Willow Haven on 106th St, LLC v. Hari Nagireddy

Indiana Supreme Court·Decided February 19, 2025·No. 24S-PL-00287·Published

Opinion

IN THE

Indiana Supreme Court FILED Feb 19 2025, 11:25 am

Supreme Court Case No. 24S-PL-287 CLERK Indiana Supreme Court

Court of Appeals

Willow Haven on 106th Street, LLC, and Tax Court

Appellant,

–v–

Hari Nagireddy and Saranya Nagireddy, Appellees.

Argued: October 2, 2024 | Decided: February 19, 2025

Appeal from the Hamilton Superior Court No. 29D02-2207-PL-5323

The Honorable Matthew Kincaid, Special Judge

On Petition to Transfer from the Indiana Court of Appeals No. 22A-PL-2931

Opinion by Justice Slaughter Chief Justice Rush and Justices Massa, Goff, and Molter concur.

Slaughter, Justice.

This is a nuisance suit between neighboring property owners in Carmel , Indiana. The plaintiffs, Hari and Saranya Nagireddy, live next door to property owned by defendant, Willow Haven on 106th Street, LLC. Willow Haven is developing its property to house up to ten residents with Alzheimer’s disease and dementia. After Willow Haven obtained a building permit from Carmel, the Nagireddys sued, seeking a declaration that Willow Haven’s proposed use of its property would be a public nuisance because it would violate Carmel’s unified development ordinance. The Nagireddys also sought and obtained a preliminary injunction against further construction of the home, which the court of appeals affirmed.

We granted transfer and now hold the injunction is improper. The Nagireddys did not prove they are likely to win their public-nuisance claim, which alleges that Willow Haven’s proposed land use is illegal because it would violate Carmel’s ordinance. At this preliminary stage, the Nagireddys did not make this showing under the ordinance. We reverse the trial court, vacate the injunction, and remand for further proceedings.

I

A

The neighborhood where the Nagireddys live and Willow Haven owns property is zoned for single-family residences under Carmel’s unified development ordinance, its UDO. Willow Haven wants to build a home for persons with Alzheimer’s disease and dementia. The home will have ten private bedrooms, each with its own private bath, plus a common kitchen, dining, and living space. The home will also have full-time staff: two dementia-certified caregivers will provide round-the-clock care; an operations manager will oversee their care; and an on-site chef will prepare meals.

Before breaking ground on its property, Willow Haven sought a building permit. Carmel’s director of community services issued a permit in August 2021. The city did not—and did not have to—send notice to the Nagireddys that it had issued the permit to their next-door neighbor, Willow Haven.

Once the Nagireddys saw construction begin next door, they contacted Carmel and learned it had issued the permit. In June 2022, the Nagireddys wrote the city to complain. They believed that Willow Haven needed a variance from Carmel’s board of zoning appeals, its BZA, to operate the home in a single-family zone. And they demanded that Carmel issue a stop-work order. The city refused, explaining it had recently approved a similar project elsewhere without requiring a zoning variance. And it determined that its UDO “could not preclude Willow Haven from constructing a home for frail elderly individuals with dementia and/or Alzheimer’s Disease” because such a bar may “violate[] both state and federal law.”

B

The Nagireddys sued Willow Haven and Carmel, along with the city’s director of community services, his department, and the city’s code-enforcement office. The Nagireddys sought a declaration that operating the home would violate the 2018 version of the UDO (which governs here because it is the version in force when Willow Haven applied for its building permit) and a preliminary and permanent injunction barring further construction . The defendants moved to dismiss under Trial Rules 12(B)(1) and 12(B)(6). They alleged (among other things) that the Nagireddys failed to exhaust administrative remedies before the BZA. The Nagireddys eventually dismissed all defendants except Willow Haven. And the trial court denied Willow Haven’s motion to dismiss.

Later, in opposing the preliminary injunction, Willow Haven repeated its exhaustion argument that the Nagireddys’ failure to “pursue the exclusive means for judicial review of issuance of the permit” meant “they do not have a reasonable likelihood of success in this cause, regardless of any other justification they may set forth.” After a hearing, the trial court issued a preliminary injunction enjoining Willow Haven from further constructing the home. Relevant here, the trial court again found that the Nagireddys need not exhaust administrative remedies before bringing their nuisance action. And it held the Nagireddys were likely to succeed with their claim because, the court found, Willow Haven needed—but did not obtain—a variance to operate its home in that neighborhood. The court did not analyze whether state or federal law requires a different result.

Willow Haven appealed, and a divided appellate panel affirmed in a precedential opinion, Willow Haven on 106th St., LLC v. Nagireddy, 228 N.E.3d 481 (Ind. Ct. App. 2024). The panel majority held that “the Nagireddys were not required to exhaust administrative remedies with the BZA before pursuing declaratory and injunctive relief with the trial court.” Id. at 489. And, it held, the Nagireddys showed they are likely to succeed on their nuisance claim because the “UDO states that an impermissible use is a public nuisance”, and Willow Haven’s land use “is not a permitted use under the express language of the UDO.” Id. at 492. Willow Haven’s land use is not a permitted use, the majority explained, because the UDO allows as of right only licensed “group homes”, and Willow Haven ’s home “is not a licensed facility of any kind”. Id. at 490.

Judge Weissmann dissented. Id. at 492. In her view, the UDO is ambiguous and thus “open to judicial construction.” Id. at 493 (quoting Anderson v. Gaudin, 42 N.E.3d 82, 85 (Ind. 2015)). To avoid the “illogical” result of the majority’s reading—that state-licensed group homes are allowed under the UDO, but unlicensed group homes authorized by state law are not—she would have read the UDO to permit Willow Haven’s land use and reversed the trial court. Ibid.

Willow Haven then sought transfer, which we granted, 241 N.E.3d 1121 (Ind. 2024), thus vacating the appellate opinion, Ind. Appellate Rule 58(A).

II

We must decide whether the trial court erred in granting the Nagireddys ’ request for a preliminary injunction. A preliminary injunction “is an extraordinary equitable remedy that should be granted with caution.” Combs v. Daniels, 853 N.E.2d 156, 160 (Ind. Ct. App. 2006). We review the grant of a preliminary injunction for abuse of discretion, Ind. Fam. and Soc. Servs. Admin. v. Walgreen Co., 769 N.E.2d 158, 161 (Ind. 2002), which “occurs if the trial court’s decision was against the logic and effect of the facts and circumstances before the court”, Wisner v. Laney, 984 N.E.2d 1201, 1205 (Ind. 2012). Another way the trial court abuses its discretion is by misinterpreting the law. Members of Med. Licensing Bd. of Ind. v. Planned Parenthood Great Nw., Haw., Alaska, Ind., Ky., Inc., 211 N.E.3d 957, 964 (Ind. 2023), reh’g denied, 214 N.E.3d 348 (Ind. 2023). When granting a

preliminary injunction, the trial court enters special findings. Ind. Trial Rule 52(A); T.R. 65(D). On appeal we must determine “whether the evidence supports the findings and, if so, whether the findings support the judgment.” Town of Linden v. Birge, 204 N.E.3d 229, 233 (Ind. 2023). We review the trial court’s factual findings for clear error and its legal conclusions de novo. Id. at 234.

To obtain a preliminary injunction, the Nagireddys had to show:

(1) they have a reasonable likelihood of success at trial;

(2) their remedies at law are inadequate, meaning they will suffer irreparable harm without an injunction;

(3) the potential injury without an injunction outweighs the potential harm from an injunction; and

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