F:\29268 Ind Law Rev 48-4\48 masthead.wpd


SURVEY OF RECENT REPORTED CASES IN
REAL PROPERTY LAW

BRIAN C. CRIST*
AARON AFT**

GREGORY C. TOUNEY***

INTRODUCTION
This Article examines the reported decisions during the survey period1 of the

Indiana Supreme Court (hereinafter the “Supreme Court”), Court of Appeals of
Indiana (hereinafter the “Court of Appeals”), and the Indiana Tax Court
(hereinafter the “Tax Court”) concerning real property issues.

I. LIENS AND FORECLOSURES
During the survey period, the Court of Appeals published opinions in five

cases that concerned the establishment, priority and foreclosure of real property
liens.  

A. Subordination Agreements and Modification of Lien Priority
In Co-Alliance, LLP v. Monticello Farm Service, Inc.,2 the Court of Appeals

considered the impact of a subordination agreement between creditors with
different lien priorities.3  Co-Alliance arose from certain agricultural borrowers’
pledge of their 2010 crops and other farm products and equipment as collateral
to secure loans from three different creditors, whose security interests were
perfected in the order of first creditor, second creditor, and third creditor
(collectively, the “Creditors”).4  On June 25, 2010, first creditor and third
creditor entered into an agreement (the “Additional Finance Agreement”)

* Brian C. Crist is a partner in Ice Miller LLP’s real estate section.  He received a B.A. in
History and Economics from the University of Missouri in 1994 and his J.D. from Vanderbilt
University in 1997.

** Aaron Aft is an associate attorney in Ice Miller LLP’s real estate section.  He received his
B.A. in Philosophy from Indiana University, Bloomington in 2004 and his J.D. from the Indiana
University Maurer School of Law in 2011.

*** Gregory C. Touney is an associate attorney in Ice Miller LLP’s real estate section.  He
received a B.A. in History from the University of Notre Dame in 2007 and his J.D. from the Indiana
University Maurer School of Law in 2011.  The authors wish to thank their friends and colleagues
in the real estate section of Ice Miller LLP, and Ice Miller’s 2014 summer class for their assistance
with this Article.

1. The survey period is from October 1, 2013 to September 30, 2014.
2. 7 N.E.3d 355 (Ind. Ct. App. 2014).
3. Id. at 356.
4. Id. at 357.  First creditor is Farmers Bank & Trust.  Second creditor is Co-Alliance, LLP. 

Third creditor is Monticello Farm Service, Inc.

http://dx.doi.org/10.18060/4806.0046



1396 INDIANA LAW REVIEW [Vol. 48:1395

whereby third creditor agreed to finance the borrowers’ 2010 crops.5  In
consideration of the additional financing, first creditor agreed to subordinate its
interest in the 2010 crops to third creditor’s interests in the 2010 crops.6  The
borrowers filed for bankruptcy in November 2010.7  In December 2011, the
borrowers and first creditor waived their respective rights to claim $181,000 of
the 2010 crop proceeds.8  First creditor then assigned its remaining interest to
second creditor, subject to any rights and interests that third creditor had under
the Additional Finance Agreement.9  Second and third creditors then waived their
interests in any 2010 crop proceeds exceeding $181,000.10  In February 2011,
first creditor sought foreclosure and a monetary judgment against borrowers, also
naming second creditor and third creditor as defendants due to their interests in
the borrowers’ property.11  Third creditor answered the complaint and cross-
claimed against the other creditors.12  Second creditor then counterclaimed
against third creditor, asserting that it had priority over third creditor’s lien.13 
Second and third creditor each moved for partial summary judgment.14  In
October 2012, the trial court determined that third creditor was entitled to the
first claim on first creditor’s $181,000, denied second creditor’s motion, and
ordered the clerk to hold the funds.15  Second creditor appealed the trial courts’
decision.16  

The sole issue the Court of Appeals considered was whether “the trial court
properly determined that the subordination agreement gave [third creditor] first
claim on the remaining $181,000 in 2010 crop proceeds.”17  The Court of
Appeals first observed that “subordination agreements are nothing more than
contractual modifications of lien priorities.”18  In a situation where not all
lienholders participate in a subordination agreement, the Court of Appeals held
a court must interpret a subordination agreement in this situation as a partial
subordination/partial assignment, which is the approach followed by a majority
of states.19  The Court of Appeals also found that the Additional Finance

5. Id. 
6. Id.
7. Id.
8. Id.
9. Id.

10. Id.
11. Id. at 358.
12. Id.
13. Id.
14. Id.
15. Id.
16. Id.  The second creditor appealed the trial court’s initial ruling, but the appeal was

dismissed because the trial court’s order was not yet final.  After the trial court disbursed the
$180,000 to third creditor, second creditor appealed.

17. Id.
18. Id.
19. Id. at 359.



2015] PROPERTY LAW 1397

Agreement between first creditor and third creditor functioned as a partial
assignment of first creditor’s first lien priority status, as it was clear from the
Additional Finance Agreement that third creditor was extending additional credit
to finance borrower’s 2010 crop, in part, based upon first creditor’s assurance
that third creditor would be first in line for payment.20  Accordingly, the Court
of Appeals upheld the trial court’s determination that the Additional Finance
Agreement assigned the maximum amount of the first creditor’s lien to third
creditor.21  By so limiting third creditor’s priority, second creditor was “neither
burdened or benefitted by the subordination agreement.”22   

The Court of Appeals considered but rejected the second creditor’s argument
that the “complete subordination” approach adopted by a minority of states
should be the controlling standard in Indiana, as the complete subordination
standard would have elevated second creditor’s lien to first lien status even
though second creditor gave no consideration for the additional financing and
would have received a windfall.23  

B.  Collection of Costs in Enforcing a Judgment
In Stoffel v. JPMorgan Chase Bank, N.A.,24 the Court of Appeals considered

two questions:  (1) under what circumstances can a creditor collect additional
costs incurred in enforcing a previously entered judgment, and (2) what type of
evidence is admissible to prove the creditor incurred additional costs.25  Stoffel
concerned a lender who filed an action seeking judgment on a promissory note
and foreclosure of a mortgage granted by a property owner.26  Lender and
property owner later filed an Agreed Judgment and Entry and Decree of
Foreclosure (hereinafter the “Judgment”) granting the lender a personal judgment
against the property owner in the amount of $139,907.82.27  The Judgment
further granted lender the right to collect other costs incurred from the time that
lender and property owner agreed upon the Judgment to the date of the sheriff’s
sale.28  The Judgment was assigned to a new lender that credit bid the Judgment
and additional costs incurred for a total of $152,121.72, and purchased the
property at the sheriff’s sale with the credit bid.29  The new lender then filed its
satisfaction and release of the Judgment with the trial court.30  Property owner
later filed a motion to compel the difference between new lender’s credit bid

20. Id.
21. Id. at 361.
22. Id. at 360.
23. Id.
24. 3 N.E.3d 548 (Ind. Ct. App. 2014).
25. Id. at 550.
26. Id.
27. Id. at 550-51.
28. Id. at 550.
29. Id. at 551.
30. Id.



1398 INDIANA LAW REVIEW [Vol. 48:1395

($152,121.72) and the face amount of the Judgment ($139,907.82), asserting that
he was entitled to the difference.31  The trial court held a hearing on the property
owner’s motion and new lender submitted affidavits from its vice president and
attorney to support the additional costs incurred after the Judgment was entered.32 
Over property owner’s objections, the trial court admitted the affidavits and
denied property owner’s motion to compel payment of the alleged surplus.33 
Property owner appealed the trial court’s judgment.34  

The Court of Appeals held that the trial court’s denial of the property
owner’s motion to compel was not a modification of the Judgment since the
terms of the Judgment left certain costs to be determined; thus, the amount of the
Judgment was an issue “squarely before the court” on property owner’s motion
to compel.35  With respect to the admission of new lender’s evidence submitted
to support the additional costs of the Judgment, the Court of Appeals determined
that the trial court abused its discretion.36  The Court of Appeals held the rules
of evidence applied to the property owner’s motion to compel, even though the
proceeding was equitable in nature.37  Applying the rules of evidence, the Court
of Appeals found that new lender’s affidavits were inadmissible hearsay and not
self-authenticating,38 and ordered the trial court to enter judgment in favor of the
property owner for the difference between the credit bid and the face amount of
the Judgment.  

C.  Full Faith and Credit of Foreign Judgments and Indiana Mortgages
In Setree v. River City Bank,39 the Court of Appeals considered whether an

Indiana court must give full faith and credit to a Kentucky court’s judgment with
respect to borrowers’ default under an Indiana promissory note and mortgage.40 
In Setree, borrowers obtained two loans from lender, each secured by separate
mortgages on various properties in Kentucky and Indiana.41  Borrowers obtained
a third loan (hereinafter the “Indiana Loan”) from lender, secured by a new

31. Id.
32. Id.  The affidavits asserted that additional costs had been incurred from the time of the

Judgment to the time the sheriff’s sale was held.  Fannie Mae also submitted a letter from an
individual that stated how the bid had been calculated and that identified post-judgment costs and
advances.  However, the letter did not include information sufficient to discern the affiant’s
employer, job description or address.

33. Id.
34. Id.
35. Id. at 553.
36. Id. at 555.
37. Id.
38. Id. at 554.  Interestingly, new lender did not dispute the affidavits were hearsay and were

not self-authenticating.
39. 10 N.E.3d 30 (Ind. Ct. App. 2014).
40. Id. at 31.
41. Id.



2015] PROPERTY LAW 1399

mortgage on Indiana real estate (hereinafter the “Indiana Property”).42  All of the
loans included cross-default provisions.43  Borrowers failed to pay Indiana real
estate taxes on the Indiana Property, which triggered a default under the Indiana
Loan.44  Lender sued borrowers in Kentucky on the first two loans based upon
the Indiana Loan default and the cross-default provisions of the Kentucky loans.45 
The Kentucky court ruled that borrowers had defaulted under the Indiana Loan
(thus triggering the cross-default provisions of the other loans), and issued its
judgment and decree foreclosing lender’s mortgages on the Kentucky real estate
(the “Kentucky Judgment”).46  Following entry of the Kentucky Judgment, lender
brought a separate lawsuit in Indiana, seeking a judgment and decree of
foreclosure as to the Indiana Property.47  Both parties filed summary judgment
motions with respect to the enforcement of the Kentucky Judgment.48  After a
hearing on each motion, the trial court entered summary judgment in favor of
lender based upon principles of full faith and credit, and concluding that the
Kentucky Judgment was res judicata as to borrowers’ default under the Indiana
Loan and the related mortgage.49   

The Court of Appeals affirmed, concluding the Full Faith and Credit Clause
of the United States Constitution50 and Indiana statute51 required the Kentucky
Judgment be afforded full faith and credit, so long as the Kentucky court had
personal and subject matter jurisdiction over the parties.  The Court of Appeals
also relied upon the United States Supreme Court’s decision in Durfee v. Duke,52
which recognized the principle that once a matter has been fully litigated and
judicially determined in one state, it cannot be retried in another state in litigation
between the same parties.53  The Court of Appeals rejected borrowers’ argument
that real property is unique; thus, requiring an exception to Durfee.  Instead, the
Court of Appeals ruled that the Kentucky Judgment had already conclusively
established Borrowers’ default under the Indiana Loan, and that the Kentucky
Judgment was required to be given full faith and credit in Indiana.54 

After determining the Kentucky Judgment was entitled to full faith and
credit, the Court of Appeals concluded res judicata was not applicable to the
Kentucky Judgment, as the issue before the trial court was “more properly

42. Id.
43. Id.
44. Id. at 32.
45. Id. at 32-33.
46. Id.
47. Id.
48. Id.
49. Id. at 34.
50. U.S. CONST. art. IV, § 1.
51. IND. CODE § 34-39-4-3 (2014).
52. 375 U.S. 106 (1963).
53. Id. at 108.
54. Setree v. River City Bank, 10 N.E.3d 30, 36 (Ind. Ct. App. 2014).



1400 INDIANA LAW REVIEW [Vol. 48:1395

defined as issue preclusion” rather than claim preclusion.55  Issue preclusion
requires the establishment of five elements:  

(1) at least one party to be bound in the second case must have been a
party in the first case; (2) the issue in the second case must be the same
as the issue in the first case; (3) the issue must have been actually
litigated; (4) the issue was actually decided in that action; and (5) the
decision on the issue in the prior action must have been necessary to the
court’s judgment and adverse to the part to be bound.56

Given the same issues between the same parties were decided in the Kentucky
Judgment, the Court of Appeals concluded issue preclusion prevented borrowers
from litigating whether the failure to pay property taxes on the Indiana Property
triggered defaults under the Indiana Loans and Indiana mortgages.57  

D.  Default Judgment in Residential Mortgage Foreclosure
In Kretschmer v. Bank of America, N.A.,58 the Court of Appeals considered

the standard applicable to a motion to set aside a default judgment in a residential
foreclosure action under Rule 60(B) of the Indiana Rules of Trial Procedure.59 
In Kretschmer, the lender obtained a default judgment against a residential
property owner after the property owner failed to answer the lender’s foreclosure
complaint.60  The property owner timely filed a Rule 60(B) motion to set aside
the judgment, claiming that he did not file an answer because he had contacted
the lender’s counsel and “informed someone at [lender’s foreclosure] counsel’s
office that his house was in a short sale” and “was told [by someone in lender’s
foreclosure counsel’s office] not to worry about anything and to continue with
the short sale.”61  As a result of his reliance on the phone conversation, the
property owner alleged that the lender should be collaterally estopped from
obtaining a default judgment, as lender failed to respond to the property owner’s
two short sale offers.62  The trial court denied the property owner’s motion.63

The Court of Appeals reversed the trial court’s decision, holding the property
owner satisfied the requirements of Rule 60(B).64  The Court of Appeals
observed that to set aside a default judgment, a litigant must establish the default
judgment against him was the result of his excusable neglect and must allege a

55. Id. at 37.
56. Id. at 36.
57. Id. at 37.
58. 15 N.E.3d 595 (Ind. Ct. App. 2014).
59. Id. at 597-98.
60. Id. at 598.
61. Id.
62. See id. at 598-99.
63. Id. at 599.
64. Id. at 599-601.



2015] PROPERTY LAW 1401

meritorious claim or defense to the claim.65  The Court of Appeals determined
that property owner’s reliance on a conversation with an unknown representative
from lender’s foreclosure counsel’s office was reasonable grounds for his failure
to file an answer to the lender’s foreclosure complaint.66  As to the meritorious
defense prong of the test, the Court of Appeals observed that “Trial Rule 60(B)
by its terms requires only an allegation of a meritorious defense,” which shows
that “if the case was retried on its merits, a different result would be reached.”67 
Although property owner did not challenge the validity of the debt, mortgage or
failure to pay the note, the Court of Appeals found that property owner had pled
facts sufficient to support a defense of estoppel and contractual sabotage based
upon the conversation with the lender’s foreclosure counsel’s representative, and
the lender’s failure to respond to multiple short sale offers.68  Thus, the Court of
Appeals reversed the trial court’s order denying the property owner’s motion to
set aside default judgment.69

E.  Interpretation of Promissory Note
In John M. Abbott, LLC v. Lake City Bank,70 the Court of Appeals considered

whether the terms of a promissory note were intrinsically ambiguous.71  John M.
Abbott, LLC (“Abbott”) acquired a retail hardware business in 2006 and
financed the acquisition with a loan obtained from lender.72  Abbott executed a
promissory note (the “Note”) in the original principal amount of $150,000 with
a variable interest rate based on a 3.4% spread over Five Year Treasury Bills.73 
The Note indicated the initial rate would be 8.310% per annum, based upon the
current index of the Five Year Treasury Bill (4.910%).74  The Note limited
interest rate changes to no more than once every five years.75  The Note also
provided that the “annual interest rate for this Note is computed on a 365/360
basis; that is, by applying the ratio of the annual interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding.”76  The Note also contained
an acknowledgment that Abbott read and understood the Note terms prior to
signing.77  In June 2009, lender filed a commercial foreclosure action against

65. Id.
66. Id. at 600-01.
67. Id. at 601.
68. Id. at 602.
69. Id.
70. 14 N.E.3d 53 (Ind. Ct. App. 2014).
71. Id. at 57.
72. Id. at 54.
73. Id. at 55.
74. Id.
75. Id.
76. Id.
77. Id.



