Town of Lapel, Indiana v. City of Anderson, Indiana, 17 N.E.3d 330

Background

Town of Lapel enacted a super-voluntary annexation ordinance (May 16, 2013) annexing ~57 acres (the Territory) in Madison County that lay more than one mile from City of Anderson’s limits and intersected Anderson’s prior proposed Southwest Annexation.
Anderson had earlier considered, but rejected, its own Southwest Annexation; Lapel’s annexation foreclosed Anderson from pursuing that plan later.
Anderson filed a declaratory judgment action (Aug. 9, 2013) seeking declarations that Lapel’s ordinance was invalid (contiguity and Home Rule Act violations).
Lapel moved for summary judgment; the trial court granted summary judgment to Anderson and denied Lapel’s motion; Lapel appealed.
Applicable statutory scheme: annexation challenges are generally limited to remonstrance or statutory appeal; remonstrance is unavailable for super-voluntary annexations and the pre-amendment statute limited appeals to nearby landowners (within 1/2 mile).
The Court of Appeals considered whether Anderson (a municipality outside the statutory bounds) had standing to seek declaratory relief under the limited judicial exceptions (fraud, discrimination, or violation of substantial rights).

Issues

Issue	Plaintiff's Argument (Anderson)	Defendant's Argument (Lapel)	Held
Whether Anderson has standing to pursue declaratory relief challenging Lapel’s annexation	Anderson argued it was affected by the ordinance and could seek relief under the Declaratory Judgment Act and Home Rule Act because the Territory is not contiguous and the annexation impaired municipal interests	Lapel argued annexation challenges are limited to statutory remonstrance/appeal; Anderson is not a remonstrator or statutorily eligible appellant and did not plead fraud/discrimination or show violation of substantial rights	Court held Anderson lacks standing; remonstrance/appeal are exclusive remedies and Anderson did not meet narrow exceptions (fraud, discrimination, substantial-rights violation)
Whether alleged Home Rule Act violations provide an independent cause of action for Anderson	Anderson contended Home Rule problems (contiguity) permit declaratory relief	Lapel contended Home Rule does not create a separate judicial remedy outside statutorily prescribed remonstrance/appeal	Court held alleged Home Rule violations do not confer independent standing; plaintiff must fit statutory route or the narrow exceptions
Whether speculative future interest in annexed territory creates a substantial-rights violation	Anderson argued it might later change course and seek the Territory, so its interests were harmed	Lapel argued mere speculation does not amount to impairment of substantial rights	Court held speculative future interest is insufficient to show substantial-rights impairment
Whether summary judgment in Anderson’s favor was proper	Anderson contended no genuine issue of material fact and was entitled to judgment as a matter of law	Lapel contended the trial court erred because Anderson lacked standing as a matter of law	Court reversed: summary judgment for Anderson was erroneous; directed entry of summary judgment for Lapel

Key Cases Cited

Bradley v. City of New Castle, 764 N.E.2d 212 (Ind. 2002) (limits judicial review of annexation to statutory remonstrance/appeal except for fraud, discrimination, or severe procedural wrongs violating substantial rights)
City of Boonville v. Am. Cold Storage, 950 N.E.2d 764 (Ind. Ct. App. 2011) (remonstrance is the exclusive annexation challenge; declaratory relief generally unavailable to non-remonstrators)
Madison County Bd. of Comm’rs v. Town of Ingalls, 905 N.E.2d 1022 (Ind. Ct. App. 2009) (county lacked standing to bring declaratory action challenging annexation; remonstrance exclusive)
City of Greenwood v. Town of Bargersville, 930 N.E.2d 58 (Ind. Ct. App. 2010) (municipality may have standing where substantial rights were violated, e.g., annexation within buffer zone implicating statutory consent)
In re Annexation Proposed by Ordinance No. X 01 95, 774 N.E.2d 58 (Ind. Ct. App. 2002) (Bradley bars declaratory review absent the narrow exceptions)
Altevogt v. Brand, 963 N.E.2d 1146 (Ind. Ct. App. 2012) (summary judgment standards and appellate review principles)
City of Hobart v. Chidester, 596 N.E.2d 1374 (Ind. 1992) (annexation is a legislative function; judicial review only as provided by statute)