes such as homicide, rape, fraud, arson, domestic
        battery, public intoxication, child abduction, child abuse, larceny,
        burglary, armed robbery, aggravated assault, vandalism,
        intimidation, invasion of privacy, and trespass.” As such, the
        City requested the trial court, among other things, to

                 [a]ward the City compensatory damages against
                 [T&T], jointly and severally, to compensate the City
                 for all damages caused by [T&T’s] operation,
                 management and maintenance of the [Towne &
                 Terrace] residential complex and individual units,
                 including but not limited to:

                          i. All resources expended by the City,
                          including but not limited to the
                          Department of Public Safety[ and]
                          IMPD . . . in response to the
                          unreasonable volume of investigations,
                          reports, and citations caused by [T&T’s]
                          neglect of the [] residential complex and
                          individual units, and




Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019        Page 4 of 24
                                ii. Any and all other public resource
                                expenditures resulting from [T&T’s]
                                neglect of the [] residential complex.

              On January 30, 2015, [T&T] filed an Answer and Counterclaim,
              denying the allegations in the Amended Complaint and asserting
              that the City owed [T&T] maintenance fees on the individual
              units owned by the City. On October 3, 2016, [T&T] moved for
              summary judgment on its counterclaim against the City.

              Prior to the trial court issuing a ruling, [T&T] filed a second
              motion for summary judgment on the City’s Amended
              Complaint[, and] the City responded on July 17, 2017. After a
              hearing on [T&T]’s second motion for summary judgment, the
              trial court issued its ruling on October 18, 2017, granting
              summary judgment to [T&T] on the City’s Amended Complaint
              and partial summary judgment on [T&T]’s counterclaim.


      City of Indianapolis v. Towne & Terrace Corp., 106 N.E.3d 507, 509-10 (Ind. Ct.

      App. 2018) (citations omitted; emphasis added) (“Towne & Terrace I”). On

      appeal, we affirmed the trial court’s grant of summary judgment in favor of

      T&T on the City’s amended complaint, and we affirmed the court’s partial

      summary judgment in favor of T&T on T&T’s counterclaim for the payment of

      maintenance charges assessed against the City. Id. at 513, 515.


[5]   While the summary judgment motions were pending in the trial court, on

      September 11, 2017, the City filed a motion for the appointment of a receiver

      over T&T. In that motion, the City alleged that one of T&T’s board members,

      Walter Timmons, had died the week before, on September 7. And the City

      stated further as follows:


      Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019        Page 5 of 24
        4. Mr. Timmons and his wife, Jacqueline Timmons, have been
        the only Directors serving on T&T’s Board, and they have served
        as the only officers for years. Mr. and Mrs. Timmons also are
        defendants in this civil action with respect to City’s claims of
        breach of fiduciary duty.

        5. Under the circumstances, it is impossible for T&T to proceed
        in this civil action without a functioning Board of Directors and
        an Officer appointed to appear and act for the corporation. T&T
        also is in peril of not being able to discharge its obligations to its
        constituents and the residents living at T&T as a direct and
        proximate result of Mr. Timmons’ untimely death.

        6. Should the City prevail on its nuisance claims,[ 3] it likely will
        render T&T insolvent or in imminent danger of insolvency such
        that it will be unable to pay debts as they become due in the
        ordinary course of business.

        7. A meeting of members must be called, notice given,
        nominations obtained, and an election held to appoint new
        directors and officers to succeed Mr. Timmons and fill vacancies
        on the Board. Without a functioning Board of Directors or
        Officers to direct them, T&T’s attorneys are incapable of
        re[pre]senting the corporation effectively.

        8. The immediate appointment of a receiver over T&T is
        necessary in order to protect City’s rights, but not only to protect
        the City’s rights. Most important, appointment of a receiver is
        necessary to protect the rights of all property owners and to
        assure the people living at T&T that basic services will be
        performed. It is necessary to preserve the corporation from
        failure caused by sudden, unexpected, and un-prepared
        circumstances that have befallen T&T and the Timmons family.


3
  The trial court entered summary judgment in favor of T&T on the City’s nuisance claims a few weeks after
the City had filed this motion.

Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019                            Page 6 of 24
      Appellants’ App. Vol. II at 36.