1402 INDIANA LAW REVIEW [Vol. 48:1395

certain borrowers, including Abbott.78  In response to the foreclosure actions
some of the borrowers, including Abbott, filed a counterclaim seeking
certification as a class and claimed that lender breached the terms of the Note
pertaining to the interest rate.79  The trial court conditionally certified and stayed
the class and later granted a motion to substitute Abbott as class representative.80 
Abbott claimed that lender exceeded the agreed-upon initial interest rate stated
in the Note by applying the 365/360 ratio to determine accrued interest.81  Lender
filed a motion for summary judgment that the trial court granted.82  Abbott
appealed.83 

The Court of Appeals upheld the trial court’s decision.84  The Court of
Appeals observed that the 365/360 method has consistently withstood legal
challenges based upon ambiguity in the federal courts and in other jurisdictions.85 
The Court of Appeals also noted that language used in the Note to explain the
mathematical application of the 365/360 ratio to determine the accrued interest
negates any confusion that would have otherwise been created if the Note had
only mistakenly stated the ratio is to be applied to determine the interest rate.86 
The Court of Appeals stated that the Note’s application of the 365/360 method
to calculate the interest rate “is an imprecision, but not so confusing that a
reasonable person would think that the rate set by the Note would be calculated
using something other than the 365/360 method,” and found that “[i]t is clear that
the term being defined is not the annual interest rate but rather the method of
computing regular interest payments.”87  Accordingly, the Court of Appeals
found the Note was not ambiguous as a matter of law.88

II.  PROPERTY TAXES AND TAX SALES
During the survey period, the Tax Court and the Court of Appeals published

several opinions regarding the assessment of real property taxes and the
applicability of certain real property tax exemptions to specific circumstances.

A.  Homestead Deduction
In Kellam v. Fountain County Assessor,89 the Tax Court considered the

proper standard for determining “an individual’s principal place of residence” for

78. Id.
79. Id.
80. Id.
81. Id.
82. Id.
83. Id.
84. Id. at 58.
85. Id. at 57.
86. Id. at 58.
87. Id.
88. Id.
89. 999 N.E.2d 120 (Ind. T.C. 2013).



2015] PROPERTY LAW 1403

purposes of a taxpayer’s eligibility for a homestead property tax deduction.90 
Kellam arose from the application of Kellam and Myers, an unmarried couple,
for mortgage and homestead deductions on co-owned property in Fountain
County, Indiana (the “Fountain Property”).91  Kellam received a homestead
deduction on the Fountain Property for 2009 and his March 2011 property tax
statement for the Fountain Property reflected a homestead deduction for 2010.92 
In March 2011, Kellam received a notice from the Fountain County Treasurer
stating that the county assessor needed a Correction of Error document filled out
for the Fountain Property.  The notice also included an updated tax statement that
did not include a homestead deduction on the Fountain Property for 2010.93  The
Fountain County Assessor explained to Kellam that the homestead deduction had
been removed from the Fountain Property because Kellam still had a 2010
homestead deduction on property he owned in Wells County (the “Wells
Property”) and it had been determined through utility usage that the Fountain
Property was not Kellam’s principal place of residence.94  Kellam explained that
he was staying elsewhere while the Fountain Property underwent renovations.95

In reply, the Fountain County Assessor told Kellam that if the homestead
deduction were removed on the Wells Property, the homestead deduction could
then be reinstated on the Fountain Property.96  Kellam sent in the proper
paperwork to demonstrate that the homestead deduction had been removed from
the Wells Property; yet, the Fountain County Assessor still denied his
reinstatement request, because Myers also had a 2010 homestead deduction on
property she owned in Grant County (the “Grant Property”).97  Kellam filed a
Petition for Correction of Error with the Fountain County Property Tax
Assessment Board, and it was denied.98  The Indiana Board of Tax Review (the
“Indiana Board”) denied Kellam’s petition on appeal based on the fact that an
individual may only have one homestead deduction per year, and both Kellam
and Myers had homestead deductions on the Wells Property and the Grant
Property at the time they filed the homestead deduction application with the
Fountain County Auditor.99  Kellam appealed to the Tax Court.100  

The Tax Court concluded the Indiana Board’s determination was not
supported by substantial or reliable evidence.101  Before reaching its decision, the
Tax Court rejected Kellam’s argument that Kellam and Myers were entitled to

90. Id. at 122.
91. Id. at 121.
92. Id.
93. Id.
94. Id.
95. Id.
96. Id.
97. Id.
98. Id.
99. Id. at 122-23.

100. Id. at 122.
101. Id. at 124.



1404 INDIANA LAW REVIEW [Vol. 48:1395

jointly file for a homestead deduction as such a deduction is only available for
married couples.102  The Tax Court also concluded Myers was not eligible for a
homestead deduction on the Fountain Property, because she received a
homestead deduction on the Grant Property.103  As for Kellam’s petition, the Tax
Court held Kellam had submitted sufficient evidence that he was no longer
receiving a homestead deduction with respect to the Wells Property and had paid
the subsequent property taxes due on that property.104  The Tax Court also
rejected the Indiana Board’s conclusion that the Fountain Property was not
Kellam’s principal place of residence because “Kellam was not residing there,”
concluding that the proper standard to determine residency “depends on the
‘intention’ to return to the property after an absence, not continuous physical
presence at the property.”105  In addition to testifying that he was not physically
residing at the Fountain Property, Kellam testified he was using the Fountain
Property as his address for voter registration, driver’s license and bank
statements.106  Based upon this evidence, the Tax Court reversed the Indiana
Board’s decision.107  

B.  Probative Evidence of Property Value
In Grabbe v. Carroll County Assessor,108 the Tax Court considered the

admissibility of certain types of evidence offered by a property owner to contest
the assessed value of his real property.109  Grabbe arose from a property owner’s
appeal of the assessed value of two adjoining agricultural parcels (the
“Property”).110  For the 2009 tax year, the Carrol County Assessor valued the
Property at $274,500.111  The property owner appealed the assessment to the
Carrol County Property Tax Assessment Board of Appeals, then to the Indiana
Board offering “four self-prepared analyses to demonstrate that the assessed
value of the subject property should only be $218,262.”112  The Indiana Board
found the property owner’s analyses lacked probative value, upholding the
Carroll County Assessor’s assessment.113  The property owner appealed to the
Tax Court.114  

102. Id. at 123.
103. Id.
104. Id.
105. Id.
106. Id.
107. Id.
108. 1 N.E.3d 226 (Ind. T.C. 2013).
109. Id.
110. Id. at 227.
111. Id.
112. Id.  The four analyses were based on four separate appraisal methods:  allocation, cost,

income, and market data.
113. Id.
114. Id.



2015] PROPERTY LAW 1405

The Tax Court upheld the Indiana Board’s determination that the property
owner’s analyses lacked probative value.115  Before considering the property
owner’s offered analyses, the Tax Court noted real property in Indiana is
assessed “on the basis of its market value-in-use:  the value ‘of a property for its
current use, as reflected by the utility received by the owner or a similar user,
from the property.’”116  “To determine a property’s market value-in-use, assessing
officials refer to a series of guidelines that explain the valuation process for both
land and improvements.”117  The Tax Court further noted that assessments
conducted in accordance with these guidelines are presumed accurate; however,
a property owner may rebut the “presumption with evidence that indicates that
the assessment does not accurately reflect the property’s market value-in-use.”118 
Probative evidence includes “actual construction costs, sales information
regarding the subject or comparable properties, appraisals that are relevant to the
market value-in-use of the property, and any other information complied in
accordance with generally accepted appraisal principles.”119  Additionally, the
Tax Court noted the property owner must show that its “suggested value
accurately reflects the property’s true market value-in-use (and, consequentially,
that the assessor’s assessed value does not).”120

The Tax Court considered whether the property owners’ four self-prepared
analyses were probative evidence as to the Property’s true market value-in-use.121 
As to the property owner’s allocation approach analysis, the Tax Court
concluded the property owner actually applied two different appraisal
methods—the allocation and abstraction methods—without providing any
evidence of whether the use of these methods conformed with any accepted
appraisal principles, a necessary requirement in order to rebut the presumption
of accuracy given to assessments calculated using the Indiana assessment
guidelines.122  As to the property owner’s cost approach analysis (which
“estimates the value of the land as if vacant and then adds the depreciated cost
of the improvements as if new to arrive at a total estimate of value”123) the Tax
Court found that analysis lacked probative value because Owner “failed to
provide any objective evidence other than his own conclusory assumptions.”124 
The Tax Court also concluded that property owner’s income approach lacked
probative value because property owner failed to provide any support for why the

115. Id. at 232-33.
116. Id. at 227 (quoting 2002 REAL PROPERTY ASSESSMENT MANUAL (2004 Reprint)

(incorporated by reference at 50 IND. ADMIN. CODE 2.3-1-2, at 2 (2002 Supp.))).
117. Id. at 227-28 (citing REAL PROPERTY ASSESSMENT GUIDELINES FOR 2002—VERSION A

(incorporated by reference at 50 IND. ADMIN. CODE 2.3-1-2, at Bks. 1 and 2 (2002))).  
118. Id. at 228.
119. Id. (citation omitted).
120. Id. (citing Eckerling v. Wayne Twp. Assessor, 841 N.E.2d 674, 678 (Ind. T.C. 2006)).
121. Id. at 228-32.
122. Id. at 228-29.
123. Id. at 230.
124. Id. at 229-30.



1406 INDIANA LAW REVIEW [Vol. 48:1395

deduction of property taxes as an expense was correct under generally accepted
appraisal standards or why application of a twenty percent capitalization rate was
appropriate.125  Lastly, the Tax Court determined that the property owner’s
market data approach lacked probative value because the property owner failed
to submit any evidence to explain how he calculated the valuation of comparable
properties and structures.126  The Tax Court affirmed the Indiana Board’s final
determination upholding the original $274,500 assessment as the property owner
had offered no probative evidence that the original assessment was wrong.127  

C.  Indiana Tax Court Rule 3 Objections
In Jones v. Jefferson County Assessor,128 the Tax Court considered whether

an assessor’s failure to object to a property owner’s failure to file a request for
a copy of an administrative record pursuant to Indiana Tax Court Rule 3 should
bar a subsequent motion to dismiss filed by an assessor.129  Jones arose from
property owners’ appeal of their residential real property assessments for the
2008 and 2009 tax years to the Indiana Board.130  After the Indiana Board issued
a final determination upholding the original assessment, the property owners
filed an appeal with the Tax Court challenging the decision.131  The Jefferson
County Assessor’s (the “Assessor”) attorney filed his appearance and answer,
and the Tax Court held a telephonic case management conference and ordered
the parties to submit their briefs on the merits of the case.132  Property owners
timely filed their initial brief, and the Assessor filed a motion to dismiss along
with a response brief.133  However, instead of addressing the merits of the case,
the Assessor’s brief argued that the motion to dismiss should be granted, because
property owners did not timely request the Indiana Board to prepare a certified
copy of its administrative record as required under Indiana Tax Court Rule 3.134

The Tax Court held that the Assessor waived its objection to property
owners’ failure to timely request the administrative record.135  In this instance,
property owners failed to timely request that the Indiana Board prepare a certified
copy of the agency record by mid-September as required under Indiana Tax
Court Rule 3.136  The Tax Court noted that “[t]hrough a series of cases, the
Indiana Supreme Court has held that a failure to timely file the administrative

125. Id. at 230-31.
126. Id. at 231-32.
127. Id. at 227, 232-33.
128. 6 N.E.3d 1048 (Ind. T.C. 2014).  
129. Id. at 1048.
130. Id.
131. Id.
132. Id.
133. Id. at 1049.
134. Id.
135. Id. at 1050.
136. Id.



2015] PROPERTY LAW 1407

record pursuant to Indiana Tax Court Rule 3 is the type of legal error or
procedural defect which, if not objected to at the appropriate time, is waived.”137 
Since the Assessor waited until mid-December to raise an objection to this
procedural defect and had numerous communications with the Tax Court
following the mid-September deadline, the Tax Court found that the Assessor
waived its objection to the timeliness of property owners’ administrative record
request.138

D.  Challenging an Assessment Based Upon Lack of Uniformity and Equality
In Thorsness v. Porter County Assessor,139 the Tax Court considered the

burden of proof and sufficiency of evidence required for a property owner’s
appeal of a property assessment based upon a lack of uniformity.140  Thorsness
arose out of a property owner’s challenge to the March 1, 2007 assessment of his
residential property for $1,647,800, even though property owner had purchased
the residential property for $1,650,000 on January 31, 2007.141  Property owner
appealed this assessment to the county property tax assessment board on the basis
that the assessment did not comply with the “uniform and equal” mandate of
Indiana’s constitution, which appeal was denied.142  Before the Indiana Board, the
property owner argued that his property was assessed at 99.9% of its sale price
while six other residential properties in the same area had been assessed at an
average of 79.5% of their recent sales prices. 143  In support of his argument, the
property owner submitted a one-page spreadsheet that included the addresses of
the six other properties, the sale dates and assessment values for each property,
and the ratio of each property’s sale price compared to its tax assessment
value.144  The property owner requested that the Indiana Board reduce his tax
assessment to $1,311,750 (i.e., 79.5% of the sale price).145  The Indiana Board
upheld the assessment, concluding the property owner’s evidence lacked the
appropriate statistical comparisons, did not include reliable sample properties,
and failed to conform with professionally accepted standards.146  The property
owner appealed to the Tax Court.147

The Tax Court affirmed the final ruling of the Indiana Board.148  On appeal,
the property owner alleged two errors by the Indiana Board:  its failure to

137. Id.
138. Id.
139. 3 N.E.3d 49 (Ind. T.C. 2014).
140. Id. at 52.
141. Id. at 50.
142. Id. 
143. Id.
144. Id.
145. Id.
146. Id.
147. Id.
148. Id. at 54.



1408 INDIANA LAW REVIEW [Vol. 48:1395

determine that the county assessor bore the burden of proof at the initial
administrative hearing and its finding that the property owner’s “evidence was
not probative in demonstrating that the Assessor’s assessment lacked
uniformity.”149  Before analyzing property owner’s arguments, the Tax Court
noted that the Indiana Constitution “does not guarantee a taxpayer the personal
right to ‘absolute and precise exactitude as to the uniformity and equality of each
individual assessment.’”150  The Tax Court also noted that one established
method of measuring uniformity and equality of property assessments is through
an assessment ratio study.151  This method “compare[s] the assessed values of
properties with an assessing jurisdiction with objectively verifiable data, such as
sales prices or market value-in-use appraisals.”152

As to who bore the burden of proof, the Tax Court acknowledged that
Indiana Code section 6-1.1-15-1(p) provided that if the assessment for which a
notice of review is filed increased the assessed value of property by more than
five percent over the immediately preceding year, the assessor had the burden of
proving that the assessment is correct.153  In the instant case, however, the Tax
Court observed that the property owner did not claim that his property’s
assessment failed to reflect its market value-in-use—a claim for which the
burden-shifting rule of Indiana Code section 6-1.1-15-1(p) would apply—but
instead claimed that his otherwise correct assessment should be reduced under
a “uniformity and equality claim,” for which the burden-shifting rule of Indiana
Code section 6-1.1-15-1(p) does not apply.154

As to the probative value of the property owner’s evidence, the Tax Court
concluded that the property owner’s evidence failed to include an assessment
ratio study that was both correctly stratified and statistically analyzed as required
by the Department of Local Government Finance’s administrative regulations.155
As a result, the Tax Court concluded that the Indiana Board did not err in finding
the property owner failed to present probative evidence to demonstrate that the
assessor’s assessment lacked uniformity.156

149. Id. at 52.
150. Id. at 51-52 (quoting State Bd. of Tax Comm’rs v. Town of St. John, 702 N.E.2d 1034,

1040 (Ind. 1998)).
151. Id. at 51.
152. Id. (alteration in original) (quoting Westfield Golf Practice Ctr., LLC v. Washington Twp.

Assessor, 859 N.E.2d 396, 399 n.3 (Ind. T.C. 2007)).
153. Id. at 52 (quoting IND. CODE § 6-1.1-15-1(p) (2009) (repealed 2011)).
154. Id. at 53.  The Tax Court further characterized property owner’s claim as not one of

correctness but rather incorrectness in relation to other assessed value without regard to the market
value-in-use of his property.

155. Id. at 53-54; see 50 IND. ADMIN. CODE 14-1-1, 14-2-1 (2007).  
156. Id. at 54.



2015] PROPERTY LAW 1409

E.  Fraternal Beneficiary Association and Charitable Purpose
Property Tax Exemptions

In Fraternal Order of Eagles No. 3988, Inc. v. Morgan County Property Tax
Assessment Board of Appeals,157 the Tax Court considered the standard a
property owner must meet in order to qualify for the fraternal beneficiary
association and charitable purpose property tax exemptions.158  Fraternal Order
of Eagles arose from property owner’s application for a property tax exemption
based on either “a fraternal beneficiary association exemption or a charitable
purposes exemption for the 2006 tax year” on 2.23 acres of land with a 10,500
square foot lodge the property owner used “to raise funds for charitable
organizations, to collect donations for needy families, and to host private events
for its members.”159  The property owner would also occasionally allow other
charitable organizations to host events at the lodge without charging a fee.160  The
Morgan County Property Tax Assessment Board of Appeals denied both
exemption requests.161  

The property owner appealed to the Indiana Board.162  At its hearing, the
property owner submitted evidence consisting of “its charitable donations from
2003 to 2006, its monthly profit and loss statements for 2005, several affidavits,
and a Usage Study” to support that it used its property for fraternal and charitable
purposes.163  The Indiana Board denied the property owner’s request for the
exemptions, and the property owner appealed to the Tax Court.164  

The Tax Court upheld the Indiana Board’s determination that the property
owner did not qualify for the fraternal beneficiary association exemption.165  The
Tax Court concluded that the Indiana Board correctly applied the standard
established by the Court of Appeals in another context,166 rather than the standard
contained in a 1944 Attorney General Opinion on which the property owner
relied.167  Consequently, the Indiana Board’s determination on this issue was not

157. 5 N.E.3d 1195 (Ind. T.C. 2014).
158. Id. at 1197.
159. Id. at 1198.
160. Id.
161. Id.
162. Id.
163. Id. (footnotes omitted).
164. Id.
165. Id. at 1201.
166. Id. at 1199-200; see State Bd. of Tax Comm’rs v. Fort Wayne Sport Club, Inc., 258

N.E.2d 874, 880 (Ind. Ct. App. 1970) (“The term ‘fraternal benefit society’ or ‘fraternal beneficiary
association’ shall mean any corporation, society, order or voluntary association, without capital
stock, organized and carried on solely for the mutual benefit of its members and their beneficiaries,
and not for profit and having a lodge system and representative form of government, and which
shall make provision for the payment of [death] benefits in accordance with this act.”) (alteration
in original).

