Marilyn Odendahl for www.theindianalawyer.com

The Indiana Court of Appeals has reversed another annexation ruling, this time finding the town of Whitestown can move forward with plans to incorporate a portion of Perry Township.

In Town of Whitestown, Indiana v. Rural Perry Township Landowners, 29A05-1409-MI-437, the appellate panel held the trial court had too narrowly interpreted Indiana’s annexation statute. Specifically, the Court of Appeals reviewed Indiana Code subsection 36-4-3-13(c) and 36-4-3-13(e)(2)(B).

Remonstrators in Boone County challenged Whitestown’s plans to annex 621.87 acres in the adjacent Perry Township. In August 2014, the Hamilton Superior Court agreed with the remonstrators that Whitestown had not demonstrated it needed and could develop the proposed annexation area in the “reasonably near future,” as required by I.C. 36-4-3-13(c).

The Court of Appeals pointed out that while previous appellate panels have established the additional tax revenues cannot be the sole reason for the annexation, the annexation statutes should not be used to impede a municipality’s future plans for growth.

“…the test prescribed under the statute is not whether the annexing municipality can make do without the territory it seeks to annex,” Judge L. Mark Bailey wrote for the court. “The statutory test, as interpreted by Indiana’s appellate courts, is whether Whitestown could use the Annexation Area for a purpose other than increased collection of property taxes in the reasonably near future. The trial court’s findings recognized that this was the case but construed the language of the statute too narrowly in light of the deference properly accorded under our case law.”

The Court of Appeals noted the testimony about the town’s rapid growth and Whitestown’s efforts to encourage, predict and plan for that growth. The town also presented plans for the infrastructure which would have to run through the unincorporated area in order to connect the municipality with the new waste water treatment plant currently under construction.

However, the Court of Appeals characterized the trial court as wholly adopting the remonstrators’ arguments and arriving at conclusion that did not acknowledge the evidence that Whitestown had met the statutory requirements on the need and use of the annexation area.

“…we remind trial courts of both the deferential standard accorded to annexing municipalities, and the risks associated with wholesale adoption of a party’s strongly one-sided proposed findings and conclusions,” Bailey wrote.

The Court of Appeals ruled the trial court had erred in it interpretation of the Indiana Code and in its application of the statutory provisions to its findings of fact. It remanded the case with instructions to enter judgment in favor of Whitestown.

The Whitestown reversal is similar to the statutory interpretation offered in Town of Fortville v. Certain Fortville Annexation Territory Landowners, 30A01-1410-MI-442.

This July 2, 2015, decision from the Court of Appeals concluded the Hancock Circuit Court erred by applying the wrong evidentiary standard when analyzing Fortville’s need and plans for the annexation area. The trial court ruled Fortville did not meet its statutory burden because it did not have any plans for any physical construction in the near future.

But the Court of Appeals noted, Fortville was providing water and emergency services to the unincorporated area and intended to expand utilities. In addition, the town wanted to manage the growth that was occurring in areas to the north and west of the annexation parcel.

The Court of Appeals held non-physical brick and mortar development uses should be considered when determining whether the municipality fulfills the requirements of I.C. 36-4-3-13( c)(2). Limiting the statute to physical construction or development, the court concluded, would result in bad policy and likely harm both the municipality and the area to be annexed.

Judges John Baker, Melissa May and Paul Mathias comprised the panel for the Fortville decision. Along with Bailey, the other judges on the Whitestown panel were Patricia Riley and Michael Barnes.