[6]   On September 26, T&T filed a response stating in relevant part that, following

      Walter Timmons’ death, “the remaining [T&T] board member[s] promptly

      proceeded to elect two (2) new directors, bringing the total board to three (3)

      members as required by its By Laws.” Id. at 41. And on November 20, after

      the trial court’s entry of summary judgment but prior to our opinion on appeal,

      T&T filed a verified petition for appointment of a receiver alleging that the City

      had not paid “maintenance fees, assessments, late charges, interest and attorney

      fees” owed to T&T. Id. at 64. The verified petition alleged further:


              14. That [T&T] is a judgment lien creditor of [the City].

              15. That [I.C. §] 32-30-5-1, et seq. provides for the appointment
              of a Receiver in an action by a creditor to subject any property or
              fund to the creditor’s claim.

              16. That [T&T] is a creditor of [the City] within the meaning of
              [I.C. §] 32-30-5-1, et seq., and seeks to subject [the City]’s
              properties within Towne & Terrace to said lien to recover the
              amounts due it from the [City].

              17. That [I.C. §] 32-30-5-1 provides for the appointment of a
              receiver in actions between persons jointly interested in any
              property or fund.

              18. That [the City] as an owner and [T&T] as a lienholder are
              jointly interested in the properties within Towne & Terrace
              owned by [the City] that are subject to the lien of [T&T].




      Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019         Page 7 of 24
                19. Said judgment further holds that the Towne & Terrace
                properties owned by [the City] are in a state of neglect and
                deterioration, and said properties have been deteriorating and
                continue to deteriorate and to be neglected by [the City].

                20. That [I.C. §] 32-30-5-1 provides for the appointment of a
                receiver in actions when it is shown that the property, fund, rent
                and profits in controversy are in danger of being lost, removed
                or materially injured.

                21. That properties within Towne & Terrace owned by [the City]
                that are subject to the lien of [T&T] are in danger of being lost,
                removed or materially injured due to the continuing neglect and
                deterioration of those properties.


      Id. at 65-66.


[7]   The trial court did not hold a hearing on the cross-motions for the appointment

      of receivers but considered only the parties’ memoranda and a few exhibits. 4 In

      its memorandum in support of the appointment of a receiver over T&T, the

      City asserted additional grounds for the appointment, including “T&T’s

      flagrant disregard of the law and its own governing documents.” Appellee’s

      App. Vol. II at 61. On September 12, 2018, the trial court granted both

      motions, and it found and concluded in relevant part as follows:


                On July 3, 2018, the decision of this Court [on summary
                judgment and partial summary judgment] was affirmed. . . .
                [T&T] became a judgment lien creditor of the City.




      4
          The exhibits included affidavits and photographs.

      Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019             Page 8 of 24
        [T&T] estimated that the City owed One Hundred Nine
        Thousand Eighty Dollars and Zero Cents ($109,080.00) for the
        years 2012 through 2016 in maintenance fees and assessments.
        The amount due for 2017 and 2018 to date has not been
        determined. That issue remains for finalization at trial. After the
        decision from the appellate court was rendered, the City tendered
        $109,080.00 to the Marion County Clerk to be held in escrow
        until a final order from this Court is issued. [T&T] asks
        the Court to appoint a receiver over all the City’s properties.

                                                  ***

        I.C.§ 32-30-5-1(2) provides for the appointment of a receiver in
        actions between persons jointly interested in any property or
        fund. Both the City and the lienholder [T&T] are jointly
        interested in the properties within Towne [&] Terrace that are
        owned by the City.

        I.C.§ 32-30-5-1(3) provides for the appointment of a receiver in
        all actions when it is shown that property, funds, rent, and profits
        are in danger of being lost, removed, or materially injured. The
        City’s properties are in a state of serious neglect and
        deterioration. Said properties are continuing to deteriorate and
        continue to be neglected by the City. The properties within
        Town [&] Terrace owned by the City are in danger of being lost,
        removed, or materially injured pursuant to subsection (3). The
        current condition of City-owned properties, within the
        community, have made it more difficult for [T&T] to recover the
        amounts owed to it for assessments and maintenance fees from
        all current homeowners.

        Therefore, the Court finds that [T&T]’s motion has merit. A
        receiver should be appointed to receive, manage, protect, request
        demolition of and/or sell, if necessary, all real estate owned by
        the City, encumbered by said liens of [T&T]. All proceeds from
        the sale of any properties, approved by the Court, should be
        held and/or used by the receiver for the benefit of the parties.

Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019         Page 9 of 24
        Wherefore, the Motion for Appointment of Receiver by [T&T] is
        hereby Granted.

