Fike Investments, LLC v. Gregory L. Wilson, Sr., Executive Director of the Indiana Civil Rights Commission

IN THE

Court of Appeals of Indiana

Fike Investments, LLC, FILED

Jim Fike, and Kim Fike, Jan 23 2025, 9:50 am

CLERK

Appellants-Respondents, Indiana Supreme Court

Court of Appeals

and Tax Court

v.

Gregory L. Wilson, Sr., Executive Director

of the Indiana Civil Rights Commission,

Appellee-Complainant.

January 23, 2025

Court of Appeals Case No.

24A-EX-3091

Appeal from the

Indiana Civil Rights Commission

Court of Appeals of Indiana | Opinion 24A-EX-3091 | January 23, 2025 Page 1 of 18

The Honorable

Beth A. Butsch, Administrative Law Judge

Adrianne L. Slash, Chairperson

Steven A. Ramos, Commissioner

Holli Harrington, Commissioner

Terry Tolliver, Commissioner

ICRC Nos.

HOra15070510

HOrt15090649

Opinion by Senior Judge Najam

Judges Pyle and Kenworthy concur.

Najam, Senior Judge.

Statement of the Case

[1] Fike Investments, LLC, Jim Fike, and Kim Fike (collectively, the Fikes) appeal

the order of the Ultimate Authority of the Indiana Civil Rights Commission

(Commission) finding they violated both the Indiana Fair Housing Act (IFHA)

and the Indiana Civil Rights Law (ICRL), awarding damages for moving

expenses and emotional distress, and imposing a civil penalty. Concluding the

evidence supports the determination of liability, the award of damages, and the

imposition of the penalty, we affirm and remand with instructions.

Issues

[2] The Fikes present three issues, which we restate as:

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I. Whether the Ultimate Authority’s exemption determination is

supported by substantial evidence.

II. Whether the award of emotional distress damages is

supported by substantial evidence.

III. Whether the imposition of a civil penalty was arbitrary and

capricious.

Statement of the Facts

[3] Fike Investments is a limited liability company in which Jim Fike and his wife,

Kim, are the only members. Fike Investments owns a single-family residence

on Hamilton Street in Granger that was listed for rent on Zillow.com. John

Chubb found the rental listing on the website, submitted an application to rent

the property, and eventually entered into a residential lease.

[4] Thereafter, Chubb, who is disabled, requested Jim and Kim to modify his lease

to allow him to have a live-in caregiver and to waive the pet deposit and

monthly pet fee for his support animal as reasonable accommodations for his

disability. When Jim and Kim denied Chubb’s requests, he filed a complaint

1

with the Commission claiming he experienced discrimination by the Fikes.

Following the filing of that complaint, Jim and Kim initiated an eviction action

against Chubb. Chubb then filed a second complaint asserting retaliatory

eviction for the prior complaint, and the two complaints were subsequently

1

Under the IFHA, it is unlawful to discriminate based on disability. I.C. § 22-9.5-5-5.

Court of Appeals of Indiana | Opinion 24A-EX-3091 | January 23, 2025 Page 3 of 18

consolidated. The Commission investigated and determined that reasonable

cause existed to support both complaints.

[5] During the administrative proceedings, both parties moved for summary

judgment. The Administrative Law Judge (ALJ) issued two orders on

summary judgment collectively concluding that the Fikes discriminated and

retaliated against Chubb in violation of both the IFHA and the ICRL and that

the Fikes were not exempt from application of the IFHA. The ALJ also

awarded Chubb damages for moving expenses and determined he was entitled

to an award for emotional distress, the extent of which remained to be

determined.

[6] The ALJ held an evidentiary hearing to determine the amount of emotional

distress damages and whether any statutory penalties should be imposed. The

ALJ issued a Recommended Order awarding Chubb $25,000 for emotional

distress but not imposing any civil penalty against the Fikes. On Chubb’s

behalf, the Commission objected to the ALJ’s order arguing, in pertinent part,

that the award for emotional distress damages should be increased and that a

civil penalty should be imposed against the Fikes.

[7] The Ultimate Authority heard oral argument on the Commission’s objections

and issued its final order affirming the ALJ’s order with modifications, the most

substantial and pertinent being that it imposed a $10,000 civil penalty against

the Fikes. The Fikes now appeal.

