COA rules paying penalty doesn't nullify appeal

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The Indiana Court of Appeals has ruled on an issue that has not directly been addressed by statute or caselaw, holding that paying a civil penalty to stop a tax sale of property doesn’t cancel out an appeal questioning that assessment’s validity.

A ruling came Tuesday in Gordon B. Dempsey v. Department of Metropolitan Development of City of Indianapolis, No. 49A02-1102-MI-165, reversing a judgment from Marion Superior Judge Robyn Moberly and Judge Pro Tempore Kim Mattingly.

The case involves a property on Berwick Avenue in Indianapolis. The owner died in 2004, and another person bought the property at a tax sale that same year but did not record a tax deed. The property remained vacant and, in May 2008, the Health and Hospital Corporation determined the building maintenance hadn’t been kept up in compliance with the city’s vacant building standards. Dempsey bought the property in June 2008 and made a down payment, and an inspector that summer visited the site and saw Dempsey doing work on the house.

An administrative hearing on the violations to the Vacant Building Standards and Unsafe Building Laws was held, and despite the inspector being present to testify about the work he saw Dempsey doing, the administrative law judge imposed a civil penalty of $2,500 against Dempsey, who was not present. Dempsey appeared at later hearings to demonstrate work was being done, and he was fined another $2,500. The ALJ waived the original fine at a subsequent hearing in June 2009 and reduced the second penalty to $1,500. That’s the assessment that remained in place and was certified as “final.”

Dempsey appealed the ALJ’s civil penalty to the Marion Superior Court, but the city department didn’t receive notice of that appeal and it certified the allegedly delinquent penalty to the county auditor and tacked the $1,500 penalty on to Dempsey’s fall 2009 tax bill as a special assessment. In October 2009, Dempsey paid the $1,500 civil penalty and additional fees despite the ongoing trial court appeal of the fine itself, and as a result the trial court in December 2010 granted a motion from the city to dismiss the appeal because it was moot.

On appeal, both parties disagree about whether Dempsey’s payment of that civil penalty to prevent a delinquent tax sale cancelled out the appeal he filed earlier that year disputing the fine itself.

The Court of Appeals found no statute or reported case directly on point, but relied on provisions of Indiana Code 6-1.1-15-10(a) applying to tax appeals, which says that taxpayers must pay their taxes on tangible property when the tax installments come due even if a petition for review or judicial review proceeding is pending.

“That said, it is apparent that the concept of mootness runs afoul of the circumstances here that involve the payment of the penalty that was imposed under the housing code that enabled Dempsey to avoid the sale of the property at a tax sale,” Judge John Baker wrote. “And there is no case, statute, or rule suggesting that Dempsey’s payment of the tax bill, which includes the penalty that was assessed under the building code, renders the appeal moot. Therefore, we reject the DMD’s assertion that Dempsey’s payment of the penalty ‘on his own volition’ removed the controversy by paying the civil penalty.”

The case is remanded to Marion Superior, with instructions to reinstate Dempsey’s appeal, decide the case on its merits, and determine whether the penalty was warranted. But the appellate court declined to allow for any attorney fees and costs to Dempsey because he doesn’t show the city department made arguments that were frivolous, unreasonable, groundless, or in bad faith.


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  1. I think the cops are doing a great job locking up criminals. The Murder rates in the inner cities are skyrocketing and you think that too any people are being incarcerated. Maybe we need to lock up more of them. We have the ACLU, BLM, NAACP, Civil right Division of the DOJ, the innocent Project etc. We have court system with an appeal process that can go on for years, with attorneys supplied by the government. I'm confused as to how that translates into the idea that the defendants are not being represented properly. Maybe the attorneys need to do more Pro-Bono work

  2. We do not have 10% of our population (which would mean about 32 million) incarcerated. It's closer to 2%.

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  4. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

  5. This man Steve Hubbard goes on any online post or forum he can find and tries to push his company. He said court reporters would be obsolete a few years ago, yet here we are. How does he have time to search out every single post about court reporters and even spy in private court reporting forums if his company is so successful???? Dude, get a life. And back to what this post was about, I agree that some national firms cause a huge problem.