Supreme Court affirms, reverses, remands in case involving faulty lift station that caused sewage leak

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(IL file photo)

The Indiana Supreme Court affirmed a trial court’s order amending a damages award but determined the lower court lacked jurisdiction to issue two other orders because each interfered with the subject matter of a pending appeal.

The Supreme Court reversed and remanded the two orders, calling them void.

The case of Conroad Associates, L.P. v. Castleton Corner Owners Association, Inc. and McKinley, Inc., 22S-PL-307, involves a dispute about a faulty sanitary lift station that serviced “various shopping centers and stand-alone buildings” in Indianapolis.

In 2015, Castleton Corner Owners Association Inc. was the property management entity responsible for operating and maintaining the lift station when it malfunctioned, flooding a building owned by Conroad Associates L.P. with raw sewage.

As a result, Conroad sued the association.

Following a 2019 bench trial, the Marion Superior Court found in Conroad’s favor and ordered the association to pay $213,288.70 in damages.

Conroad moved for proceedings supplemental to enforce the judgment. But about two weeks later, the association moved to stay execution of the judgment.

The trial court denied that motion and the parties cross-appealed. The association, however, did not file an appeal bond that would have stayed enforcement prior to Conroad’s resolution.

Thus, Conroad filed a second motion for proceedings supplemental, and the trial court ultimately transferred to Conroad the lift station, related easement and “all other assets of the Association.” It subsequently denied the association’s motion to reconsider.

The association then filed a second appeal, but soon filed for bankruptcy, which stayed the second appellate case.

The first appeal, known as Conroad I, was resolved about three months later, reducing Conroad’s damages to $164,640.70.The association filed a check with the Marion County clerk and asked the trial court to amend the damages award pursuant to Conroad I, order the clerk to disburse the funds and vacate the proceedings supplemental order.

With the second appeal still pending — and following the lift of the bankruptcy stay and a hearing on the association’s motion — the trial court issued three orders in May 2021 granting the motion in full.

The association subsequently moved to dismiss the second appeal, known as Conroad II, and the Court of Appeals of Indiana agreed.

Conroad then filed the instant appeal, contending in part that the trial court lacked jurisdiction to issue the May 2021 orders because Conroad II remained pending at the time. The COA disagreed and affirmed in April 2022. 

The Supreme Court then granted transfer and, in a Friday opinion, affirmed and reversed in part.

Writing for the court, Chief Justice Loretta Rush said “(j)urisdictional rules ensure finality and certainty in the administration of justice. One such rule, Appellate Rule 8, erects a jurisdictional fence between the trial court and the appellate court — preventing parties from pursuing similar relief in different courts at the same time. Under Rule 8, once a final judgment is appealed and the clerk certifies completion of the record, the trial court has no authority to interfere with the subject matter of that appeal until it is terminated.

“Here, the trial court issued three orders: one amending a damages award pursuant to remand instructions from a prior appeal, and two resolving issues that were pending on appeal. The parties only dispute the validity of the latter two orders,” Rush continued. “Applying Appellate Rule 8, we hold that the trial court lacked jurisdiction to issue those orders because, in each, the court directly interfered with the subject matter pending on appeal. We therefore affirm in part, reverse in part, and remand.”

Justices Mark Massa, Geoffrey Slaughter and Christopher Goff concurred. Justice Derek Molter did not participate.

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