Indiana Code 32-17-10-2 is unconstitutional as applied retroactively to a land-use restriction in a Vincennes Girl Scout organization’s deed requiring an Illinois Girl Scout group to use deeded land as a camp for 49 years.
In Girl Scouts of Southern Illinois v. Vincennes Indiana Girls, Inc., 42S00-1210-PL-597, Vincennes Indiana Girls Inc. deeded its Camp Wildwood in 1965 to Girl Scouts of Southern Illinois on the condition that scouting use continue for 49 years, with the deed providing that ownership of the campground would revert to VIG if the scouting-use condition was breached during that time. The deed also said that GSSI couldn’t convey, sell or dispose of the camp in any fashion for that 49-year period unless VIG’s existence is terminated during that time.
In January 2009, GSSI stopped using the camp for Girl Scout activities and decided to sell it. After it informed VIG of its intent, VIG discovered that it had been administratively dissolved in 2004 for failure to pay annual feels to the secretary of state. It was reinstated in August 2009. Both parties sued for quiet title to the camp, with the trial court granting summary judgment quieting title to VIG.
GSSI claimed that VIG’s reversionary interest expired by operation of I. C. 32-17-10-2, which limits reversionary clauses in land transactions to a maximum of 30 years. It also argued that VIG’s administrative dissolution in 2004 allowed GSSI to sell the camp.
Based on Indiana law, VIG’s corporate existence continued, in a limited capacity, even while it was administratively dissolved, and its reinstatement was retroactive as if the dissolution hadn’t occurred, Justice Loretta Rush wrote. As such, its reversionary rights did not terminate by operation of the deed.
“Here, though the parties only intended the restriction to run for 49 years instead of indefinitely, their contract would nevertheless be substantially impaired if it were cut off after just 30 years by applying Indiana Code section 32-17-10-2 — an effect just as ‘permanent, irrevocable, and retroactive in altering the [parties’] contractual relationships as in Clem (v. Christole, Inc.) 582 N.E.2d 780, 782 (Ind. 1991),” Rush wrote. “We see no reason this restriction, and the contractual relationship it creates, should have any less constitutional protection in a condition subsequent than in a restrictive covenant as in Clem.”
“And because VIG’s interest imposes a land-use restriction similar to a restrictive covenant, it deserves the same level of Contracts Clause protection. Since the parties bargained for a 49-year land use limitation on Camp Wildwood, terminating that restriction after just 30 years would substantially impair VIG’s contract rights. Indiana Code section 32-17-10-2 is therefore unconstitutional as applied retroactively to the land-use restriction in VIG’s deed to GSSI.”
The justices affirmed the grant of quiet title to VIG.