Court Opinion

ID: 4244578
Source: CourtListenerOpinion
Date Created: 2018-02-13 16:10:41.633502+00
Date Added: 2024-06-11T07:48:06.902841
License: Public Domain

FILED
                                                                            Feb 13 2018, 7:45 am

                                                                                CLERK
                                                                            Indiana Supreme Court
                                                                               Court of Appeals
                                                                                 and Tax Court

      ATTORNEY FOR APPELLANTS                                    ATTORNEYS FOR APPELLEE
      William M. Horne                                           Curtis T. Hill, Jr.
      Horne Law LLC                                              Attorney General of Indiana
      Indianapolis, Indiana
                                                                 Kyle Hunter
                                                                 Deputy Attorney General
                                                                 Indianapolis, Indiana

                                                  IN THE
          COURT OF APPEALS OF INDIANA

      John E. Moriarity and Mae E.                               February 13, 2018
      Moriarity,                                                 Court of Appeals Case No.
      Appellants-Petitioners,                                    27A04-1612-PL-2731
                                                                 Appeal from the Grant Circuit
              v.                                                 Court
                                                                 The Honorable Mark E. Spitzer,
      Indiana Department of Natural                              Judge
      Resources,                                                 Trial Court Cause No.
      Appellee-Respondent.                                       27C01-1511-PL-73

      Najam, Judge.

                                        Statement of the Case
[1]   John and Mae Moriarity (collectively “the Moriaritys”) appeal the trial court’s

      order in which the court affirmed the decision of the Natural Resources

      Commission (“the Commission”) in favor of the Indiana Department of

      Court of Appeals of Indiana | Opinion 27A04-1612-PL-2731 | February 13, 2018                  Page 1 of 14
      Natural Resources (“DNR”) following the DNR’s notice of violation issued to

      the Moriaritys and final order thereon. The Moriaritys present three issues for

      our review, which we restate as follows:

              1.       Whether the DNR erred when it exercised jurisdiction
                       over the Moriaritys’ dam.

              2.       Whether the DNR’s determination that the Moriaritys’
                       dam is a “high hazard” dam is supported by substantial
                       evidence.

              3.       Whether the Moriaritys preserved for appellate review
                       their claim that the DNR exceeded its statutory authority
                       when it entered an order that did not expressly allow for
                       the possibility that the Moriaritys could make
                       modifications to their dam and lake to remove them from
                       the DNR’s jurisdiction.

[2]   We affirm.

                                  Facts and Procedural History1
[3]   The Moriaritys own farm land in Grant County. Between 1997 and 2000, John

      constructed a dam and a lake on the farm, and he stocked that lake with fish.

      The dam is more than twenty feet high at some points, the lake has a surface

      1
        We held oral argument in this case on October 30, 2017. On October 31, we ordered the parties to
      participate in mediation pursuant to Appellate Rule 20. The parties participated in mediation but were
      unable to reach a mediated resolution of the case.

      Court of Appeals of Indiana | Opinion 27A04-1612-PL-2731 | February 13, 2018                    Page 2 of 14
      area of approximately forty acres, and the lake contains more than 100 acre-feet

      of water.2

[4]   During the course of the construction, the Moriaritys were in contact with the

      DNR about any relevant permits the Moriaritys might need, but the DNR did

      not instruct them to obtain any specific permits from the DNR. Nonetheless,

      between 2002 and 2008, the DNR issued to the Moriaritys a notice of violation

      (“NOV”) with respect to the dam on at least three separate occasions. The

      Moriaritys either did not comply with those NOVs or had them subsequently

      dismissed by a trial court. On May 14, 2012, the DNR issued another NOV to

      the Moriaritys. The 2012 NOV alleged, in relevant part, that the Moriaritys’

      dam was in violation of Indiana’s Dam Safety Act, Ind. Code Ann. §§ 14-27-

      7.5-1 to -16 (West 2011).

[5]   The Moriaritys sought administrative review of the 2012 NOV. At an ensuing

      fact-finding hearing, the DNR presented expert testimony that streams existed

      on the Moriaritys’ property. The DNR’s experts further testified that the

      Moriaritys’ lake was created by the damming of those streams.