                                                  ***

                   The City’s Request for Appointment of Receiver

                                                  ***

        I.C. § 32-30-5-1(5) gives the Court the authority to appoint a
        receiver when a corporation: (A) has been dissolved; (B) is
        insolvent; (C) is in imminent danger of insolvency; or (D) has
        forfeited its corporate rights. The City did not prevail on its
        nuisance claims in its interlocutory request for relief from this
        Court’s judgment. The City’s position that [T&T] was insolvent,
        or in immediate danger of insolvency based on contingent or
        unliquidated damages due to a likely assessment of damages
        drawn from alleged nuisance violations against [T&T], is no
        longer a valid basis for the appointment of receiver, pursuant to
        Indiana law.

        The City argued that despite [T&T]’s success on appeal on some
        issues, most of the privately-owned properties at the complex are
        also in very bad condition. . . .

        The City also claimed that [T&T] had not previously demanded
        that residents, who reside in non-City owned properties, pay their
        own past due and uncollected maintenance fees and assessments.
        The City argued that lack of revenue, principally needed to
        maintain the common areas, had significantly contributed to the
        overall deterioration of the complex. The City believed that
        unsafe and deteriorated buildings, frequent squatters, and
        unrestrained criminal activity at Town [&] Terrace were not
        solely due to poorly maintained City properties, but that the
        alarming state of building disrepair, crime, and city ordinance
        violations are the fault of all property owners at Town [&]
        Terrace. The City made no specific reference to the Indiana
Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019      Page 10 of 24
        Unsafe Building Code in its pleadings or brief, but asked the
        Court to appoint a receiver to deal with the entire state of affairs
        at Town [&] Terrace including remediation and/or demolition of
        all privately held properties.

        I.C. § 36-7-9-1 provides receivership remedies for rehabilitation of
        unsafe buildings. This portion of the act applies to actions
        brought by consolidated cities, counties, and other municipalities
        that have adopted ordinances for building habitability and
        building safety under section 3 of this chapter. The City, as a
        consolidated city and county, acting through its code
        enforcement division (now BNS),[] satisfies the definition of
        specific entities that can bring an action of this kind pursuant to
        I.C. § 36-7-9-1 through the enactment of certain local ordinances.
        The Court finds that the City’s request for a receiver to be
        appointed, as part of an ordinance violation case, rests within the
        Indiana Unsafe Building Law.

                                                  ***

        The City originally filed this action as an ordinance violation
        case, which makes I.C. § 36-7-9-4 applicable to the case at bar[.]

                                                  ***

        Pursuant to [I.C. § 36-7-9-20], the receiver would be authorized
        to use management fees and assessments, collected from
        residents, to repair and restore supervised properties. The
        receiver may also use monies received from the sale of any parcel
        of real estate within Town [&] Terrace, for the purposes listed
        above. . . .

        Further, pursuant to I.C. § 32-30-5-1(7), “ample justice to the
        parties” demands that a receiver be appointed over all property
        within Towne [&] Terrace. Both the City and [T&T], as home
        owners, have a responsibility to participate in revitalization


Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019        Page 11 of 24
        and security of this community. Both the City and [T&T] will be
        responsible to pay the receivers for services. A public-private
        partnership must be commenced to rebuild and recreate a safe
        and thriving [T&T] neighborhood.

        In the interim, while the parties argued for the appointment of
        receivers, the Court ordered a thorough building structure
        inspection and real estate appraisal of all properties owned by the
        City. The final reports of those evaluations are not yet due.

        The entire complex of buildings in Town [&] Terrace is in a state
        of disrepair. The neighborhood is rife with crime. Many of the
        buildings have been abandoned and are vacant. The common
        areas also need to be upgraded, repaired, and restored. The
        remaining residents of Towne [&] Terrace live in fear.
        Deteriorated properties and abandoned real estate have been an
        inducement and a venue for assaults on law-abiding residents at
        Towne [&] Terrace such as rape, assault, narcotics activity,
        arson, armed robbery and homicide. These and other
        undesirable activities occurring at Towne [&] Terrace give the
        Court ample authority based on the directives in I.C. § 32-30-5-
        1(7) and I.C.§ 36-7-9-20, in addition to other local ordinance and
        code violations, to grant the City’s motion for appointment of
        receiver.

