Silver Lake Partners, LLC v. Town of Silver Lake, Indiana (mem. dec.)

MEMORANDUM DECISION Pursuant to Ind. Appellate Rule 65(D), this Memorandum Decision shall not be FILED regarded as precedent or cited before any Jun 07 2019, 8:46 am

court except for the purpose of establishing CLERK Indiana Supreme Court the defense of res judicata, collateral Court of Appeals and Tax Court estoppel, or the law of the case.

ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEE Bruce N. Munson Jay A. Rigdon Law Office of Bruce N. Munson, P.C. Rockhill Pinnick, LLP Muncie, Indiana Warsaw, Indiana

IN THE COURT OF APPEALS OF INDIANA

Silver Lake Partners, LLC, June 7, 2019 Appellant-Petitioner, Court of Appeals Case No. 18A-PL-2701 v. Appeal from the Kosciusko Superior Court Town of Silver Lake, Indiana, The Honorable David C. Cates, Appellee-Respondent. Judge Trial Court Cause No. 43D01-1806-PL-61

Friedlander, Senior Judge. [1] Silver Lake Partners, LLC (“the LLC”), appeals the trial court’s affirmation of

an administrative order to demolish a building on its property. We affirm.

Court of Appeals of Indiana | Memorandum Decision 18A-PL-2701 | June 7, 2019 Page 1 of 9 [2] For decades, Silver Lake Elementary School (“the School”) served the residents

of Silver Lake, Kosciusko County, Indiana. The School was built in the 1930s

and is an Art Deco-style multi-story building containing classrooms and a

gymnasium. It closed in 2005, and the school corporation sold it. The LLC

purchased the School in 2008. The School has remained vacant and unused

since 2008. The LLC has attempted to start a charter school in the School but

has failed to obtain regulatory approval. [3] On May 12, 2009, the Town of Silver Lake (“the Town”) enacted an ordinance

that adopted Indiana’s Unsafe Building Law and created an Office of the

Building Commissioner. The Town has cited the School for violations of the

ordinance more than 365 times since 2009. [4] The Town hired Calvin Bolt to inspect the School. He performed inspections

on December 9, 2016, and January 2, 2017. On January 10, 2017, he submitted

a report to the Town Council. We discuss the report in more detail below, but

Bolt identified numerous problems with the roof and other parts of the building.

He summarized the School as “not safe or habitable inside and is a hazard

inside.” Appellant’s App. Vol. 2, p. 13. [5] On March 27, 2018, the Town’s building commissioner issued a demolition

order, instructing the LLC to demolish the School within fifteen days. The

LLC requested a hearing. Hearing Officer Thomas Earhart held an evidentiary

hearing on May 16, 2018. On May 30, 2018, Hearing Officer Earhart issued an

order approving the building commissioner’s demolition order. He determined

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the School met the statutory definition of an unsafe building and was “a danger

to the health and safety of the public.” Id. at 147. [6] On June 9, 2018, the LLC filed a Petition for Judicial Review, alleging the

hearing officer’s determination was arbitrary and capricious because it was

unsupported by evidence. The trial court held oral argument and considered

the evidence that had been presented to the hearing officer. On September 12,

2018, the court issued findings of fact and conclusions thereon affirming the

hearing officer’s order. The LLC filed a motion to correct error, which the

court denied. This appeal followed. [7] The LLC argues the trial court should have reversed the hearing officer’s order.

The LLC further argues the evidence presented to the hearing officer

established the LLC had attempted to correct the problems that had caused the

building commissioner to issue the demolition order. [8] Indiana Code sections 36-7-9-1 et seq. is also known as the Unsafe Building

Law (“the USB”). Municipalities and counties may adopt the USB by

ordinance. Ind. Code § 36-7-9-3 (1990). Under the USB, enforcement

authorities may issue orders requiring property owners to remedy unsafe

buildings, including: vacating an unsafe building; sealing an unsafe building

against unauthorized intrusion; removal of trash or debris; repair or

rehabilitation of an unsafe building; and demolition or repair of an unsafe

building. Ind. Code § 36-7-9-5 (2015). [9] An unsafe building is defined as follows:

