Court Opinion

ID: 4018561
Source: CourtListenerOpinion
Date Created: 2016-07-25 15:04:51.236077+00
Date Added: 2024-06-11T14:44:49.451056
License: Public Domain

FILED
                                                                           Jul 25 2016, 8:37 am

                                                                               CLERK
                                                                           Indiana Supreme Court
                                                                              Court of Appeals
                                                                                and Tax Court

ATTORNEY FOR APPELLANTS                                    ATTORNEY FOR APPELLEE
James E. Ayers                                             Sheri Bradtke McNeil
Wernle, Ristine & Ayers                                    Kopka Pinkus Dolin PC
Crawfordsville, Indiana                                    Crown Point, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

Darrell Birge and Sandra Birge,                            July 25, 2016
Appellants-Plaintiffs,                                     Court of Appeals Case No.
                                                           54A01-1509-PL-1495
        v.                                                 Appeal from the Montgomery
                                                           Circuit Court
Town of Linden, Indiana,                                   The Honorable Peggy Lohorn,
Appellee-Defendant.                                        Special Judge
                                                           Trial Court Cause No.
                                                           54C01-1409-PL-774

Robb, Judge.

Court of Appeals of Indiana | Opinion 54A01-1509-PL-1495 | July 25, 2016                           Page 1 of 13
                                 Case Summary and Issue
[1]   Darrell and Sandra Birge own farmland in Montgomery County, Indiana. In

      2014, the Birges filed a complaint against various governmental entities and

      independent contractors after modifications to an existing drainage system

      caused flooding on their property. The complaint named the Town of Linden

      (“Town”) as a defendant. The Town filed a motion to dismiss for failure to

      state a claim, which the trial court granted. The Birges now appeal the

      dismissal of their claims against the Town. Concluding the trial court erred in

      dismissing the Birges’ complaint for failure to state a claim, we reverse and

      remand.

                             Facts and Procedural History
[2]   On September 22, 2014, the Birges filed a Verified Complaint for Nuisance and

      Damages against (1) the Town; (2) Montgomery County; (3) Montgomery

      County Drainage Board (“Drainage Board”); (4) Montgomery County Board of

      Commissioners (“Board of Commissioners”); (5) Montgomery County

      Surveyor (“County Surveyor”); (6) Banning Engineering, P.C.; and (7) Harvey

      Construction Company, Inc. On November 13, 2014, the Town filed an

      answer, which raised as an affirmative defense governmental immunity under

      the Indiana Tort Claims Act (“ITCA”). With leave of the trial court, the Birges

      filed an amended complaint on February 10, 2015, alleging in relevant part:

              4. That . . . Montgomery County by the [Drainage Board], prior
              to 2012, and in accordance with I.C. 36-9-27-34, had established

      Court of Appeals of Indiana | Opinion 54A01-1509-PL-1495 | July 25, 2016   Page 2 of 13
        and maintained a farm drainage system designated Montgomery
        County Hose Drain, to collect and remove underground water
        from agricultural land to the south of [the Birges’] property, a
        portion of which drain was located within a right-of-way across
        [the Birges’] property dedicated for use as an agricultural farm
        drainage ditch.

        5. That said Hose Drain was a regulated farm drain, repairs and
        maintenance of which were to be supervised by the County
        Surveyor and funded by benefit assessments and maintained by
        the [Drainage Board] in accordance with I.C. 36-9-27-34(a), to
        collect and carry away underground water from the agricultural
        fields of the farmers of Montgomery County, flowing south to
        north through the [Town], and to thus drain the farm lands of
        [the Birges] and others.

        6. That the [Town] in an effort to reduce flooding from storm water,
        applied for funds to improve its storm drainage system, and the
        [Drainage Board] did consort and conspire with the [Town] to
        improperly utilize the Hose Drain right-of-way and the statutory powers
        of the Drainage Board to assist the Town to build new components of a
        municipal storm water drainage system under the pretense that such was
        an agricultural drain and in the course of such conspiracy abused
        its statutory power as set out in I.C. 36-9-27-34(a) to wrongfully
        assess payment for such Town storm drain from the owners of
        agricultural land in the water shed, including the land owned by
        [the Birges], who were assessed in the sum of $9,000 for
        construction of the Linden Town Storm Drain, which was of no
        benefit to [the Birges] or to other agricultural landowners. The
        [Drainage Board] agreed to and did authorize the construction of
        the Linden Storm Sewer to follow the course of the original
        agricultural Hose Drain and to disrupt and block the operation of
        the Hose Drain.

