City of Indianapolis v. Kahlo
2010 Ind. App. LEXIS 2217
| Ind. Ct. App. | 2010Background
- Plaintiffs Kahlo and Elder sue the City, the Metropolitan Development Commission, and the Indiana Sports Corporation over the 2007 Amendment to the 1985 Project Agreement for Square 88 (Union Station Center plan).
- The 1985 Agreement obligated the ISC to develop an 88,000-square-foot plaza, a parking garage, and an office building on Square 88.
- The 1985 Agreement also included a 30-year restrictive covenant requiring plaza use for public benefit with a buyout provision.
- In 2007, the City and ISC amended the Agreement to reduce the plaza to 10,000 square feet and extended the covenant term to perpetuity upon payment.
- Plaintiffs allege improper modification procedures under IC 36-7-15.1, improper disposition of property under IC 36-1-11-3, and seek declaratory, injunctive, and monetary relief.
- The trial court treated the motion as summary judgment; it denied, and the Court of Appeals granted interlocutory review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiffs have standing to sue. | Kahlo/Elder are third-party beneficiaries. | They are not parties to the covenant, lacking standing. | Plaintiffs have standing as third-party beneficiaries. |
| Whether the 1985 Agreement is a redevelopment plan or a project agreement. | The 1985 Agreement is a redevelopment plan under IC 36-7-15.1-8. | The agreement is a project agreement under IC 36-7-25-5. | The 1985 Agreement is a project agreement, not a redeve lopment plan. |
| Whether the 2007 Amendment triggered the buyout provision of the restrictive covenant. | Amendment terminations/terminations may trigger buyout. | Amendment neither terminates nor triggers buyout; it merely alters terms. | Amendment did not terminate the covenant; no buyout triggered. |
| Whether the 2007 Amendment required City-County Council approval under IC 36-1-11-3. | Disposal of property required council approval. | Disposal did not apply because conveyance was by the Commission to the ISC. | Disposal rules did not apply; proper party conveyed title. |
Key Cases Cited
- Cain v. Griffin, 849 N.E.2d 507 (Ind. 2006) (third-party beneficiary rights require intent to benefit the third party)
- King v. Ebrens, 804 N.E.2d 821 (Ind. Ct. App. 2004) (restrictive covenants construed in favor of free use of property)
- Founds of E. Chic., Inc. v. City of E. Chic., 927 N.E.2d 900 (Ind. 2010) (standing requires a personal stake and direct injury)
- Niezer v. Todd Realty, Inc., 913 N.E.2d 211 (Ind.Ct.App.2009) (contract interpretation is a question of law on summary judgment)