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Discussion and Decision

[8] Judicial review of an administrative agency’s action is governed by the Indiana

Administrative Orders and Procedures Act (AOPA). 255 Morris, LLC v. Ind.

Alcohol & Tobacco Comm’n, 93 N.E.3d 1149, 1152-53 (Ind. Ct. App. 2018).

Under the version of the AOPA in effect during these proceedings, we may set

aside an agency action only if we determine the party seeking relief has been

prejudiced by such action that is “(1) arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law; (2) contrary to

constitutional right, power, privilege, or immunity; (3) in excess of statutory

jurisdiction, authority, or limitations, or short of statutory right; (4) without

observance of procedure required by law; or (5) unsupported by substantial

2

evidence.” Ind. Code § 4-21.5-5-14(d) (1987).

[9] Our review of an agency’s action is purposely limited in recognition of the

agency’s expertise in its field and the public’s reliance on its authority to govern

in that area. Brookston Res., Inc. v. Dep’t of Nat. Res., 243 N.E.3d 1127, 1139

(Ind. Ct. App. 2024) (quoting Moriarity v. Ind. Dep’t of Nat. Res., 113 N.E.3d 614,

619 (Ind. 2019)). Accordingly, when we review an agency’s decision, we do

not reweigh the evidence, judge witness credibility, or substitute our judgment

for that of the agency. Ind. Dep’t of Nat. Res. v. Prosser, 132 N.E.3d 397, 401

2

Effective July 1, 2024, Section 4-21.5-5-14(d)(5) was amended to require the party seeking judicial relief to

demonstrate that the agency action is “unsupported by a preponderance of the evidence” rather than

“unsupported by substantial evidence.”

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(Ind. Ct. App. 2019), trans. denied. And we are bound by the agency’s findings

of fact if they are supported by substantial evidence. Id. The party seeking

judicial review bears the burden of demonstrating the invalidity of the agency’s

action. Id.; I.C. § 4-21.5-5-14(a).

I. Exemption Determination

[10] The Fikes contend the Ultimate Authority’s exemption determination is not

supported by substantial evidence. The Ultimate Authority affirmed the ALJ’s

determination that the Fikes do not qualify for the exemption from application

of the IFHA. The Fikes, however, assert they fulfill the requirements of the

exemption set out in Indiana Code section 22-9.5-3-1(a) (1990).

[11] Indiana Code section 22-9.5-3-1(a) supplies, in certain circumstances, an

exemption under the IFHA. The statute provides, in pertinent part, that the

IFHA does not apply to:

(1) The sale or rental of a single-family house sold or rented by an

owner if:

(A) the owner does not:

(i) own more than three (3) single-family houses at

any one (1) time; or

(ii) own any interest in, nor is there owned or

reserved on the owner’s behalf, under any express or

voluntary agreement, title to, or any right to any

part of the proceeds from the sale or rental of more

than three (3) single-family houses at any one (1)

time; and

(B) the house was sold or rented without:

(i) the use of the sales or rental facilities or services

of a real estate broker, an agent, or a salesman . . . .

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Id. The Fikes claim the exemption applies to them because Fike Investments,

LLC is the owner of the house rented by Chubb, and it is the only property

owned by the company. In addition, the Fikes assert that the website

Zillow.com, on which they listed the house for rent, was not a real estate broker

at the time of their listing.

[12] As the party seeking the benefit of an exemption, the Fikes must demonstrate

they meet the terms of the exemption. See Ind. Dep’t of Nat. Res. v. Krantz Bros.

Const. Corp., 581 N.E.2d 935, 938 (Ind. Ct. App. 1991); see also U.S. v. Columbus

Country Club, 915 F.2d 877, 882 (3d Cir. 1990) (where defendant country club

claimed statutory exemption from Fair Housing Act, court stated: “Under

general principles of statutory construction, ‘[o]ne who claims the benefit of an

exception from the prohibition of a statute has the burden of proving that his

claim comes within the exception.’” (quoting Mills Music, Inc., v. Snyder, 469

U.S. 153, 188 n.20 (1985) (White, J., dissenting))).