167. Id.



1410 INDIANA LAW REVIEW [Vol. 48:1395

contrary to law. 
The Tax Court further upheld the Indiana Board’s determination that the

property owner did not present a prima facie case that it was a fraternal
beneficiary association under the applicable Court of Appeals standard,
“explaining that to make [such a] case [the] taxpayer must walk the Indiana
Board through every element of its analysis rather than assuming that the
evidence speaks for itself.”168  The Tax Court agreed with the Indiana Board that
the property owner’s other evidence was conclusory and failed to demonstrate
that it met the six requirements of a “fraternal beneficiary association” under
Indiana Code section 27-11-1-1, such as being governed by a representative
system.169  The Tax Court also found the fact that the property owner was
recognized as a “fraternal society” under federal law did not establish that it was
a “fraternal beneficiary association” under Indiana law.170  
The Tax Court upheld the Indiana Board’s determination that the property owner
was not entitled to a charitable purposes exemption, disagreeing with the
property owner’s assertion that using property for fraternal purposes was
synonymous with “using property for charitable purposes because fraternal
organizations collectively seek to promote the general welfare of their members
and society in general.”171  The Tax Court further noted that the property owner’s
usage study failed to provide information about the amount of time dedicated to
charitable (exempt) purposes rather than social (non-exempt) purposes and also
failed to provide proof that its activities were in fact charitable.172  

F.  Charitable Purpose Property Tax Exemption
In Hamilton County Assessor v. SPD Realty, LLC,173 the Tax Court again

considered the application of the charitable purpose property tax exemption to
a particular set of facts.174  Hamilton County Assessor arose from a group of
people’s (“Founders”) creation of a public benefit corporation (“Tenant
Corporation”) which, according to Tenant Corporation’s Articles of
Incorporation, was formed for the “charitable purpose of procuring tissue donors,
performing tissue donor recoveries and providing related donor services.”175 
Founders had difficulty renting a suitable space for their operations so they
purchased a property (the “Property”) through a related limited liability company
(“Landlord Company”) and leased approximately half of the building on the

168. Id. at 2000 (explaining the holding of Long v. Wayne Twp. Assessor, 821 N.E.2d 466,
471 (Ind. T.C. 2005)).

169. Id. at 1201.
170. Id.
171. Id. at 1202.
172. Id.
173. 9 N.E.3d 773 (Ind. T.C. 2014).
174. Id. at 774.
175. Id. 



2015] PROPERTY LAW 1411

Property to Tenant Corporation.176  Pursuant to the terms of the lease created
between the parties, Tenant Corporation “would pay an annual base rent
equivalent to [Landlord Company’s] entire mortgage, all real and personal
property taxes, and all build-out and operating expenses.”177 Landlord Company
filed an application for a property tax exemption with respect to the Property
with the Hamilton County Property Tax Assessment Board of Appeals, which
denied the exemption.178  On Landlord Company’s appeal, the Indiana Board
granted the exemption.179  The Hamilton County Assessor (the “Assessor”)
appealed to the Tax Court. 

The Tax Court concluded that the Indiana Board correctly granted the
Landlord Company the exemption since there was substantial evidence the
Property was occupied and used for a charitable purpose.180  The parties agreed
that a property tax exemption is appropriate where property is owned, occupied
and predominantly used for a charitable purpose, but the Assessor did not present
any evidence that Tenant Corporation was not engaged in a charitable purpose,
other than an argument in its opening statement that challenged the Landlord
Company’s evidence.181  

The Tax Court also upheld the Indiana Board’s determination that the
Landlord Company primarily owned the property for a charitable purpose.182  The
Tax Court observed that, when the ownership, occupancy, and use of a property
is not unified in one entity, Indiana law requires all entities that own, occupy, and
use the property to have their own charitable purpose.183  The evidence submitted
indicated the Founders formed Landlord Company for the sole purpose of
acquiring and renting the Property to Tenant Corporation in furtherance of its
charitable tissue bank operations.184  The Tax Court also held the close
relationship between the two entities supported the Indiana Board’s finding that
each had a similar charitable purpose.185  The Assessor argued that the fact that
Tenant Corporation paid above-market rent demonstrated that Landlord
Company had a profit motive similar to commercial landlords, rather than a
charitable purpose.186  The Tax Court disagreed, noting that the amount of rent
charged to Tenant Corporation was designed to cover just the mortgage costs and
operations expenses, not to generate profits for Landlord Company.187  Since the
totality of the evidence indicated Landlord Company owned the Property to

176. Id.
177. Id. at 774-75.
178. Id. at 775.
179. Id.
180. Id.
181. Id. at 776
182. Id. at 778.
183. Id. at 775.
184. Id. at 777.
185. Id.
186. Id.
187. Id. at 778.



1412 INDIANA LAW REVIEW [Vol. 48:1395

support the Tenant Corporation’s charitable purpose, the Tax Court concluded
there was no reasonable basis for overturning the Indiana Board’s grant of the
exemption.188  

Finally, the Tax Court upheld the Indiana Board’s determination that the
Property complied with the occupancy requirements of Indiana Code section 6-
1.1-10-36.3(a), even though the occupancy period was only for four months of
the tax year at issue.189  

G.  Obsolescence and Over Assessment of Real Property
In Idris v. Marion County Assessor,190 the Tax Court considered the standard

a property owner must meet to prove that a property tax assessment should be
reduced as a result of obsolescence and over-assessment.191  Idris arose from
property owners’ appeal of the assessed value of a condominium unit in a six-
story, mixed-use building in downtown Indianapolis, featuring two bars on the
first three floors and residential condominiums on the second three floors.192  The
property owners unsuccessfully appealed its assessed value to the Marion County
Property Tax Assessment Board of Appeals.193  On appeal to the Indiana Board,
the property owners argued the assessed value should be reduced from $395,900
to $270,000 due to excessive noise, odors, and persistent crime.194  The property
owners also presented real estate listings and county tax reports for other
condominium units in the building that were both smaller and larger than their
unit.  The Indiana Board declined to reduce the assessment in its final
determination and the property owners appealed.195

The Tax Court concluded the Indiana Board was correct in denying property
owner’s appeal.  As for the property owners’ obsolescence argument, the Tax
Court noted that obsolescence is a form of depreciation to “either the functional
or economic loss of value to property, which is expressed as a percentage
reduction to an improvement’s replacement cost.”196  To establish a prima facie
case for an obsolescence adjustment, a taxpayer must present probative evidence
during the Indiana Board hearing that (1) identifies the factors that are causing
the obsolescence, and (2) quantifies the amount of obsolescence in which the
taxpayer believes he or she is entitled.197  Although the Tax Court expressed
sympathy for the property owners’ plight, it noted the Indiana Board’s ruling

188. Id.
189. Id.
190. 12 N.E.3d 331 (Ind. T.C. 2014).
191. Id. at 332.
192. Id.
193. Id.  The property owners appealed pro se.  
194. Id.
195. Id. at 332-33.
196. Id. at 334 (citing REAL PROPERTY ASSESSMENT GUIDELINES FOR 2002—VERSION A

(2002) (incorporated by reference at 50 IND. ADMIN. CODE 2.3-1-2 (2002 Supp.))).  
197. Id.



2015] PROPERTY LAW 1413

“reflect[s] some of the challenges taxpayers have in understanding the
complexities of our property tax system.”198  The property owners’ evidence of
“odor problems, excessive noise, and crime issues” did not establish any of these
criteria; thus, the Tax Court concluded the Indiana Board did not abuse its
discretion in this regard.199  

The Tax Court also concluded the property owners did not establish that the
assessed value of the other units in the building required a reduction in the
property owner’s assessment.200  Indiana real property is assessed based on its
market value-in-use:  “the value of a property for its current use, as reflected by
the utility received by the owner or a similar user, from the property.”201  A
taxpayer may challenge a property assessment and establish the market value-in-
use by presenting probative, market-based evidence (such as sales information
for comparable properties) explaining the characteristics shared by properties
comparable to the subject property that are relevant to the fair market value.202 
While the property owners presented evidence as to comparable properties,
specifically other units in their building, the Tax Court noted that they failed to
describe their own property, or explain how differences between their property
and the comparable properties affected the market value-in-use of their
property.203  As no probative evidence was presented as to this issue, the Tax
Court upheld the Indiana Board’s determination.204

H.  Original Jurisdiction of Tax Court to Enjoin the Collection
of Property Taxes

In West Ohio II, LLC v. Marion County Assessor,205 the Tax Court examined
its jurisdiction over a property owner’s appeal to enjoin the collection of property
taxes during the pendency of an appeal of assessed value.206  West Ohio II arose
out of property owner’s appeal of the assessed value of a multi-tenant office
building located in Indianapolis.207  Almost one year later, when the Marion
County Property Tax Assessment Board of Appeals had not yet scheduled a
hearing on the appeal, property owner filed a petition with the Tax Court seeking
to enjoin the collection of property taxes based on the valuation that the property
owner was appealing.208

198. Id.
199. Id.
200. Id. at 335. 
201. Id. at 334 (quoting 2002 REAL PROPERTY ASSESSMENT MANUAL (2004 Reprint)

(incorporated by reference at 50 IND. ADMIN. CODE 2.3-1-2 (2002 Supp.))).  
202. Id. (citing Long v. Wayne Twp. Assessor, 821 N.E.2d 466, 471 (Ind. T.C. 2005)).
203. Id. at 335.
204. Id.
205. 9 N.E.3d 267 (Ind. T.C. 2014).
206. Id. at 268.
207. Id.
208. Id.



1414 INDIANA LAW REVIEW [Vol. 48:1395

The Tax Court concluded it did not have subject matter jurisdiction to hear
the property owner’s request.209  “Subject matter jurisdiction can only be
conferred upon a court by the Indiana Constitution or by statute.”210  Indiana
Code section 33-26-3 confers jurisdiction to the Tax Court only over “original
tax appeals,” which is defined as a case that (1) arises under Indiana’s tax laws,
and (2) is an initial appeal of a final determination of either the Indiana
Department of State Revenue or the Indiana Board.211  Indiana Code section 33-
26-6-2(a) provides that a taxpayer who wishes “to initiate an original tax appeal
must file a petition in the tax court to set aside the final determination of the
department of state revenue or the Indiana board of tax review.”212  Indiana Code
section 33-26-6-2(b) states that “a taxpayer who wishes to enjoin the collection
of a tax pending the original tax appeal must file a petition with the tax court to
enjoin the collection of the tax.”213 

Conceding that it had not received a final determination from the Indiana
Board, the property owner asserted three arguments as to why the Tax Court had
jurisdiction.214  First, the property owner asserted that the “will raise”
requirement for appellate petitions under Indiana Code section 33-26-6-2(b)
implicitly contemplates pre-final determination jurisdiction.215  The Tax Court
rejected the property owner’s argument, noting that the statutory language at
issue as a whole presumes the Tax Court has jurisdiction before the appellate
petition requirements are triggered.216  Second, the property owner asserted that
the authority of the Tax Court to issue injunctive relief is similar to the power to
issue preliminary injunctive relief; thus, conferring jurisdiction over pre-final
determination requests for injunctive relief.217  The Tax Court rejected this
argument on the basis that its injunctive powers are not triggered until it has
original jurisdiction.218  Third, the property owner asserted that the Tax Court
was bound through the principal of stare decisis to follow its rationale and
holding in American Trucking Ass’n, Inc. v. Indiana.219  However, the Tax Court
also declined to follow American Trucking Ass’n, holding that the case was not
binding.220 

209. Id. at 270.
210. Id. at 268 (citing State v. Sproles, 672 N.E.2d 1353, 1356 (Ind. 1996)).
211. Id.
212. Id. at 269.
213. Id.
214. Id.
215. Id. 
216. Id.
217. Id. at 270.
218. Id.
219. Id. (citing American Trucking Ass’n, Inc. v. Indiana, 512 N.E.2d 920 (Ind. T.C. 1987)).
220. Id.  The Tax Court explained that the Indiana Supreme Court issued an alternative writ

of prohibition barring the Tax Court from exercising original jurisdiction in American Trucking
Ass’n.



2015] PROPERTY LAW 1415

I.  Establishment of Neighborhood and Base Rate Determination
for Assessment Purposes

In McKeeman v. Carroll County Assessor,221 the Tax Court considered the
proper standard to establish a property owner’s “neighborhood” and base rate for
purposes of assessed value of real estate.222  McKeeman arose out of a property
owner’s appeal of his 2006 tax year assessment based upon the failure to
establish the property owner’s “neighborhood” with the Steuben County Property
Tax Assessment Board, which denied the property owner’s appeal.223  The
property owner appealed to the Indiana Board, which also upheld property
owner’s original assessment.224  Since the property owner was appealing a final
determination of the Indiana Board, the Tax Court noted that the property owner
had the burden of proof to demonstrate that the “Indiana Board’s final
determination is arbitrary, capricious, an abuse of discretion, not in accordance
with the law, or unsupported by substantial evidence.”225  On appeal to the Tax
Court, the property owner unsuccessfully asserted three arguments as to the
Indiana Board error.226  

First, the property owner argued that the Indiana Board had improperly
rejected his claim that the assessor did not correctly establish his neighborhood,
even though some evidence was presented that certain properties in the
neighborhood differed in size, usage, and access to roads.227  The Tax Court
declined to find error, noting that the assessment guidelines permit a
neighborhood to contain properties that vary with respect to road access, size and
use types.228

Second, the property owner claimed that the properties used to establish his
property’s base rate were improper.229  The Tax Court rejected this argument,
noting that the administrative record did not disclose what properties were
utilized in developing the base rate, and the property owner failed to show the
base rate was erroneous as applied to his property.230  

Third, the Tax Court found that the property owner’s sales comparison
analysis lacked probative value because the analysis did not explain the
circumstances surrounding the court-ordered sale of two comparison properties
and sales details for two additional comparison properties.231  As a result, the
analysis was not indicative of market value-in-use with respect to other offered

221. 10 N.E.3d 612 (Ind. T.C. 2014).
222. Id. at 613.
223. Id.
224. Id.
225. Id. at 614 (citing IND. CODE § 33-26-6-6(e) (1), (5) (2014)).
226. Id.
227. Id.
228. Id.
229. Id.
230. Id.
231. Id. at 616-17.



1416 INDIANA LAW REVIEW [Vol. 48:1395

comparisons.232

J.  Charitable Purpose Property Tax Exemption Burden of Proof
In Housing Partnerships, Inc., v. Owens,233 the Tax Court considered a

property owner’s appeal of the denial of a charitable purpose property tax
exemption for certain rental properties.234  Housing Partnerships involved a
property owner that was incorporated in 1994 “to undertake, promote, develop
and encourage any activity or means to ameliorate the housing needs of
disadvantaged persons . . . [and] to sponsor, support, and promote, and to
undertake housing projects.”235  The property owner funded its housing projects
from the sale and rental of its housing units, donations from individuals and
businesses, and various public and private grants.236  In 2006, the property owner
applied for a property tax exemption on each of its rental properties and its
administrative office, claiming that the charitable purposes exemption set forth
in Indiana Code section 6-1.1-10-16 applied to the properties.237  The
Bartholomew County Property Tax Board of Appeals denied the application in
March 2007.238  The property owner then appealed to the Indiana Board.239  

At the Indiana Board hearing, the property owner provided testimony from
its officers and a member of its board of directors indicating that the property
owner had been recognized by the Internal Revenue Service as a 501(c)(3)
organization, and describing the various housing and rehabilitation services that
the property owner provided to the community.240  The Indiana Board denied the
property owner’s request for the exemption on the basis that the property owner
had not demonstrated that the subject properties were owned, occupied and
predominately used for a “charitable purpose,” as the term is used in Indiana
Code section 6-1.1-10-16.241  The property owner then appealed to the Tax
Court.242

The Tax Court upheld the Indiana Board’s determination that the property
owner was not entitled to a charitable purposes exemption, concluding that the
Indiana Board did not abuse its discretion in weighing the property owner’s
evidence with respect to the alleged charitable purpose of property owner’s
ownership, occupation, and use of the properties as low-income housing.243  To

232. Id. 
233. 10 N.E.3d 1057 (Ind. T.C. 2014).
234. Id. at 1059.
235. Id.
236. Id.
237. Id. at 1059-60.
238. Id.
239. Id. at 1060.
240. Id. 
241. Id.
242. Id.
243. Id. at 1063.