[6]   The DNR also presented the testimony of Kenneth Smith, the DNR’s assistant

      director of the water division, who testified that the Moriaritys’ dam was a

      2
        The Dam Safety Act does not apply to a structure that meets all of the following conditions: is built for the
      sole purpose of erosion control, watering livestock, recreation, or providing a haven or refuge for fish or
      wildlife; has a drainage area above the dam of not more than one square mile; does not exceed twenty feet in
      height; and does not impound a volume of more than one hundred acre-feet of water. Ind. Code § 14-27-7.5-
      1(1) (2017). The Moriaritys have stipulated that their structure impounds more than one hundred acre-feet of
      water and, as such, does not meet all of the conditions of Section 14-27-7.5-1(1).

      Court of Appeals of Indiana | Opinion 27A04-1612-PL-2731 | February 13, 2018                      Page 3 of 14
      “high hazard” dam. In particular, Smith testified that it is “not that hard to tell

      a High-Hazard Dam. You can stand on the dam, literally can look downstream

      of it and see things that are in harm’s way.” Appellants’ App. Vol. II at 106.

      Smith further testified that, looking out from the Moriaritys’ dam, it was

      “visually obvious” that that dam “was a High-Hazard Dam” due to the

      presence of several structures that, if a breach occurred, would be inundated

      “with great velocity and depth.” Id. at 129. Similarly, George Crosby, a DNR

      geologist, testified that, if the dam “breaks above the house [of the Moriaritys’

      son, who lived nearby], it’s likely that there could be some serious damage to

      that house and . . . to other homes, too.” Appellants’ App. Vol. III at 45.

      Crosby further testified that, “even without the homes, . . . this thing would still

      be considered High-Hazard . . . due to [a downstream] road because of the

      traffic; that’s a very high-traffic road.” Appellee’s App. Vol. III at 188.

[7]   Following the fact-finding hearing and oral argument, the Commission entered

      its order for the DNR and against the Moriaritys, which the Commission

      supported with findings of fact and conclusions of law. The Commission’s

      “Final Order” stated as follows:

              1. [The Moriaritys] . . . are hereby ordered to draw down the
              water level in the Moriarity impounded lake to an elevation of
              between 840 and 845 feet NAVD. They shall . . . consult with a
              professional engineer duly licensed in Indiana . . . to develop a
              safe and appropriate dewatering plan for accomplishing the draw
              down as herein ordered.

              2. The water level of the impounded lake shall be maintained at
              between 840 and 845 feet NAVD until the Moriaritys . . . have
      Court of Appeals of Indiana | Opinion 27A04-1612-PL-2731 | February 13, 2018   Page 4 of 14
              complied with the remainder of this Order as set forth below in
              Paragraphs 3 and 5.

              3. [The Moriaritys] . . . are hereby ordered to comply with I.C.
              [§] 14-27-7.5-9(a) by having their dam inspected by a professional
              engineer . . . and submitting a report of that inspection to the
              DNR’s Division of Water within ninety (90) days of the issuance
              of a final order in this proceeding. . . .

              4. [The Moriaritys] . . . are hereby ordered to comply with I.C.
              [§] 14-27-7.5-9(b) by completing any maintenance, repair, or
              alteration as required to fulfill the usual and customary
              requirements of the DNR.

              5. In lieu of compliance with Paragraphs 1 through 4 above, [the
              Moriaritys], . . . under the direction of a professional engineer . . .
              [may ] dewater, breach, and permanently decommission the
              dam.

              6. [The Moriaritys] . . . are hereby ordered to pay [a total of
              $10,000 in] civil penalties for their violations of the Dam[] Safety
              Act. . . .

      Appellant’s App. Vol. II at 56-57. The Moriaritys filed a petition for judicial

      review thereafter, and the trial court affirmed the Commission’s decision. The

      Moriaritys filed a motion to correct error with the trial court, which was

      subsequently deemed denied. This appeal ensued.

                                      Discussion and Decision
                                              Standard of Review

[8]   Our standard of review is well settled:

      Court of Appeals of Indiana | Opinion 27A04-1612-PL-2731 | February 13, 2018   Page 5 of 14
              Pursuant to Indiana’s Administrative Order[s] and Procedures
              Act (“AOPA”), we may set aside an agency action only if it 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 evidence.