[13] To fulfill the requirement of Section 22-9.5-3-1(a)(1)(A), the Fikes assert that

Fike Investments, LLC is the sole owner of the house that Chubb rented and

that Fike Investments, LLC owns no other houses. The Fikes explain that the

other three homes are owned either by Jim and Kim together or by Fike Rental

Investments, LLC and are not relevant to this action.

[14] The Ultimate Authority concluded the Fikes are not exempt from application of

the IFHA because they collectively “owned four separate single family

residential properties.” Appellants’ App. Vol. 2, p. 26 (Appealed Order,

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Conclusion of Law #6). Specifically, the Ultimate Authority determined that

Kim owns or has a pecuniary interest in the rental proceeds from a total of four

single-family properties, which exceeds the mandatory limit provided in Section

22-9.5-3-1(a)(1)(A). See id. The Ultimate Authority based its determination on

the evidence that shows Kim owns two houses with Jim, is a member of Fike

Investments, LLC which owns the house at issue here, and is a member, the

president, and the registered agent of Fike Rental Investments, LLC which

owns another house. Appellants’ App. Vol. 3, pp. 61-62 (March 26, 2021 Order

Granting Indiana Civil Rights Commission’s Motion for Summary Judgment

3

and Notice of Final Prehearing Conference, Findings of Fact ## 11, 13, 15-17,

21).

[15] Nevertheless, a detailed analysis of Kim’s interest in these four properties is not

necessary to determine whether the Fikes are entitled to the exemption in this

case. Rather, the application of the exemption here turns on the language of the

statute. The first requirement in the exemption statute is that the house must be

rented by the owner. See I.C. § 22-9.5-3-1(a)(1). While the evidence shows that

Fike Investments, LLC is the record owner of the Hamilton Street house,

Appellee’s App. Vol. II, p. 149 (Quitclaim Deed), the evidence does not show

that the house was rented by Fike Investments.

3

The Appealed Order specifically incorporated all findings of fact from both the March 26, 2021 Order

Granting Indiana Civil Rights Commission’s Motion for Summary Judgment and Notice of Final Prehearing

Conference and the May 9, 2022 Order on Parties’ Cross Motions for Summary Judgment. Appellants’ App.

Vol. 2, p. 24 (Appealed Order, Findings of Fact ## 1, 2).

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[16] The Fikes assert that “[a]t all times we have been acting as agents of Fike

Investments, LLC, and not as individuals.” Appellants’ App. Vol. 2, p. 41 (Aff.

in Support of Summary Judgment, ¶4). But “a person’s belief or understanding

is not an objective fact,” and “[u]nder the objective theory of contracts, the

intent relevant in contract matters is not a party’s subjective intent but the

outward manifestation of it.” Akin v. Simons, 180 N.E.3d 366, 377 (Ind. Ct.

App. 2021). The Fikes’ contention that they were acting as agents of Fike

Investments, LLC and not as individuals is merely a self-serving statement of

their belief. It is not a statement of objective fact manifested in their lease, the

Pet Addendum, or the eviction action against Chubb.

[17] The first sentence of Chubb’s lease states: “THIS LEASE made this 28th day of

April 2015, between Jimmy W. Fike and Kimberly A. Fike, the ‘Landlord’ herein,

and . . . John Chubb the ‘Tenant’ herein.” Appellee’s App. Vol. III, p. 6

(emphasis added). And Jim and Kim did not sign the lease in their capacities as

members of the LLC but, instead, signed the lease as “Landlord” without any

further designation. See id. at 10. Further, the lease makes no reference at all to

Fike Investments. See id. at 6-10. Similarly, a Pet Addendum that was

executed the same day as the lease, identifies Jim and Kim as the landlords,

bears their signatures without any designation of their corporate capacities, and

contains no reference to Fike Investments. Appellee’s App. Vol. II, p. 65 (Pet

Addendum). And in the eviction action against Chubb, Jim and Kim are

designated as the plaintiffs with no mention of Fike Investments or indication

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they are members of the LLC acting on its behalf. See id. at 97, 98 (Aff. for

Immed. Poss’n.; Notice of Claim).

