Following denial of its request for primary plat approval for a subdivision, The Lake County Trust Company (“LCTC”) appealed and the trial court ordered mediation. Eventually the Commission and LCTC reached a written settlement agreement (the “Agreement”) providing that LCTC submit a revised primary and sketch plan in accordance with the Agreement, and then the Commission would , at its next regular meeting, approve the Agreement and its engineering. LCTC made the agreed upon submission, and the Commission met as scheduled, but voted to defer a decision on the subdivision for thirty days. LCTC then filed a motion to enforce the Agreement, and the Commission voted to reject the Agreement. The trial court ordered the Agreement be enforced, and it directed the Commission to approve the plat and issue any necessary permits. Although the Commission complied, the trial court found that the Commission acted in bad faith in failing to approve the subdivision after having granted its attorneys (who had agreed to the Agreement) full settlement authority. However, the trial court said that the Commission could not be sanctioned therefore since governmental entities are not subject to sanctions under the Indiana Alternative Dispute Resolution Rules. Following appeals, the Court of Appeals handled the matters as a consolidated appeal and agreed that the Commission was immune from sanctions, and found that held that the Commission did not act in bad faith.
The Indiana Supreme Court reversed in part, finding that government entities are not exempt from sanctions under the State ADR Rules, further noting that when governmental entities enter into mediation agreements in court, they are on the same basis as any other litigant and subject themselves to the Court’s authority to control actions, including the imposition of sanction for noncompliance. The Court agreed, however that the Commission did not act in bad faith for failing to approve the subdivision because such action remained subject to the Commission’s final approval at a public meeting. Specifically, the Court agreed with the Commission that it is precluded from delegating authority to its attorneys to approve subdivision plans pursuant to a mediation agreement.
Lake County Trust Co. v. Advisory Plan Commission of Lake County, 2009 WL 1153997 (Ind. 4/28/2009)
The opinion can be accessed at: http://www.in.gov/judiciary/opinions/pdf/04280902bd.pdf