Court Opinion

ID: 4126214
Source: CourtListenerOpinion
Date Created: 2017-02-15 16:18:43.074972+00
Date Added: 2024-06-11T14:29:51.531216
License: Public Domain

FILED
                                                                   Feb 15 2017, 10:26 am

                                                                        CLERK
                                                                    Indiana Supreme Court
                                                                       Court of Appeals
                                                                         and Tax Court

      ATTORNEYS FOR APPELLANT                                    ATTORNEYS FOR APPELLEE
      Steven E. Runyan                                           James R. Williams
      Justin Leverton                                            Matthew L. Kelsey
      Kroger, Gardis & Regas, LLP                                Defur Voran LLP
      Indianapolis, Indiana                                      Muncie, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      Mint Management, LLC, and                                  February 15, 2017

      J&MW Holdings, LLC,                                        Court of Appeals Case No.
                                                                 89A01-1603-PL-496
      Appellants-Plaintiffs.
                                                                 Appeal from the Wayne Superior
              v.                                                 Court
                                                                 The Honorable Charles K. Todd,
      City of Richmond, Indiana,                                 Jr., Judge
                                                                 Trial Court Cause No.
      Appellee-Defendant.
                                                                 89D01-1310-PL-44

      Pyle, Judge.

                                         Statement of the Case
[1]   Appellants/Plaintiffs, Mint Management, LLC and J&MW Holdings, LLC

      (collectively, “Property Owners”), appeal the trial court’s grant of summary

      judgment in favor of Appellee/Defendant, the City of Richmond, Indiana (“the

      City”), on the Property Owners’ declaratory judgment claim. The Property

      Court of Appeals of Indiana | Opinion 89A01-1603-PL-496 | February 15, 2017            Page 1 of 12
      Owners filed a claim for a declaratory judgment on the issue of whether they

      were required to pay the City’s fee (“Stormwater Fee”) for financing its

      stormwater system. The City filed a motion for summary judgment, and the

      trial court granted the motion. It reasoned that all owners of real estate parcels

      in Richmond were required to pay the Stormwater Fee pursuant to the language

      of the City’s stormwater ordinance.

[2]   On appeal, the Property Owners argue that we should interpret the City’s

      stormwater ordinance as exempting their properties from the Stormwater Fee

      because the stormwater runoff from their properties does not enter the City’s

      stormwater system. Because we conclude that the language of the ordinance as

      a whole requires all property owners in Richmond to pay the Stormwater Fee,

      we conclude that the trial court did not err in granting summary judgment in

      favor of the City.

[3]   We affirm.

                                                       Issue
              Whether the trial court erred when it granted summary judgment
              in favor of the City.

                                                       Facts
[4]   On April 16, 2007, the City adopted Ordinance No. 47-2006 (“the Ordinance”),

      which created a Stormwater Management District in Richmond (“Stormwater

      District”). The Stormwater District was created “for the purpose of managing

      the stormwater collection and conveyance systems and activities in the [C]ity,

      Court of Appeals of Indiana | Opinion 89A01-1603-PL-496 | February 15, 2017   Page 2 of 12
      establishing rates and charges for the users of the stormwater system of the

      [C]ity[,] and other related matters.” (App. 234). In order to finance the

      Stormwater District, Section 59.06 of the Ordinance, the “Stormwater Service

      Charge” section, provided that:

              A [Stormwater Fee] shall be imposed on each and every lot and
              parcel of land within the City which directly or indirectly contributes
              to the storm water system of the City, which charge shall be
              assessed against the property owner thereof, who shall be
              considered the user for the purposes of this chapter.

      (App. 240) (emphasis added).

[5]   The Property Owners, collectively, own four parcels of real estate (“the

      Properties”) in Richmond. They retained a registered land surveyor who

      investigated the drainage patterns of the Properties and determined that

      stormwater runoff from the Properties did not drain directly or indirectly into

      the City’s stormwater system. Based on these surveys, the Property Owners

      filed separate claims against the City requesting a declaration that they were not

      required to pay Stormwater Fees under the Ordinance since the Properties did

      not “contribute to” the City’s stormwater system. (App. 240). They also

      requested recovery of the Stormwater Fees they had already paid. The trial

      court consolidated the claims, and the City moved for summary judgment

      against the Property Owners on all claims on January 21, 2015.

