COA: property conveyed with a restrictive covenant

The Indiana Court of Appeals Friday had to determine whether the conveyance of a school for park and recreational use was done so by a restrictive covenant or a fee simple with condition subsequent.

There is no Indiana precedent addressing the distinction between a restrictive covenant and a fee simple with condition subsequent, Judge Melissa May noted in Old Utica School Preservation, Inc., Kenneth Morrison, Scott Sandefur, and Pam Sandefur v. Utica Township, John Durbin as Township Trustee, Jacob's Well, Inc., Kevin Williar, John Posey, et al. 10A01-1501-PL-43.

This is the second time the appeals court has ruled on a dispute between Clark County residents and Old Utica School Preservation Inc. and Utica Township and others over a quitclaim deed that conveyed an unused school to the township. The quitclaim deed said the school had to be used for park and recreation purposes, as outlined in I.C. 20-4-5-8(b).  Some community activities were held at the school, but it eventually fell in disrepair. Utica Township then leased the school to Jacob’s Well, a nonprofit religious organization that would use the property to provide transitional housing to single mothers and women who receive professional assistance for drug addiction. Kevin and Barbara Williar, the founders of the organization, financed renovation of the school and built an apartment on site to live in.

The residents and the preservation group sued, seeking an injunction against Jacob’s Well using the school. Part of the building was still available for public use, and some groups did use it. The trial court determined the language of the deed is a restrictive covenant and plaintiffs didn’t have standing to sue, but the COA reversed last year. On remand, the trial court again ruled against the plaintiffs, but this time found the language to be a fee simple conveyance with a condition subsequent.

May noted that I.C. 20-4-5-8(b), in effect at the time of the conveyance, does not outline what is to happen to the school in the event that it is not used for park and recreational activities. In addition, the current statute no longer includes the requirement that land be used for park and recreation purposes.

“Here, it is not clear whether (the Greater Clark County School Corp.) intended the transfer to be a restrictive covenant or a fee simple estate subject to condition subsequent. However, the deed does not indicate the School would revert to GCCSC if it is not used for park and recreation purposes, nor does the statute under which the School was conveyed indicate such,” May wrote. “Absent such statutory language, and in light of the deed’s language that the property ‘shall be used by Utica Township . . . for park and recreation purposes,’ we conclude the conveyance was a restrictive covenant.”

The case is remanded for correction of the declaratory judgment to indicate the property was conveyed with a restrictive covenant. The appeals court affirmed the trial court’s determination the school was used for park and recreation purposes and that the residents did not demonstrate an irreparable injury that would make a mandatory injunction appropriate.