ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
R. Thomas Bodkin Robert R. Faulkner
Shellie Deffendall Kyle Leslie C. Shively
Charles L. Berger Evansville, Indiana
Evansville, Indiana
Karl L. Mulvaney ATTORNEYS FOR AMICUS CURIAE
Douglas D. Church STATE OF INDIANA
Indianapolis, IN
Jeffrey A. Modisett
Attorney General of Indiana
A. Scott Chinn
Geoffrey Slaughter
Special Counsels to
the Attorney General
SUPREME COURT OF INDIANA
TOWN COUNCIL OF )
NEW HARMONY, INDIANA, )
)
Appellant (Defendant Below ), ) Cause No. 87S01-9911-CV-673
) in the Supreme Court
v. )
) Cause No. 87A01-9808-CV-305
SHIRLEY PARKER, ) in the Court of Appeals
)
Appellee (Plaintiff Below ). )
Still, aside from acquisition or invasion most government regulation of property does not
offend the Takings Clause. See, e.g., Herrington v. Sonoma County, 834 F.2d
1488 (9th Cir. 1988) (disapproval of development plans not a taking), cert. denied,
489 U.S. 1090 (1989); Major Media of the Southeast, Inc. v. City of
Raleigh, 792 F.2d 1269 (4th Cir. 1986) (requiring billboard removal five and a
half years after adoption of ordinance not a taking), cert. denied, 479 U.S.
1102 (1987); Landmark Land Co. v. City of Denver, 728 P.2d 1281, 1287
(Colo. 1986) (it must be shown that the ordinance precludes use of [the]
property for any reasonable purpose; building limitations intended to promote view of mountains
not a taking), appeal dismissed sub nom., Harsh Inv. Corp. v. City of
Denver, 483 U.S. 1001 (1987).
The Supreme Court has held that the government may, consistent with the Takings
Clause, affect property values by regulation without incurring an obligation to pay under
the full scope of the States police power. This may be done
when the regulation proscribes harmful or noxious uses of property, although the proscribed
use need not rise to this level. See Lucas v. South Carolina
Coastal Council, 505 U.S. 1003, 1022 (1992).
As Justice Scalia observed in writing for the Court in Lucas, where the
state reasonably concludes that the health, safety, morals, or general welfare would be
promoted by prohibiting particular contemplated uses of land, compensation need not accompany prohibition.
Id. (quoting Penn Central Transp. Co. v. City of New York, 438
U.S. 104, 125 (1978)). Moreover, a landowner is not entitled to unlimited
access to abutting property at all points along a highway, nor does a
taking occur where ingress and egress is made more circuitous and difficult.
State v. Ensley, 240 Ind. 472, 489, 164 N.E.2d 342, 350 (1960); see
also Jenkins v. Board of County Commrs, 698 N.E.2d 1268, 1271 (Ind. Ct.
App. 1998), trans. denied.
The record reveals that although Parkers property is subdivided as lots, it is
functionally one inclusive piece of undeveloped land. The property is roughly rectangular,
and it is bordered by three streets, or at least by right of
way dedicated for future streets. Steam Mill Street is actually a paved
street that runs along the northern edge of Parkers property. South Street
is just two wheel tracks along the southern edge. (R. at 73,
197, 306, 320.) First, Second, and Third Streets run North to South;
they are paved or rocked until they reach Ms. Parkers undeveloped holding.
(R. at 357.) In sum, there are no paved streets leading into
Parkers property.
In the present case, the decision to place a chain across South
Street
did not deprive Parker of access to her property, as it is accessible
by a wide variety of streets and rights of way. Parker presents
no reason why access through South Street was particularly important or how her
inconvenience in using the alternate routes was greater than that suffered by the
general public. See Young v. State, 252 Ind. 131, 134, 246 N.E.2d
377, 379 (1969), cert. denied, 396 U.S. 1038 (1970).
See footnote
The facts presented at the evidentiary hearing do not support the trial courts
conclusion that placing a chain at the point where paved South Street dead-ends
into Parkers land constituted a taking.
The Town of New Harmony is correct on this point. The law
contemplates that Parker should seek an improvement permit and, if the application was
denied, appeal the denial to the Board of Zoning Appeals, or request a
variance from the applicable zoning ordinance. See Ind. