Indiana Appeals Court Holds Plaintiffs Failed to Exhaust Administrative Remedies in Zoning Dispute

The Bowens (Plaintiffs) designed an accessory building with the help of U.S. Architects. They were issued a building permit and a certificate of occupancy. The Barnettes (Defendants), neighbors, complained to the Carmel Department of Community Services (DCS) about the height of the building. The DCS then notified and advised the Plaintiffs that their building was not in compliance with the Carmel Zoning Ordinance, and advised them to apply for a variance with the Carmel Board of Zoning Appeals (BZA). Plaintiffs then followed instructions and applied for a variance but the request for variance was denied by the BZA. The Plaintiffs continued to operate in their building without appealing either determinations made by the DCS or BZA (The City), and ultimately decided o file a complaint for declaratory relief against the City.

The City and the Defendant in return filed a motion for judgment on the pleadings based on the Plaintiff’s failure to exhaust their administrative remedies, but the trial court found that the City violated the Plaintiffs’ due process rights by revoking their license without giving them the opportunity to be heard, and ordered the City to reissue the certificate of occupancy or provide compensation to the Plaintiffs. The trial court further concluded that U.S. Architects lacked standing to bring an action against the defendants because it had not suffered a denial in the property interest or incur an actual injury.

Defendants in return appealed while The City decided not to file a notice of appeal and Plaintiffs in return claimed that the appeal was moot because the Defendants could not enforce an ordinance on the City’s behalf. The Court however concluded that the appeal was not moot because a party that appeared previously on the record in a lower court proceeding also has the right to appear in appellate proceedings. The court went on to find that the Plaintiffs did in fact fail to exhaust their administrative remedies, and that The City therefore did not violate the Plaintiffs’ due process rights. In Regards to the U.S. Architects contention that the trial court erred in determining that it could not bring a declaratory action judgment, the court found that the trial court’s decision should be affirmed because an injury suffered to U.S Architects would be derivative of that suffered by the Plaintiffs, and because U.S. Architects did not receive advisory opinions or guidance that would effect their designing of future buildings.

Barnette v US Architects, LLP, 2014 WL 3695257 (IN App. Ct. 7/25/2014)

The opinion can be accessed at: http://www.in.gov/judiciary/opinions/pdf/07251402tac.pdf