INDIANAPOLIS (Legal Newsline) - The Indiana Supreme Court last week upheld a ruling holding a property owner, his lawyer and a company in contempt of court for violating terms of a temporary restraining order.
The contempt holding stems from a lawsuit over the costs of an environmental cleanup.
John Witt purchased a property that had, for many years, been the site of a gasoline filling station.
Though he never used the property as a gas station, the underground storage tanks, or USTs, that had supplied the former pumps remained in the ground on the property.
When it was discovered that one or more of the tanks had leaked petroleum chemicals into the ground, Witt notified the state Department of Environmental Management and contracted with HydroTech Corp. to remove the USTs and perform the cleanup in accordance with IDEM standards.
Witt also retained attorney Mark Shere to pursue claims against the previous landowners for damage to the property and the costs associated with the cleanup. Jay Petroleum Inc. and Jack James were among the defendants named in that suit.
Several months into the suit, and after an initial discovery conference, Jay Petroleum sent a letter to Shere's office, addressed to Witt, requesting seven days advance notice of the removal of the USTs.
In addition, Jay Petroleum insisted on having its environmental consultant on site. However, Witt would not agree unless Jay Petroleum revealed what soil testing it planned to conduct or agreed to stipulations regarding the samples that would limit the company's options at trial.
At the end of the day, Jay Petroleum informed Witt that it would seek a temporary restraining order and preliminary injunction to stop the removal of the USTs.
The trial court judge granted the company's motion.
Shere and HydroTech each interpreted the TRO to permit backfilling of the open UST pits and that further sampling could be obtained on one of the exposed UST pits.
HydroTech, in particular, was concerned that the site would be unsafe unless the holes were backfilled.
The company took the remaining samples and commenced backfilling the holes.
Soon after, Jay Petroleum filed a motion for contempt of court.
The trial court held Witt, HydroTech and Shere in contempt and held them jointly and severally liable for $108,487.32 in costs and attorneys' fees.
On appeal before the state's high court, Witt and Shere challenge the propriety of the trial court's TRO and modified preliminary injunction, and contend that the trial court abused its discretion in ruling on the contempt motion and in determining the sanction imposed.
HydroTech also appealed, claiming that the trial court abused its discretion by holding it in contempt because it relied on Shere for its understanding of the TRO.
The Court, in its March 21 opinion, affirmed the trial court's ruling.
"Witt and Shere assert that the TRO was issued 'under an incorrect legal standard' and that this 'moots' the finding of contempt for violating its terms. We disagree. An order of the court is only unenforceable when the court lacked jurisdiction," Acting Chief Justice Brent E. Dickson wrote for the Court.
"If, in the valid exercise of its jurisdiction, a court issues an erroneous order, that order must be obeyed. The only remedy from an erroneous order is appeal and disobedience thereto is contempt."
However, a preliminary injunction is appealable as of right and a TRO is not, the Court said.
"Regardless, such appeal must be filed 'within 30 days' after the entry of the order into the record. This was not done. Because of procedural default, the validity of the TRO and preliminary injunction cannot be challenged in this appeal," Dickson wrote.
Nevertheless, the Court said in its nine-page opinion that the terms "clearly indicate" that the trial court was ordering the work on the property to cease until a hearing could be held.
"Witt and Shere assert that a 'catch-all' phrase could have been included in the TRO to ensure that there was a complete work stoppage. While this may have improved the clarity of the order, we find that its omission did not render the TRO ambiguous," Dickson wrote.
"The court's order explicitly enjoined and restrained Witt, Shere and HydroTech from 'soil excavation, or other environmental investigation and remediation activities.''"
If backfilling was believed to be the only possible way to adequately provide for public safety, permission could have been -- but was not -- sought from the trial court, the Court pointed out.
"Instead, Witt and Shere unilaterally authorized HydroTech to collect the samples and backfill the holes. The trial court did not abuse its discretion by holding them in contempt of court for doing so," Dickson wrote.
The Court also found that the trial court did not abuse its discretion in issuing its sanctions and by holding Witt and Shere jointly and severally liable.
As for HydroTech, the Court said it is "undisputed" that the company was made aware of the fact that the trial court had entered an order enjoining work on the site before the backfilling commenced and additional samples were taken.
"At this point, HydroTech's project manager made his own decision regarding what work he could continue on the site despite the trial court's order, and then took that action," Dickson wrote.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.