Mendenhall v. City of Indianapolis

Citations: 717 N.E.2d 1218; 1999 Ind. App. LEXIS 1827; 1999 WL 819710Docket: 49A04-9901-CV-1

Court: Indiana Court of Appeals; October 12, 1999; Indiana; State Appellate Court

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Burke Mendenhall and Plaza-Hill Realty Corporation appealed a trial court's summary judgment favoring the City of Indianapolis and Marion County, as well as the denial of Mendenhall's motion for summary judgment regarding his inverse condemnation claim. The Court of Appeals of Indiana affirmed the trial court's decision, determining that undisputed facts indicated the actions Mendenhall contested were executed by an agent of the State of Indiana, thereby granting the City and County immunity. The court addressed several issues, including whether the trial court correctly established the agent's status in a prior adjudication, if the City and County were immune for actions taken by the County Prosecutor and City Police in a civil forfeiture case, and whether inverse condemnation was an appropriate remedy for the property's seizure. 

The case stemmed from a civil complaint filed by Marion County Prosecutor Stephen Goldsmith in 1983 against Mendenhall and others, alleging racketeering activities related to the operation of adult bookstores. The complaint sought forfeiture of properties involved in these activities under Indiana's RICO Act and the Civil Remedies for Racketeering Activity Act.

A seizure petition was filed along with a probable cause affidavit from an Indianapolis Police Department detective, alleging that two bookstores sold obscene materials. The affidavit also referenced a new bookstore on property owned by Mendenhall. After reviewing supporting testimony, a trial judge issued an ex parte order confirming probable cause for violations of Indiana law, directing the police to secure Mendenhall's property before the bookstore's opening. On August 3, 1983, police padlocked the building and denied access to Mendenhall and his associate, Gorelick. The defendants sought to dismiss the complaint and vacate the seizure order, claiming violations of their First and Fourteenth Amendment rights. The trial court denied this motion but allowed for an interlocutory appeal. The case was consolidated with another appeal concerning similar constitutional issues, although Mendenhall was not a party in that appeal.

On February 2, 1984, the Indiana Court of Appeals modified the seizure order, instructing the police to release Mendenhall's property and preserve all items within it. Mendenhall regained possession and later transferred the property title to Plaza-Hill, an Indiana corporation. On June 12, 1985, the Court of Appeals ruled that Indiana's statutory scheme regarding RICO and CRRA violated the First Amendment by acting as a prior restraint on obscenity. Subsequently, Mendenhall filed a federal civil rights complaint, which was stayed pending the state court's appeal resolution.

On March 2, 1987, the Indiana Supreme Court vacated the appellate ruling, determining that including obscenity as a predicate offense did not render the RICO and CRRA statutes unconstitutional and upheld the pre-trial seizure. During this time, Gorelick defaulted on his lease, leading Mendenhall to lease the premises to Video Gift Center, which aimed to open an adult bookstore. However, on August 1, 1987, the property was reseized by the police under the original order upon direction from Goldsmith. The United States Supreme Court later granted certiorari in a related case, ruling on February 21, 1989, that while the statutory scheme was constitutional, the pre-trial seizure of bookstore contents violated the First Amendment as a prior restraint on expression.

In April 1989, Mendenhall settled a state court litigation, where Goldsmith, through deputy prosecutor Philip Blowers, agreed to dismiss a pending RICO/CRRA action against Mendenhall in exchange for his commitment to refrain from using his property for "adult use." Mendenhall signed an agreement, resulting in the dismissal of the RICO action with prejudice and the lifting of a stay in federal proceedings. Subsequently, the District Court dismissed Mendenhall's federal civil rights complaint and declined to exercise jurisdiction over a related state inverse condemnation claim, a decision later affirmed by the Seventh Circuit Court of Appeals.

On December 22, 1995, Mendenhall filed a complaint in Marion County Superior Court for damages from inverse condemnation against the City and County, which were jointly represented. Both parties sought summary judgment. The trial court granted the City and County’s motion for summary judgment, denied Mendenhall’s motion, and ruled in favor of the City and County. Mendenhall's motion to correct the error was denied, leading to this appeal.

The legal standards for reviewing summary judgment are outlined: it is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. The moving party must show prima facie evidence of no genuine issues, after which the burden shifts to the nonmovant to present specific facts demonstrating such issues exist. Summary judgment is inappropriate even with undisputed facts if the law is incorrectly applied to those facts. The appellate court reviews the case under the same standards as the trial court, considering only designated materials and interpreting them in favor of the nonmoving party to determine if genuine issues exist.

The losing party in a trial court must demonstrate to the appellate court that an error occurred. While specific findings and conclusions from the trial court are helpful, they are not mandatory, and the appellate review is not restricted to the trial court's rationale for summary judgment. A summary judgment can be upheld based on any applicable theory supported by the evidence. The simultaneous requests for summary judgment by both parties do not change the review standard; each motion is evaluated separately to identify genuine issues of material fact and the legal entitlement of the moving party.

In the case involving Mendenhall, the trial court found that the facts were undisputed but Mendenhall argued that the law was misapplied. Mendenhall contested three key legal conclusions: (1) the trial court found that issue preclusion established Goldsmith's status as a state agent; (2) the City/County was entitled to immunity for Goldsmith's actions; and (3) an inverse condemnation claim was not a suitable remedy for Mendenhall's damages related to the civil forfeiture action.