              Ind. Code § 4-21.5-5-14(d) (Supp. 2012). The party seeking
              judicial review bears the burden of proving the agency action is
              invalid for one of the above five reasons. Id. § 4-21.5-5-14(a).

              Further, when reviewing a challenge to an administrative
              agency’s decision, “this Court will not try the facts de novo nor
              substitute its own judgment for that of the agency.” State Bd. of
              Registration for Prof’l Eng’rs v. Eberenz, 723 N.E.2d 422, 430 (Ind.
              2000) (citing Ind. Dep’t of Envtl. Mgmt. v. Conard, 614 N.E.2d 916,
              919 (Ind. 1993)). Rather, we defer to the agency’s findings if they
              are supported by substantial evidence. Ind. Dep’t of Envtl. Mgmt.
              v. West, 838 N.E.2d 408, 415 (Ind. 2005).

              On the other hand, we review an agency’s conclusions of law de
              novo. Nat. Res. Def. Council v. Poet Biorefining-N. Manchester, LLC,
              15 N.E.3d 555, 561 (Ind. 2014).

      Jay Classroom Teachers Ass’n v. Jay Sch. Corp., 55 N.E.3d 813, 816 (Ind. 2016).

                                      Issue One: DNR’s Jurisdiction

[9]   The Moriaritys first contend that the DNR erred when it exercised jurisdiction

      over their dam. In particular, the Moriaritys assert that the DNR

      misinterpreted the Indiana Code; that the DNR’s assertion of jurisdiction under

      Court of Appeals of Indiana | Opinion 27A04-1612-PL-2731 | February 13, 2018   Page 6 of 14
       the Dam Safety Act here is not supported by substantial evidence; and that the

       DNR’s erroneous exercise of jurisdiction denied the Moriaritys due process and

       resulted in an arbitrary and capricious decision. We address each of the

       Moriaritys’ arguments in turn.

                                              Statutory Construction

[10]   We first turn to the Moriaritys’ claim that the DNR misinterpreted its

       jurisdiction under the Indiana Code. In particular, the Moriaritys allege that

       the “DNR’s jurisdiction hinged on whether the fish pond—or, more

       technically, its ‘structure’—was built ‘in, on, or along’ a stream.” Appellants’

       Br. at 21. “‘To the extent the issue turns on statutory construction, whether an

       agency possesses jurisdiction over a matter is a question of law for the courts.’”

       Walczak v. Labor Works-Ft. Wayne LLC, 983 N.E.2d 1146, 1152 (Ind. 2013)

       (quoting Ind. Dep’t of Envtl. Mgmt. v. Twin Eagle LLC, 798 N.E.3d 839, 844 (Ind.

       2003)).

[11]   As the Indiana Supreme Court has explained:

               When construing a statute our primary goal is to ascertain the
               legislature’s intent. Adams v. State, 960 N.E.2d 793, 798 (Ind.
               2012). To discern that intent, we look first to the statutory
               language itself and give effect to the plain and ordinary meaning
               of statutory terms. Pierce v. State, 29 N.E.3d 1258, 1265 (Ind.
               2015). “If a statute is unambiguous, that is, susceptible to but
               one meaning, we must give the statute its clear and plain
               meaning.” State v. Evans, 810 N.E.2d 335, 337 (Ind. 2004)
               (quotation omitted).

       Court of Appeals of Indiana | Opinion 27A04-1612-PL-2731 | February 13, 2018   Page 7 of 14
       Suggs v. State, 51 N.E.3d 1190, 1193-94 (Ind. 2016).

[12]   Indiana Code Section 14-27-7.5-8(a)(1) (2017) provides in relevant part that the

       DNR has “jurisdiction . . . over the maintenance and repair of structures in, on,

       or along . . . streams.” The statute does not define “streams.” But that term

       has a plain and ordinary meaning, namely, “a body of running water flowing in

       a channel on the surface of the ground[.]” Webster’s 3d New Int’l Dictionary

       2258 (2002). And the Commission used that plain and ordinary meaning here:

               [t]he DNR’s witnesses all provided definitions of “stream” as
               flowing water through a defined channel. The DNR’s definition
               is consistent with the definitions provided by the parties as
               Exhibit 3, which includes definitions from both standard English
               dictionaries and technical dictionaries. The Moriaritys argue that
               [the definition proffered by their expert witness, Heather Bobich,]
               should be used. She relies upon the Army Corps of Engineers’
               definition. However, it is not necessary to use a technical
               definition of “stream.” The legislature chose to use the word
               “stream” and chose not to define it. As “stream” has a common
               meaning, the failure to define it supports the conclusion that the
               legislative intent must have been to use the plain and ordinary
               meaning. . . . Applying the rules of statutory construction,
               “stream” is clear and unambiguous and requires no further
               interpretation.