        7. That by reason of such conduct [Montgomery] County by the
        intentional act of its Surveyor and Drainage Board did, in 2012,
        abandon and destroy said agricultural drain by cutting it, and by
Court of Appeals of Indiana | Opinion 54A01-1509-PL-1495 | July 25, 2016      Page 3 of 13
        constructing a new closed storm water drain which does not
        drain the subsurface water from [the Birges’] land, but instead
        carries only part of the surface water from the [Town] through
        such land, and by reason of defective design and construction
        collects and deposits large portions of storm water from the
        Town into the subsurface of the property of [the Birges] . . . .
        The Construction did also block and prevent the prior subsurface
        drainage from the property of [the Birges] along the right-of-way
        of said former Hose Drain, such that underground water pools
        and is not carried away, and surface water pools and is not
        carried away, causing water to accumulate and the water table to
        rise creating a nuisance to [the Birges] by reason of flooding and
        bog-like conditions, ruination of farmland, failure of [the Birges’]
        residential septic system, and [destruction of] the right of [the
        Birges] to peaceful possession and use of their premises . . . . The
        result of said acts by the County has been the inability to farm
        approximately 13 acres of prime farmland because of the chronic
        wet and bog-like condition thereof.

        8. That [the Birges] did, prior to such placement, specifically
        warn the County Surveyor and the Drainage Board of the
        defective design, and probable consequences of the planned
        construction of the Linden Storm Sewer line on and across [the
        Birges’] property, and requested reconsideration and competent
        engineering review. The County officials, namely the County
        Surveyor and the [Drainage Board,] proceeded despite such
        requests and warnings and without referral for a competent
        engineering evaluation. Following construction, when the
        predicted flooding occurred and its effects were discovered on
        October 12, 2012, when harvest of some areas proved impossible,
        [the Birges] sought relief from the [Board of Commissioners],
        which has failed to undertake any corrective action. . . . No
        significant action has been taken by any Defendant to correct
        such conditions.

        9. That [the Birges] are not able by any means to prevent such
        discharge, flooding, and accumulation of storm water or to

Court of Appeals of Indiana | Opinion 54A01-1509-PL-1495 | July 25, 2016   Page 4 of 13
              accomplish the removal of the excess water, and each of those
              conditions constitutes a nuisance preventing the reasonable use
              of the farm property of [the Birges], and interfering with the use,
              value and habitability of [the Birges’] home, and reducing the
              agricultural value of [the Birges’] land and also [the value of] that
              portion of [the Birges’] land which is a platted subdivision . . . .

      Appendix of the Appellant at 27-29 (emphasis added).

[3]   Based on the foregoing, the amended complaint sought an injunction ordering

      the abatement of the nuisance, but “[i]n the event the Court does not grant a

      mandatory injunction,” the complaint further asserted a claim for inverse

      condemnation. Id. at 32-33. Specifically, the complaint alleged that,

              by reason of the acts of Montgomery County and [the Town] the
              property of [the Birges] has been rendered of substantially
              reduced value in that (1) [the] water table has been elevated such
              that access across the area is impeded or prevented, (2)
              cultivation of many acres is prevented, (3) the home of [the
              Birges] is rendered unsalable and its habitability is in question
              and its value reduced, and (4) areas of platted subdivision have
              been rendered unbuildable and therefore of no value for
              development on account of the artificially high water table . . . .

      Id. at 33.

[4]   On March 2, 2015, the Town filed a motion to dismiss for failure to state a

      claim, which the trial court granted. This appeal followed.

