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Girl Scouts of S. Ill. v. Vincennes Ind. Girls, Inc. - 988 N.E.2d 250 (Ind. 2013)

Rule:

Under the Contracts Clause of the Indiana Constitution, no ex post facto law, or law impairing the obligation of contracts, shall ever be passed. Ind. Const. art. 1, § 24. That provision protects vested contract rights, including contract rights arising under a deed.

Facts:

Vincennes Indiana Girls, Inc. (VIG) deeded its campground to Girl Scouts of Southern Illinois, Inc. (GSSI), but on the condition that it be used for Scouting purposes for 49 years, and that the campground could not be sold or conveyed. The deed provided that the ownership of the campground would revert back to VIG if the intended use was breached. After 44 years, GSSI ceased using the campground as a Scout facility, and decided to sell it. Thereafter, VIG sued to quiet title to the campground and enjoin GSSI from selling until the 49-year period had expired, alleging that Indiana Code section 32-17-10-2, a statute which limited the duration of reversionary interests to 30 years was unconstitutional as applied, as a retroactive impairment of its contract rights under the Contracts Clause of the Indiana Constitution. The trial court granted summary judgment quieting the title in VIG, and GSSI appealed.

Issue:

Did Indiana Code section 32-17-10-2 unconstitutionally impair VIG’s contract rights under the deed?

Answer:

Yes.

Conclusion:

The Court held that Indiana Code section 32-17-10-2 was unconstitutional as applied under the Contracts Clause of the Indiana Constitution. According to the Court, because VIG’s interest imposes a land-use restriction similar to a restrictive covenant, it deserved the same level of Contracts Clause protection. Since the parties bargained for a 49-year land use limitation on the campground, terminating that restriction after just 30 years would substantially impair VIG's contract rights. In conclusion, the Court determined that the Indiana Statute in question was unconstitutional as applied retroactively to the land-use restriction in VIG’s deed to GSSI.

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