Court Opinion

ID: 853439
Source: CourtListenerOpinion
Date Created: 2013-03-02 01:26:03.318253+00
Date Added: 2024-06-11T13:11:31.731960
License: Public Domain

Attorneys for Appellant

Michael A. Wukmer
Ice Miller
Indianapolis, IN

James M. Houck
Greencastle, IN

Attorneys for Appellees

Robert C. Perry
Greencastle, IN

      IN THE
      INDIANA SUPREME COURT

THE CLEAR CREEK CONSERVANCY DISTRICT,
      Appellant (Defendant below),

      v.

ROBERT E. KIRKBRIDE and
BONNIE K. KIRKBRIDE,
      Appellees (Plaintiffs below).

)
)     Supreme Court No.
)     67S05-0004-CV-00269
)
)
)
)     Court of Appeals No.
)     67A05-9904-CV-152
)

      APPEAL FROM THE PUTNAM CIRCUIT COURT
      The Honorable Diana LaViolette, Judge
      Cause No.  67CO1-7107-MI-4

                           ON PETITION TO TRANSFER

                                March 6, 2001

SULLIVAN, Justice.

      The Clear Creek Conservancy District  assessed  the  Kirkbrides  sewer
construction costs of $3,800 for each of two  lots.   Thinking  their  total
liability was $3,800 (rather than $7,600), the  Kirkbrides  did  not  object
within the time period specified by law.   They  later  asked  a  court  for
relief because of their “mistake or excusable neglect.”  We hold  that  once
the statutory deadline passed, the assessment became  final  and  the  court
had no authority  to  grant  relief  on  grounds  of  mistake  or  excusable
neglect.

                                 Background

      The Indiana Conservancy Act allows for “the  creation  of  conservancy
districts  for  the  purpose  of  controlling  stream  pollution,  drainage,
irrigation, water supply and other natural resources.  It  creates  a  board
of directors and permits the  levying  of  a  tax  and  assessment  for  the
benefits and improvements  to  the  real  estate  within  the  district.”[1]
Martin v. Ben Davis Conservancy Dist., 238 Ind. 502, 507,  153 N.E.2d 125,
128 (1958).  Pursuant to the Conservancy Act, the  Clear  Creek  Conservancy
District (“District”) was created to provide sewer service to the  residents
of certain subdivisions located  in  Putnam  County.   The  Conservancy  Act
authorizes a district  to  pay  for  the  construction  of  sewer  works  by
collecting “assessments from land that receives  exceptional  benefits  from
the operation of  the”  sewers.   Ind.  Code  §  14-33-7-5(4)  (1998).   The
District elected to use this technique  to  fund  the  construction  of  its
sewers.  Following statutory procedures to be discussed  at  greater  length
infra, court-appointed appraisers prepared a report  which  called  for  the
imposition of an “exceptional benefits assessment” of $3,800 per  lot.   The
appraisers filed its report with the trial court on August 5, 1998.

      Ronald and Bonnie Kirkbride were owners of two subdivision lots,  Lots
51 and 52, which were situated within the boundaries of the  District.   The
two lots had been deeded together in a single warranty deed which  was  duly
recorded in the office of the recorder.  The Kirkbrides’ single family  home
was constructed on the property line between the two lots.  The  Kirkbrides,
along with other benefited landowners, received a notice,  dated  August  6,
1998, informing them that each lot had been assessed $3,800 which  would  be
imposed unless they filed an exception to the report  before  September  29,
1998, the time set for court hearing on whether to  accept  the  appraisers’
report.  The Kirkbrides  neither  filed  an  exception  to  the  appraisers’
report nor attended the hearing.  Having raised no objection to the  report,
the Kirkbrides were assessed a  total  of  $7,600  for  the  two  lots.   On
October 29, 1998, the trial court approved the appraisers’ report.

      On January 14, 1999, the Kirkbrides sought relief under Indiana  Trial
Rule 60(b)(1), alleging mistake, surprise, or excusable neglect for  failure
to file an exception to the appraisers’ report.[2]  Their  motion  requested
that the trial court amend its order and reduce the assessment  from  $7,600
to $3,800, the amount of a single lot.  On March 22, 1999, the  trial  court
granted the Kirkbrides’ motion and  modified  its  order  accordingly.   The
District appealed.  The Court of Appeals affirmed, finding that because  the
Kirkbrides’ failure to file  exceptions  constituted  the  equivalent  of  a
default judgment, Trial Rule 60 was available for the trial court to  reduce
the assessment.  See Clear Creek Conservancy Dist. v. Kirkbride, 719 N.E.2d
852 (Ind. Ct. App. 1999).