[6]   In its motion for summary judgment, the City argued that the Ordinance

      imposed the Stormwater Fee against all real property within the City’s

      boundaries, not just properties whose stormwater runoff drained into, or

      Court of Appeals of Indiana | Opinion 89A01-1603-PL-496 | February 15, 2017   Page 3 of 12
      “contribute[d] to,” the City’s stormwater system. Accordingly, the City argued

      that it was entitled to summary judgment on the Property Owners’ declaratory

      judgment and recovery claims. In support of this argument, the City cited to

      Ordinance Section 59.05, the “Definitions” section, and Ordinance Section

      59.07, the “Stormwater Service Rate Establishment Procedures” section. Both

      of those sections indicated that the Stormwater Fee was meant to apply to all

      “user[s]” of the stormwater system. (App. 240). In Section 59.05, the

      Ordinance defined “user[s] as all “property owner[s] benefitting from the

      stormwater system.” (App. 44). The City then cited to language in INDIANA

      CODE § 8-1.5-5-5, a section of the Ordinance’s enabling statute, that indicated

      that all property owners were to be considered to benefit from the stormwater

      system. Based upon this language, the City argued that the Ordinance as a

      whole specified that all property owners in the City were required to pay the

      Stormwater Fee because all property owners benefitted from the stormwater

      system. The City also designated an affidavit from the District Engineer of the

      Richmond Sanitary District in which the District Engineer averred that: “In

      my professional opinion, the City of Richmond and its systems benefit[] all

      parcels within the City, specifically including the parcels owned by the Plaintiffs

      in this cause of action.” (App. 256).

[7]   The Property Owners responded to the City’s motion for summary judgment

      and argued that, per the language of Section 59.06 of the Ordinance, only

      owners of those parcels “‘which directly or indirectly contribute[d] to the storm

      water system of the City’” were required to pay the Stormwater Fee. (Property

      Court of Appeals of Indiana | Opinion 89A01-1603-PL-496 | February 15, 2017   Page 4 of 12
       Owners’ Br. 8) (quoting App. 240). Because water on the Properties did not

       flow into the City’s stormwater system, they argued that the Properties did not

       “contribute to” the system and, therefore, they should not have to pay a

       Stormwater Fee. (App. 240). The Property Owners did not, however, address

       the other Ordinance sections regarding the definition of “user” and the intent of

       the Ordinance to charge all property owners that benefitted from the

       stormwater system.

[8]    The trial court held a hearing on the City’s motion for summary judgment on

       April 21, 2015. It then granted the City’s motion, agreeing with the City’s

       arguments regarding the interpretation of the Ordinance and concluding that

       the Ordinance imposed the Stormwater Fee against all real property within the

       City’s boundaries regardless of any specific property’s contribution to the storm

       water system. The Property Owners now appeal.

                                                     Decision
[9]    On appeal, the Property Owners argue that the trial court erred in granting

       summary judgment in favor of the City on their claims that they are not subject

       to the Stormwater Fee provision of the Ordinance and that they may recover

       their past Stormwater Fee payments. They argue that the City did not prove

       that there were no genuine issues of material fact about whether they were

       subject to the Ordinance.

[10]   When reviewing the grant of a summary judgment motion, we apply the same

       standard applicable to the trial court. Wagner v. Yates, 912 N.E.2d 805, 808

       Court of Appeals of Indiana | Opinion 89A01-1603-PL-496 | February 15, 2017   Page 5 of 12
       (Ind. 2009). Summary judgment is proper only when there is a genuine issue as

       to any material fact and the moving party is entitled to judgment as a matter of

       law. Id. The party moving for summary judgment has the burden of making a

       prima facie showing that there is no genuine issue of material fact and that it is

       entitled to judgment as a matter of law. Goodwin v. Yeakle’s Sports Bar & Grill,

       Inc., 62 N.E.3d 384, 386 (Ind. 2016). Once these two requirements are met by

       the moving party, the burden then shifts to the non-moving party to show the

       existence of a genuine issue by setting forth specifically designated facts. Id.

       Any doubt as to any facts or inferences to be drawn therefrom must be resolved

       in favor of the non-moving party. Id.

[11]   Here, the Property Owners’ claim was a request for declaratory judgment. The

       Indiana Declaratory Judgment Act provides that:

               Any person interested under a deed, will, written contract, or
               other writings constituting a contract, or whose rights, status, or
               other legal relations are affected by a statute, municipal
               ordinance, contract, or franchise, may have determined any
               question of construction or validity arising under the instrument,
               statute, ordinance, contract, or franchise and obtain a declaration
               of rights, status, or other legal relations thereunder.

       I.C. § 34-14-1-2.

[12]   In support of their argument that the trial court erred when determining that

       they were subject to the Ordinance’s Stormwater Fee provisions, the Property

       Owners note that Section 59.06 of the Ordinance provides that:

               A [Stormwater Fee] shall be imposed on each and every lot and
               parcel of land within the City which directly or indirectly contributes
               to the storm water system of the City, which charge shall be

       Court of Appeals of Indiana | Opinion 89A01-1603-PL-496 | February 15, 2017   Page 6 of 12
               assessed against the property owner thereof, who shall be
               considered the user for the purposes of this chapter.