2015] PROPERTY LAW 1417

constitute a charitable purpose, the property owner was required to demonstrate
that (1) “its ownership, occupation and use of the subject properties as low-
income housing provided ‘evidence of relief of human want . . . manifested by
obviously charitable acts different from the everyday purposes and activities of
man in general’” and (2) “through the accomplishment of those charitable acts,
benefit inures to the public sufficient to justify the loss of tax revenue.”244  

The property owner presented testimony that its housing efforts:  were
directed at distressed areas, relieved the government of its burden to revitalize
those areas, provided below-market rental rates thereby relieving the government
of its obligation to subsidize rents paid by tenants, and helped tenants become
more financially self-sufficient.245  The Tax Court noted that the property
owner’s testimony was not supported by evidence in the administrative record
showing that the government would have otherwise borne the burdens for the
services provided by the property owner’s activities and that the property
owner’s activities were not already subsidized by government services such as
grants and financial subsidies.246  The Tax Court also upheld the Indiana Board’s
determination that the property owner was not entitled to a property tax
exemption merely because the property owner received governmental grants,
particularly since the property owner never explained whether the federal grants
imposed any conditions on the receipt of the federal money.247  The Tax Court
therefore found that the Indiana Board’s determination was not “arbitrary,
capricious, an abuse of discretion or contrary to law.”248

K.  Notice Requirements for Issuing a Tax Deed
In Gupta v. Busan,249 the Court of Appeals considered the sufficiency of

notice sent to a property owner to comply with statutory requirements for
obtaining a tax deed.250  Gupta arose out of a purchaser’s acquisition of the tax
certificate for certain real property (the “Property”) owned by a property owner
at a tax sale.251  On February 24, 2009, the purchaser sent notice of the sale and
redemption period, which was to expire on June 10, 2009, to the property owner
by certified and first class mail in compliance with the applicable statutory
deadlines.252  The notices were not returned to purchaser.253  The purchaser also

244. Id. at 1061 (quoting Indianapolis Elks Bldg. Corp. v. State Bd. of Tax Comm’rs, 251
N.E.2d 673, 683 (Ind. Ct. App. 1969)).

245. Id. at 1061-62.
246. Id.
247. Id. at 1064.
248. Id.
249. 5 N.E.3d 413 (Ind. Ct. App. 2014).
250. Id. at 414-15.
251. Id. at 415.
252. Id.
253. Id.



1418 INDIANA LAW REVIEW [Vol. 48:1395

posted notice of the sale at the Property.254  Following the expiration of the
redemption period, the purchaser then mailed notice of his filing for petition for
issuance of a tax deed to the property owner through certified and first class
mail.255  Again, these notices were also not returned to the purchaser.256  The
purchaser then subsequently petitioned for and was granted a tax deed for the
Property.257  The property owner filed an action for quiet title in 2012, in which
he claimed he never received any of the purchaser’s notices and did not see the
notice posted at the Property.258  At trial, the property owner argued that he did
not receive notice as required by statute—specifically, that the purchaser failed
to comply with the statutory certified mail requirements.259  The trial court
granted summary judgment in the property owner’s favor and denied the
purchaser’s cross-motion for summary judgment.260  Purchaser appealed.261  

In considering purchaser’s appeal, the Court of Appeals first noted that
typically a tax deed is incontestable except by an appeal or a Trial Rule 60(B)
motion filed within sixty days of the issuance of the deed, with the only
exception being a constitutional challenge to the inadequacy of the notice.262 
Despite the procedural irregularity, the Court of Appeals examined the
purchaser’s notices under Indiana’s statutory notice requirements.263  In this
instance, the purchaser had introduced certified mail receipts, postmarked by the
post office as evidence that he sent the notices to property owner by certified
mail; thus complying with the plain language of the statutory notice provision.264 
The Court of Appeals declined to imply the term “certified mail” included the
additional and distinct requirement the notice be sent “return receipt requested,”
overruling the trial court’s grant of summary judgment in favor of the property
owner.265

L.  Notices Required in Connection with a Tax Sale
In the case of In re 2011 Marion County Tax Sale v. Marion County

254. Id.
255. Id.
256. Id.
257. Id.
258. Id.
259. Id.
260. Id.
261. Id.
262. Id.  The Court of Appeals further noted that if treated as a Trial Rule 60(B) motion the

trial court would only be permitted to consider the overall reasonableness of the notice provided,
not the statutory requirements.  Under the Court of Appeals’ analysis, the notice was constitutional
but could not be used as a basis for the Court of Appeals’ decision since purchaser did not raise the
issue at the trial court level or on appeal.

263. Id.
264. Id. at 417.
265. Id.



2015] PROPERTY LAW 1419

Auditor,266 the Court of Appeals considered the nature and extent of the notices
that are required in connection with a tax sale, including whether the owner of
a building that encroaches onto parcels that are delinquent must also be given
formal notices in connection with the tax sale of the parcels that are
delinquent.267  Marion County Tax Sale arose from a property owner’s
(“Taxpayer”) failure to pay property taxes with respect to three contiguous tax
parcels located in Marion County (the “Delinquent Tax Parcels”).268  The mailing
address for one of the Delinquent Tax Parcels was also the business address of
Taxpayer and was listed with the Marion County Auditor (the “Auditor”) as
Taxpayer’s address (the “Business Address”).269  The principal of Taxpayer lived
on a parcel contiguous to one of the three Delinquent Tax Parcels, and the
building located on that tax parcel encroached by a few feet onto one of the three
Delinquent Tax Parcels.270

At three different times—prior to the tax sale of the Delinquent Tax Parcels,
immediately after the tax sale of the Delinquent Tax Parcels, and after the
applicable redemption period for the tax sale had expired and a request for a tax
deed had been filed—the Auditor had sent the applicable notices specified under
Indiana Code sections 6-1.1-24-4 and 6-1.1-25-4.5.271  Each of the notices was
first sent via certified mail to the Business Address and, when the certified mail
went unclaimed, via first class mail to the Business Address.272  The Auditor also
sent notices as to the completion of the tax sale and the expiration of the
redemption period via certified mail and then via first class mail to an attorney
listed as the agent for service of process for Taxpayer (the “Attorney”), but
whose registered office was not current in Taxpayer’s files with the Indiana
Secretary of State, and to Michael Smith (“Smith”), whose interest in the
Delinquent Tax Parcels the Auditor identified from a title examination of the
Delinquent Tax Parcels.273  After the Auditor’s prior notices received no
response, the Auditor sent notices of the request for a tax deed and thirty day
objection period via first class mail to the occupants of each of the three
Delinquent Tax Parcels, to Taxpayer at the Business Address, and to the
Attorney.274  Taxpayer claimed to have never received any of the notices and to
have first learned of the tax sale after one of the occupants of one of the
Delinquent Tax Parcels brought the issue to Taxpayer’s attention.275  Taxpayer’s
principal testified that Taxpayer had historically had problems with mail being

266. 14 N.E.3d 883 (Ind. Ct. App. 2014).
267. Id. 
268. Id. at 885.
269. Id. 
270. Id.
271. Id. at 885-86.
272. Id. 
273. Id.
274. Id.
275. Id. at 887.



1420 INDIANA LAW REVIEW [Vol. 48:1395

correctly delivered to the Business Address.276  The Auditor’s office had no
record of any of the notices that were sent via first class mail being returned as
undeliverable.277  Taxpayer filed an objection, asserting in its initial filing that the
notices had not been reasonably calculated to inform Taxpayer of the impending
sales, and Taxpayer further argued that notice delivered after the sale had
occurred did not cure the alleged defects in due process.278  The trial court ruled
against Taxpayer and ordered that tax deeds be issued.279  Taxpayer appealed.280

The Court of Appeals agreed with the trial court, holding that the Auditor’s
notices via certified mail and first class mail to the Business Address, the
Attorney, the occupants of the Delinquent Tax Parcels, and Smith met due
process requirements.281  The Court of Appeals stated that a property may be sold
in connection with unpaid property taxes under the Due Process Clause of the
United States Constitution only if the government provides the owner with notice
and an opportunity to be heard.282  The Court of Appeals noted that the Due
Process Clause does not require actual notice; rather, only notice that is
reasonably calculated to inform the parties of the nature of the claim is
required.283  The Court of Appeals held that the Due Process Clause is satisfied
by mailing notices to all addresses of which the applicable county auditor is
aware, to the property itself, and to any third parties identified in a title search,
as had been done in the instant case.284  In reaching its conclusion, the Court of
Appeals specifically rejected the argument that the Auditor should have searched
for an updated address for the Attorney, stating that the Auditor was not required
to perform an open-ended search of the public records in order to effect
service.285  The Court of Appeals also held that the Auditor was not required to
provide additional notice by reason of the fact that a building located primarily
on another property encroaches onto one of the Delinquent Tax Parcels.286  In
rejecting that argument, the Court of Appeals noted that the Auditor was not
aware of the encroachment and rejected any argument that the Auditor should be
required to give notice to the owner of a neighboring encroaching
improvement.287

276. Id. at 887-88.
277. Id. at 888.
278. Id. at 886.
279. Id. at 889.
280. Id.
281. Id. at 890-91.
282. Id. at 890.
283. Id.
284. Id. at 890-91.
285. Id. at 891.
286. Id.
287. Id.



2015] PROPERTY LAW 1421

M.  Determining Assessed Value
In Indianapolis Racquet Club, Inc. v. Marion County Assessor,288 the Tax

Court considered whether the submission as evidence of property assessments
from properties used for a similar purpose but located in other townships rebut
the presumption that an assessed value is accurate.289  Indianapolis Racquet Club
arose from property owner’s ownership and operation of a tennis club located in
Washington Township in Marion County.290  Believing the assessed value for
each of the parcels encompassing the tennis club (the “Parcels”) was too high, the
property owner filed a petition with the Marion County Property Tax Assessment
Board of Appeals (the “County Board”) to challenge the assessed valuation of the
Parcels.291  Instead of submitting an appraisal of the Parcels to support the
property owner’s appeal, the property owner presented the assessed value of
other tennis clubs located in other townships and counties in the Indianapolis
area.292  The property owner conceded that the assessed value of the Parcels was
in accordance with the applicable township land order.293  However, the property
owner argued that the use of the rates from the township land order was
inappropriate because (1) the use of the Parcels differed significantly from that
of other properties in the area with which the Parcels had been grouped in the
applicable land order and were the only property in the neighborhood with their
zoning classification; (2) unlike other properties in the vicinity, the Parcels did
not have direct access to major cross streets; and (3) the Parcels included the only
tennis facility in an area with significant retail, restaurant and gas station uses.294 
After the County Board rejected the property owner’s arguments on the basis that
the property owner had failed to establish a prima facie case that the Parcels were
overvalued, the property owner appealed to the Indiana Board, which affirmed
the County Board’s ruling.295  The property owner appealed to the Tax Court.296

The Tax Court upheld the decision of the Indiana Board.297  The Tax Court
began by noting that, under Indiana law, real property is assessed on the basis of
the property’s “market value-in-use.”298  A county assessor determines the
“market value-in-use” of land other than farmland by examining recent sales of
similar properties in the same area to prepare “land orders” that establish a range
of base values per square foot (referred to as “base rates”) to be applied to each
property whose use falls within the applicable category of uses in that land

288. 15 N.E.3d 150 (Ind. T.C. 2014).
289. Id. 
290. Id. at 151.
291. Id. at 152.
292. Id. at 154.
293. Id. 
294. Id. at 153-54.
295. Id. at 152.
296. Id.
297. Id. at 151. 
298. Id. at 152.



1422 INDIANA LAW REVIEW [Vol. 48:1395

order.299  A value as presented in a land order sometimes must be adjusted in
order to arrive at a more accurate result.300  This is done by applying an
“influence factor” to account for an increase or decrease in the land’s value.301 
An assessment made in accordance with a land order is presumed to be
accurate.302  However, the presumption of accuracy can be rebutted by a taxpayer
“with market-based evidence that indicates that the assessment does not
accurately reflect the land’s market value-in-use.”303  

The Tax Court ruled that land assessments from land that was subject to
different land orders are not probative evidence with respect to a property tax
assessment appeal, without additional facts.304  In order for the assessed values
of other tennis clubs to be probative, the property owner would need to present
additional analysis as to how the factors applicable to the land subject to those
other land orders also applied to the Parcels—something the property owner had
failed to do.305  Also, in order to justify a decrease in value due to the use of the
Parcels, the property owner would need to demonstrate how that use would
negatively impact property value.306  Here, the property owner never attempted
to do so.307  Finally, although property taxes under Article 10, Section 1 of the
Indiana Constitution must be subject to a uniform and equal rate of taxation,
merely showing that the assessed value of the Parcels was different from the
assessed value of other tennis clubs did not establish a violation of this
requirement.308  Instead, the taxpayer must establish that the assessed value did
not bear the same relationship to market value as other properties in the same
area, which the property owner failed to establish.309

N.  Establishing Prima Facie Case in Challenging an Assessment
In Howard County Assessor v. Kokomo Mall, LLC, the Tax Court considered

whether it could re-weigh evidence presented to the Indiana Board in connection
with an assessment appeal and whether the presentation by a property owner of
an appraisal report prepared in accordance with the Uniform Standards of
Professional Appraisal Practice (“USPAP”) established a prima facie case on
behalf of the property owner as to the assessed value of the property in
question.310

299. Id.
300. Id. at 152-53.
301. Id. at 153.
302. Id.
303. Id.
304. Id. at 155.
305. Id.
306. Id. at 156.
307. Id.
308. Id. at 156 n.9.
309. Id. at 156-57.
310. 14 N.E.3d 895 (Ind. T.C. 2014).



2015] PROPERTY LAW 1423

Howard County Assessor arose out of property owner’s appeal of the
assessed values of three different tax parcels in Howard County (the “Parcels”)
for three different tax years.311  After the property owner’s appeal was initially
denied by the Howard County Property Tax Assessment Board of Appeals, the
property owner appealed to the Indiana Board.312  At the hearing before the
Indiana Board, the property owner presented a summary appraisal report that had
been prepared in accordance with USPAP standards.313  The Howard County
Assessor (the “Assessor”) argued that the appraisal had not been properly
prepared in accordance with USPAP standards.314  The Indiana Board determined
that the appraisal was probative of the value of the Parcels despite various defects
in the appraisal and that the property owner had established a prima facie case
that the assessed value was incorrect.315  The Indiana Board further found that the
Assessor had not rebutted or impeached the evidence presented by the property
owner, reducing the assessed value for all Parcels for the 2008 and 2009 tax
years and reducing the appraised value of one Parcel for the 2007 tax year.316 
The Assessor appealed to the Tax Court.317 

The Tax Court noted that a party seeking to overturn a decision of the
Indiana Board bears the burden of demonstrating that the decision is invalid by
reason of being “arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with the law . . . or unsupported by substantial or reliable
evidence.”318  In applying this general rule, the Tax Court ruled that it can
consider on appeal only issues of law and cannot attempt to gauge the probative
value of evidence that was presented.319  Accordingly, the Tax Court did not
consider the Assessor’s arguments regarding the credibility of the property
owner’s evidence.320

The Tax Court also rejected the Assessor’s proposal to reconsider the policy
that a USPAP-prepared appraisal establishes a prima facie case for a property
owner.321  Without specifically addressing whether such a policy exists, the Tax
Court concluded the Indiana Board had not applied such a policy, but had rather
reviewed the appraisal and found it probative as to the value of the Parcels.322 
Accordingly, the property owner had rebutted the presumption that the county’s
assessed value was correct, and the Assessor had failed to present any evidence

311. Id. at 896-97.
312. Id.
313. Id. at 896.
314. Id. at 896-97.
315. Id. at 897.
316. Id. 
317. Id.
318. Id. at 898.
319. Id.
320. Id. 
321. Id. at 899.
322. Id.



1424 INDIANA LAW REVIEW [Vol. 48:1395

to rebut or attach the findings of the appraisal.323  The Tax Court also concluded
that a policy that required a county to rebut the conclusions of a USPAP-prepared
appraisal would not be an undue burden on assessors.324  Instead, the Assessor
could present other evidence, such as comparable sales, to rebut or impeach an
appraisal presented by a taxpayer.325

III.  EASEMENTS, COVENANTS, AND TITLE ISSUES
During the survey period, the Court of Appeals published several opinions in
cases concerning easements, real property covenants, and other title issues.