        Therefore, the Court finds that the City’s Motion for
        Appointment of Receiver has merit. A receiver should be
        appointed to receive, manage, protect, request demolition of
        and/or sell, if necessary, all real estate owned by [T&T], and if
        found to be unsafe, the real property of other condominium
        owners. All proceeds from the sale of any properties, approved
        by the Court, should be held and/or used by the receiver for the
        benefit of the parties.

        The City’s Motion for Appointment of Receiver over all
        properties within Towne and Terrace, including the common
        areas, is hereby Granted.

Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019       Page 12 of 24
                Wherefore, the Court having found that both motions are
                meritorious and should be granted, hereby, enters a Joint Order
                for Appointment of Receiver for both parties, to wit: the
                property owned by the City, for all properties owned and
                managed by [T&T] directors, and for all privately held properties
                within this complex.


      Appellants’ App. Vol. III at 3-13. This interlocutory appeal ensued. 5


                                         Discussion and Decision
                                                     T&T’s Appeal

[8]   T&T contends that the trial court abused its discretion when it granted the

      City’s motion to appoint a receiver over T&T and properties within Towne &

      Terrace owned by nonparties. Our scope of review of an interlocutory order

      appointing a receiver is limited. Schrenker v. State, 919 N.E.2d 1188, 1191 (Ind.

      Ct. App. 2010), trans. denied. We will not weigh the evidence on appeal, and we

      must construe the evidence along with all reasonable inferences in favor of the

      trial court’s decision. Id. The appointment of a receiver is in the sound

      discretion of the trial court, and therefore our standard of review is that of abuse

      of discretion. Id.


[9]   Still, the appointment of a receiver is an


                “extraordinary and drastic remedy to be exercised with great
                caution. The action affects one of man’s most cherished and
                sacred rights guaranteed by the United States Constitution—the



      5
          This is an interlocutory appeal as of right pursuant to Indiana Appellate Rule 14(A)(6).

      Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019                             Page 13 of 24
               right to be secure in his property. This right is fundamental to
               every society in which men are free.”


       Id. at 1191-92 (quoting Crippin Printing Corp. v. Abel, 441 N.E.2d 1002, 1005

       (Ind. Ct. App. 1982) (internal quotation omitted)).


[10]   The appointment of a receiver is a statutorily granted authority that must be

       strictly construed, and it cannot be sustained unless proper statutory grounds for

       the appointment are sufficiently shown. Id. at 1192. As our Supreme Court has

       stated, “It is, we think, axiomatic that a receiver should not be appointed if the

       plaintiff has an adequate remedy at law or by way of temporary injunction.”

       Ziffrin Truck Lines, Inc. v. Ziffrin, 242 Ind. 544, 180 N.E.2d 370, 372 (1962).


[11]   The trial court appointed a receiver over T&T and the properties owned by

       nonparties on two separate statutory grounds, namely, the Unsafe Building

       Law and Indiana Code Section 32-30-5-1(7). T&T contends that the trial court

       abused its discretion when it appointed a receiver because there is no evidence

       to support a receivership on either ground. We address each contention in turn.


                                               Unsafe Building Law

[12]   As we noted in Towne & Terrace I, the trial court in its summary judgment order

       stated that


               [T&T] owns only the common areas of the Towne & Terrace
               condominium property. [T&T] owns no lots, individual units or
               any other property on the site. [T&T] has no direct control over
               the individual dwellings within the condominium community.



       Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019         Page 14 of 24
               Further, the directors of [T&T] have no police powers, no
               authorization to enforce laws, and no control over what happens
               inside a particular residence. The directors have no authority to
               correct operations, management, or maintenance issues. Only
               the owners can make such changes and the City did not sue any
               individual owners in this case.


       106 N.E.3d at 512 (citation to record omitted).


[13]   As a general matter, the Unsafe Building Law (“the UBL”) allows

       municipalities and counties to regulate the use of property in order to protect

       the public health, safety, and welfare. Crum v. City of Terre Haute, 812 N.E.2d

       164, 166 (Ind. Ct. App. 2004). Here, because T&T controlled only the common

       areas of the complex, and there is no evidence that the common areas contained

       any buildings or structures, the first relevant section of the UBL is Indiana Code

       Section 36-7-9-4(c) (2018), which provides in relevant part:


               For purposes of this chapter, a tract of real property that does not
               contain a building or structure . . . is considered an unsafe
               premises if the tract of real property is:

               (1) a fire hazard;

               (2) a hazard to public health;

               (3) a public nuisance; or

               (4) dangerous to a person or property because of a violation of a
               statute or an ordinance.




       Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019        Page 15 of 24
[14]   Indiana Code Section 36-7-9-5 provides that a city’s enforcement authority may

       issue an order requiring action relative to any unsafe premises, and the order

       must allow at least ten days to accomplish the required action. And Indiana

       Code Section 36-7-9-7 provides in relevant part that a hearing must be held

       relative to an order issued under Indiana Code Section 36-7-9-4(c). Only after

       the final date of an order requiring action under Section 36-7-9-5 may a city’s

       enforcement authority initiate a civil action under Section 36-7-9-17, and “a

       court acting under section 17 of this chapter may appoint a receiver for the

       unsafe premises,” Ind. Code § 36-7-9-20.


[15]   On appeal, T&T asserts, and we agree, that the City did not comply with the

       requirements of the UBL. Indeed, the City did not assert that the UBL was a

       basis for the appointment of a receiver. It is undisputed that the City, through

       its enforcement authority, did not issue an order under Section 5 of the UBL

       requiring T&T to take any action; no hearing was held; and the City did not

       initiate a civil action under Section 17 of the UBL. Nevertheless, the trial court

       construed the City’s request for a receiver, “as part of an ordinance violation

       case,” to “rest[] within the [UBL].” Appellants’ App. Vol. III at 8. The only

       ordinance violation alleged in the City’s amended complaint was for nuisance,

       and that issue was resolved in T&T’s favor on summary judgment. In any

       event, the trial court did not find that the common areas of Towne & Terrace




       Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019      Page 16 of 24
       are “unsafe premises” as defined by Indiana Code Section 36-7-9-4(c). 6 There is

       simply no factual basis for the appointment of a receiver over T&T pursuant to

       the UBL, and we reverse the trial court’s appointment of a receiver on that

       ground.


                                      Indiana Code Section 32-30-5-1(7)

[16]   The trial court also appointed a receiver over T&T pursuant to Indiana Code

       Section 32-30-5-1(7), which is Indiana’s general receivership statute. That

       statute provides in relevant part that a receiver may be appointed in cases “as

       may be provided by law or where, in the discretion of the court, it may be

       necessary to secure ample justice to the parties.” I.C. § 32-30-5-1(7). However,

       again, “a receiver should not be appointed if the plaintiff has an adequate

       remedy at law or by way of temporary injunction.” Ziffrin Truck Lines, Inc., 180

       N.E.2d at 372.


[17]   Here, in support of appointing a receiver over T&T under this statute, the trial

       court stated,


                pursuant to I.C. § 32-30-5-1(7), “ample justice to the parties”
                demands that a receiver be appointed over all property within
                Towne [&] Terrace. Both the City and [T&T], as home owners,
                have a responsibility to participate in revitalization and security
                of this community. Both the City and [T&T] will be responsible



       6
         To the extent the City contends that the trial court was authorized to appoint a receiver under Indiana
       Code Section 36-7-9-20(b), the City does not direct us to any evidence that the common areas of Towne &
       Terrace are “unsafe premises.” And the City’s claim that “[r]eliance on the [UBL] was not erroneous”
       because the trial court anticipated that the City would comply with “the procedures set forth” in the UBL at
       “a future date” is not well taken. Appellee’s Br. at 23.

       Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019                              Page 17 of 24
               to pay the receivers for services. A public-private partnership
               must be commenced to rebuild and recreate a safe and thriving
               [T&T] neighborhood.

                                                  ***
               The entire complex of buildings in Town [&] Terrace is in a state
               of disrepair. The neighborhood is rife with crime. Many of the
               buildings have been abandoned and are vacant. The common
               areas also need to be upgraded, repaired, and restored. The
               remaining residents of Towne [&] Terrace live in fear.
               Deteriorated properties and abandoned real estate have been an
               inducement and a venue for assaults on law-abiding residents at
               Towne [&] Terrace such as rape, assault, narcotics activity,
               arson, armed robbery and homicide. These and other
               undesirable activities occurring at Towne [&] Terrace give the
               Court ample authority based on the directives in I.C. § 32-30-5-
               1(7) and I.C.§ 36-7-9-20, in addition to other local ordinance and code
               violations, to grant the City’s motion for appointment of receiver.


       Appellants’ App. Vol. III at 12 (emphases added).