      Court of Appeals of Indiana | Opinion 54A01-1509-PL-1495 | July 25, 2016    Page 5 of 13
                                  Discussion and Decision
                                      I. Standard of Review
[5]   We review de novo the trial court’s grant or denial of a motion to dismiss based

      on Trial Rule 12(B)(6). Kitchell v. Franklin, 997 N.E.2d 1020, 1025 (Ind. 2013).

      “A motion to dismiss for failure to state a claim tests the legal sufficiency of the

      claim, not the facts supporting it.” Id. In conducting our review, we accept as

      true the facts alleged in the complaint. Trail v. Boys & Girls Clubs of Nw. Ind., 845
N.E.2d 130, 134 (Ind. 2006). “[W]e view the pleadings in the light most

      favorable to the nonmoving party, with every reasonable inference construed in

      the nonmovant’s favor.” Babes Showclub, Jaba, Inc. v. Lair, 918 N.E.2d 308, 310

      (Ind. 2009). A complaint may not be dismissed for failure to state a claim

      “unless it is clear on the face of the complaint that the complaining party is not

      entitled to relief.” Charter One Mortg. Corp. v. Condra, 865 N.E.2d 602, 605 (Ind.

      2007).

                                  II. Failure to State a Claim
[6]   The complaint asserts claims for nuisance, civil conspiracy, and inverse

      condemnation. In granting the Town’s motion to dismiss for failure to state a

      claim, the trial court concluded it was clear on the face of the complaint that

      discretionary function immunity applies in this case and the Birges failed to

      allege facts supporting a claim for civil conspiracy. We conclude otherwise.

      Court of Appeals of Indiana | Opinion 54A01-1509-PL-1495 | July 25, 2016   Page 6 of 13
                           A. Discretionary Function Immunity
[7]   The ITCA governs tort claims against governmental entities and public

      employees. Veolia Water Indianapolis, LLC v. Nat’l Trust Ins. Co., 3 N.E.3d 1, 5

      (Ind. 2014). Governmental entities may be subject to liability for tortious

      conduct unless the conduct falls within an immunity granted by the ITCA. Id.

      Indiana Code section 34-13-3-3(7) provides, “A governmental entity or an

      employee acting within the scope of the employee’s employment is not liable if

      a loss results from . . . [t]he performance of a discretionary function.” Whether

      an act constitutes the performance of a discretionary function is a question of

      law for the court’s determination. City of Beech Grove v. Beloat, 50 N.E.3d 135,

      138 (Ind. 2016). As an exception to the general rule of liability, discretionary

      function immunity is narrowly construed. Id. We apply the

      “planning/operational test” our supreme court adopted in Peavler v. Bd. of

      Comm’rs of Monroe Cnty., 528 N.E.2d 40 (Ind. 1988):

              Under the planning/operational dichotomy, the type of
              discretion which may be immunized from tort liability is
              generally that attributable to the essence of governing. Planning
              activities include acts or omissions in the exercise of a legislative,
              judicial, executive or planning function which involves
              formulation of basic policy decisions characterized by official
              judgment or discretion in weighing alternatives and choosing
              public policy. Government decisions about policy formation
              which involve assessment of competing priorities and a weighing
              of budgetary considerations or the allocation of scarce resources
              are also planning activities.

      Court of Appeals of Indiana | Opinion 54A01-1509-PL-1495 | July 25, 2016     Page 7 of 13
      Id. at 45 (citations omitted). In applying this test, “we distinguish between

      decisions involving the formulation of basic policy, entitled to immunity, and

      decisions regarding only the execution or implementation of that policy, not

      entitled to immunity.” Gary Cmty. Sch. Corp. v. Boyd, 890 N.E.2d 794, 800 (Ind.

      Ct. App. 2008) (quotation omitted), trans. denied. “The critical inquiry is not

      merely whether judgment was exercised but whether the nature of the judgment

      called for policy considerations.” Peavler, 528 N.E.2d at 45 (quotation omitted).

      “The question may require an extended factual development . . . .” Id. at 46.