A.  Public Standing Challenges to Indiana Code
Section 20-23-6-9(d) Violations

In Old Utica School Preservation, Inc. v. Utica Township, the Court of
Appeals considered the applicability of the public standing doctrine to allegations
of violation of Indiana Code section 20-23-6-9.326  Old Utica arose out of a
school corporation’s (“Corporation”) transfer of a former elementary school
(“School”) to Utica Township (“Township”) via quitclaim deed.327  In conformity
with Indiana Code section 20-23-6-9, the deed included a restrictive covenant
that stated the School could only be used “for park and recreation purposes.”328 
The Township opened the School to the public but was soon unable to maintain
its condition due to a lack of sufficient funds.329  On June 17, 2011, a non-profit
company (“Company”) leased the School from the Township and “invested
approximately $300,000 in renovations on the School.”330  The lease required the
Company to allow the Township access to the gym and cafeteria for community
events to take place in the School.331  The Corporation knew about the
Company’s use of the School but did not object or take any action to reclaim
authority over the School.332  On October 25, 2012, several individuals who
owned land adjacent to the School as well as a non-profit historical preservation
society (collectively, “Citizens”) filed a complaint seeking declaratory judgment
and injunctive relief, asserting that the Company did not use the school solely for
park and recreation purposes as required by Indiana law.333  The Company filed

323. Id.
324. Id. 
325. Id. 
326. Old Utica Sch. Pres., Inc. v. Utica Twp., 7 N.E.3d 327, 329-30 (Ind. Ct. App.), trans.

denied, 16 N.E.3d 980 (Ind. 2014).
327. Id. at 329.
328. Id. (noting that at the time the property was transferred, the statutory provision at issue

was codified at IND. CODE § 20-4-5-8 (repealed 2005)).
329. Id.
330. Id.
331. Id.
332. Id.
333. Id.



2015] PROPERTY LAW 1425

a motion for summary judgment on December 7, 2012, arguing that the Citizens
lacked standing to bring their claim.334  The trial court held that the Citizens did
not have standing, granted summary judgment in favor of the Township and
dismissed the Citizens’ complaint.335  The Citizens then filed a motion to correct
error, which the trial court denied.336  The Citizens’ appeal ensued.337

The Court of Appeals concluded that the public standing doctrine conferred
to Citizens the right to enforce the restrictive covenant in the School’s deed to the
Township.338  The Court of Appeals noted that, in general, “only those persons
who have a personal stake in the outcome of the litigation and who show that
they have suffered or were in immediate danger of suffering a direct injury as a
result of the complained-of conduct will be found to have standing” to bring an
action.339  One exception to this rule is the public standing doctrine, which
“applies [both] in cases where public rather than private rights are at issue and
in cases that involve the enforcement of a public rather than a private right.”340 
The Court of Appeals found that a public right was at issue:  Since the School
property was deeded to the Township, the statutory language in Indiana Code
section 20-23-6-9(d) required that the School property be used for park and
recreational purposes.341  Thus, the public had an interest in enforcing the use
restrictions.342  The Court of Appeals further noted it was not considering
whether the lease between the Township and the Company violated the
restrictive covenant in the School deed or what a township should do when
confronted with similar situations, where funds are not available to maintain
property transferred via Indiana Code section 20-23-6-9.343

B.  Adverse Possession and Prescriptive Easements
In Flick v. Reuter, the Court of Appeals considered whether (1) a property

owner was liable to a prior owner of the property’s aunt (“Possessor”) for
damages incurred when the property owner attempted to evict the Possessor from
the property owner’s property (“Property”) without legal process and (2)
Possessor had acquired fee title to or other legal right to remain on the Property
through adverse possession.344  Landowners purchased the Property in 1982.345 

334. Id.
335. Id.
336. Id.
337. Id.
338. Id. at 332-33.
339. Id. at 331.
340. Id.
341. Id. at 332-33.
342. Id. at 333.
343. Id. 
344. Flick v. Reuter, 5 N.E.3d 372, 377 (Ind. Ct. App.), trans. denied, 16 N.E.3d 980 (Ind.

2014). 
345. Id. at 374.



1426 INDIANA LAW REVIEW [Vol. 48:1395

Five years later, the landowners allowed Possessor to live in a mobile home on
0.8 acres of the Property (“Disputed Property”).346  The Disputed Property was
never deeded to Possessor.347  Possessor lived on the Disputed Property, tended
the land, gardened, and had a septic system and water lines installed on the
Disputed Property.348  When Possessor first moved to the Disputed Property, she
received property tax statements and paid them, believing that they were for the
Disputed Property.349  In 1988, landowners deeded 2.28 acres to their son, which
included the Disputed Property.350  For the next two decades, Possessor continued
to live on and maintain the Disputed Property without dispute.351

In 2010, a new property owner (“New Owner”) purchased the 2.28 acres,
which included the Disputed Property.352  New Owner surveyed the 2.28 acres,
which revealed that Possessor’s mobile home, yard, well, and part of her septic
system were all located on the Property.353  New Owner offered to purchase
Possessor’s mobile home but Possessor declined the offer.354  Property owner
then cut off the water supply to the mobile home and severed the lines that ran
to Possessor’s well.355  New Owner also filed a complaint against Possessor for
trespass in the Lawrence County Circuit Court.356  Possessor then filed an answer
and counterclaimed against New Owner for trespass, obtaining a default
judgment against New Owner when he failed to timely respond.357  New Owner
later had the default judgment set aside.358  In the meantime, New Owner entered
onto Possessor’s property and mowed over her plants and installed an electric
fence around the perimeter of her mobile home, preventing her from entering into
the mobile home temporarily.359  Possessor then filed a motion to amend her
counterclaim, adding a request for attorney’s fees and damages and summary
judgment onto her complaint.360  New Owner also filed a motion for summary
judgment.361  The trial court granted summary judgment in Possessor’s favor,
finding that Possessor had acquired title to the Disputed Property through adverse
possession and through the establishment of a prescriptive easement.362  The trial

346. Id.
347. Id.
348. Id.
349. Id.
350. Id.
351. Id. at 374-75.
352. Id. at 375.
353. Id.
354. Id.
355. Id.
356. Id.
357. Id.
358. Id.
359. Id. at 376.
360. Id.
361. Id.
362. Id.



2015] PROPERTY LAW 1427

court also granted her motion to quiet title and ordered New Owner to pay
$29,487.70 in damages.363  New Owner appealed the trial court’s rulings.364

The Court of Appeals upheld the trial court’s award of $29,487.70 in
damages to Possessor, but overruled the trial court’s grant of summary judgment
in favor of Possessor on her adverse possession claim.365  With respect to
Possessor’s damages claim, the Court of Appeals noted that New Owner
improperly resorted to self-help remedies by cutting the water lines, mowing
down Possessor’s plants, and installing an electric fence around Possessor’s
mobile home.366  In doing so, New Owner improperly committed trespass to
chattel instead of using the available legal remedies:  an action for ejectment or
writ of assistance.367  

With respect to Possessor’s adverse possession claim, the Court of Appeals
determined Indiana Code section 32-21-7-1 requires that an “adverse possessor
pay and discharge:  all taxes and special assessments that the adverse possessor
. . . reasonably believes in good faith to be due on the land” during the claimed
period, in addition to establishing the elements of control, intent, notice, and
duration for the statutory period of ten years.368  In this instance, the documents
provided by Possessor showed that she only paid taxes on her mobile home from
2006 to 2010 and not the Disputed Property, and thus the trial court should have
granted summary judgment in favor of New Owner.369  

The Court of Appeals also held that the trial court improperly granted
summary judgment in favor of Possessor on her prescriptive easement claim.370 
Before analyzing Possessor’s claim, the Court of Appeals noted that the “law
disfavors prescriptive easements”; accordingly, the party claiming a prescriptive
easement must meet stringent requirements.371  For a prescriptive easement to
have been created, there must be evidence of “an actual, hostile, open, notorious,
continuous, uninterrupted adverse use for twenty years under a claim of right.”372 
The Court of Appeals concluded that Possessor failed to meet the “adverse”
element of a prescriptive easement claim because, as landowners allowed her to
live on the Disputed Property, her use of the land was permissive and not
adverse.373  Additionally, the Court of Appeals found that Possessor did not
submit any evidence to show that she communicated, either explicitly or
implicitly, to the previous landowners that she was staying on the property under

363. Id. at 377.
364. Id.
365. Id. at 378-81.  The Court of Appeals also considered and upheld the trial court’s decision

to set aside Possessor’s default judgment for property owner’s failure to appear.
366. Id. at 378.
367. Id.
368. Id. at 380.
369. Id. at 380-81.
370. Id. at 381.
371. Id. 
372. Id. at 382.
373. Id.



1428 INDIANA LAW REVIEW [Vol. 48:1395

a claim of right.374

C.  Restrictive Covenants in Residential Declarations
In Avon Trails Homeowner’s Ass’n, Inc. v. Homeier, the Court of Appeals

considered the interpretation of a restrictive covenant contained in a declaration
of covenants for a residential subdivision.375  In Avon Trails, a homeowners’
association (“Association”) managed a subdivision (“Subdivision”) that was
governed by a Declaration of Covenants, Conditions, and Restrictions
(“Declaration”).376  The Declaration contained a provision prohibiting the
outdoor storage of semi-tractor trucks, trailers, boats, and similar items within the
confines of the Subdivision.377  A homeowner in the Subdivision (“Owner”) had
a trailer parked on her lot within the Subdivision.378  On four different occasions,
the Association sent a letter to Owner notifying her that she violated the
restrictive covenant contained in the Declaration and requesting that she remove
the trailer.379  Each time, Owner failed to remove the trailer.380  The Association
sent the fourth letter through its counsel and specified that the trailer had to be
moved by a certain date.381  When Owner failed to remove the trailer by the
specified date, the Association filed a complaint and motion seeking a
preliminary injunction.382 

At the hearing, the trial court sua sponte raised the issue of whether the
restrictive covenant contained in the Declaration even applied to lot owners
within the Subdivision.383  The trial court ultimately denied the Association’s
request for a preliminary injunction, finding that the restrictive covenant did not
apply to lot owners within the Subdivision.384  The Association then filed its
notice of appeal on December 6, 2012.385  However, on April 30, 2013, the
Association and Owner jointly filed a motion to vacate the trial court’s order and
to impose a permanent injunction on Owner.386  In the motion, Owner agreed that
the restrictive covenant did apply to owners within the Subdivision and agreed
to a permanent injunction preventing her from storing a trailer on her lot.387  On

374. Id.
375. Avon Trails Homeowners Ass’n, Inc. v. Homeier, 1 N.E.3d 731, 732-33 (Ind. Ct. App.

2013).
376. Id. at 733.
377. Id.
378. Id.
379. Id.
380. Id.
381. Id.
382. Id.
383. Id. at 734.
384. Id.
385. Id.
386. Id.
387. Id.



2015] PROPERTY LAW 1429

May 1, 2013, the trial court denied the parties’ joint motion and the parties
appealed.388  On June 11, 2013, the Court of Appeals issued an order granting the
parties’ joint motion in part, dismissing the matter without prejudice, and
remanding the case back to the trial court.389  On remand, the trial court reinstated
its May 1, 2013, order denying the parties’ joint motion.390  The Association’s
appeal followed.391

The Court of Appeals held that the restrictive covenant did apply to owners
of lots within the Subdivision, finding that the language prohibiting the storage
of trailers and other items within the Declaration was clearly intended to apply
to lot owners within the subdivision.392  Therefore, the Court of Appeals
determined that the trial court’s order was clearly erroneous.393  As a result, the
Court of Appeals reversed the trial court’s determination and ordered the trial
court to grant the parties’ joint motion.394

D.  Shared Use/Maintenance Provisions in Deeds
In Terry Weisheit Rental Properties, LLC v. David Grace, LLC,395 the Court

of Appeals considered the meaning of shared use/maintenance language in a
series of deeds.396  Terry Weisheit Rental arose from Terry Weisheit Rental
Properties, LLC’s (“Weisheit”) and David Grace, LLC’s (“Grace”) ownership
of subdivided parcels of real estate that had been under common ownership until
1981.397  In 1981, the northern portion of the property was conveyed to Grace’s
predecessor in title in two lots, each improved with paved parking and drive areas
with only one lot, Lot 21a, providing access to public streets.398  The southern
portion, comprised of three lots, was similarly improved with paved parking and
driving areas and provided access to public streets via Lot 21b.399  The deed by
which Weisheit took title to the northern lots (the “Weisheit Deed”) included the
following provision:

ALSO, the mutual use and maintenance of a drive whose centerline is 82
feet South of the Northwest corner of said Lot #20, the mutual use and

388. Id. at 734-35.
389. Id. at 735.
390. Id.
391. Id.
392. Id. at 737.
393. Id.  The trial court had concluded that the general prohibition against parking trailers was

only applicable to the declarant, home builders and the Association because the Declaration
permitted the same parties to park trailers in the event it was necessary to perform their respective
responsibilities. 

394. Id. at 738.
395. 12 N.E.3d 930 (Ind. Ct. App. 2014).
396. Id. at 932.
397. Id. at 933.
398. Id. 
399. Id.



1430 INDIANA LAW REVIEW [Vol. 48:1395

maintenance of the parking areas, and the equal sharing of expenses of
maintaining the party wall comprising the southerly side of the structure
located on above-described tract and the northerly side of the structure
located on grantors’ tract adjoining to the South of the above described
tract.400

The deed by which Grace took title (“Grace Deed”) contained a virtually
identical provision.401  Both properties were improved with commercial buildings
that shared a party wall running east-west; Weisheit owned the southern portion
and Grace the northern portion.402  Weisheit operated a construction business and
leased space to other commercial tenants on its property.403  Grace leased its
property to Dance Central Academy (“Dance Central”).404  

Weisheit’s business and that of Grace’s predecessor-in-title required delivery
by large trucks that had to cross Lot 21a (part of the Grace property), and trucks
delivering to Grace’s predecessor-in-title had to cross Lot 21b (part of the TW
property) in order to reach the appropriate loading dock.405  Customers and
patrons of Grace’s tenant, Dance Central, frequently used the paved parking and
drive areas on both the Grace property and the Weisheit property.406  Weisheit
objected, and at one point parked a box truck just south of the property line
between Lots 21a and 21b, which caused problems for customers trying to park
in front of Dance Central.407  Grace brought a quiet title action to establish its
claim of an easement based on the Grace Deed.408  The trial court concluded that
the deeds to the Grace property (i.e. the Grace Deed and that of Grace’s
predecessor-in-title) did not create an easement, but, rather, “a prescriptive
easement existed as to all parties for the mutual use of [Lots] 21a and 21b.”409 
Weisheit appealed the finding of a prescriptive easement and Grace appealed the
finding that the deed failed to create an express easement.410

The Court of Appeals concluded that the trial court erred in interpreting the
Grace Deed and Weisheit Deed as both clearly included “language establishing
mutual obligations for maintenance of those commonly-used parts of the parking
and driving areas and the party wall.”411  The Court of Appeals concluded
easements were not established because the provisions lacked a clear indication

400. Id.
401. Id.
402. Id.
403. Id.
404. Id. at 933-34.
405. Id.
406. Id. at 934.
407. Id.
408. Id.
409. Id.
410. Id.
411. Id. at 935.



2015] PROPERTY LAW 1431

of the dominant and servient estates.412  Instead, the clear duties and rights
established by the Grace Deed and Weisheit Deed created an affirmative
covenant, which is an affirmative burden on each grantee to perform some act.413 
Covenants may be personal or run with the land, depending on the intent of the
parties to the covenant.414  A covenant will run with the land if:  (1) the parties
intend it to run with the land (which intent may be expressed in the covenant or
inferred from the circumstances at the time the covenant was entered into), (2)
the covenant touches and concerns the land (i.e., if the covenant is logically
connected to the use and enjoyment of the property interest it binds), and (3)
there is privity of estate between subsequent grantees of the original parties to the
covenant.415  In this instance, the Court of Appeals concluded that the Grace
Deed and Weisheit Deed created affirmative covenants that ran with the land and
were binding upon successors-in-interest with respect to the mutual use and
maintenance of the parking and driving areas and the party wall.416 

E.  Tenancy by the Entireties and Rights of Survivorship
In Powell v. Estate of Powell,417 the Court of Appeals considered the legal

effect of a conveyance of real estate by the entirety to two or more individuals
who are not husband and wife, an issue that was a matter of first impression in
Indiana.418  Powell arose from a grantor’s 1995 conveyance of certain property
(the “Property”) to his two sons, Kevin Powell (“Kevin”) and Gary Powell
(“Gary”).419  The deed vesting title in the name of the brothers stated as follows: 
“[T]his Indenture Witnesses that Lawrence H. Powell . . . CONVEY and
WARRANT [sic] to G. Kevin Powell . . . and Gary Lee Powell . . . , as tenants
by the entireties . . . , the following described real estate in Washington County,
State of Indiana . . . .”420  Gary died in 2013 and was survived by Kevin.421

Following Gary’s death, his estate (the “Estate”) filed a complaint for
declaratory judgment seeking a ruling that title to the Property was held by Kevin
and Gary as tenants in common and not as joint tenants with rights of
survivorship.422  Kevin filed a counterclaim asking for declaratory judgment that
the deed created a joint tenancy with right of survivorship—meaning that upon
the death of Gary, Kevin became the sole owner of the Property—rather than a

412. Id. at 936.
413. Id. at 937.
414. Id.
415. Id.
416. Id. at 938.
417. 14 N.E.3d 46 (Ind. Ct. App. 2014).
418. Id. at 47.
419. Id. at 46-47.
420. Id. at 47. 
421. Id.
422. Id.



