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Friday, July 24, 2009

Ind. Decisions - "Court reverses property tax verdict"

The July 23rd COA opinion in City of Hammond v. Graoch Associates #52, L.P., d/b/a River Park Apartments (ILB summary here - 2nd decision) is the subject of a story today in the Gary Post Tribune, reported by Christin Nance Lazerus:

The former owner of the Hammond's River Park apartments will be forced to pay 2005 property taxes, after the Indiana Court of Appeals reversed a lower court decision on Thursday.

Hammond condemned the complex in November 2005, since it was viewed as a drain on city resources. Police were dispatched to the apartments often and the Health Department closed several buildings for alleged health violations.

The city agreed to prorate the 2005 taxes for complex owner Graoch Associates #52 L.P. based on the 2004 bill. The city received a $259,140.92 credit and agreed to pay the bill when it came due.

After the condemnation was complete and the $14 million in compensation was paid, the Court of Appeals decided Southtown Properties, Inc. v. City of Fort Wayne.

Graoch filed a lawsuit, arguing that -- based on the Southtown case -- it owed no property taxes for 2005, and sought to recoup the money credited to the city.

Graoch obtained a declaratory judgment against the Lake County Assessor, Treasurer, and Auditor that Graoch did not owe 2005 property taxes. The trial court also ordered judgment against the city, finding the money credited for payment of taxes had to be returned.

In its reversal, the Court of Appeals decided that the Southtown case does not relieve property owners of liability for property tax if condemnation of the property was complete before Southtown was decided.

"Retroactive application of Southtown in this case would impair an existing contract and vested rights," the court wrote.

Posted by Marcia Oddi on July 24, 2009 09:15 AM
Posted to Ind. App.Ct. Decisions