Judge caps Bloomington’s annexation legal-fee payment at $37,500

A special judge for the Monroe County circuit court has ordered Bloomington to pay $37,500 in attorney fees to lawyers for the county residents who defeated the city’s proposed annexation of Areas 1A and 1B. That meant the judge rejected their request for nearly $200,000.

Together, Areas 1A and 1B encompass 4,987 acres west and southwest of Bloomington and had an estimated combined population of 8,553 when the city restarted the annexation process in 2021.

The seven-page ruling was issued Friday (July 24) by special judge Nathan Nikirk. It resolves the last remaining issue in the lawsuit and constitutes a final judgment. Bloomington was ordered to pay the $37,500 directly to Bunger & Robertson, the law firm representing the remonstrators.

The $37,500 comes from an explicit cap that is included in Indiana state law. In the same law there is no cap on the amount that a municipality can spend on outside legal counsel to pursue annexation.

Since 2016, the city of Bloomington has spent at least $2.18 million on outside legal services for annexation-related matters, which was paid to one law firm, Bose & McKinney. That doesn’t include any estimates for the city legal department’s staff time.

Nikirk heard oral arguments on the attorney-fee question a month and a half ago, on June 5. At that hearing, attorneys for Bloomington argued that state law imposes a single $37,500 limit, while attorney William Beggs, representing the remonstrators, asked for $199,441.98 in unpaid fees and litigation expenses.

Nikirk sided with Bloomington’s interpretation of state law. The law says that when a court prevents an annexation after a remonstrance hearing, the municipality must reimburse the remonstrators for reasonable attorney fees, litigation expenses and appeal costs “not to exceed” $37,500.

“‘Not to exceed’ is unambiguous,” Nikirk wrote. He concluded that the Indiana General Assembly had made a policy choice to limit a municipality’s liability. He wrote that that courts are required to strictly construe laws authorizing attorney-fee awards.

The remonstrators had proposed several ways of interpreting the law to allow a larger award. They argued that the court could award up to $37,500 for each remonstrator, for each of the two annexation territories or for each attorney involved in the case.

Nikirk rejected all of those theories. The statute refers collectively to “the remonstrators,” he wrote, and the challenges to Areas 1A and 1B were brought in one lawsuit and decided through a single remonstrance hearing.

“No reading of the statute supports multiple caps” based on the number of remonstrators, attorneys, parcels, trial days or hearings, Nikirk wrote.

The figures presented to the court showed that Bunger & Robertson had billed, or expected to bill, $377,292.33 for its work on the case. Of that amount, $177,850.35 had already been paid, with nearly all of the money coming from County Residents Against Annexation, Inc. (CRAA). The nonprofit organization coordinated opposition to the annexation and paid the bills with donated money.

The original September 2024 fee petition from remonstrators requested $274,911.83. They amended the request on June 4, the day before oral arguments, reducing it to $199,441.98. That represented fees and expenses that had not been paid and that the remonstrators said were incurred after Oct. 27, 2023.

Bloomington did not dispute the reasonableness of the hourly rates, the number of hours that the attorneys worked or the total amount billed. The dispute instead centered on the statutory limit and on who had incurred or paid the expenses.

Nikirk also rejected an argument that the court could reimburse the legal fees CRAA had already paid. CRAA does not own land within Areas 1A or 1B and did not sign a remonstrance petition, so it is not itself a remonstrator eligible for an award under the statute, the judge concluded.

The law firm’s engagement agreement was with CRAA, not with the individual landowners who were parties to the case. Nikirk wrote that none of those landowners had a contractual obligation to pay the firm’s fees. Bunger & Robertson also told the court during the June 5 hearing that it would not pursue the petitioners for any amount the court did not order Bloomington to reimburse.

“Any unpaid balance of fees following the Court’s award is a function of the plain language” of the law and the legislature’s decision to impose the cap, Nikirk wrote.

The fee dispute grew out of Bloomington’s unsuccessful effort to annex Areas 1A and 1B, two territories west and southwest of the city.

Bloomington’s broader annexation effort dates to 2017, when the administration of then-mayor John Hamilton proposed adding more than 9,000 acres and roughly 14,000 residents to the city. The process was interrupted by a state law aimed specifically at Bloomington, but the Indiana Supreme Court struck down that law in December 2020 as unconstitutional special legislation.

Hamilton restarted the annexation process in 2021. On Sept. 23 of that year, the Bloomington city council approved the annexation of seven territories on a series of 6–3 votes.

Property owners then had an opportunity to remonstrate (that is, formally object) by signing petitions against annexation. Certified results issued by the Monroe County auditor in February 2022 showed enough signatures to stop annexation outright in five territories. Areas 1A and 1B had enough signatures for remonstrators to ask for judicial review but not enough for an automatic stop.

The remonstrators filed their lawsuit on March 16, 2022. After a weeklong bench trial that concluded in May 2024, Nikirk ruled on Aug. 7, 2024, that the two annexations could not proceed. He found that Bloomington had not met the statutory requirements for annexation and that annexation was not in the best interests of the affected landowners.

Bloomington appealed, but the Indiana Court of Appeals upheld Nikirk’s decision on Sept. 24, 2025. The Indiana Supreme Court declined on Feb. 10, 2026, to accept Bloomington’s request for further review, leaving only the attorney-fee question unresolved.

Friday’s ruling closes that case with a judgment of $37,500 against Bloomington.
Even though Friday’s ruling resolves the litigation over Areas 1A and 1B, it does not end all of Bloomington’s annexation litigation. A separate constitutional case remains pending before the Indiana Supreme Court and affects the five other proposed territories—Area 1C, Area 2, Area 3, Area 4, and Area 5.

Bloomington dismissed its constitutional claims involving Areas 1A and 1B and agreed not to rely on that issue in the remonstrance trial that produced Friday’s fee award.

The separate case concerns a 2019 state law that invalidated many older agreements under which property owners had waived their right to oppose annexation in exchange for sewer service. Bloomington argues that retroactively voiding those agreements unconstitutionally impaired its contracts.

The Monroe circuit court and Indiana court of appeals ruled against the city, finding that Bloomington could not invoke the state or federal contract clauses against the state and that the law did not substantially impair the city’s contracts. The Indiana Supreme Court heard oral arguments on Bloomington’s request to transfer the case on Oct. 30, 2025, but had not ruled as of Friday on whether it would accept the case or leave the court of appeals decision in place.

[Bloomington Annexation Timeline]