[18] If Jim and Kim intended to act as agents for the LLC and bind it to the lease,

they should have signed the lease in their corporate capacities. See Blackwell v.

Superior Safe Rooms LLC, 174 N.E.3d 1082, 1094 (Ind. Ct. App. 2021)

(observing principle that identity of parties to contract is ascertained from

examining written contract itself), trans. denied. However, they signed the lease

as individuals, not as representatives of Fike Investments LLC. Once they

executed the lease in this manner, the exemption was inapplicable because they

are not the owners of the property. Further, while the evidence shows that Jim

and Kim may have interacted with Chubb at subsequent times as

representatives of the LLC, see Appellee’s App. Vol. II, pp. 75, 79, 88 (Letters

and Notice to Leave Premises), the fact remains that the LLC, the owner of the

property, did not lease the property to Chubb as required for the exemption to

4

apply under Section 22-9.5-3-1(a)(1). In sum, in this transaction Jim and Kim

confused and conflated themselves with their LLC.

4

We observe that even if Kim and Jim had signed the lease as agents of the LLC, their status as members of

the LLC would not preclude their personal liability for their own acts. The Indiana Business Flexibility Act

controls the creation and operation of LLCs in our state. With regard to the personal liability of an LLC

member, this act provides:

A member, a manager, an agent, or an employee of a limited liability company is not

personally liable for the debts, obligations, or liabilities of the limited liability company,

whether arising in contract, tort, or otherwise, or for the acts or omissions of any other

member, manager, agent, or employee of the limited liability company. A member, a

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[19] Thus, having determined that the Fikes are not entitled to the Section 22-9.5-3-1

exemption, we conclude the Ultimate Authority’s exemption determination is

supported by substantial evidence. Accordingly, we need not address whether

Fike Investments LLC owns or has an interest in more than three single-family

houses or whether Zillow.com was a real estate broker at the time of this listing.

II. Emotional Distress Damages

[20] The Fikes next assert the evidence does not support the award of emotional

distress damages to Chubb. Particularly, they claim that Chubb submitted no

evidence of emotional distress and that the award was based solely on

presumptions and conclusory statements.

[21] As with our evaluation of the exemption determination, our review of this

decision is limited such that we do not reweigh the evidence, judge witness

credibility, or substitute our judgment for that of the agency. Ind. Dep’t of Nat.

Res., 132 N.E.3d at 401. We are bound by the agency’s findings of fact if they

are supported by substantial evidence. Id. And, as before, the Fikes have the

manager, an agent, or an employee of a limited liability company may be personally liable for the

person’s own acts or omissions.

Ind. Code § 23-18-3-3(a) (1993) (emphasis added). Given the evidence of Jim and Kim’s actions in this case

as individuals rather than members of the LLC, they would be personally liable for any obligations arising

therefrom. See, e.g., Pazmino v. Bose McKinney & Evans, LLP, 989 N.E.2d 784, 786-87 (Ind. Ct. App. 2013)

(applying plain language of I.C. § 23-18-3-3(a) to determine whether evidence established that employee of

LLC requested firm’s services on his own behalf or if he requested firm’s services on behalf of LLC).

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burden of showing the invalidity of the agency’s action. See id.; I.C. § 4-21.5-5-

14(a).

[22] In fashioning a remedy under the ICRL, the Commission is authorized to

award damages for emotional distress, Ind. Code § 22-9-1-6(j)(1) (2014); Ind.

Civil Rts. Comm’n v. Alder, 714 N.E.2d 632, 637 (Ind. 1999); yet there is a dearth

of case law from our state courts on the subject. Nevertheless, we may look to

federal statutes, cases, and policy statements for guidance as the IFHA borrows

heavily from the federal Fair Housing Act and explicitly declares that one of its

purposes is “[t]o provide rights and remedies substantially equivalent to those

granted under federal law.” Furbee v. Wilson, 144 N.E.3d 801, 806 (Ind. Ct.

App. 2020); Ind. Code § 22-9.5-1-1(3) (1990). Accordingly, we turn to a federal

decision often cited for guidance.

