Town of Cedar Lake, Indiana v. Certain Cedar Lake 2014 Annexation Territory Landowners
85 N.E.3d 643
Ind. Ct. App.2017Background
- In 2014 Cedar Lake adopted ordinances to annex ~2,795 acres (232 parcels) adjacent to the town; fiscal plans projected ~$350,000/year net tax increase but contained no specific development plans.
- Remonstrators (owners of 185 parcels, ~79.7%) filed to set aside the annexation; the trial court held a bench trial in January 2017 and entered detailed findings in February 2017 setting the annexation aside.
- The Town relied on prospective regional projects (Illiana Toll Road, commuter-rail extension, an Amazon facility in nearby Illinois, a proposed freight rail line, and a proposed South Suburban/Peotone airport) and on infrastructure expenditures (water mains extended to the territory) to show the land was “needed and can be used … for its development in the reasonably near future.”
- Remonstrators presented evidence that most of the annexation territory is agricultural, no developers had expressed interest, some land previously held for development had been sold for farming, and no specific development was planned in the next 3–5 years.
- The trial court found (among other things) that the Town presented no specific development plans or developers, the regional projects were speculative with doubtful near-term impact, and therefore the Town failed to meet its statutory burden under Ind. Code § 36-4-3-13(c).
- The Town appealed, arguing (inter alia) the trial court applied the wrong legal standard and insufficient deference to municipal legislative judgment; the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument (Town) | Defendant's Argument (Remonstrators) | Held |
|---|---|---|---|
| Proper standard of review in remonstrance cases | Apply a "rational-basis"/arbitrary-and-capricious review to the annexation decision (more deferential to municipality) | Trial court must be reviewed for clear error on factual findings in remonstrance; not a direct review of legislative ordinance | Court: Review remonstrance judgments for clear error; rational-basis is inappropriate here |
| Whether Town met burden that territory is “needed and can be used … in the reasonably near future” | Investments, regional project plans, demographic trends, and fiscal projections provide a rational basis to show territory will be used | Lack of concrete development plans, no developer interest, agricultural use continuing, and regional projects speculative show Town failed burden | Court: Findings that projects were speculative, no developers or concrete plans, and territory unlikely to be developed in near future are supported; Town failed burden |
| Required deference to municipal legislative judgment | Trial court should give substantial deference and not reweigh evidence; Town’s legislative choice should stand if rational | Deference required but court must enforce statutory requirements; deference does not bar invalidating annexation when burden not met | Court: Substantial deference owed, but trial court did not apply wrong standard and appropriately required proof of statutory elements |
| Remedy / effect of judgment | Town sought reversal | Remonstrators sought to bar annexation | Court: Affirmed trial court; annexation set aside and Town barred from attempting annexation of territory for 4 years unless alternative statutory route followed |
Key Cases Cited
- City of Carmel v. Steele, 865 N.E.2d 612 (Ind. 2007) (framework for annexation/remonstrance and legislative nature of annexation)
- Rogers v. Municipal City of Elkhart, 688 N.E.2d 1238 (Ind. 1997) (municipality bears burden to prove statutory compliance for annexation)
- Chidester v. City of Hobart, 631 N.E.2d 908 (Ind. 1994) (bench-trial findings standard and court’s role in remonstrance proceedings)
- Town of Fortville v. Certain Fortville Annexation Territory Landowners, 51 N.E.3d 1195 (Ind. Ct. App. 2016) (requires clear-error review of trial court judgment in remonstrance cases)
- City of Fort Wayne v. Certain Southwest Annexation Area Landowners, 764 N.E.2d 221 (Ind. 2002) (annexation is a legislative function and courts must afford deference to municipal judgment)
- Abell v. City of Seymour, 275 N.E.2d 547 (Ind. 1971) (historical reference regarding long-running speculative projects)
- Smith v. Dermatology Assocs. of Fort Wayne, P.C., 977 N.E.2d 1 (Ind. Ct. App. 2012) (standards for reversing a negative judgment)