Court of Appeals of Indiana | Opinion 22A-PL-2899 | November 15, 2023 Page 1 of 7

ATTORNEY FOR APPELLANT

Mark K. Leeman

Leeman Law Office

Logansport, Indiana

ATTORNEYS FOR APPELLEE

Theodore E. Rokita

Attorney General of Indiana

Kyle Hunter

Deputy Attorney General

Indianapolis, Indiana

I N T H E

COURT OF APPEALS OF INDIANA

John E. Moriarity, Mae E. 

Moriarity, and C-A-R-E Auto 

Auction, Inc.,

Appellants-Plaintiffs,

v.

State of Indiana, Indiana Natural 

Resources Commission, and 

Indiana Department of

Natural Resources,

Appellees-Defendants

November 15, 2023

Court of Appeals Case No.

22A-PL-2899

Appeal from the Grant Circuit 

Court

The Honorable Mark E. Spitzer, 

Judge

Trial Court Cause No.

27C01-1805-PL-17

Opinion by Judge Weissmann

Judges Riley and Bradford concur.
Court of Appeals of Indiana | Opinion 22A-PL-2899 | November 15, 2023 Page 2 of 7

Weissmann, Judge.

[1] Nearly 30 years ago, John and Mae Moriarity built on their property a dam big 

enough to violate Indiana’s Dam Safety Act.

1 After being ordered to either 

modify the dam or remove it, the Moriaritys sought compensation from the 

State for what they say will be attending damages—namely, a 30-to-40- acre 

mud pit and thousands of dead fish. This claim ignores the simple fact that the 

Moriaritys created the quagmire in which they find themselves and cannot now 

rely on the State to bail them out. Therefore, we affirm the trial court’s 

dismissal of the Moriaritys’ inverse condemnation action. 

Facts

[2] In the late 1990s, the Moriaritys built a dam that rose more than 20 feet in 

certain spots, creating a roughly 30-to-40-acre pond that contained over one 

hundred acre-feet of water. After learning about the dam, the Indiana 

Department of Natural Resources (DNR) ordered the Moriaritys to make 

changes, fearing safety deficiencies could cause the structure to burst and 

endanger nearby homeowners. 

[3] The Moriaritys first litigated, and lost, a claim that their dam did not fall within 

the DNR’s jurisdiction. Moriarity v. Ind. Dep’t of Nat. Res., 113 N.E.3d 614, 617-

1

Ind. Code § 14-27-7.5 et seq.
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18 (Ind. 2019). Our Supreme Court concluded that the Moriaritys must either 

modify the illegal dam to comply with the Dam Safety Act or remove it. 2

[4] But while that case worked its way through the courts, the Moriaritys also 

pursued an inverse condemnation action. They claimed the DNR’s action in 

forcing them to modify or remove their illegal dam constituted a regulatory 

taking that entitled them to just compensation. The trial court dismissed the

Moriaritys' inverse condemnation complaint, finding that the facts “[did] not 

support a finding of a regulatory taking by the DNR.” App. Vol. III, p. 47.

Discussion and Decision

[5] On appeal, the Moriaritys claim they met the low bar necessary to survive

dismissal of their inverse condemnation claim. A motion to dismiss under 

Indiana Trial Rule 12(B)(6) generally “tests the legal sufficiency of the plaintiff’s 

claims, not the fact supporting it.” Bellwether Props., LLC v. Duke Energy Ind., 

Inc., 87 N.E.3d 462, 466 (Ind. 2017). A Trial Rule 12(B)(6) dismissal is 

reviewed de novo. Crystal Valley Sales, Inc. v. Anderson, 22 N.E.3d 646, 652 (Ind. 

Ct. App. 2014). Thus, the issue here is whether the Moriaritys’ complaint 

alleged facts constituting a compensable regulatory taking. It did not. 

2 The Indiana Supreme Court affirmed a trial court’s judgment, which itself affirmed the decision of the 

Natural Resources Commission, that the Moriaritys’ dam violated the Indiana Dam Safety Act because it 

was an impermissible “high-hazard structure.” Moriarity, 113 N.E.3d at 622-23 (citing Ind. Code § 14-27-7.5-

8(b)). 
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Regulatory Taking 

[6] Both Article 1, § 21 of the Indiana Constitution and the Fifth Amendment to 

the United States Constitution prevent the taking of private property for public 

use without “just compensation.” These provisions “are textually 

indistinguishable and are to be analyzed identically.” State v. Kimco of Evansville, 

Inc., 902 N.E.2d 206, 210 (Ind. 2009). 

[7] Two types of regulatory action generally establish per se takings: (1) the 

permanent physical invasion of property; or (2) the deprivation of all or 

substantially all economic or productive use of an owner’s property. Lingle v. 

