Sides settle in historic house demolition lawsuit, Bloomington doesn’t levy $83.5K fine

A settlement agreement approved by the court last week means that the owner of a house at 523 West 7th St. across from Fairview Elementary School will not be fined $83,500 for demolishing it about two years ago without the proper permit.

It was Monroe County circuit court judge Kara Krothe who signed off on the settlement, by ordering the case dismissed, based an a joint motion from the two sides—the owners and the city of Bloomington.

In fall 2019, the house was under consideration by Bloomington’s historic preservation commission (HPC) for designation as historic.

It was on Aug. 8, 2019 when the HPC recommended that the city council consider designating the house as historic. But the commission’s resolution was missing a crucial element: It did not explicitly say that the house was being put under interim protection.

Before it was put on the city council’s agenda for action, towards the end of September 2019, owners David Holdman and Judie Baker had the house demolished. They did not have the required certificate of zoning compliance.

After the demolition, the city assessed a fine of $83,500, based on a penalty levied for the demolition and for each day after the demolition, contending the property was in violation of the city code for each of those days. The city arrived at $83,500 by capping the fine at the most recent value of the house and garage as assessed by Monroe County.

In their subsequent legal papers, the owners argued that if there were a violation of the city code for undertaking a demolition without having the certificate, then the violation happened just once, and was not recurring, which was the way the city was attempting to levy the fine.

The court action was a request for a writ of mandamus requiring the city after-the-fact to issue a certificate of zoning compliance for demolition of the house. That’s why former director of Bloomington’s planning and transportation department, Terri Porter, is the named defendant in the case. It would have been up to Porter to issue the certificate.

The city contended that the issuance of such a certificate was moot, especially since the city was, by the end of May 2020, already saying that it would no longer pursue the fine.

The owners contended that without the certificate, they would still be vulnerable to potential future city action. On that point, judge Krothe agreed with the owners, in her order from five months ago. On April 21, Krothe denied the city’s motion for summary judgement.

In her order, Krothe wrote: “The court disagrees that this matter is moot. If Baker and Holdman do not receive the CZC they are still subject to fines for not obtaining the CZC.”

In her April 21 order, Krothe also denied the owners’ motion for summary judgment, writing that it was not clear if the request for a certificate of zoning compliance had been properly made: “Whether or not the Plaintiffs application was proper is a determination of fact. There seems to be a dispute about whether or not the Plaintiffs properly applied for a demolition permit. Therefore, Plaintiffs Motion for Summary Judgment is denied.”

Instead of continuing to battle things out in the circuit court, the two sides reached a settlement.

Under the terms of the settlement,  the owners of the house are being issued a certificate of zoning compliance by the city.

The part of the settlement that ensures the $83,500 fine is not levied against the owners states that the city of Bloomington will “release and forever discharge the Plaintiffs from all claims, actions, causes of action, demands, debts, liabilities and other obligations, including all potential penalties and fines resulting from violations of the Bloomington Municipal Code…”

Under the terms of the settlement, Bloomington did not have to pay legal fees for the owners. The case for the owners was handled by David Ferguson and Christine Bartlett with Ferguson Law.

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