       Appellants’ App. Vol. II at 51. We agree with the Commission and hold that

       the term “stream” is unambiguous and means a body of running water flowing

       in a channel on the surface of the ground.

[13]   Still, the parties dispute whether, to constitute a stream under the statute, a

       body of running water must flow continuously in a channel or may flow

       Court of Appeals of Indiana | Opinion 27A04-1612-PL-2731 | February 13, 2018   Page 8 of 14
       intermittently. Here, while the DNR presented evidence of flowing water in

       streams on the property, Bobich testified that she observed no flowing streams

       in 2012, which, she conceded, was “a hot and very dry year.” Id. at 46. After

       concluding that there were streams on the Moriaritys’ property, the

       Commission also concluded that “[t]he fact that water does not flow constantly

       is not determinative.” Id. at 52.

[14]   We agree with the DNR. As the DNR points out, the Moriaritys’ suggestion

       that only structures along continuously flowing streams fall under the DNR’s

       jurisdiction

               ignores the variableness of the weather and the seasons, and it
               would exclude streams that might have a significant volume of
               flowing water for the majority of the year and then dry up for a
               couple weeks during the hottest part of the summer or during a
               year of extreme dr[o]ught.

       Appellee’s Br. at 26-27. We also agree that “[u]sing a broader meaning of the

       word ‘stream’ is especially appropriate here[] because the purpose of the Dam

       Safety Act is to protect the public and ensure that dams and other structures on

       water are maintained in good repair.” Id. at 25-26. Absent a clear intent from

       our legislature to the contrary, we hold that, as a matter of law, both

       continuously flowing and intermittent streams constitute streams under the

       statute.

       Court of Appeals of Indiana | Opinion 27A04-1612-PL-2731 | February 13, 2018   Page 9 of 14
                                              Sufficiency of the Evidence

[15]   The Moriaritys next contend that the DNR presented insufficient evidence to

       prove that it had jurisdiction over their dam and lake. However, that

       contention amounts to a request that we reweigh the evidence, which we

       cannot do. Again, Indiana Code Section 14-27-7.5-8 provides that the DNR

       has jurisdiction over the maintenance and repair of structures in, on, or along

       streams. And the DNR presented testimony from several experts who stated

       unequivocally that streams existed on the Moriaritys’ property and that the lake

       was created by damming those streams. We hold that the DNR presented

       sufficient evidence to prove that it had jurisdiction over the Moriaritys’ dam

       and lake pursuant to Indiana Code Section 14-27-7.5-8, and the Moriaritys have

       not shown that the Commission’s decision is contrary to law.

                                                 Derivative Arguments

[16]   The Moriaritys also assert that the DNR’s erroneous exercise of jurisdiction

       deprived the Moriaritys of their right to due process 3 and, similarly, resulted in

       an arbitrary and capricious decision by the Commission. 4 But these arguments

       are derivative of the Moriaritys’ contention that the DNR unlawfully exercised

       3
        In particular, the Moriaritys maintain that, because there are multiple definitions of “stream” depending on
       which dictionary is consulted, there were no ascertainable standards by which they had fair notice that the
       DNR had jurisdiction over their streams.
       4
          In particular, the Moriaritys assert that, “[i]n the absence of a plain and ordinary meaning of
       ‘stream, . . . [the] DNR’s choice of a stream definition was arbitrary, and its determination [here] was
       arbitrary and capricious.” Appellants’ Br. at 33.

       Court of Appeals of Indiana | Opinion 27A04-1612-PL-2731 | February 13, 2018                      Page 10 of 14
       jurisdiction here. As explained above, the DNR did not unlawfully exercise its

       jurisdiction. As such, the Moriaritys’ derivative arguments must fail.