Chevron U.S.A., Inc., 544 U.S. 528, 538 (2005). Outside of these “two relatively 

narrow categories,” courts turn to the well-worn Penn Central factors. Id. (citing 

Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978)). These 

factors require consideration of (1) the economic impact of the regulation, (2) 

the extent the regulation interfered with distinct investment-backed 

expectations, and (3) the character of the government action. Id. at 538-39.

[8] Here, given that no physical invasion occurred, the Moriaritys largely allege the

second category of a per se taking: the loss of all economic or productive use of 

their property. But even if such a loss occurred, the Moriaritys’ claim fails 

because the government may affect a total regulatory taking without 

compensation where “‘background principles of nuisance and property law’ 

independently restrict the owner’s intended use of the property.” Lingle, 544 

U.S. at 538 (quoting Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1026-32 

(1992)).
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[9] The Moriaritys never possessed a right to build an illegal dam. Therefore, they 

are not entitled to compensation because the State forced them to remove or 

modify it. This situation falls neatly within a category of regulatory cases 

identified by the United States Supreme Court as not deserving of just 

compensation. In Lucas, the petitioner purchased two beachfront lots that he

intended for future residential use. 505 U.S. at 1007. But within a few years, the 

state of South Carolina enacted a law that effectively banned “any permanent 

habitable structures” from being built on his lots, which were within a beach 

erosion zone. Id. Under these circumstances, the Supreme Court found no 

compensable taking because “background principles” in the “law of property 

and nuisance” supported the state’s right to place such restrictions upon land 

ownership. Id. at 1029.

[10] As an illustrative example, Justice Scalia pointed out that “the owner of a lakebed . . . would not be entitled to compensation when he is denied the requisite 

permit to engage in a landfilling operation that would have the effect of 

flooding others’ land.” Id. This is true even where the “regulatory action may 

well have the effect of eliminating the land’s only economically productive use” 

because the government action “does not proscribe a productive use that was 

previously permissible under relevant property and nuisance principles.” Id.

(emphasis added).

[11] The Moriaritys’ situation mirrors Justice Scalia’s example. The DNR is 

requiring the Moriaritys to fix or remove the dam because of the hazard it poses

to them and their neighbors. To find for the Moriaritys here would be like
Court of Appeals of Indiana | Opinion 22A-PL-2899 | November 15, 2023 Page 6 of 7

endorsing the lake-bed owner’s unpermitted landfilling operation and then—

once the threat of flooding arises—forcing the State to pay the owner to undo 

his own actions that created the danger in the first place. Such a result is absurd. 

Indeed, the “recognition that the Takings Clause does not require compensation 

when an owner is barred from putting land to a use that is proscribed by those 

‘existing rules or understandings’ is surely unexceptional.” Id. Thus, the 

Moriaritys’ complaint did not plead a per se regulatory taking.

[12] For similar reasons, the Moriaritys also failed to plead a regulatory taking under

the Penn Central factors. First, under our standard of review, we assume as true 

the Moriaritys’ claim that the dam’s removal will cause them significant 

economic damages. Yet this injury is counterbalanced by the corresponding 

lack of any investment-backed expectations the Moriaritys should have had. 

Although the Moriaritys alleged their expectation that the dam would create a 

“thriving ecosystem” of fish and wildlife, Appellant’s Br., p. 26 (citing App. 

Vol. II, p. 88), left entirely unmentioned is any reasonable expectation that they 

possessed the right to build a dam that violated Indiana’s Dam Safety Act. And 

the Moriaritys would have been entirely wrong to simply assume their dam’s 

legality. As the Supreme Court remarked in Lucas, a “property owner necessarily 

expects the uses of his property to be restricted, from time to time, by various 

measures newly enacted by the State in legitimate exercise of its police powers.” 

505 U.S. at 1027 (emphasis added). 

[13] Lastly, the character of the government action here supports finding no 

regulatory taking occurred. In regulating the Moriaritys’ dam, the DNR is 
Court of Appeals of Indiana | Opinion 22A-PL-2899 | November 15, 2023 Page 7 of 7

acting to promote the common good and ensure public safety from the risk that 

a potentially deficient dam will fail and flood nearby landowners. These facts 

are the hallmark of a permissible government action. See Duke Energy Ind., LLC 

v. Bellwether Props., LLC, 192 N.E.3d 1003, 1009 (Ind. Ct. App. 2022) (finding 

no regulatory taking where government action “is intended to protect life and 

property”).

[14] Because the Moriaritys’ complaint did not successfully plead a regulatory 

taking, we affirm its dismissal. 

Riley, J., and Bradford, J., concur.