[8]   In City of Beech Grove, 50 N.E.3d 135, a woman fell and injured herself when she

      stepped into a pothole on a city street. The woman sued the City for her

      injuries, alleging the City negligently failed to maintain the street. The City

      claimed discretionary function immunity under the ITCA and moved for

      summary judgment. The trial court denied the City’s motion for summary

      judgment and certified the order for interlocutory appeal. This court accepted

      jurisdiction and reversed in a divided opinion. Our supreme court granted

      transfer and affirmed the denial because the designated evidence failed to

      demonstrate the City engaged in a policy decision. Id. at 136.

[9]   In support of its motion for summary judgment, the City designated an affidavit

      from the Mayor and minutes from City Council and Board of Works and Safety

      meetings. The City argued the designated evidence showed the City executed a

      complete road reconstruction project in lieu of piecemeal repairs due to a policy

      determination. With respect to the Mayor’s affidavit, our supreme court

      concluded the affidavit could not be relied upon because “[t]he actions of

      Court of Appeals of Indiana | Opinion 54A01-1509-PL-1495 | July 25, 2016   Page 8 of 13
       individual members of a board or commission outside a meeting cannot be

       substituted for the actions at a duly constituted meeting or for the minutes

       thereof.” Id. at 140 (alteration in original) (quoting Scott v. City of Seymour, 659
N.E.2d 585, 590 (Ind. Ct. App. 1995)). As for the minutes from City Council

       and Board of Works and Safety meetings, the court noted the minutes reflected

       “the steps taken to fund a project that had already been discussed, planned, and

       approved.” Id. at 142. The minutes did not reveal “any discussion about how

       the area encompassed within the Project was decided upon, why specific repairs

       were selected over others, what would be done about road damage in the

       meantime, why total reconstruction was necessary, or the costs of total

       reconstruction compared to conducting other individual repairs.” Id.

       Ultimately, although the ongoing discussions regarding the funding and

       timeline for the project could support an inference that the City, at some point,

       engaged in a policy discussion, the court affirmed the denial of summary

       judgment because the minutes did not reveal an actual weighing of options or

       cost-benefit analysis with respect to the decision to suspend routine

       maintenance in favor of the project. Id. at 142-43; see also Gerbers, Ltd. v. Wells

       Cnty. Drainage Bd., 608 N.E.2d 997, 999 (Ind. Ct. App. 1993) (“If . . . the trial

       court assumed that by actually acting, the Board must have consciously

       weighed the competing interests, the trial court’s assumption [was] erroneous

       and contrary to Peavler.”), trans. denied.

[10]   Given the standard enunciated in City of Beech Grove, we cannot say it is “clear

       on the face of the complaint” that the Town is entitled to discretionary function

       Court of Appeals of Indiana | Opinion 54A01-1509-PL-1495 | July 25, 2016    Page 9 of 13
       immunity. Charter One Mortg. Corp., 865 N.E.2d at 605. The complaint alleges,

       “the [Town] in an effort to reduce flooding from storm water, applied for funds

       to improve its storm drainage system.” App. at 27. But the fact the Town

       applied for the funds does not, in itself, demonstrate a conscious weighing of

       options with respect to the Town’s decision to improve its storm drainage

       system. As our supreme court observed in Peavler, the question of discretionary

       function immunity “may require an extended factual development.” 528
N.E.2d at 46. Accepting as true the facts alleged in the complaint, we believe

       the question of immunity in this case requires additional factual development.

       At this stage in the proceedings, the trial court erred in determining the Town is

       entitled to discretionary function immunity.

[11]   We express no opinion as to the ultimate resolution of the immunity issue, but

       to the extent the trial court concluded immunity under the ITCA would bar the

       Birges’ claim for inverse condemnation, the trial court erred. If the government

       takes property but fails to initiate eminent domain proceedings, Indiana Code

       section 32-24-1-16 permits the owner of the property to recover money damages

       in an action for inverse condemnation. Murray v. City of Lawrenceburg, 925
N.E.2d 728, 731 (Ind. 2010). The immunity provisions provided by the ITCA

       do not apply to claims for inverse condemnation, see Ind. Code § 34-13-3-1

       (stating Indiana Code chapter 34-13-3 “applies only to a claim or suit in tort”),

       and could not apply in any event because just compensation is constitutionally

       required, see Murray, 925 N.E.2d at 731 (stating the Indiana Constitution and

       the Fifth Amendment of the United States Constitution require just

       Court of Appeals of Indiana | Opinion 54A01-1509-PL-1495 | July 25, 2016   Page 10 of 13
       compensation if the State exercises its inherent authority to take private

       property for public use). If the Town is entitled to discretionary function

       immunity in this case, immunity will extend only to tort claims brought under

       the ITCA.