The trial court's decision was based on prior rulings that confirmed Goldsmith was acting as a state agent, thereby preventing Mendenhall from pursuing an inverse condemnation claim against the City/County. Mendenhall claimed the trial court erred in this determination, asserting that issue preclusion only applies to issues actually adjudicated in previous cases, and does not cover matters inferred without explicit adjudication. The fairness of applying issue preclusion to a party that had a full opportunity to litigate the issue is a critical consideration.

Reviewing a trial court's decision on issue preclusion follows an abuse of discretion standard. In a prior federal case, Mendenhall brought section 1983 claims against Goldsmith, the City, and the County. The District Court determined that Goldsmith is a state officer, thus exempting the City and County from liability for his actions related to a civil forfeiture action. Mendenhall now seeks damages from the City and County for alleged inverse condemnation linked to Goldsmith's prosecution. He argues that issue preclusion does not apply since his inverse condemnation claim was dismissed without prejudice, indicating it was not adjudicated on the merits. However, this reflects a misunderstanding of issue versus claim preclusion; claim preclusion applies only when a final judgment on the merits exists. The federal court did not decide Mendenhall's state inverse condemnation claim but ruled that Goldsmith acted as an agent of the State, preventing re-litigation of this issue. Consequently, while the inverse condemnation claim is not barred, the City and County cannot be held liable due to Goldsmith’s recognized status as a State agent.

Mendenhall also contends that the City/County should not benefit from Goldsmith's prosecutorial immunity; however, since it has been established that he acted as a State agent, the question of prosecutorial immunity is moot. Additionally, the trial court ruled that the City/County is entitled to judicial immunity concerning actions taken by the Indianapolis Police Department (IPD) in executing a pre-trial seizure order. Mendenhall disputes this ruling, but judicial immunity is well-established for judges acting within their jurisdiction, barring exceptions only when jurisdiction is completely absent.

The underlying policy for granting judicial immunity is to uphold judicial independence in decision-making. This immunity extends to non-judicial officers performing quasi-judicial functions, as established in J.A.W. v. State. Individuals involved in tasks critical to the judicial process are considered extensions of the judicial officer and are thus entitled to immunity. The determination of immunity is based on the function performed, not the identity of the performer, following the functional approach from the U.S. Supreme Court. The execution of court orders is deemed integral to judicial proceedings, granting immunity to non-judicial officers acting in furtherance of valid court orders. In this case, the Indianapolis Police Department (IPD) executed a seizure order originally issued in 1983, which was valid and within the trial court's jurisdiction. Consequently, IPD is shielded from liability under judicial immunity, and the City cannot be held liable for IPD's actions. 

In a subsequent seizure in 1987, IPD acted on the same order after the Indiana Supreme Court upheld the constitutionality of the statute related to the case. Although the property was released to Mendenhall following a Court of Appeals decision, the order was later reinstated. Mendenhall's objections regarding IPD's actions were not raised in the trial court at the pertinent time. The trial court also concluded that no taking occurred under Mendenhall's inverse condemnation claim, stating that he failed to demonstrate that his property was taken for public use without formal appropriation. The legal framework for inverse condemnation requires the landowner to prove an interest in land taken for public use without proper eminent domain procedures, followed by potential damage assessments if a taking is found.

A taking by inverse condemnation occurs when there is substantial interference with private property that impairs the owner's use or enjoyment. Determining whether such interference is substantial is typically a factual question. An inverse condemnation action is not actionable until the landowner demonstrates that their property has lost all economically beneficial use. 

In Mendenhall's case, his inverse condemnation claims against the City and County are inappropriate for three reasons: 

1. Claims regarding property taken due to civil forfeiture should have been directed at the State, as Goldsmith acted on the State's behalf during the forfeiture proceedings. The CRRA stipulates that if property is found to violate RICO, it must be forfeited to the State, making the State liable for any improper taking.
   
2. Mendenhall's claims related to the padlocking of his property under the seizure order should have been raised in the original trial court where the order was issued. He did not challenge the order in that court and instead filed a separate action, missing the chance to contest the validity of the seizure.

3. His claim regarding a covenant restricting future use of the property is waived since he voluntarily signed it to expedite the return of his property. If there was no basis for the seizure, the property would have been returned without restrictions. Mendenhall has not demonstrated that the covenant deprived his property of all economically beneficial use.

Additionally, Mendenhall's motion for summary judgment was denied because the undisputed facts indicate that neither the City nor the County was responsible for any taking, thus he is not entitled to judgment or compensation for inverse condemnation.

The trial court properly granted summary judgment in favor of the City and the County, determining that neither entity was legally responsible for Mendenhall's alleged damages related to inverse condemnation of his property. Additionally, the court correctly denied Mendenhall's motion for summary judgment. The appellate court affirmed the trial court's judgment. The document also notes that oral arguments took place on September 14, 1999, in Indianapolis, Indiana, and refers to both Mendenhall and Plaza-Hill collectively as "Mendenhall." Mendenhall attempted to appeal for both himself and Plaza-Hill pro se; however, Plaza-Hill's appeal was dismissed due to its lack of legal representation. The district court found that Goldsmith was protected by absolute prosecutorial immunity concerning liability in a civil forfeiture action. The text clarifies that prosecutorial and judicial immunities are separate from the immunity outlined in the Indiana Tort Claims Act, which does not apply to the inverse condemnation claims raised by Mendenhall. Mendenhall's references to the Tort Claims Act are therefore irrelevant to the case. Lastly, a procedural hearing that was supposed to occur did not take place, but this is not a matter of contention in the current proceedings.