1432 INDIANA LAW REVIEW [Vol. 48:1395

tenancy in common.423  The trial court conducted a hearing and held the Property
was intended to be held by the brothers as tenants in common.424  Kevin
appealed.425

The Court of Appeals overruled the trial court’s interpretation of the deed.426 
Because a tenancy by the entirety can only be held by a husband and wife, the
Court of Appeals observed that the only two possibilities of ownership between
Kevin and Gary were a tenancy in common or a joint tenancy with rights of
survivorship.427  The Court of Appeals agreed that the relevant statute for
purposes of interpreting the deed was Indiana Code section 32-17-2-1(c), which
provides:

Except as provided in subsection (b), a conveyance or devise of land or
any interest in land made to two (2) or more persons creates an estate in
common and not in joint tenancy unless:  

(1) it is expressed in the conveyance or devise that the grantees or
devisees hold the land or interest in land in joint tenancy and to the
survivor of them; or
(2) the intent to create an estate in joint tenancy manifestly appears
from the tenor of the instrument.428

Thus, the statutory presumption in Indiana is that concurrent owners of real estate
are tenants in common, unless one of the two exceptions is applicable to the
granting provision.429  In Powell, the first exception in subsection (c)(1) did not
apply, as the deed did not specifically express a joint tenancy with rights of
survivorship.430  As a result, the key question was whether the grantor expressed
an intent to convey the Property to Kevin and Gary in joint tenancy.431  In
answering this question, the Court of Appeals first noted that one of its rules of
construction in interpreting a deed is to presume that the party or parties drafting
it intended for every part of the deed to have some meaning.432  The Court of
Appeals concluded the most notable aspect of tenancy by the entirety is that upon
the death of one tenant, the surviving tenant takes possession of the whole—the
right of survivorship.433  By specifying that Kevin and Gary would take the
property “as tenants by the entireties,” the Court of Appeals concluded that the
grantor meant to convey the right of survivorship, and as a result, the Property

423. Id.
424. Id.
425. Id.
426. Id. at 48.
427. Id.
428. Id.
429. Id. at 49.
430. Id.
431. Id. at 49-50.
432. Id. at 50.
433. Id.



2015] PROPERTY LAW 1433

was to be held by Kevin and Gary as joint tenants with rights of survivorship.434

IV.  OIL AND GAS LEASES AND MINERAL RIGHTS
During the survey period, the Court of Appeals published two opinions in

cases concerning oil and gas lease and mineral rights issues.

A.  Royalty and Automatic Termination Provisions
In L.C. Neely Drilling, Inc. v. Hoosier Energy Rural Electrical Cooperative,

Inc.,435 the Court of Appeals considered the interpretation of an advanced royalty
clause in an oil and gas lease.436   L.C. Neely arose out of an oil and gas lease
entered between a landowner (“Original Owner”) and an oil company (the
“Company”) in 2003 (the “Original Lease”).437  The Original Lease required the
Company to pay five dollars per acre as an advanced royalty per year if actual
royalties on oil production had not been paid within thirty-six months of the
commencement of the Original Lease term.438  The Original Lease further
provided that Original Owner must demand payment of “any amount due” prior
to terminating the Original Lease for failure to pay (the “Demand Clause”).439 
In 2008, the Company and Original Owner entered into an amendment to the
Original Lease (the “Lease Amendment”) which provided that the lease would
remain in effect for a period of five years from the original January 3, 2004,
commencement date and continue “as long . . . as gas is produced and sold from
the Lands or from lands pooled therewith or advance royalties are paid.”440  The
Lease Amendment also included a clause providing that if no royalties were paid
or accruing at the end of the thirty-six month period, the lease would continue to
be “in force and effect from year to year . . . upon payment or tender to the
Lessor of Advance Royalties . . . being made annually thereafter on or before the
anniversary date of the expiration of said 36 month period” (the “Advance
Royalties Clause”).441  The Demand Clause was not amended.442

By January 2012, no royalties had been paid, and a new landowner (“New
Owner”) had acquired fee simple title to the subject property.443  The Company
failed to timely pay the 2012 advance royalties by the January 3, 2012, deadline
but sent a check for advance royalties to New Owner on January 27, 2012.444 
New Owner returned the check and notified the Company that the lease had

434. Id. at 47.
435. 8 N.E.3d 251 (Ind. Ct. App. 2014).
436. Id. at 253.
437. Id.
438. Id.
439. Id.
440. Id.
441. Id.
442. Id.
443. Id.
444. Id.



1434 INDIANA LAW REVIEW [Vol. 48:1395

terminated due to the untimely payment of the 2012 advance royalties.445  The
Company subsequently filed a quiet title action, seeking a judgment in its favor
determining that the lease had expired.446  Both parties filed cross-motions for
summary judgment, the trial court granted New Owner’s motion for summary
judgment and the Company appealed.447  

The Court of Appeals concluded the lease terminated when the Company
failed to timely pay the 2012 advance royalties without need of notice from New
Owner.448  The Court of Appeals noted that advance royalty clauses generally fall
into two categories (1) a “drill or pay” clause in which an oil company has an
obligation to either commence production within a certain timeframe or pay
advance royalties, and the failure to do one or the other constitutes a breach of
the lease but does not automatically terminate the lease, or (2) an “unless” clause,
which provides that a lease will terminate automatically unless an oil company
either drills or pays advance royalties by a prescribed date.449  In this instance, the
Court of Appeals found that the Advance Royalties Clause was clearly and
unambiguously an “unless” clause, as after the expiration of the initial term, the
lease was to continue from year-to-year if the oil company paid advance royalties
in the proper amount by January 3 of each successive year.450  The Company
either had the option to renew the lease by timely paying advance royalties each
year or allowing the lease to expire, which “is the very essence of an ‘unless
clause.’”451  Accordingly, the Court of Appeals concluded the lease automatically
terminated when the Company did not timely pay the advance royalties.452

The Court of Appeals also held the Demand Clause was not a prerequisite to
termination as it explicitly stated that in addition to other termination provisions
set forth in the lease, the lease would automatically terminate under certain
circumstances—such as a failure to pay following demand; thus, New Owner was
not required to demand payment, as the termination provisions of the Advance
Royalties Clause were not subject to the Demand Clause. 

B.  Lapse of Mineral Interests
In Westervelt v. Woodcock,453 the Court of Appeals determined whether the

payment of ad valorem taxes on a mineral interest prevented the lapse of such
interest.454  Westervelt arose when the Kathleen A. Briggs Trust (the “Trust”)

445. Id. at 254.
446. Id.
447. Id.
448. Id. at 258.
449. Id. at 255.
450. Id. at 256.
451. Id.
452. Id. at 258.
453. 15 N.E.3d 75 (Ind. Ct. App. 2014).
454. Id. 



2015] PROPERTY LAW 1435

filed a quiet title action pertaining to a mineral interest in Posey County.455  At
the time of the filing of the action, the Trust owned the surface rights and seven-
eighths of the minerals.456  After various defendants settled or were defaulted,
Carolyn Sue Stinson (“Stinson”) was the only remaining defendant.457  Stinson
was the successor-in-interest to an individual who, via a deed from 1958, was
granted mineral rights for a term of thirty years “and as long thereafter as oil
and/or gas is produced from these premises or the property is being developed or
operated therefor.”458  

Continuous production of oil had occurred on the land covered by Stinson’s
mineral deed, and Stinson had paid all real estate taxes that had been assessed
against her mineral interest.459  Nonetheless, the Trust argued that Stinson’s
mineral interest had lapsed pursuant to Indiana’s Dormant Mineral Act (Indiana
Code section 32-23-10-2) (the “Act”), which extinguishes mineral rights that
have not been “used” for the statutory period of twenty years.460  The trial court
granted summary judgment to the Trust and Stinson appealed.461 

The Court of Appeals concluded that Stinson’s payment of taxes prevented
the lapse of the mineral interest.462  At the outset, the court observed that a
mineral interest is “used” for purposes of the Act when, among other
possibilities, “taxes are paid on the mineral interest by the owner of the mineral
interest.”463  Under Indiana law, an oil or gas interest—including royalties—is
subject to assessment and taxation as real property.464  The Trust had argued that
Stinson’s mineral interest lapsed because her tax payments were for ad valorem
taxes assessed on royalties, and the payments did not appear in the public
record.465  In support of its argument, the Trust relied on Miller v. Weber,466 in
which the Court of Appeals previously concluded that payment of capital gains
taxes on the mineral interest did not satisfy the “use” requirement of Indiana
Code section 32-23-10-3(a)(6).467  

The Court of Appeals, though, distinguished Miller from Stinson’s interest
by concluding that the Miller payment of capital gains taxes did not create a
public record of ownership of the mineral interest, as capital gains taxes are not
recorded in any public document.468  In this instance, Stinson paid ad valorem

455. Id. at 76.
456. Id.
457. Id.
458. Id. at 77. 
459. Id.
460. Id.
461. Id. at 76.
462. Id. at 78.
463. Id.; IND. CODE § 32-23-10-3(a)(6) (2014).
464. Westervelt, 15 N.E.2d at 78; IND. CODE § 6-1.1-4-12.4(b) (2014).
465. Westervelt, 15 N.E.2d at 78; IND. CODE § 6-1.1-4-12.4(b) (2014).
466. 839 N.E.2d 204 (Ind. Ct. App. 2005).
467. Id. at 79.
468. Id.



1436 INDIANA LAW REVIEW [Vol. 48:1395

taxes that were, or should have been, recorded in public documents, as Posey
County assessed taxes on Stinson’s interest and generated tax statements which
included identifiable information such as legal descriptions and well numbers.469 
Consequently, the Court of Appeals concluded the “use” requirement of Indiana
Code section 32-23-10-3(a)(6) was satisfied through payment of ad valorem
property taxes and Stinson’s interest was deemed not to have lapsed.470

V.  LANDLORD-TENANT
During the survey period, the Court of Appeals published three opinions in

cases concerning residential and commercial landlord-tenant issues.

A.  Security Deposits and Residential Leases
In Washmuth v. Wiles,471 the Court of Appeals considered the notice

requirements applicable to the seizure of residential lease security deposits.472 
Washmuth arose from a lease for residential property.473  On April 1, 2013, tenant
moved out of the property, but did not provide landlord with a forwarding
address to which landlord was to send the security deposit and any itemized list
of damages.474  On April 29, 2013, landlord and tenant exchanged text messages
regarding the return of the security deposit, at which point tenant directed
landlord to send the itemized list of damages to its attorney’s address.475  

On May 23, 2013, tenant filed a small claims court action against landlord
for the return of the security deposit.476  Upon receiving tenant’s address in the
small claims filing, landlord mailed the itemized list of damages to tenant on May
28, 2013.477  The small claims court entered an order concluding that tenant had
provided landlord with a permanent address (a post office box in the town in
which the property was located) on payment checks while tenant was still in
possession of the property, as well as the address of tenant’s attorney, thus,
triggering landlord’s obligation to return the deposit with an itemized list of
damages within forty-five days.478  The small claims court further determined that
landlord’s return was not timely and required landlord to return the entire
security deposit and to pay tenant’s attorney’s fees.479  Landlord appealed.480

The Court of Appeals reversed, holding that landlord’s forty-five day

469. Id. at 80.
470. Id.
471. 12 N.E.3d 938 (Ind. Ct. App. 2014). 
472. Id. at 939.
473. Id.
474. Id. at 940.
475. Id.
476. Id.
477. Id.
478. Id.
479. Id.
480. Id.



2015] PROPERTY LAW 1437

window to deliver its notice of itemized damages did not begin until tenant’s text
notification of his attorney’s address, and rejecting the small claims court’s
conclusion that the post office box listed on tenant’s past rental checks provided
landlord with his forwarding address.481  Indiana Code section 32-31-3-12
requires a landlord to refund a security deposit, net of any damage claims
provided in an itemized list, within forty-five days after termination of the rental
agreement or delivery of possession to the landlord.482  The Court of Appeals
observed that the post office box was used only in connection with tenant’s stay
at the property and that there was no evidence that this post office box remained
a valid address after the lease terminated.483  Further, the Court of Appeals
declined to establish an obligation for landlords to search through years of
canceled checks to find a forwarding address for their tenants.484  Since tenant
supplied a forwarding address on April 29, 2013, and landlord mailed the notice
to tenant on May 28, 2013, landlord’s notice of itemized damages was timely.485

B.  Duty of Care—Snow and Ice Removal
In Pier 1 Imports (U.S.), Inc. v Acadia Merrillville Realty, L.P.,486 the Court

of Appeals considered the duty of care for a commercial landlord with respect to
snow and ice removal from sidewalks.487  Pier 1 arose out of a retail customer’s
slip and fall on an ice-covered sidewalk in front of a tenant’s retail store.488  The
lease agreement between landlord and tenant allocated the responsibility for
removing snow and ice from sidewalks to landlord.489  To satisfy this obligation,
landlord had contracted with a company (“Company”) to remove snow and ice
from the sidewalk.490  After allegedly slipping on an ice-covered sidewalk outside
of tenant’s retail store, a customer sued landlord, tenant, and Company for
damages related to her injuries.491  All three defendants moved for summary
judgment.492  The trial court granted landlord’s and Company’s summary
judgment motions, concluding that landlord’s contract with Company and
Company’s use of a combined forty-five man hours to salt the sidewalk prior to
the incident absolved both of any liability.493  Tenant’s motion was denied, and

481. Id. at 942-43.
482. Id. at 942.
483. Id.
484. Id.
485. Id.
486. 991 N.E.2d 965 (Ind. Ct. App.), trans. dismissed, 997 N.E.2d 357 (Ind. 2013).
487. Id. at 966.
488. Id.
489. Id.  
490. Id.
491. Id.
492. Id.
493. Id. at 967.



1438 INDIANA LAW REVIEW [Vol. 48:1395

tenant appealed.494
The Court of Appeals concluded the grant of summary judgment in favor of

landlord and the Company was improper as a genuine issue of material fact
existed as to the scope of landlord and Company’s duty of care.495  The Court of
Appeals first noted that in negligence actions, summary judgment is rarely
appropriate.496  Whether landlord discharged its duty of care merely by
contracting with Company was a matter for the jury to decide and was not
appropriate for summary disposition.497  Similarly, whether Company failed to
exercise reasonable care in performing its snow and ice removal services was
also a question for the jury.498  Though Company had devoted a substantial
amount of time in salting the sidewalk, one of tenant’s employees continued to
salt the sidewalk, which raised a genuine issue of material fact as to whether
Company had fully discharged its duty.499  Accordingly, the Court of Appeals
reversed the trial court’s summary judgment rulings.500

C.  Operating Co-Tenancy
In Claire’s Boutiques, Inc., v. Brownsburg Station Partners LLC,501 the Court

of Appeals considered the interpretation of an operating co-tenancy provision in
a lease.502  Claire’s Boutiques arose out of a commercial landlord’s ownership of
a retail shopping center (the “Shopping Center”).503  The Shopping Center
consisted of two large single-tenant buildings and two other buildings divided
into smaller retail spaces known as Building A1 and Building A3.504  In 2007,
landlord negotiated a lease with tenant for the lease of 1500 square feet of retail
space in Building A3 for a term of sixty-one months.505  The lease contained an
operating co-tenancy provision granting tenant the right (1) to pay percentage
rent only (five percent of gross retail sales) if occupancy of the non-department
retail tenants in Buildings A1 and A3 fell below seventy percent, or if Kohl’s or
Lowe’s (or a similar anchor) failed to open for business; and (2) to terminate the
lease in the event occupancy fell below the above thresholds for a period of at

494. Id.
495. Id. at 969-70.  The Court of Appeals considered and rejected landlord’s and the

Company’s argument that tenant lacked standing to challenge the grant of summary judgment in
favor of landlord and the Company.  Id.

496. Id. at 969.
497. Id. at 970.
498. Id.
499. Id.
500. Id.
501. 997 N.E.2d 1093 (Ind. Ct. App. 2013).
502. Id. at 1095.
503. Id.
504. Id.
505. Id.