       (App. 240) (emphasis added). They contend that the language “directly or

       indirectly contributes” authorizes the imposition of a Stormwater Fee for only

       those property owners whose parcels add stormwater to the City’s stormwater

       system. (App. 240).

[13]   In response, the City points to the definition of “user” and the language in the

       enabling statute and Ordinance indicating that the Ordinance applies to all

       property owners within the boundaries of the City regardless of their

       stormwater runoff. It argues that the Property Owners’ selective reading of the

       four words of Section 59.06 of the Ordinance leads to an irrational and

       disharmonizing interpretation of the Ordinance as a whole.1 We agree.

[14]   Because the parties quote seemingly conflicting provisions of the Ordinance, we

       must interpret the language of the Ordinance to determine whether real estate

       property is subject to a Stormwater Fee even if it does not contribute

       stormwater runoff to the stormwater system. We have previously described our

       standard for interpreting ordinances as follows:

               Interpretation of an ordinance is subject to the same rules that
               govern the construction of a state statute. Words are to be given
               their plain, ordinary, and usual meaning, unless a contrary
               purpose is shown by the statute or ordinance itself. Where
               possible, every word must be given effect and meaning, and no

       1
         Notably, the City does not challenge the results of the Property Owners’ property surveys demonstrating
       that the stormwater runoff from the Properties does not drain into the City’s stormwater system.

       Court of Appeals of Indiana | Opinion 89A01-1603-PL-496 | February 15, 2017                     Page 7 of 12
               part is to be held meaningless if it can be reconciled with the rest
               of the statute. The goal in statutory construction is to determine
               and effect legislative intent. Courts must give deference to such
               intent whenever possible. Thus, courts must consider the goals
               of the statute, and the reasons and policy underlying the statute’s
               enactment. If the legislative intent is clear from the language of
               the statute, the language prevails and will be given effect.

       Rollett Family Farms, LLC v. Area Plan Comm’n of Evansville-Vanderburgh Cty., 994

       N.E.2d 734, 738 (Ind. Ct. App. 2013). In addition, we “‘avoid interpretations

       that depend on selective reading of individual words that lead to irrational or

       disharmonizing results.’” ESPN, Inc. v. Univ. of Notre Dame Police Dep’t, 62

       N.E.3d 1192, 1195 (Ind. 2016) (quoting West v. Office of Ind. Sec’y of State, 54

       N.E.3d 349, 355 (Ind. 2016)).

[15]   The Ordinance’s enabling statute is INDIANA CODE § 8-1.5-5, et seq (“the

       Stormwater Act”), which allows a municipality to create a “special taxing

       district for the purpose of providing for the collection and disposal of storm

       water of the district . . . and for the purpose of levying special benefit taxes for

       purposes of storm water collection and disposal.”2 I.C. § 8-1.5-5-5. The

       Stormwater Act provides that the Board of a stormwater management district

       “may assess and collect user fees from all of the property of the storm water district

       for the operation and maintenance of the storm water system.” I.C. § 8-1.5-5-7

       (emphasis added). In other words, this provision of the enabling statute

       2
        Section 59.01 of the Ordinance concerning the adoption of state law provides that the Ordinance adopts
       “the provisions of [INDIANA CODE] § 8-1.5-5-1, [et seq], including any amendments or substitutions therein.”
       (App. 235).

       Court of Appeals of Indiana | Opinion 89A01-1603-PL-496 | February 15, 2017                      Page 8 of 12
       authorizes city ordinances to assess a fee against all real estate parcels in the

       city, without distinctions or exceptions. Other language in the Stormwater Act

       is similarly broad and inclusive. Specifically, INDIANA CODE § 8-1.5-5-5

       provides that “[a]ll territory in the district and all territory added to the district is

       considered to have received a special benefit from the storm water collection

       and disposal facilities of the district.” (Emphasis added).

[16]   Like its enabling statute, the Ordinance includes language encompassing all

       property owners within the City’s boundaries. Through this language, the

       Ordinance clarifies that the Stormwater Fee is meant for all property owners

       that benefit from the stormwater system and that all property owners benefit

       from the system. Specifically, the Ordinance defines “Stormwater Service

       Charge” as “[a] charge imposed on users of the stormwater system.” (App.

