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Supreme Court splits on Barrett Law sewer payment case

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A divided Indiana Supreme Court has ruled that the City of Indianapolis didn’t violate the constitution by refusing to grant some homeowners’ refund requests for sewer project assessments they’d paid in full when other homeowners who’d made partial installment payments had the remaining balance of assessments owed discharged.

The 3-2 ruling came today in the case of City of Indianapolis, et al. v. Christine Armour, et al., No. 49A02-0901-CV-84, in which 45 homeowners in an Indianapolis subdivision sued the city for not receiving refunds of sewer assessments they’d paid. The assessments were part of a sanitary sewer project funded under the Barrett Law, Indiana Code Chapter 36-9-39, and the homeowners were able to either pay the full amount or make partial payments each month. But when the city switched to funding these projects under the Septic Tank Elimination Program, those who’d been paying monthly installments were no longer responsible for anything that had been unpaid. Homeowners who’d paid the nearly $10,000 assessments in one lump sum prior to Nov. 1, 2005, were denied any refund on any portion, equivalent to what the other neighbors had discharged by the city.

Those homeowners sued for refunds, declaratory relief, or a writ of mandamus, alleging the city's decision to not refund the money violated the Equal Protection Clause. The trial court agreed and entered judgment against Indianapolis for $380,914. The Indiana Court of Appeals in 2009 affirmed that judgment and found the city didn’t have a rational basis for granting relief to those who’d been paying gradually but not for those who had paid in full up front. The only way to resolve the constitutional Equal Protection Clause violation, according to the intermediate appellate court, was to issue refunds to the plaintiffs.

But the state Supreme Court disagreed, with a three-justice majority reversing the trial court decision and finding no constitutional violation had occurred. Justice Frank Sullivan wrote the majority opinion and was joined by Chief Justice Randall T. Shepard and Justice Steven David, while Justices Robert Rucker and Brent Dickson dissented.

“We hold that Resolution 101 does not violate the Equal Protection Clause of the Fourteenth Amendment because it rationally related to legitimate government interests,” Justice Sullivan wrote.

The majority found that the city’s rationale was that low- and middle-class families were more likely to have been paying gradually and those who paid in full up front were likely higher income, meaning it was reasonable that it would coincide with the government’s interest in moving away from the Barrett Law system because of the financial burdens it created. But overall, the majority cited a U.S. Supreme Court case from 1981 in determining that it doesn’t matter under the rational basis review what the actual facts might show about that financial hardship if the issue might be debatable before the governmental decision-maker. That is why the Court of Appeals erred in requiring actual proof of the financial hardship statuses of those who had their assessments discharged, the majority wrote.

The majority justices also pointed out that the decision to not refund money to those who’d paid in full was another legitimate government interest – preservation of limited resources in not emptying its coffers.

“It is true that those whose assessments were discharged also received a sewer and did so at a lower price,” Justice Sullivan wrote. “But the Equal Protection Clause does not require substantive equality among taxpayers if there is a rational basis for differing treatment, and the Court of Appeals erred in concluding otherwise.”

But Justices Rucker and Dickson disagreed, finding the city’s “rational basis” wasn’t sufficient and was used as more a blanket reason without any practical justification of it actually doing what it claimed to do.

“However, merely declaring that Barrett Law funding ‘imposed financial hardships on middle- and low-income property owners who were often most in need of sanitary sewers due to failing septic systems,’ does nothing to explain why the City treated differently residents who elected to pay their assessments in a lump sum versus those who elected to pay in installments,” Justice Rucker wrote. “Here, there is no indication that the Board even believed the classification would further its stated objective. In my view, the disconnect demonstrates that the classification fails to have ‘a fair and substantial relation’ to the statutory objective.”

The U.S. Supreme Court hasn't specifically addressed whether a municipality contravenes the Equal Protection Clause when it forgives an outstanding assessment owed by some property owners while, at the same time, it refuses to refund an equivalent amount to similarly situated property owners who have already paid the same assessment in full.
 

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  1. Im very happy for you, getting ready to go down that dirt road myself, and im praying for the same outcome, because it IS sometimes in the childs best interest to have visitation with grandparents. Thanks for sharing, needed to hear some positive posts for once.

  2. Been there 4 months with 1 paycheck what can i do

  3. our hoa has not communicated any thing that takes place in their "executive meetings" not executive session. They make decisions in these meetings, do not have an agenda, do not notify association memebers and do not keep general meetings minutes. They do not communicate info of any kind to the member, except annual meeting, nobody attends or votes because they think the board is self serving. They keep a deposit fee from club house rental for inspection after someone uses it, there is no inspection I know becausee I rented it, they did not disclose to members that board memebers would be keeping this money, I know it is only 10 dollars but still it is not their money, they hire from within the board for paid positions, no advertising and no request for bids from anyone else, I atteended last annual meeting, went into executive session to elect officers in that session the president brought up the motion to give the secretary a raise of course they all agreed they hired her in, then the minutes stated that a diffeerent board member motioned to give this raise. This board is very clickish and has done things anyway they pleased for over 5 years, what recourse to members have to make changes in the boards conduct

  4. Where may I find an attorney working Pro Bono? Many issues with divorce, my Disability, distribution of IRA's, property, money's and pressured into agreement by my attorney. Leaving me far less than 5% of all after 15 years of marriage. No money to appeal, disabled living on disability income. Attorney's decision brought forward to judge, no evidence ever to finalize divorce. Just 2 weeks ago. Please help.

  5. For the record no one could answer the equal protection / substantive due process challenge I issued in the first post below. The lawless and accountable only to power bureaucrats never did either. All who interface with the Indiana law examiners or JLAP be warned.

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