      The  only  issue  presented  in  this  appeal  is  whether   benefited
landowners in conservancy districts are allowed to file untimely  exceptions
to appraisers’ report by seeking judicial relief under  Indiana  Trial  Rule
60(B)(1).

                                 Discussion

      The District contends that the Kirkbrides’ failure to file  exceptions
to the appraisers’ report  deprived  the  trial  court  of  jurisdiction  to
reduce their  exceptional  benefits  assessment  under  Indiana  Trial  Rule
60(B)(1).  The Kirkbrides respond, arguing that  (1)  the  trial  court  had
proper jurisdiction to rule  on  the  motion;  and  (2)  the  court’s  order
granting them relief was proper  because  the  billing  for  the  two  lots,
$7,600, was a surprise to them.  (The  Kirkbrides  say  that  they  believed
that because “their two lots had been deeded together  and  a  single  house
[was] constructed across the property line of  both  lots  that  they  would
only be assessed for a single lot.”  Appellee’s Br. at 6.)
      At issue is whether the principles articulated in Lehnen v. State, 693
N.E.2d 580 (Ind. Ct. App. 1998), transfer denied, 706 N.E.2d 169,  a  case
involving a dispute arising out of an eminent domain action, are  applicable
to conservancy district assessments.  In Lehnen, the  landowners  failed  to
file exceptions to an appraisers’ report that established  the  payments  to
which they were entitled for appropriation of part of their  land.   Id.  at
581.  The landowners contended that the appraisers’  report  was  tantamount
to a complaint and so the failure to file exceptions was the  equivalent  of
a default judgment.  Thus,  the  landowners  argued,  the  trial  court  had
proper jurisdiction to modify the assessment of  damages  by  way  of  Trial
Rule 60(B)(1) on the basis of their attorney’s excusable neglect.  Id.   The
Court of Appeals rejected the landowner’s argument, reasoning:

           Eminent domain proceedings are statutory, and where the  statute
      fixes a definite procedure, it must be followed.  Compliance with  all
      the provisions  relating  to  the  assessment  of  damages  and  their
      recovery is essential also on the part of the landowner.   Failure  to
      file exceptions within the requisite time has been held to deprive the
      court of jurisdiction to try the issue of damages.  If  neither  party
      files exceptions, the appraisers’ award is conclusive.

Id. at 582 (internal citations omitted) (emphasis added).  The Lehnen  court
held that because the landowners failed to  file  timely  their  exceptions,
the trial court did not have jurisdiction to step in and consider the  issue
of modifying the damage assessment.  Id.

      The Court of Appeals in this case declined to follow  Lehnen,  finding
that,  unlike  the  eminent  domain  statute,  “the  legislature  [did]  not
provide[] a similar comprehensive statutory scheme for filing exceptions  to
appraisers’   reports   in   exceptional   benefits   assessment   actions.”
Kirkbride, 719  N.E.2d  at  855.   Based  on  this  distinction,  the  court
concluded that the trial court’s  order  approving  the  appraisers’  report
constituted a default judgment and affirmed the trial court’s use  of  Trial
Rule 60 in granting relief.  Id.  We disagree.

      Judge Friedlander’s dissent in this case was correct when  he  stated,
“[T]he principle to be distilled from Lehnen, i.e., ‘when a statute fixes  a
definite procedure, it must be followed,’  applies  without  regard  to  the
volume  or  size  of  the  statutes.”   Kirkbride,   719   N.E.2d   at   857
(Friedlander, J., dissenting) (quoting Lehnen, 693  N.E.2d  at  582).   This
Court has held repeatedly that a party’s failure to file  exceptions  within
the statutory time limit in eminent domain actions deprives the trial  court
of jurisdiction to consider the issue of damages.  See Southern Indiana  Gas
& Elec. Co. v. Decker, 261 Ind. 527, 524, 307 N.E.2d 51, 53  (1974)  (citing
Agan v. Hendricks Super. Ct., 250 Ind. 675, 235 N.E.2d 458 (1968); Denny  v.
State, 244 Ind. 5, 189 N.E.2d 820 (1963); State v.  Redmon,  205 Ind. 335,
186 N.E. 328 (1933)); see also Best Realty Corp. v. State, 400 N.E.2d 1204,
1205 (Ind. Ct. App. 1980).