                                       Issue Two: High Hazard Dam

[17]   The Moriaritys also contend that the Commission’s determination that their

       dam is a “high hazard dam” under Indiana Code Section 14-27-7.5-8(b) is

       erroneous. In particular, the Moriaritys claim that a computerized inundation

       study conducted by one of the DNR’s experts, Suzanne Delay, was “fatally

       flawed because it was based on a starting water elevation that undisputed

       evidence showed to be 2.3 feet higher than the top of the dam at its starting

       point or ‘breakout point,’ as measured and described by [the] DNR.”

       Appellants’ Br. at 33. Thus, the Moriaritys maintain that the “high hazard

       classification lacked substantial evidence.” Id. at 37.

[18]   Indiana Code Section 14-27-7.5-8(b)(1) states that a “high hazard” dam

       includes a “structure the failure of which may cause the loss of life and serious

       damage to homes, industrial and commercial buildings, public utilities, major

       highways, or railroads.” And 312 IAC 10.5-3-1 states in relevant part:

               (a) the division shall assign whether a dam is classified as:

                        (1) high hazard;

                        (2) significant hazard; or

                        (3) low hazard;

               based on best information available.

       Court of Appeals of Indiana | Opinion 27A04-1612-PL-2731 | February 13, 2018   Page 11 of 14
               (b) In making the determination of assignment under subsection
               (a), the division shall apply existing U.S. Army Corps of
               Engineers Phase 1 reports and other appropriate documentation.

               (c) The division may also consider observations of the dam and the
               vicinity of the dam, including the risk posed to human life and property if
               the dam fails.

                        (1) If an uncontrolled release of the structure’s
                        contents due to a failure of the structure may result in
                        any of the following, the dam shall be considered
                        high hazard:

                                 (A) The loss of human life.

                                 (B) Serious damage to:

                                          (i) homes;

                                          (ii) industrial and
                                          commercial buildings; or

                                          (iii) public utilities. . . .

       (Emphasis added.)5

[19]   The Moriaritys’ emphasis on Delay’s allegedly flawed analysis misses the mark.

       Other witnesses presented substantial evidence to support the Commission’s

       5
          The Moriaritys note that, while Indiana Code Section 14-27-7.5-8(b) classifies a dam as high hazard when
       it may cause loss of human life and serious property damage, 312 IAC 10.5-3-1 is written in the disjunctive
       and requires a showing that a dam breach may result in either loss of human life or serious property damage.
       The Moriaritys do not ask us to resolve this apparent inconsistency between the statute and the
       administrative code.

       Court of Appeals of Indiana | Opinion 27A04-1612-PL-2731 | February 13, 2018                    Page 12 of 14
       conclusion that the Moriaritys’ dam was a high-hazard dam. In particular,

       Smith testified that the hazard posed by the dam was obvious and included

       potential damage to nearby residences. Crosby similarly testified that, if the

       dam broke, it could cause serious damage to several homes. And Crosby

       further stated that, “even without the homes,” the dam was “still . . . High-

       Hazard” due to a downstream, “very high-traffic road.” Appellee’s App. Vol.

       III at 188. Thus, as the Commission found, “even without Ms. Delay’s

       testimony, there is sufficient evidence to support [the] DNR’s conclusion that

       this is a high hazard dam.” Appellants’ App. Vol. II at 54. Accordingly, the

       Moriaritys cannot show that the Commission’s decision on this question is

       contrary to law.

                                           Issue Three: Final Order

[20]   Finally, the Moriaritys contend that the DNR’s final order “exceeded the

       agency’s statutory authority because it would effectively require the Moriaritys

       to dewater their fish pond completely, without the possibility of making

       modifications that would remove the fish pond from [the] DNR’s jurisdiction.”

       Appellants’ Br. at 37. However, the Moriaritys raised this issue for the first

       time in their motion to correct error. As such, the issue is waived. See Troxel v.

       Troxel, 737 N.E.2d 745, 752 (Ind. 2000).

                                                     Conclusion

[21]   In sum, we affirm the trial court’s denial of the Moriaritys’ petition for judicial

       review.

       Court of Appeals of Indiana | Opinion 27A04-1612-PL-2731 | February 13, 2018   Page 13 of 14
[22]   Affirmed.

       Brown, J., and Pyle, J., concur.

       Court of Appeals of Indiana | Opinion 27A04-1612-PL-2731 | February 13, 2018   Page 14 of 14