Court of Appeals of Indiana | Memorandum Decision 18A-PL-2701 | June 7, 2019 Page 3 of 9

a building or structure, or any part of a building or structure, that is:

(1) in an impaired structural condition that makes it unsafe to a person or property;

(2) a fire hazard;

(3) a hazard to the public health;

(4) a public nuisance;

(5) dangerous to a person or property because of a violation of a statute or ordinance concerning building condition or maintenance; or

(6) vacant or blighted and not maintained in a manner that would allow human habitation, occupancy, or use under the requirements of a statute or an ordinance; . . . .

Ind. Code § 36-7-9-4 (2014). [10] When an enforcement authority issues an order requiring a property owner to

take action on an unsafe building, the property owner may request a hearing

before a designated hearing authority. Ind. Code § 36-7-9-7 (2015). The

hearing authority may affirm, rescind, or modify the order. Id. The hearing

authority’s decision may be appealed to “the circuit or superior court of the

county in which the unsafe premises are located.” Ind. Code § 36-7-9-8 (2015).

This type of appeal is an action de novo, and the court may affirm, modify, or

reverse the hearing authority’s decision. Id.

Court of Appeals of Indiana | Memorandum Decision 18A-PL-2701 | June 7, 2019 Page 4 of 9 [11] “Under de novo review, a trial court may, ‘to a limited extent, weigh the

evidence supporting the finding of fact by the enforcement authority. The court

may negate the finding only if, based upon the evidence as a whole, the finding

of fact was arbitrary, capricious, an abuse of discretion, unsupported by the

evidence, or in excess of statutory authority.’” Brown v. Anderson Bd. of Pub.

Safety, 777 N.E.2d 1106, 1108 (Ind. Ct. App. 2002) (quoting Kopinski v. Health &

Hosp. Corp. of Marion Cty., 766 N.E.2d 454, 454-55 (Ind. Ct. App. 2002)), trans.

denied. The trial court may not substitute its judgment for that of the hearing

authority because “the facts should be determined only one time.” Id. When

we review the trial court’s decision in a case involving an unsafe building, we,

like the trial court, are required to determine whether its decision was arbitrary,

capricious, an abuse of discretion, unsupported by the evidence, or in excess of

statutory authority. Groff v. City of Butler, 794 N.E.2d 528 (Ind. Ct. App. 2003). [12] In this case, the LLC purchased the School in 2008. The LLC tried several

times to start a charter school in the building but failed to obtain approval from

regulators. [13] The School deteriorated over the following years, and the Town received

numerous complaints about its condition. Some complainants saw birds and

bats exiting the building. In addition, the School’s doors were left propped

open at times, and broken windows were visible. Other complainants noted the

School was adjacent to a public playground, and unsupervised children had

been found trespassing in the building in the past. Fourteen large air

conditioning units were installed in the School’s windows, and people

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expressed concern that they could fall out on passersby. The LLC neglected the

lawn and mowed it only sporadically. Finally, the Town’s marshal saw

sinkholes on the property. [14] The Town had cited the LLC over 365 times for violations of the unsafe

building ordinance. The LLC failed to pay fines related to the citations. In

addition, Town officials met with the LLC’s members several times over the

years, and they did not see any proof that the LLC had the financial resources

to pay for the extensive repairs the School needed. Paul Hayden, who works

for Indiana Landmarks, a nonprofit organization that seeks to preserve historic

buildings, examined the School’s exterior. He testified the School was a “large

building” that needed “a lot of work.” Appellant’s App. Vol. 2, p. 133.

Hayden further explained, “There becomes [sic] a tipping point where a

building is not financially feasible to be restored. We’re getting to that point.”

Id. at 134. [15] Bolt inspected the School from the roof to the basement on December 9, 2016,

and January 2, 2017. He noted substantial problems with the roof. He

explained that a portion of the roof had a new membrane, but the supporting

“sheathing boards” had rotted away and had not been properly replaced. Tr.

