December 4, 2019

Demolition Is a Proper Contempt Sanction; Indy Diamond, LLC v. City of Indianapolis

Category: Indianapolis Law Club | Author: | Share:

Indy Diamond owns a large parcel of real estate in Marion County. On the land is a severely dilapidated former apartment complex that is currently vacant aside from criminals and squatters who frequent the property. After years of fighting with the City of Indianapolis over numerous municipal code violations, the parties entered into an agreed judgment whereby Indy Diamond agreed to secure and maintain the property.

Indy Diamond failed to comply with the terms of the agreed judgment and the City filed a contempt petition. The court granted the petition and, as a sanction, ordered Indy Diamond to demolish the buildings located on the property. Indy Diamond appealed.

The Court of Appeals upheld demolition as an appropriate sanction on the facts of the case, explaining:

A party who has been injured or damaged by the failure of another person to conform to a court order may seek a finding of contempt. Once a party is found in contempt, the trial court has the inherent authority to fashion an appropriate contempt sanction that is “coercive and remedial in nature.” In other words, when a court exercises its civil contempt power—the power is not to be used in a primarily punitive fashion, but instead to “coerce action for the benefit of the aggrieved party.”

Where, as here, a court exercises its inherent civil contempt power and fashions a coercive contempt sanction, we typically required that there be an opportunity for the contemnor to purge himself or herself of contempt…. [B]ecause of the purge condition, the contemnor always carries the “keys to the jail” in his or her pocket.

Here the trial court, gave Indy Diamond two different avenues to purge itself of contempt. Indy Diamond failed to take either avenue and the Court of Appeals found no abuse of discretion in the sanction of demolition.

Indy Diamond argued on appeal that the trial judge was personally biased against it. The Court of Appeals strongly rejected the argument:

[T]here is absolutely no evidence of personal bias, and we find Indy Diamond’s accusation against this trial judge, which is essentially a claim that the judge violated the Indiana Code of Judicial Conduct, to be out of line.

While finding the claim of bias to be “unfounded and meritless,” the court chose not to assess appellate damages.

Lessons:

1. Sanctions for contempt should be coercive and remedial.
2. When imposing a coercive sanction, the court should ordinarily give the contemnor an opportunity to purge himself or herself of contempt.
3. A demolition order is within a court’s inherent contempt power.
4. Accusing a judge of personal bias is “out of line” in the absence of compelling evidence of actual bias.