[23] In U.S. v. Balistrieri, 981 F.2d 916, 932 (7th Cir. 1992), the court clarified that an

injured person’s testimony may, by itself, provide sufficient evidence of

emotional distress. The court explained that:

in determining whether the evidence of emotional distress is

sufficient to support an award of damages, we must look at both

the direct evidence of emotional distress and the circumstances of

the act that allegedly caused that distress. The more inherently

degrading or humiliating the defendant’s action is, the more reasonable it

is to infer that a person would suffer humiliation or distress from that

action; consequently, somewhat more conclusory evidence of

emotional distress will be acceptable to support an award for

emotional distress.

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Id. (internal citation omitted) (emphasis added). Further, the court noted that

the factfinder, which in this case was the ALJ:

is in the best position to evaluate both the humiliation inherent in

the circumstances and the witness’s explanation of his injury.

Moreover, the [factfinder] is able to examine the witness

personally . . . [and] may glean as much if not more about a

witness’s emotional state from the witness’s demeanor than from

his attempts to explain the nature of his injury in words.

Id. at 933.

[24] At the evidentiary hearing, Chubb testified that when he was evicted he rented

two storage units because he had no place to go. Tr. Vol. 2, p. 17. He moved

his belongings into one unit, and he lived in the other. Id. at 18. The storage

units had no running water or plumbing, and, because residing in a storage unit

is not permitted, he arrived to the unit late and left early. Id. at 18, 19. He lived

this way for two and one-half weeks. Id. at 19. Chubb testified that “it was

very difficult to find another place to live, especially when you have eviction on

your record.” Id. at 18. When questioned by his attorney about how Jim and

Kim’s behavior and the eviction made him feel, Chubb explained:

Q. Let's talk about the Fikes’ behavior during this eviction.

How did -- how do you feel the -- how did the Fikes’ behavior

make you feel?

A. Well, I felt -- what is the word? I felt hated, because they

wouldn't talk to me, they would only talk to [Chubb’s

roommate].

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....

Q. So, can you explain to us how you felt having -- after the

eviction and having to live in the trailer -- or at a storage unit at

that time?

A. How I felt?

Q. And how you --

A. After I got a copy of the hearing, I went through it again

trying to figure out what happened, and I was just a miserable

wreck. I don’t know how to explain. I really don’t.

Id. at 34, 25.

[25] Based on the evidence, the ALJ found, and the Ultimate Authority later

adopted, that:

8. Chubb surreptitiously lived in the second storage unit for a

period of two and a half weeks with no toilet or running water as

he was unable to rent affordable housing for a period of time, due

to his limited income and the eviction proceeding on his credit

record.

9. Chubb suffered inconvenience, embarrassment and emotional

distress caused by living in the storage unit for two and a half

weeks. A person without an emotional or mental disability

would find such living circumstances challenging and degrading.

A person suffering from panic disorder, syncope, post-traumatic

stress disorder and agoraphobia, such as Chubb, would find such

living circumstances especially challenging and upsetting.

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Appellants’ App. Vol. 2, pp. 25-26 (Appealed Order, Findings of Fact ##8, 9).

As a result of these findings, the Ultimate Authority determined that Chubb

was entitled to damages for emotional distress and awarded him $25,000 “as

compensation for emotional distress caused by living in a storage unit for two

and a half weeks because of the unlawful and retaliatory eviction.” See id. at 28

(Appealed Order, Conclusion of Law #18); id. at 29 (Appealed Order, ¶3).

[26] Contrary to the Fikes’ assertions, Chubb’s testimony provides direct evidence of

his emotional distress. He felt “hated” and was a “miserable wreck.” Tr. Vol.

2, pp. 34, 25. And, as acknowledged by the ALJ, there is a logical and

permissible inference that it would be distressing for anyone in good mental

health to live in a storage unit for two and one-half weeks without plumbing or

running water, much less someone with mental health issues. This evidence

supports the award for emotional distress.

[27] Moreover, our review of the record reveals additional distressing circumstances.

Chubb submitted a letter to the Fikes from his treating physician confirming his

need for an emotional support animal, and in response, Jim and Kim told

Chubb they “‘would not take that BS from your doctor.’” Appellee’s App. Vol.