2015] PROPERTY LAW 1439

least one year.506  In May 2009, tenant decided to close its store in the Shopping
Center for under performance, vacating the leased premises in June 2009 without
notice to landlord.507  Landlord sent a default notice demanding payment of the
accelerated balance of the rent.508  Tenant never responded to the notice and
made no further rent payments.509  Landlord sued for breach of the lease, and
both parties moved for summary judgment.510  Tenant alleged the seventy percent
occupancy threshold had not been achieved for over a year, triggering tenant’s
right to terminate.511  The trial court determined the co-tenancy provision was
ambiguous, calculated the threshold based upon the leasable square footage in
Buildings A1 and A3, and concluded the termination right had not vested.512 
Tenant appealed.513

The Court of Appeals held that the operating co-tenancy provision of the
lease was not ambiguous; therefore, the trial court erred in concluding that the
seventy percent occupancy was to be calculated as a percentage of gross leasable
area rather than percentage of possible tenants.514  The Court of Appeals also held
the lease did not define a method of termination and the operating co-tenancy
provision did not require any notice to exercise tenant’s option to terminate.515 
Accordingly, the trial court erred when it held that tenant failed to properly
terminate its lease by vacating the premises.516  The Court of Appeals also
rejected landlord’s argument that the tenant’s decision to vacate was not based
on the operating co-tenancy provision, but on other business considerations, since
a party to a contract may defend its performance based upon a legal excuse for
non-performance that existed at the time although such party was ignorant of the
fact at the time.517

VI.  BANKRUPTCY AND QUIET TITLE ACTIONS
In Goodman v. Serine,518 the Court of Appeals considered the impact a

bankruptcy court order has with respect to an action to quiet title to the property
impacted by the bankruptcy court order.519  Goodman arose from a property

506. Id. at 1095-96.
507. Id. at 1096.
508. Id.
509. Id.
510. Id.
511. Id.
512. Id.
513. Id. at 1096-97.
514. Id. at 1099.
515. Id. at 1101.
516. Id.
517. Id. at 1101-02.
518. 6 N.E.3d 481 (Ind. Ct. App. 2014).
519. Id. at 482.



1440 INDIANA LAW REVIEW [Vol. 48:1395

owner’s failure to pay federal income taxes for 2003, 2005, and 2006.520  On
March 10, 2008, the Internal Revenue Service (the “IRS”) filed tax liens on the
property owner’s property (the “Property”).521  On July 22, 2008, the property
owner filed for bankruptcy and included the Property as an asset.522  The IRS
then filed a proof of claim for the unpaid taxes.523  On August 11, 2008, property
owner executed a land contract for the sale of the Property to purchaser for
$150,000, with $20,000 paid at execution and $10,000 at a later date with the
balance paid through monthly payments over a period of ten years.524  The
contract clearly stated that the Property contained encumbrances, including the
tax liens.525  Property owner executed the contract and delivered a quitclaim deed
on the same day, but the deed was not recorded until February 1, 2010.526  On
July 8, 2009, property owner filed a motion with the bankruptcy court for
permission to sell the Property free and clear of any liens.527  In their motion,
property owner alleged that they still owned the Property and did not disclose the
sale, land contract, or conveyance.528  Additionally, property owner represented
in their motion that the IRS consented to the sale of the Property.529  Property
owner’s motion was granted by the bankruptcy court on August 5, 2009, but no
sale occurred following that date.530  Property owner’s bankruptcy action was
dismissed on October 1, 2009.531  Purchaser filed an action seeking to quiet title
to the Property in March 2012 and named the IRS as a defendant.532  Purchaser
further claimed that the IRS tax liens on the Property had been released by the
bankruptcy court.533  In his motion, purchaser noted that the quitclaim deed had
not been recorded until 2010 but failed to mention that the sale, land contract,
and conveyance had occurred before the bankruptcy court’s order clearing the tax
liens and granting approval for the sale of the Property.534  Purchaser and IRS
each moved for summary judgment and the trial court granted summary judgment
in favor of the IRS.535  Purchaser appealed.536

The Court of Appeals determined that the trial court was not the proper

520. Id.
521. Id.
522. Id.
523. Id.
524. Id. at 483.
525. Id.
526. Id.
527. Id.
528. Id.
529. Id.
530. Id.
531. Id.
532. Id.
533. Id.
534. Id.
535. Id.
536. Id.



2015] PROPERTY LAW 1441

forum for the resolution of purchaser’s quiet title action, because the sale of the
Property took place during bankruptcy proceedings and was therefore subject to
the bankruptcy court’s jurisdiction.537  The Court of Appeals vacated the trial
court’s judgment and ordered the trial court to dismiss purchaser’s quiet title
action.538

VII.  MECHANIC’S LIENS
During the survey period, the Court of Appeals published three opinions in

cases concerning mechanics’ lien issues.

A.  Slander of Title
In Country Contractors, Inc., v. A Westside Storage of Indianapolis, Inc.,539

the Court of Appeals considered the standard to prove slander of title based on
improperly filed mechanic’s liens.540  Country Contractors arose out of a
contractor’s agreement to construct a storm sewer and other excavation work for
a property owner, eventually entering into a written contract for the work.541  The
contractor subcontracted with an excavator to perform most of the work.542  The
excavator then hired three other companies to provide materials for the project
(collectively, the “Suppliers,” and together with the excavator, the
“Subcontractors”).543  The contractor and excavator began work in the summer
of 2008.544  In the fall of 2008, property owner paid the contractor
$191,535.72.545  During that same time, the excavator sent the contractor a total
of five invoices.546  The contractor paid the first four invoices but failed to pay
the fifth invoice for $38,182.23, claiming to have never received it.547  Near the
end of 2008, the contractor stopped all work on the project.548  In February 2009,
the Subcontractors filed notices of intent to hold mechanic’s liens on the
property.549  In May 2009, the property owner paid each of the Subcontractors’
mechanic’s liens.550  Later that month, the contractor filed a notice of intent to

537. Id. at 483-84.
538. Id. at 484.
539. 4 N.E.3d 677 (Ind. Ct. App. 2014).
540. Id. at 682-83.  The Court of Appeals also considered the Owner’s claim to pierce

Contractor’s corporate veil, concluding “the trial court clearly erred in piercing the veil . . . .”  Id.
at 687-91.

541. Id. at 692-93.
542. Id. at 682.
543. Id.
544. Id.
545. Id.
546. Id.
547. Id.
548. Id.
549. Id.
550. Id.



1442 INDIANA LAW REVIEW [Vol. 48:1395

hold a mechanic’s lien on the property.551  The property owner then contracted
with another construction company to complete the project.552  The property
owner filed a breach of contract claim against the original contractor in May
2009, alleging that it failed to complete performance and failed to pay the
Subcontractors.553  In the complaint, the property owner also demanded an
accounting of the payments he had made to the original contractor under the
contract.554  A trial was held in January 2013, and the property owner sought
damages for breach of contract and slander of title.555  On March 11, 2013, the
trial court found in favor of the property owner and awarded damages in the
amount of $117,542.20.556  The original contractor appealed.557

The Court of Appeals held that there was sufficient evidence to support the
trial court’s finding that the original contractor slandered property owner’s
title.558  In support of its holding, the Court of Appeals found that the original
contractor’s filing of a lien against the property owner’s property was improper,
because the contractor filed a lien claim when the contractor had not performed
the work itself and had failed to pay the Subcontractors’ invoice.559  The Court
of Appeals further determined that the contractor should not have filed the lien,
because it had constructive notice that the property owner had paid the
Subcontractors directly, as a record of the payment was on file with the county
recorder.560

B.  Award of Attorney’s Fees
In Goodrich Quality Theaters, Inc. v. Fostcorp Heating and Cooling, Inc.,561

the Court of Appeals considered whether the trial court abused its discretion in
awarding attorney’s fees to certain contractors and against a general contractor
pursuant to the Indiana mechanic’s lien statute.562  Goodrich Quality Theaters,

551. Id.
552. Id.
553. Id.
554. Id.
555. Id.
556. Id.
557. Id.
558. Id. at 692-93.  The Court of Appeals also considered and rejected contractor’s defenses

to the trial court’s award of attorney’s fees.  Id. at 693.  The Court of Appeals also determined the
trial court’s award of delay damages to property owner was speculative and based on inconclusive
evidence.  Id. at 699.

559. Id. at 692.
560. Id. at 692-93.
561. 16 N.E.3d 426 (Ind. Ct. App.), aff’d on reh’g, No. 64A03-1308-PL-318, 2014 WL

7051157, at *1 (Ind. Ct. App. Dec. 15, 2014).
562. Id.  The Court of Appeals also considered several other issues related to the interpretation

of construction contracts and the power of a trial court to retroactively make a prior ruling a final
judgment.  Id. at 434-38.



2015] PROPERTY LAW 1443

Inc. (“Goodrich”) hired Roncelli, Inc. (“Roncelli”) to serve as general contractor
for construction of an IMAX movie theater in Portage, Indiana (the “Theater”).563 
Goodrich leased the land on which the Theater was to be constructed from Spirit
Master Funding III, LLC (“Spirit Master”) and obtained Spirit Master’s consent
to construct the Theater on its land.564  Goodrich hired Paradigm Design, Inc.
(“Paradigm”) to create the design drawings for the Theater.565  Roncelli hired
Fostcorp Heating and Cooling, Inc. (“Fostcorp”), Wilson Iron Works, Inc.
(“Wilson Iron”), and Johnson Carpet, Inc. (“Johnson Carpet”) as project
contractors.566  Wilson Iron in turn hired Falpeg Capital, LLC, d/b/a Gooder-
Henrichsen, Inc. (“Gooder”), and Gateway Construction as subcontractors.567 
Fostcorp in turn hired Sheet Metal Werks, Inc. (“Sheet Metal”) and Air Temp
Mechanical (“Air Temp”) as subcontractors.568  Several disputes as to completed
work and payments resulted in Wilson Iron, Johnson Carpet, and Fostcorp
(collectively, the “Contractors”) filing mechanics liens against the Theater
property.569  Litigation ensued with the Contractors seeking to foreclose their
mechanic’s liens.570  Based upon meritorious claims against Roncelli for failure
to pay for services rendered under the various contracts, the trial court awarded
Contractors their attorney’s fees based upon the Indiana Mechanics Lien
Statute.571  Roncelli appealed.572

The Court of Appeals concluded that the trial court abused its discretion in
awarding attorney’s fees against Roncelli pursuant to the Indiana mechanic’s lien
statute.573  The Indiana mechanic’s lien statute provides that a lienholder who
recovers a judgment in an action to enforce a lien under the statute is entitled to
recover reasonable attorney’s fees; however, a lienholder may not recover
attorney’s fees from a party who is not the property owner, even if the judgment
is related to work performed that gives rise to the mechanic’s lien.574  Since
Roncelli was not the owner of the real estate or the Theater, the Court of Appeals
concluded that a mechanic’s lien could not be enforced against Roncelli and
attorney’s fees payable under the mechanic’s lien statute were inapplicable.575

563. Id. at 429.
564. Id.
565. Id.
566. Id.
567. Id.
568. Id.
569. Id. at 430-32. 
570. Id.
571. Id. at 441 (citing IND. CODE § 32-28-3-14 (2014)).
572. Id. at 429.
573. Id. at 441.
574. Id. (citing IND. CODE § 32-28-3-14 (2014)).
575. Id.



1444 INDIANA LAW REVIEW [Vol. 48:1395

VIII.  COMMON ENEMY DOCTRINE
In Samples v. Wilson,576 the Court of Appeals considered a property owner’s

trespass and nuisance claims.577  Samples arose from property that Wilson owned
(the “Wilson Property”) with a border elevation of approximately twelve feet
higher than that of the adjacent property that Samples owned (the “Samples
Property”).578  Water flowed from the Wilson Property onto the Samples
Property.579  In 1998, Wilson enlarged the pond and associated dam located on
the Wilson Property.580  In 2003, Samples filed a complaint against Wilson,
alleging trespass from water related to the construction of the dam.581  In 2006,
Wilson conveyed the Wilson Property to a new owner (“New Owner”).582  In
2007, Samples amended his complaint to include New Owner and alleged that
the expanded dam on the Wilson Property encroached on the Samples Property,
the dam was improperly constructed, and water runoff from the Wilson Property
created standing water on Samples Property.583  Samples sought an injunction to
cease the encroachment and correction of the dam deficiencies and monetary
damages.584  During the 2013 trial, Samples testified that a portion of the
expanded dam encroached on his property and two acres of his property became
swampy after the dam expansion.585  Wilson and New Owner both testified that
the two acres had been periodically wet prior to the dam expansion and Samples
utilized the two acres for storage and a burn area before and after the dam
expansion.586  A surveyor also testified the dam did not encroach on the Samples
Property.587  The trial court entered judgment in favor of New Owner.588  Samples
appealed.589

The Court of Appeals upheld the trial court’s ruling with respect to Samples’
nuisance and trespass claim.590  On appeal, Samples had argued that the trial
court’s findings that the dam did not encroach upon the Samples Property were
irrelevant, because the casting of water from the Wilson Property created a
trespass.591  The Court of Appeals observed the “common enemy” doctrine

576. 12 N.E.3d 946 (Ind. Ct. App. 2014).
577. Id. at 948.
578. Id.
579. Id.
580. Id.
581. Id.
582. Id. at 948-49.
583. Id. at 949.
584. Id.
585. Id.
586. Id.
587. Id.
588. Id.
589. Id.
590. Id. at 952.
591. Id. at 950.



2015] PROPERTY LAW 1445

provides that “surface water which does not flow in defined channels is a
common enemy and that each landowner may deal with it in such manner as best
suits his own convenience.”592  An exception to the common enemy doctrine
exists where “an owner of land has, by artificial means, thrown or cast water onto
his neighbor in unusual quantities so as to amplify the force at a given point or
points.”593  The evidence indicated that the dam did not throw or cast onto the
Samples Property; rather, the Samples Property received natural runoff from the
Wilson Property and another neighboring property.594  The Court of Appeals also
determined that Samples’ allegation of nuisance was not supported by evidence
since testimony and an inspection performed by the Indiana Department of
Natural Resources indicated that the dam was constructed with proper
components, and the wetlands on Samples’ land existed prior to the dam
expansion.595

IX.  MITIGATION OF CONTRACTUAL DAMAGES
In Fischer v. Heymann,596 the Indiana Supreme Court considered a non-

breaching party’s duty to mitigate its damages from the other party’s breach of
contract.597  Fischer arose from a purchaser’s agreement to purchase a residential
condominium unit from seller for $315,000.598  Prior to closing, purchaser
demanded that seller repair an electrical problem after an inspection report
revealed three power outlets did not work.599  When seller failed to timely
respond to purchaser’s demand, purchaser terminated the purchase agreement,
claiming that the electrical issue was a “major defect” under the purchase
agreement.600  Days later, seller repaired the electrical issue for $117.601 
Purchaser nonetheless refused to perform under the purchase agreement, and
Seller sued for specific performance.602  Seller kept the condominium unit listed
for sale, finally selling it five years later for $180,000.603  The trial court ruled in
purchaser’s favor, concluding that the purchaser reasonably believed the
electrical problem was severe enough to justify its termination of the purchase
agreement.604  On appeal, the Court of Appeals disagreed that the purchaser’s
belief was objectively reasonable and remanded to the trial court to determine

592. Id.
593. Id.
594. Id. at 951.
595. Id. at 951-52. 
596. 12 N.E.3d 867 (Ind.), reh’g denied, 12 N.E.3d 867 (Ind. 2014).
597. Id. at 869.
598. Id.
599. Id.
600. Id.
601. Id.
602. Id.
603. Id.
604. Id.



1446 INDIANA LAW REVIEW [Vol. 48:1395

damages.605
On remand, seller sought damages of $306,616.73, which included the

difference between the original contract sale price and the proceeds from the sale
of the unit, along with closing costs, attorney’s fees, and maintenance costs.606 
The trial court entered damages in favor of seller in an amount equaling
$93,972.18 on the basis that seller failed to mitigate her damages by declining to
sell the condominium in 2007 for $240,000.607  Both parties appealed, with
purchaser claiming that seller was required to mitigate her damages by timely
responding to its demand for the electrical repair.608  The Court of Appeals
agreed with purchaser, reducing seller’s damage award to $117—the cost of the
electrical repairs.609  Seller appealed the Court of Appeals’ ruling to the Supreme
Court.610

The Supreme Court overruled the Court of Appeals, finding performance
beyond a non-breaching party’s contractual duty is not required for it to mitigate
its damages.611  Purchaser’s unreasonable demand for electrical repairs and
subsequent termination was a breach under the purchase agreement; accordingly,
seller was not required to timely comply with the repair request, and Purchaser
had no right to terminate the agreement.612  Just as breaching parties may not take
advantage of their breach to relieve them of their contractual duties, neither may
they take advantage of their breach to require non-breaching parties to perform
beyond their contractual duties.613  The Supreme Court upheld the trial court’s
determination that it was unreasonable for seller to have not sold the unit in 2007
for $240,000, as the records supported the trial court’s finding.614

X.  RECOVERY UNDER THE ENVIRONMENTAL LEGAL ACTION STATUTE
In JDN Properties v. VanMeter Enterprises, Inc.,615 the Court of Appeals

considered the scope of liability under the Environmental Legal Actions Statute
(the “ELA”).616  JDN Properties arose from a corporation’s (the “Owner”)
ownership of a parcel of land (the “Land”).617  An individual was the sole owner
of the Owner (“Farmer”).618  Farmer was also the president of the company that

605. Id.
606. Id. at 869-70.
607. Id. at 870.
608. Id.
609. Id.
610. Id.
611. Id. at 872-73.
612. Id.
613. Id.
614. Id. at 874.
615. 17 N.E.3d 357 (Ind. Ct. App. 2014).
616. Id. at 358.
617. Id. at 359.
618. Id.