       240). Then, the Ordinance specifies that “Customer (or User): Shall mean a

       property owner benefiting from the stormwater system.” 3 (App. 237). These

       definitions, in combination with the Stormwater Act’s language that “[a]ll

       territory in the district and all territory added to the district is considered to have

       3
         The Property Owners argue that “the Ordinance overwrote the definition of ‘user’ and instead imposed a
       more restrictive definition” when it provided that the Stormwater Fee “shall be imposed on each and every
       lot and parcel of land within the City which directly or indirectly contributes to the stormwater system of the
       City, which charge shall be assessed against the property owner thereof, who shall be considered the user for
       the purposes of this chapter.” (Property Owners’ Br. 16; App. 213). The Property Owners claim that this
       “definition” is more restrictive and, therefore, prevails over the definition in Section 59.05, the “Definition”
       section of the statute. However, the case that the Property Owners cite in favor of this argument concerns
       two conflicting statutes, not two provisions within one statute. We instead find that the Ordinance’s
       definition of a “user” as “a property owner benefiting from the stormwater system” governs as it is in the
       Ordinance’s “Definition” section. That section provides that “[f]or the purposes of this chapter, the
       following definitions shall apply unless the context clearly indicates or requires a different meaning.” (App.
       209). The context here does not require a different meaning.

       Court of Appeals of Indiana | Opinion 89A01-1603-PL-496 | February 15, 2017                         Page 9 of 12
       received a special benefit from the storm water collection and disposal facilities

       of the district,” imply that all people who benefit from the stormwater system

       must be charged a Stormwater Fee and that all property owners benefit from

       the stormwater system. I.C. § 8-1.5-5-5. These provisions do not distinguish

       properties based on the amount of stormwater they add to the system. Notably,

       the City also designated an affidavit from the District Engineer of the

       Richmond Sanitary District in which the District Engineer averred that: “In

       my professional opinion, the City of Richmond and its systems benefit[] all

       parcels within the City, specifically including the parcels owned by the Plaintiffs

       in this cause of action.” (App. 256).

[17]   In addition, it is clear that, even under the Property Owners’ interpretation of

       the phrase “contribute to,” a property owner may “contribute to” the sewer

       system even if stormwater runoff from his or her property does not drain into

       the system. Specifically, the Ordinance’s definition of “stormwater system” in

       Section 59.05 also includes City infrastructure relating to sanitary sewer

       management. (App. 240). Specifically, it includes “combined sewers,” which

       are defined as “[p]ipe[s] or conduit[s] primarily used to convey sanitary sewage

       and secondarily intended to convey stormwater.” (App. 237, 240).

       Accordingly, it appears that the system benefits everyone who utilizes any

       sanitary sewer infrastructure, in addition to stormwater management

       infrastructure. By extension, under the “indirectly or directly contributes”

       language of Section 59.06 of the Ordinance, we interpret that a property owner

       could also “indirectly or directly contribute[]” to the stormwater system if his or

       Court of Appeals of Indiana | Opinion 89A01-1603-PL-496 | February 15, 2017   Page 10 of 12
       her sanitary sewage contributed to the stormwater system. (App. 240). Thus,

       Section 50.06 does not implicate just stormwater runoff, as the Property

       Owners suggest. There is no evidence in the record regarding the Property

       Owners’ use of the sanitary sewer system, so that issue is not dispositive.

       Nevertheless, the Ordinance’s inclusion of sanitary sewage usage as a basis for

       its Stormwater Fee supports the interpretation that the Stormwater Fee was not

       intended to be based solely on whether a property’s stormwater runoff drains

       into the system.

[18]   In light of the Ordinance’s language indicating that the Stormwater Fee was

       intended to apply to all property owners in the City because all property owners

       benefit from the stormwater system, we agree with the City that selectively

       interpreting “directly or indirectly contributes to” to exclude properties such as

       the Properties would create a disharmonious result with the remainder of the

       Ordinance and its enabling statute. Accordingly, we conclude that all property

       within a stormwater district “contributes to” that district even if its stormwater

       does not drain into the stormwater district’s sewer system. Therefore, the

       Ordinance’s Stormwater Fee provision did apply to the Property Owners, and

       the trial court did not err when it granted summary judgment in favor of the

       City. See ESPN, Inc., 62 N.E.3d at 1195 (quoting West, 54 N.E.3d at 355)

       (explaining that we “‘avoid interpretations that depend on selective reading of

       individual words that lead to irrational or disharmonizing results’”).

       Court of Appeals of Indiana | Opinion 89A01-1603-PL-496 | February 15, 2017   Page 11 of 12
[19]   Affirmed.

       Bradford, J., and Altice, J., concur.

       Court of Appeals of Indiana | Opinion 89A01-1603-PL-496 | February 15, 2017   Page 12 of 12