                                           B. Civil Conspiracy
[12]   “A civil conspiracy is a combination of two or more persons who engage in a

       concerted action to accomplish an unlawful purpose or to accomplish some

       lawful purpose by unlawful means.” Miller v. Cent. Ind. Cmty. Found., 11 N.E.3d
944, 962 (Ind. Ct. App. 2014), trans. denied. The complaint alleges the Town

       conspired with the Drainage Board to “improperly utilize” the existing right-of-

       way and construct new components for the municipal storm drainage system,

       which “caus[ed] water to accumulate and the water table to rise creating a

       nuisance to [the Birges] by reason of flooding and bog-like conditions . . . .”

       App. at 27-28. The trial court concluded the Birges failed to plead facts

       supporting a claim for civil conspiracy because they did not allege the Town

       acted unlawfully or to accomplish an unlawful purpose. We disagree.

[13]   Civil conspiracy is not an independent cause of action. Am. Heritage Banco, Inc.

       v. McNaughton, 879 N.E.2d 1110, 1115 (Ind. Ct. App. 2008). It must be alleged

       with an underlying tort. Crystal Valley Sales, Inc. v. Anderson, 22 N.E.3d 646, 653

       (Ind. Ct. App. 2014), trans. denied. Unlike criminal conspiracy, the gist of a civil

       conspiracy is not the unlawful agreement, but the damage caused by acts

       committed in pursuance of the agreement. K.M.K. v. A.K., 908 N.E.2d 658,

       Court of Appeals of Indiana | Opinion 54A01-1509-PL-1495 | July 25, 2016   Page 11 of 13
       663-64 (Ind. Ct. App. 2009), trans. denied; 16 Am. Jur. 2d Conspiracy § 53 (2016).

       Thus, an allegation of civil conspiracy is “just another way of asserting a

       concerted action in the commission of a tort.” Boyle v. Anderson Fire Fighters

       Assoc. Local 1262, 497 N.E.2d 1073, 1079 (Ind. Ct. App. 1986), trans. denied.

[14]   In its order granting the Town’s motion to dismiss, the trial court recognized

       the pleaded facts may support an underlying claim for nuisance1 but concluded

       the tort of nuisance does not constitute an “unlawful” purpose or means. See

       App. at 61 (noting the Birges “label the planning and construction [of the storm

       drain] as ‘wrong’ because of the alleged result of nuisance, not because of an

       unlawful purpose or means”). This conclusion was error. An allegation of civil

       conspiracy is merely an assertion of concerted action in the commission of a

       tort causing damage to the Birges. Accordingly, the trial court erred in

       concluding the Birges failed to allege facts supporting a claim for civil

       conspiracy.

                                                    Conclusion
[15]   The trial court erred in dismissing the Birges’ complaint for failure to state a

       claim. We therefore reverse and remand for further proceedings consistent with

       this opinion.

       1
        Indiana Code section 32-30-6-6 defines a nuisance as: “Whatever is: (1) injurious to health; (2) indecent; (3)
       offensive to the senses; or (4) an obstruction to the free use of property; so as essentially to interfere with the
       comfortable enjoyment of life or property . . . .”

       Court of Appeals of Indiana | Opinion 54A01-1509-PL-1495 | July 25, 2016                             Page 12 of 13
[16]   Reversed and remanded.

       Najam, J., and Crone, J., concur.

       Court of Appeals of Indiana | Opinion 54A01-1509-PL-1495 | July 25, 2016   Page 13 of 13