2015] PROPERTY LAW 1447

leased the Land from the Owner (“Tenant”).619  At all relevant times, Tenant
operated the Land.620  Farmer hired vendor to redirect underground water lines
serving the Land away from a well located near underground storage tanks
(“USTs”) used for petroleum heating fuel on the Land.621  Farmer subsequently
died, transferring the Owner entity to Farmer’s son, who had never participated
in the operations of Owner or Tenant.622  Farmer’s son then sold the Land to third
parties who formed and transferred title to the Land to purchaser.623  Owner
disclosed as part of the sale that USTs had been located on and removed from the
Land but that there had never been a reportable release of any hazardous
substances or petroleum.624  Years later, purchaser discovered petroleum
contamination on the Land related to the USTs, which it spent significant sums
to remediate.625  Purchaser then sued Owner under the ELA, which provides that
“a person may, regardless of whether the person caused or contributed to the
release of a hazardous substance or petroleum into the surface or subsurface soil
or groundwater that poses a risk to human health and the environment, bring an
environmental legal action against a person that caused or contributed to the
release to recover reasonable costs of a removal or remedial action involving the
hazardous substances or petroleum.”626  The trial court granted Owner’s motion
for summary judgment.627  Purchaser appealed.628

The Court of Appeals reversed the trial court, ruling that a landlord who has
knowledge that a tenant’s use of land is causing environmental contamination,
but does nothing to halt or remediate such contamination and sells that property
to a third party without disclosing the property’s condition, “contributes” to such
contamination.629  In such a situation, both landlord and tenant would be
potentially liable under the ELA.630  Owner presumably received rents from
Tenant while being fully aware (by virtue of Farmer’s ownership/control of both
entities) that Tenant’s use of the property was causing petroleum contamination
in the ground, as demonstrated by the redirection of the water lines, thus
precluding summary judgment in Owner’s favor.631

619. Id.
620. Id.
621. Id.
622. Id.
623. Id.
624. Id.
625. Id.
626. Id. at 359-60 (citing IND. CODE § 13-30-9-2 (2014)).
627. Id. at 359.
628. Id.
629. Id. at 362.
630. Id.
631. See id.



1448 INDIANA LAW REVIEW [Vol. 48:1395

XI.  ABANDONMENT OF MOBILE HOMES
In Mobile Home Management Indiana, LLC v. Avon Village MHP, LLC,632

the Court of Appeals addressed the issue of the timing requirements of the
Indiana Abandoned Mobile Home Statute.633  Mobile Home Management arose
from a property owner’s purchase of certain property that contained mobile
homes from a sheriff’s sale.634  The sale did not include title to the mobile
homes.635  The owner auctioned the mobile homes as “abandoned” under the
Abandoned Mobile Home Statute,636 which grants a property owner the right to
auction an abandoned mobile home if it has been on the property owner’s
property without permission for thirty days.637  The thirty day period begins when
the property owner delivers a statutorily required notice to the mobile home’s
owner of record.638  If the owner of record of the mobile home does not request
additional time or remove the mobile home within thirty days of the first notice,
the property owner is required to send a second notice by certified mail to the
owner of record of the mobile home.639  The auction may be held no sooner than
thirty days after the second notice’s return receipt is received by the property
owner.640  In Mobile Home Management, the property owner mailed both
statutory notices, but did not comply with the statutorily required timeframes,
conducting the auction only forty-two days after the first notice, rather than the
statutory minimum of sixty days.641  The property owner purchased all the mobile
homes at issue at the auction.642  Shortly after the auction, the record owner of the
mobile homes sold the mobile homes to a third party.643  The property owner then
filed suit for declaratory judgment to declare it the rightful owner of the mobile
homes.644  The trial court denied the third party’s motion for summary
judgment.645  The third party appealed.646  

The Court of Appeals reversed the trial court, holding that a property owner
is required to strictly comply with the statutory notice requirements under the
Abandoned Mobile Home Statute.647  Accordingly, the third party purchaser was

632. 17 N.E.3d 275 (Ind. Ct. App. 2014).
633. Id. at 276 (citing IND. CODE § 9-22-1.5-1 (2014)).
634. Id. at 277.
635. Id.
636. Id. at 278 (citing IND. CODE § 9-22-1.5-1 (2014)).
637. Id. at 279 (citing IND. CODE § 9-22-1.5-2 (2014)).
638. Id. (citing IND. CODE § 9-22-1.5-3 (2014)).
639. Id. (citing IND. CODE § 9-22-1.5-4 (2014)).
640. Id.
641. Id. at 280.
642. Id. at 277.
643. Id. at 278.
644. Id.
645. Id.
646. Id.
647. Id. at 280.



2015] PROPERTY LAW 1449

the title holder to the mobile homes.648

XII.  ZONING
During the survey period, the Court of Appeals published two opinions in

cases concerning the interpretation and application of zoning ordinances.

A.  Exhaustion of Administrative Remedies
In Barnette v. US Architects, LLP,649 the Court of Appeals considered

whether a declaratory judgment action challenging a zoning determination and
denial of a variance should be dismissed for failure to exhaust administrative
remedies.650  Landowners (“Owners”) retained an architect (“Architect”) to
design an accessory building on their residential lot.651  Owners submitted plans
to the Carmel Department of Community Services (“DCS”), which ultimately
issued a building permit and subsequent certificate of occupancy.652  Several
months after the accessory building was built, Owners’ neighbors complained to
DCS that Owners’ accessory building violated building height restrictions in the
Carmel Zoning Ordinance.653  DCS sent Owners a letter stating that the DCS had
determined that the building permit had been issued in error, advising Owners to
file for a design standards variance.654  Owners did not appeal DCS’s
determination that their accessory building exceeded height restrictions under the
Carmel Zoning Ordinance to the Carmel Board of Zoning Appeals (“BZA”)
pursuant to Indiana Code section 36-7-4-918.1.655  However, Owners did apply
for a variance on the advice of and with the assistance of DCS, which was denied
by the BZA.656  Owners did not appeal the denial of variance by the BZA.657 
DCS sent a second letter to Owners stating that the certificate of occupancy was
being withdrawn and providing Owners with sixty days in which to remodel the
accessory building.658  Owners did not appeal this determination.659  Instead,
Owners and Architect (collectively, “Plaintiffs”) filed a complaint against the
City of Carmel (“City”) for a declaratory judgment seeking interpretation of the
Carmel Zoning Ordinance provision applicable to building height requirements
for the accessory building.660  City, and the neighbor who intervened in the

648. Id.
649. 15 N.E.3d 1 (Ind. Ct. App. 2014).
650. Id. at 4.
651. Id.
652. Id.
653. Id. at 5.
654. Id.
655. Id.
656. Id.
657. Id.
658. Id. at 5-6.
659. Id. at 6.
660. Id.



1450 INDIANA LAW REVIEW [Vol. 48:1395

matter, contended that Plaintiffs had not exhausted their administrative
remedies.661  Plaintiffs asserted that DCS had violated their due process rights by
effectively revoking their certificate of occupancy without a hearing and asserted
estoppel as an affirmative defense.662  The trial court held that Plaintiffs’ failure
to exhaust administrative remedies would have been fatal to their claims but for
two reasons:  (1) DCS’s violation of Owners’ due process rights in revoking the
certificate of occupancy without a hearing, and (2) DCS should be estopped from
revoking the certificate of occupancy issued because Owners had reasonably
relied (to their detriment) on the issuance of the building permit and certificate
of occupancy only to be told almost six months after construction was completed
that the accessory building did not comply with the Carmel Zoning Ordinance.663 
The neighbors appealed, but City did not.664

The Court of Appeals concluded that Owners’ failure to exhaust their
administrative remedies left the trial court without subject matter jurisdiction and
so reversed the trial court’s ruling and remanded with instruction to dismiss
Owners’ complaint.665  The Court of Appeals first established that, as a general
rule, where “an administrative remedy is available, filing a declaratory judgment
action is not a suitable alternative.”666  The Court of Appeals observed that this
general rule applies even where the basis of the complaint is the
unconstitutionality of a statute, which may be beyond the agency’s power to
resolve, because administrative remedies may be able to resolve the issue without
reaching the constitutional question.667  The Court of Appeals acknowledged that
an exception to the general rule exists “when some equitable consideration
precludes its application,”668 but concluded that the trial court erred when it
determined that Plaintiffs had satisfied the elements of a claim of equitable
estoppel and were therefore excused from exhausting their administrative
remedies prior to filing suit.669  The Court of Appeals also rejected Plaintiffs’ due
process claims, concluding that, after failing to take advantage of opportunities
to appeal the DCS determinations and the BZA denial of the requested variance,
Owners could not claim to have been denied due process.670

661. Id.
662. Id.
663. Id. at 7.
664. Id. at 8.
665. Id.
666. Id. at 9 (citing Carter v. Nugent Sand Co., 925 N.E.2d 356, 360 (Ind. 2010)).
667. Id.
668. Id. at 10 (citing Smith v. State Lottery Comm’n of Ind., 701 N.E.2d 926, 931 (Ind. Ct.

App. 1998)).
669. Id. at 11.
670. Id.



2015] PROPERTY LAW 1451

B.  Interpretation of a PUD Ordinance
In Brookview Properties, LLC v. Plainfield Plan Commission,671 the Court

of Appeals considered the Plainfield Plan Commission’s (“PPC”) interpretation
of a PUD ordinance.  Brookview Properties concerned a property owner’s plan
to develop apartments under the name Hearthview Metropolis on twenty-five
acres of property within the Metropolis PUD (the “Hearthview Parcel”).672  The
Metropolis PUD was originally conceived of as a mixed-use project to be
developed in phases by a single developer.673  The property owner acquired the
Hearthview Parcel at a sheriff’s sale following foreclosure against the original
developer of the Metropolis PUD.674  In July 2012, the property owner filed for
approval of a PUD Preliminary Plan and a PUD Final Detailed Plan that provided
for the development of apartments on the Hearthview Parcel.675  At a public
hearing on the property owner’s petition, the PPC heard comments for and
against the Hearthview Metropolis project.676  At the hearing, the property owner
took the position that although the original preliminary plan encompassing the
Hearthview Parcel (the “Original Plan”) that contemplated multi-family use of
the Hearthview Parcel had expired, the uses permitted under the Original Plan
remained approved uses.677  Accordingly, the PPC’s authority was limited to
approving the property owner’s proposed development standards.678  At the end
of the hearing, PPC denied the property owner’s petition, finding that the
proposed Hearthview Metropolis project was not appropriate for the surrounding
area because (1) additional multi-family units would add to the existing
imbalance of housing types in Plainfield, (2) the project did not address the
remaining undeveloped areas within the original PUD area, (3) the project was
not consistent with the original intent of the PUD, and (4) the design of the
project was inconsistent with the design of the Metropolis PUD.679  The property
owner filed petition for judicial review of the PPC’s denial of its petition.680  The
trial court affirmed the PPC denial of the property owner’s petition.681  Property
owner appealed.682  

The Court of Appeals considered four issues:  (1) whether the PPC exceeded
its authority when it denied the development plan, (2) whether the PPC’s findings
were adequate, (3) whether the PPC’s decision violated the property owner’s

671. 15 N.E.3d 48 (Ind. Ct. App. 2014).
672. Id. at 55.
673. Id.
674. Id.
675. Id.
676. Id.
677. Id.
678. Id.
679. Id. at 57.
680. Id.
681. Id.
682. Id.



1452 INDIANA LAW REVIEW [Vol. 48:1395

substantive and procedural due process rights, and (4) whether the PPC’s
decision constituted an unconstitutional taking without just compensation.683  The
Court of Appeals affirmed the trial court’s ruling as to all four issues.684  First,
the property owner contended that PPC’s sole function in reviewing its petition
was to consider the proposed development plans according to the prescribed
development standards for multi-family housing.685  The property owner argued
that the power to re-zone land is with the Town Council, not the PPC, and PPC’s
denial amounted to a change in the underlying PUD zoning ordinance.686  The
Court of Appeals rejected the argument, concluding that the Metropolis PUD did
not establish a land use for the Hearthview Parcel, in part because no primary
plan designating a land use, let alone a multi-family use, had been approved with
respect to the Hearthview Parcel.687  As such, the trial court did not err in
concluding that the PPC had the authority to reject a proposed multi-family use
for the Hearthview Parcel.688

Second, the property owner argued that the PPC’s findings were
insufficiently detailed, in particular that certain of the PPC’s findings were mere
general statements tracking the language of the ordinance.689  Indiana Code
section 36-7-4-1406(a) requires that plan commissions issue written findings of
each decision to allow for adequate judicial review.690  Findings should include
specific, concrete reasons for each decision, and should not be raised piecemeal,
so that a petitioner can attempt to amend their petition to comply with the
ordinance being applied.691  Findings of a plan commission are insufficient if they
are merely a general recitation of the requirements of the ordinance at issue.692 
The Court of Appeals read the PPC’s findings as sufficiently detailed to provide
the property owner with notice of the reasons for the PPC’s denial.693

Third, the property owner argued that the PPC’s denial of its petition on the
ground that multi-family use was approved under the Metropolis PUD was
without legitimate basis, and beyond the PPC’s discretion, and was therefore a
denial of due process.694  Because the evidence supported the PPC’s
determination that the Metropolis PUD did not designate any land use for the
Hearthview Parcel, the Court of Appeals rejected the property owner’s

683. Id. at 58-66.
684. Id.
685. Id. at 58.
686. Id.
687. Id. at 59-60.
688. Id. at 60.
689. Id. at 61.
690. Id.
691. Id. (citing The Kroger Co. v. Plan Comm’n of the Town of Plainfield, 953 N.E.2d 536,

543 (Ind. Ct. App. 2011)).
692. Id.
693. Id. at 65.
694. Id.



2015] PROPERTY LAW 1453

argument.695
Fourth, the property owner argued that it acquired the Hearthview Parcel

with the knowledge and expectation that multi-family use was approved under
an existing preliminary plan, and that the PPC’s denial constituted a taking
without just compensation.696  The Court of Appeals rejected this argument,
concluding that because no preliminary plan had been approved for the
Hearthview Parcel, the property owner could not have had any expectation
concerning a specific land use of it.697

XIII.  COMMON LAW DEDICATION TO GOVERNMENTAL UNITS
In Lagro Township v. Bitzer,698 the Court of Appeals considered the

circumstances under which language in a deed establishing a cemetery can
effectuate a public dedication to a governmental unit.  Lagro Township arose out
of a property owners’ deed of one acre of “real estate in Wabash County to ‘the
public’ to be used as a cemetery.”699  The one acre parcel was located on a larger
219-acre parcel of land that was later purchased by the Bitzers (“Owners”) in
1967.700  From the time that Owners purchased the 219 acres in 1967, Lagro
Township (the “Township”) never contacted them about the cemetery or
otherwise attempted to maintain the cemetery.701  In 2006, the Wabash County
Assessor assigned the cemetery its own tax identification number for the first
time, showing the cemetery as exempt from property tax; however, the
cemetery’s legal description and acreage on the tax records were misidentified
so the exempt acreage was never deducted from Owners’ property taxes.702  In
2009, Owners cleared the cemetery area except for the two headstones of the
original landowners.703  Shortly thereafter, the Township’s Trustee (the
“Trustee”) conducted an investigation and concluded that Owners had desecrated
the cemetery.704  The Township then brought a quiet title action to establish the
Township’s interest in preserving the cemetery and to recover damages from
Owners.705  The trial court granted Owners’ motion for summary judgment and
the Township appealed.

The Court of Appeals concluded that the Township did not have statutory
control over the cemetery.706  Though the Township correctly stated that

695. Id. at 65-66.
696. Id. at 66.
697. Id.
698. 999 N.E.2d 902 (Ind. Ct. App. 2013).
699. Id. at 902.  
700. Id.
701. Id. at 903.
702. Id.
703. Id.
704. Id.
705. Id.
706. Id. at 907.



1454 INDIANA LAW REVIEW [Vol. 48:1395

Indiana’s General Cemetery Law grants townships the responsibility to locate
and maintain certain cemeteries that are without funds for maintenance (Indiana
Code section 23-14-68-3), the Court of Appeals noted that the statute is
inapplicable to cemeteries located on land on which property taxes are assessed
and paid.  In this instance, the cemetery property was misidentified in the
county’s tax records.707  As a result, Owners had paid taxes on all of their land,
including the cemetery property, without deduction or exemption since 1967.708 
Accordingly, the Court of Appeals upheld the trial court’s decision even though
“there was a genuine issue of material fact with regard to whether and to what
extent the dedication of [the cemetery] to the public was accepted by the public
through usage.”709

707. Id.
708. Id.
709. Id.