Vol. 3, p. 45. Without new sheathing boards, the membrane would inevitably

sag and leak. Further, the lack of a supporting structure under the membrane

made portions of the roof unsafe for walking. In addition, the entire perimeter

of the roof needed repair, because portions of the membrane had peeled open

along the parapet walls, allowing moisture to infiltrate the building. Bolt

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recommended ripping out the membrane and installing new roof sheathing

throughout. [16] Next, Bolt noted bricks and limestone on the west side of the School’s exterior

were “tilting and tipping out.” Id. at 43. He explained the bricks would need to

be removed and reinstalled to prevent water intrusion. In addition, rain water

was entering through the chimney, and mortar joints on the chimney needed to

be re-caulked. Bolt also saw seven broken windows. Further, Bolt stated that

at least three of the fourteen window air conditioning units needed to be

removed because the frames around them had rotted, posing a risk that the

units would fall out. [17] Inside the School, Bolt noticed that many ceiling tiles had fallen out due to

saturation from roof leaks. Some of the tiles on the ceiling and floor displayed

“extensive mold.” Id. at 44. There was also mold on the walls of several

rooms. Bolt indicated testing was necessary to determine whether the mold was

hazardous. In addition, the gymnasium’s wooden floor was warped and

buckled due to water infiltration. Bolt found several dead birds throughout the

School, which indicated that the building had not been sufficiently sealed. [18] In the basement, Bolt saw mud on the floor and water marks on the wall

indicating where flooding had occurred. He theorized that the floor drain was

blocked and indicated that further work was needed to determine the source of

the water. In summary, Bolt described the school as an “albatross” and

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explained that repairing and reconfiguring the building for another use, such as

apartments, would cost “a hefty 7 figure amount.” Id. at 129. [19] Bolt later advised the Town’s council not to enter the School without a

respirator due to mold. On one occasion in 2016, the Town’s marshal searched

the building to see if anyone had broken and entered. He had trouble

breathing, which he attributed to mold. On the day of the evidentiary hearing,

the marshal had stopped by the School, and he saw broken windows that had

not been repaired or boarded up. In addition, James Malcolm testified at the

evidentiary hearing on behalf of the LLC. He had walked through the School a

week before the hearing, and he conceded that he saw mold and broken

windows. [20] This evidence clearly supports the hearing officer’s determination that the

School is an unsafe building as defined by Indiana Code section 36-7-9-4. The

building has deteriorated, and the LLC lacks the resources to correct the

numerous, substantial problems. As a result, the trial court did not err in

determining the school is in an impaired structural condition that makes it

unsafe to a person or property; it is a hazard to the public health; it is a public

nuisance; and it is vacant or blighted and not maintained in a manner that

would allow human habitation, occupancy, or use. Further, the building is

unlikely to be repaired and restored to use. See Brown, 777 N.E.2d at 1106

(demolition order was supported by substantial evidence; the house was in a

dilapidated and dangerous state, homeowner had failed to make necessary

repairs despite ample opportunity and was unlikely to make repairs).

Court of Appeals of Indiana | Memorandum Decision 18A-PL-2701 | June 7, 2019 Page 8 of 9 [21] The LLC argues that it made efforts to correct the problems before the

evidentiary hearing, including removing all ceiling tiles. It further argues Bolt’s

report was “unprofessional” and “vague.” Appellant’s Br. p. 9. The LLC

finally argues Bolt’s assessment of roof leaks is wrong. These arguments are not

sufficient grounds for reversal. We are obligated to determine whether the

hearing officer’s decision was arbitrary and capricious, and we have determined

that it was not arbitrary and capricious because it was supported by substantial

evidence. The LLC presented its arguments to the hearing officer, and on

appeal they amount to a request to reweigh the evidence, which our standard of

review forbids. See 409 Land Tr. v. City of South Bend, 709 N.E.2d 348 (Ind. Ct.

App 1999) (trial court order affirming demolition order was not an abuse of

discretion; property owner had attempted to make repairs, but repairs were

untimely and insufficient to correct the property’s substantial problems), trans.

denied. [22] For the foregoing reasons, we affirm the judgment of the trial court. [23] Judgment affirmed.

Riley, J., and May, J., concur.

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