Homeowners win attorney fees in Kosciusko fairgrounds dispute

Homeowners who secured a victory over a neighboring fairground property in a motorized racing dispute will get damages and appellate attorney fees for bad-faith or frivolous litigation, the Indiana Court of Appeals has ruled.

Issues began for nine Kosciusko County homeowners in 2018 when they requested an injunction against the Kosciusko County Community Fair, seeking to enforce a 1989 restrictive covenant and prevent the fair from conducting motorized races on its property. Original homeowners in the 1980s had sued the fair after a dispute arose regarding the operation of its automobile racetrack.

As part of the original settlement, the fair executed a binding restrictive covenant between itself and the original homeowners and their successors and assigns. The agreement limited the fair’s use of the grandstand and racetrack facility for events, but didn’t mention motorized racing.

An appellate panel affirmed in 2018 a trial court’s order that found current homeowner Chris Cummins was a successor and granted a preliminary injunction. The appellate court held the restrictive covenant runs with the land, Cummins had standing to enforce the restrictive covenant, the fair failed to prove the restrictive covenant lacked an essential term, and its reliance on the statute of frauds and the rule against perpetuities was misplaced.

Following that decision, the homeowners moved for partial summary judgment and a request for permanent injunction, stating that the complaint sought, in pertinent part, to enjoin the fair from violating the restrictive covenant which prohibited it from conducting motorized racing.

They also designated the affidavits of Chris Cummins and predecessor James Cummins, which the fair unsuccessfully moved to strike as inadmissible. The trial court ultimately granted the homeowners’ motion and found them entitled to a permanent injunction based on the designated materials and undisputed facts. Noting that the appellate panel’s prior decision, the trial court concluded that the homeowners succeeded on the merits and entered partial summary judgment as to the validity and enforceability of the restrictive covenant.

The Indiana Court of Appeals on Thursday declined to vacate the trial court’s order per the fair’s request in Kosciusko County Community Fair, Inc. v. Mary Clemens, et al., 19A-PL-02306.

Citing its 2018 decision, the appellate court noted that it had expressly held Chris Cummins had standing, and therefore the doctrine of law of the case precluded relitigation on that issue.

Additionally, it pointed back to its decision that the restrictive convent was not unenforceable due to the statute of fraud, and that the designated evidence establishes the restrictive covenant was in writing and recorded with the Kosciusko County Recorder’s Office. Likewise, it found relitigation was precluded on the fair’s argument as to the rule against perpetuities.

“Based upon the designated evidence, the Fair’s arguments, and our 2018 Opinion, we conclude the trial court did not err in entering its September 3, 2019 judgment based upon the restrictive covenant,” Judge Elaine Brown wrote for the appellate court. “… Homeowners have shown, in light of the 2018 Opinion and the designated evidence, that the Fair’s claims on appeal are meritless, and we conclude an award of damages, including appellate attorney fees, is appropriate in this case.”

The case was therefore remanded with for a determination of damages for frivolous or bad-faith litigation pursuant to Ind. Appellate Rule 66(E).