III, p. 184 (May 9, 2022 Order on Parties’ Cross Motions for Summary

Judgment, Finding of Fact ##8, 12). We find this comment to be inherently

degrading and humiliating, making it more reasonable to infer that Chubb

suffered emotional distress as a result of Jim and Kim’s actions. We conclude

there is substantial evidence supporting the award of damages for emotional

distress to Chubb.

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III. Civil Penalty

[28] Lastly, the Fikes argue the Ultimate Authority acted arbitrarily and capriciously

by imposing a civil penalty, and they urge us to reverse the determination. “‘A

decision is arbitrary and capricious when it is made without consideration of

the facts and lacks any basis that may lead a reasonable person to make the

decision made by the administrative agency.’” Am. Senior Cmtys. v. Ind. Fam. &

Soc. Servs. Admin., 206 N.E.3d 495, 499 (Ind. Ct. App. 2023) (quoting Ind. Real

Estate Comm’n v. Martin, 836 N.E.2d 311, 313 (Ind. Ct. App. 2005), trans.

denied), trans. denied. As before, the burden of demonstrating the invalidity of

the agency action is on the party who asserts the invalidity. See Ind. Dep’t of Nat.

Res., 132 N.E.3d at 401; I.C. § 4-21.5-5-14(a).

[29] Following oral argument, the Ultimate Authority modified the Recommended

Order of the ALJ, in part, by:

Adding a new Paragraph to the Decision and Order section to

issue a civil penalty under IC 22-9.5-6-15 against [the Fikes] in

the amount of $10,000.00 based on the findings of fact, the

arguments presented at oral argument, and its desire to be

consistent with previous decisions rendered by the Commission

for similar cases.

Appellants’ App. Vol. 2, p. 33 (ICRC Attachment A to Appealed Order, ¶3).

As cited by the Ultimate Authority, Indiana Code section 22-9.5-6-15 (1990)

provides for a civil penalty, stating in relevant part:

(a) If the commission determines at a hearing under section 14 of

this chapter that a respondent has engaged in or is about to

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engage in a discriminatory housing practice, the commission may

order the appropriate relief, including actual damages, reasonable

attorney’s fees, court costs, and other injunctive or equitable

relief.

(b) To vindicate the public interest, the commission may assess a

civil penalty against the respondent in an amount that does not

exceed the following:

(1) Ten thousand dollars ($10,000) if the respondent has not been

adjudged by order of the commission or a court to have

committed a prior discriminatory housing practice.

[30] In the argument section of their brief, the Fikes make allegations regarding the

Ultimate Auhtority’s assessment of a civil penalty, but they fail to show that the

decision was made without consideration of the facts and that it lacks any basis

that would lead a reasonable person to make such a decision. See Am. Senior

Communities, 206 N.E.3d at 499.

[31] The Ultimate Authority’s authorization to assess a civil penalty is grounded in

statutory language that is clear on its face and, thus, it cannot be said there was

no reasonable basis for the action. Accordingly, we conclude that imposition of

the civil penalty was not arbitrary and capricious.

[32] Given that Jim and Kim signed the lease as individuals and not as agents of

Fike Investments, LLC, they are personally liable for their actions and

omissions under the lease. Accordingly, Jim and Kim, not the LLC, are

responsible for the damages and penalties imposed by the Ultimate Authority.

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Conclusion

[33] Based upon the foregoing, we conclude that the Ultimate Authority’s

exemption determination and award of damages for emotional distress are both

supported by substantial evidence. Additionally, we conclude the Ultimate

Authority’s assessment of a civil penalty was not arbitrary and capricious, and

we determine that Jim and Kim Fike are personally liable for the damages and

civil penalty imposed by the Ultimate Authority.

[34] Affirmed and remanded with instructions that the Ultimate Authority modify

its final order to provide that the determination of liability, the award of

damages, and the imposition of the penalty are against only Jim Fike and Kim

Fike.

Pyle, J., and Kenworthy, J., concur.

ATTORNEY FOR APPELLANTS

Robert J. Palmer

May Oberfell Lorber

Mishawaka, Indiana

ATTORNEYS FOR APPELLEE

Theodore E. Rokita

Attorney General of Indiana

Abigail R. Recker

Deputy Attorney General

Indianapolis, Indiana

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