COA takes declaratory judgment case to Greensburg high school

An Indiana Court of Appeals panel is set to hit the road Friday to hear oral arguments in a case involving unpaid rent for a leased property used to house minimum security prisoners in Madison County.

Judges John Baker, Edward Najam and L. Mark Bailey will hear the case of Happy Valley LLC v. Madison County Board of Commissioners, et al., 18A-CC-2581,  at 1:30 p.m. Friday at Greensburg Community High School in Greensburg.

In the case, the commissioners of Madison County and the Madison County Community Corrections Advisory Board executed a four-year lease with Happy Valley LLC for premises to house minimum security prisoners. A provision of the lease held that, “When the Commissioners of Madison County, Indiana, make a written determination that funds are not appropriated or otherwise available to support continued performance of this Contract, the Contract shall be cancelled. This determination shall be final and conclusive.”

Two years after entering the contract, Madison County built its own minimum-security facility and moved all the prisoners previously held at the Happy Valley premises to its new location. When the County Council examined a proposed budget that included the rent due under the parties’ lease, it struck the amount from the proposed budget.

The county attorney then notified Happy Valley that its tenants would be terminating the lease pursuant to the agreement’s provision, and the commissioners and advisory board filed a declaratory judgment action. That action requested a determination that the lease was terminated by the attorney letter or by a February 2017 commission resolution.

Happy Valley counterclaimed and raised affirmative defenses, seeking unpaid rent for 2017 and 2018 and alleging the tenant’s non-compliance with Indiana’s Open Door Law, failure to satisfy contractual conditions for termination, and non-compliance with the good faith requirement of Indiana Code § 5-22-3-1. However, the trial court granted the tenants declaratory relief.

On appeal, the panel is set consider whether the declaratory judgment is contrary to law.

Greensburg Community High School is located at 1000 E. Central Ave., Greensburg, 47240.

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