[18]   The undisputed evidence shows that T&T does not manage or control any

       buildings or structures in Towne & Terrace. It is also undisputed that the City’s

       properties in Towne & Terrace have either been demolished or are vacant and

       boarded up. The trial court does not cite to any evidence in the record that the

       common areas managed by T&T are so deteriorated that they contribute to the

       “undesirable activities” at the complex, and nothing in the record supports a

       determination that T&T has violated a local ordinance or state statute. Id.

       Indeed, just as we noted in Towne & Terrace I, here, “at no point did the City

       designate evidence indicating that [T&T]’s use or maintenance of the common



       Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019           Page 18 of 24
       areas amounted to a nuisance.” 106 N.E.3d at 513. Thus, the evidence does

       not support the trial court’s reasoning for appointing a receiver over T&T.


[19]   Still, on appeal, the City maintains that the appointment of a receiver over T&T

       was warranted because T&T “denied the City its right to vote at the annual

       Members’ meeting in violation of the Indiana Code” and because T&T

       “refus[ed] to permit inspection of [T&T’s] records.” Appellee’s Br. at 17, 20.

       But, as shown by its recent petition seeking an injunction against T&T to

       require T&T to permit the it “to attend, participate in, and vote on all issues”

       that arise at its annual meeting, which petition is still pending before the trial

       court, the City has a remedy other than a receivership to resolve these issues.

       Appellee’s App. Vol. V at 2. Accordingly, this alleged ground for the

       appointment of a receiver is not valid. See Ziffrin Truck Lines, Inc., 180 N.E.2d at

       372.


[20]   In sum, the power to appoint a receiver should be exercised only in a clear case

       of extreme necessity. Schrenker, 919 N.E.2d at 1192. Here, the only evidence

       cited by the trial court in support of the appointment of a receiver over T&T is

       the need for the common areas to be “upgraded, repaired, and restored.”

       Appellants’ App. Vol. III at 12. But there is no evidence in the record to show

       that the condition of the common areas warrants the appointment of a receiver.

       We reverse the trial court’s order appointing a receiver over T&T. Finally, to

       the extent the trial court’s order purports to appoint a receiver over properties

       owned by nonparties, T&T is correct that the trial court did not have

       jurisdiction to do that, and we also reverse the court’s judgment in that respect

       Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019         Page 19 of 24
       accordingly. See McCollum v. Malcomson, 171 Ind. App. 527, 358 N.E.2d 177,

       180 (1976) (holding that “where a receiver seeks to acquire property in the

       possession of a stranger to the litigation, either the complainant therein must

       first amend the complaint to make the outsider a party or the receiver must

       proceed against the outsider by ordinary civil action”).


                                            The City’s Cross-appeal

[21]   On cross-appeal, the City contends that the trial court abused its discretion

       when it granted T&T’s verified motion to appoint a receiver over the City’s

       properties at Towne & Terrace. In particular, the City maintains that the “trial

       court lacks the power to appoint a receiver over real property owned by a

       political subdivision”; that there is no evidence to support the appointment of a

       receiver over the City’s properties; and that the appointment of a receiver

       violates Article 3, Section 1 of the Indiana Constitution. Appellee’s Br. at 30.

       We address each contention in turn.


                                             Trial Court’s Authority

[22]   In support of its contention that the trial court “lacks the power to appoint a

       receiver over real property owned by a political subdivision,” the City asserts

       that “Indiana law does not permit liens on government property.” Appellee’s

       Br. at 30, 32. The City appears to suggest that the appointment of a receiver

       over the properties constitutes an equitable lien and, as such, is prohibited. But

       the City neither expressly makes that argument nor supports that argument with

       citation to relevant authority. In sum, the City does not make cogent argument


       Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019       Page 20 of 24
       to support its contention that the trial court lacked authority to appoint a

       receiver over the properties, and the issue is waived.


                                               Insufficient Evidence

[23]   The City next contends that the appointment of a receiver over its property “is

       inappropriate and not supported by the facts at bar.” Appellee’s Br. at 32.

       Again, the trial court cited two statutory grounds as support for the

       appointment of a receiver over the City’s properties, namely, Indiana Code

       Section 32-30-5-1(2) and (3). In particular, the court found in relevant part as

       follows:


               I.C.§ 32-30-5-1(2) provides for the appointment of a receiver in
               actions between persons jointly interested in any property or
               fund. Both the City and the lienholder [T&T] are jointly
               interested in the properties within Towne [&] Terrace that are
               owned by the City.