      Indeed,  this  principle  has  been  applied  in  at  least  one  case
involving a conservancy district.  See In re  The  Big  Raccoon  Conservancy
Dist., 173 Ind. App. 218, 222, 363 N.E.2d 1004,  1007-08  (1977)  (holding
that because the conservancy district act is a creature of the  legislature,
freeholders were required to follow statutory procedures for dissolving  the
district).

      Similar to the eminent domain procedures,[3] the Conservancy Act fixes
a  definite  procedure  for   the   imposition   of   exceptional   benefits
assessments.   After  court   approval   of   the   conservancy   district’s
comprehensive plan for the accomplishment  of  the  purpose  for  which  the
district  was  established,  see  Ind.  Code  §  14-33-6-6(c)(1998),  and  a
decision by the district’s board to meet its expenses and  obligations  from
the collection of assessments from land that receives  exceptional  benefits
from the operation of the district plan,  see  id.  §  14-33-7-7(a)(3),  the
court appoints a board of three competent, disinterested  persons  to  serve
as appraisers, see id. § 14-33-8-1(2).

      In the case of sewer projects, the board of appraisers, following  the
requirements of see id. §§ 14-33-8-6 and 14-33-8-8, appraises the amount  of
exceptional benefits received by each record  owner  of  real  property  and
files a report of its findings with the court, see id. §§ 14-33-8-9 and  14-
33-8-10.  The report must contain the name of  each  record  owner  of  real
property appraised and the amount of  exceptional  benefits.   See  id.  The
court then sets a date for a hearing on the  report.   See  id.  §  14-33-8-
12(a).

      The court gives notice of the hearing by publication, by mail to  each
owner named in the report, and by mail to the district.  See id. §  14-33-8-
12(b).  Publication of the notice must occur at least 30 days and  the  mail
notice must occur at least 20 days before the date of the hearing.  See  id.
 The owner “is considered to have  acquiesced”  in  the  appraisal  “unless,
within the time limit prescribed by the notice of hearing on the  report  of
the board of appraisers, the interested person files  an  exception  to  the
appraisers’ report  specifying  in  the  exceptions  ...  the  appraisal  of
exceptional benefits.”  Id. § 14-33-8-13(b).  While  the  determinations  of
the board of appraisers are considered prima facie correct, a person  filing
exceptions is entitled to be heard and  present  evidence  at  the  hearing.
See id. § 14-33-8-15.  At the conclusion of the  hearing,  the  trial  court
either dismisses or approves the report; its order is subject  to  appellate
review.  See id. § 14-33-8-16.[4]
      In short, the  Conservancy  Act  provides  a  definite  procedure  for
interested landowners to follow when contesting an appraisers’  report,  and
“where the statute  fixes  a  definite  procedure,  it  must  be  followed.”
Lehnen, 693  N.E.2d  at  582.   Landowners  must  comply  with  the  special
statutory procedures laid out by the  legislature  before  seeking  judicial
review of either the damage assessment (under eminent domain  actions),  see
Decker, 261  Ind.  at  524,  307  N.E.2d  at  53,  or  exceptional  benefits
assessments (under conservancy district statutes).  Allowing  landowners  to
file untimely exceptions in the trial court is simply not authorized by  the
conservancy district statutory scheme.

      Here, the Kirkbrides were required to take  action  by  filing  timely
exceptions to the appraisers’ report pursuant to Indiana Code  §  14-33-8-13
and as explained in the notification sent  to  them.   That  is,  they  were
required to file exceptions to the appraisers’ report before  September  29,
1998, the date of the hearing, in order to contest the exceptional  benefits
assessment of $7,600.  The Kirkbrides do  not  dispute  that  they  received
notification of the hearing detailing the implications  of  the  appraisers’
report,  but  they  neither  attended  the  hearing  nor  filed  exceptions.
Consequently,  the  Kirkbrides  are  deemed  to  have  acquiesced   in   the
appraisers’ report, and it became conclusive as to them.

