Posted by: Patricia Salkin | November 2, 2020

IN Appeals Court Holds Circuit Court Acted Within Its Discretion in Entering Preliminary Injunction Against Landlord Over Enforcement of Town Zoning Ordinance Regulating Adult Entertainment Facilities

This post was authored by Matthew Loescher, Esq.

Midwest Entertainment Ventures, Inc. (d/b/a Theatre X) (MEV), and AMW Investments, Inc. (AMW) was operating as an adult entertainment venue pursuant to an adult business license issued to it by the Town. At some point, the Building Commissioner issued a notice of violation (NOV) and an order of abatement to AMW, notifying AMW that there were holes in the walls between Theatre X’s viewing rooms in violation of the Town’s Zoning Ordinance and requiring AMW to permanently close the holes. This was eventually remedied, but in February 2019, police observed Theatre X patrons engaged in indecent acts on the premises. As a result, the Building Commissioner sent AMW notice of intent to revoke. MEV and AMW sought judicial review of the decision by city council to revoked venue’s adult business license, after theatre violated zoning ordinance by failing to provide managers a clear view of all areas on the premises and knowingly allowing sexual acts to occur on the premises. The Circuit Court denied theatre and landlord’s motions to dismiss for lack of subject matter jurisdiction and granted the city’s motion for a preliminary injunction. Following this decision, Theatre and landlord filed this interlocutory appeal.

On appeal, MEV and AMW contended that the trial court did not have subject matter jurisdiction to issue the preliminary injunction. Specifically, AMW argued that the Town failed to provide any evidence that AMW “operates” Theatre X, citing provisions of the SOB Ordinance defining “operates” and “operating”. Under the lease agreement, however, AMW required MEV to operate the premises as an adult entertainment venue, and AMW retained the ultimate authority to control any changes to the building, including those necessary to comply with applicable ordinances. Moreover, the trial court found that: MEV operated Theatre X, MEV and AMW shared the same principal business address, AMW owned the land and the building in which Theatre X was operated, and both MEV and AMW were subject to the Zoning Ordinance the SOB Ordinance. The court therefore found that the trial court did not abuse its discretion by enjoining AMW.

Midwest Entertainment Ventures, Inc v. Town of Clarksville, 158 NE 3d 787 (IN App 10/21/2020)

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