               I.C.§ 32-30-5-1(3) provides for the appointment of a receiver in
               all actions when it is shown that property, funds, rent, and profits
               are in danger of being lost, removed, or materially injured. The
               City’s properties are in a state of serious neglect and
               deterioration. Said properties are continuing to deteriorate and
               continue to be neglected by the City. The properties within
               Town [&] Terrace owned by the City are in danger of being lost,
               removed, or materially injured pursuant to subsection (3). The
               current condition of City-owned properties, within the
               community, have made it more difficult for [T&T] to recover the
               amounts owed to it for assessments and maintenance fees from
               all current homeowners.


       Appellants’ App. Vol. III at 4-5.


       Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019         Page 21 of 24
[24]   In its brief on appeal, the City asserts that T&T “must show either a clear legal

       right in itself to a property in controversy, or that it has some lien upon or

       property right in it, or that it is a fund out of which it may have satisfaction in

       order to obtain appointment of a receiver.” Appellee’s Br. at 32 (citing Rubber

       Co. v. Duncan, 86 Ind. App. 218, 155 N.E. 625, 626 (1927)). 7 In essence, the

       City maintains that, without valid liens over the City’s property, T&T cannot

       show any grounds for the appointment of a receiver. But neither of the two

       statutory grounds cited by the trial court as support for the appointment of a

       receiver over the City’s properties requires a lien. 8 Thus, the City’s argument

       on this issue misses the mark.


[25]   In sum, the City asserts that T&T does not have valid liens on the City’s

       properties and cannot, therefore, seek the appointment of a receiver. Without

       citation to authority, the City states that the “[a]ppointment of a receiver is an

       equitable remedy imposed over the property of a debtor to secure payment of its

       obligations.” Appellee’s Reply Br. at 6. But the City ignores the relevant

       statutory grounds for the appointment of a receiver which do not require a lien.

       And the City does not address the trial court’s findings that the City’s properties

       within Towne & Terrace “are in a state of serious neglect and deterioration,”

       “continue to be neglected by the City,” and “are in danger of being lost,




       7
         Rubber Co. addresses only one subsection of the relevant statute, namely, the predecessor statute to Indiana
       Code Section 32-30-5-1(7), which is not relevant to this issue.
       8
         Indiana Code Section 32-30-5-1(2) requires a showing that the parties are jointly interested in a property,
       and the City acknowledges that T&T has a security interest in the City’s Towne & Terrace properties.

       Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019                                 Page 22 of 24
       removed, or materially injured pursuant to subsection (3).” Appellants’ App.

       Vol. III at 4. Because the City does not challenge those findings, which support

       an independent basis for the trial court’s order without any reference to liens,

       the City has waived review of that basis for the appointment of a receiver over

       its property. We cannot say that the trial court abused its discretion when it

       appointed a receiver over the City’s properties.


                                               Separation of Powers

[26]   Finally, the City contends that the appointment of a receiver over its properties

       violates the separation of powers doctrine set out in Article 3, Section 1 of the

       Indiana Constitution. However, we note that the City made no argument

       under the Indiana Constitution to the trial court, and the issue is waived.

       Arnold v. Butts, 92 N.E.3d 1123, 1127 (Ind. Ct. App. 2018). Waiver

       notwithstanding, our Supreme Court has held that Article 3, Section 1 “relates

       solely to the state government and officers charged with duties under one of the

       separate departments of the state, and not to municipal governments and

       officers.” Willsey v. Newlon, 161 Ind. App. 332, 316 N.E.2d 390, 391-92 (1974).

       Accordingly, the City cannot prevail on this claim.


                                                     Conclusion

[27]   The trial court erred when it appointed a receiver over T&T and nonparties,

       and we reverse the trial court on that issue. The City has not carried its burden

       on appeal to persuade us that the trial court abused its discretion when it

       appointed a receiver over the City’s properties in Towne & Terrace, and we


       Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019       Page 23 of 24
       affirm the trial court on that issue. In any event, the City has at its disposal the

       means, other than the appointment of a receiver, to work toward its stated goal

       of implementing a revitalization plan for Towne & Terrace and the surrounding

       area, including bringing actions against property owners for ordinance

       violations, injunctions, and, where warranted, eminent domain.


[28]   Affirmed in part and reversed in part.


       Baker, J., and Robb, J., concur.




       Court of Appeals of Indiana | Opinion 18A-OV-2310 | April 16, 2019        Page 24 of 24