      As noted supra, the Kirkbrides seek to invoke the provisions of  Trial
Rule 60 (B)(1) which allow relief from a final order or judgment on  grounds
of “mistake ... or excusable  neglect.”   They  argue  that  their  mistaken
impression that their exceptional benefit liability was $3,800 (rather  than
$7,600) entitled them to invoke the rule.  Given the legislature’s  detailed
and clear specification of the way in which exceptional benefit  assessments
are to be contested, we hold that the Kirkbrides’ misunderstanding here  was
not a “mistake” within the meaning of the rule.   To  hold  otherwise  would
undermine  the  statutory  scheme  for  fixing  in   place   the   financing
arrangements  of  conservancy  districts  and,  by   extension,   of   other
governmental units operating under similar statutory arrangements.[5]

                                 Conclusion

      Having previously granted transfer, we vacate the opinion of the Court
of Appeals pursuant to Indiana Appellate Rule 11(B)(3)  and  remand  to  the
trial court for proceedings consistent with this opinion.

SHEPARD, C.J., and DICKSON, BOEHM, and RUCKER, JJ., concur.
-----------------------
      [1] The Conservancy Act was codified as Indiana  Code  §  13-3-3-2  et
seq., and then Indiana Code § 19-3-2-1 et seq.; now see Indiana Code  §  14-
33-1-1 et. seq. (Supp. 1995).
      [2] Indiana Trial Rule 60(B)(1) provides, “On  motion  and  upon  such
terms as are just the court may relieve a party or his legal  representative
from an  entry  of  default,  final  order,  or  final  judgment,  including
judgment by default, for ... mistake, surprise, or excusable neglect.”
      [3] Under the eminent domain statutes, after a complaint is  filed  to
appropriate a landowner’s real estate, see Ind. Code § 32-11-1-2  (1998),  a
notice of the complaint filing is sent to the affected landowner; see id.  §
32-11-1-3; the notice tells the landowner to appear before a court within  a
specified time to show cause why the land should not be  appropriated,  id.;
after approval of appropriation, the  court  appoints  three  appraisers  to
assess the landowner’s damages resulting  from  the  appropriation  and  the
appraisers prepare a report reflecting the assessment thereof; id. §  32-11-
1-4;  another  notice  is  sent  to  the  landowner  explaining   that   the
appraisers’ report was filed and that the landowner has  20  days  from  the
mailing of the notice to file written exceptions to the appraisers’  report,
id. § 32-11-1-8; if no exceptions  are  filed,  the  appraisers’  report  is
conclusive as to the matter of damages, id.; see also Samplawski v. City  of
Portage, 512 N.E.2d 456, 458 (Ind. Ct. App. 1987).
      [4] It is worth noting one important difference between the  exception
procedures in the Conservancy Act  and  the  eminent  domain  statute.   The
Conservancy Act provides that a landowner  accepts  the  appraisers’  report
“unless, within the time limit prescribed by the notice of  hearing  on  the
report of the board of appraisers, the interested person files an  exception
to  the  appraisers’  report  ...  .”   Ind.  Code  §  14-33-8-13(b)  (1998)
(emphasis added).  In contrast, the eminent domain statute expressly sets  a
defined time limit — 20  days  after  filing  the  report  —  in  which  the
landowner must file exceptions to the appraisers’ report.  See id. §  32-11-
1-8.  Thus, for the landowner to file timely  exceptions  in  a  conservancy
district action, he or she must have received a notice of the hearing  under
Ind. Code § 14-33-8-12, and that notice must have a definite time  limit  to
object.  If no  notice  was  sent  to  the  affected  landowners,  then  the
landowners would have a basis to seek judicial  relief.   However,  that  is
not the situation in  this  case.   In  compliance  with  the  statute,  the
Kirkbrides received a notice of the hearing on  the  report  informing  them
that (1) the amount assessed for each lot was $3,800; (2)  their  lots,  Lot
51 and Lot 52, were listed separately in the report (R. at 7, 68);  (3)  the
hearing on the report was set for September 29,  1998;  and  (4)  interested
parties will have  accepted  the  appraisers’  report  “unless  such  person
file[d] exceptions to said Appraiser’s [sic] Report before the time set  for
the hearing. . . .”  (R. at 4.)
      [5] This case is  distinct  from  Clear  Creek  Conservancy  Dist.  v.
Wooden, 712 N.E.2d 997 (Ind.  Ct.  App.  1999),  in  which  relief  from  an
assessment was granted pursuant to statute and not pursuant  to  Trial  Rule
60.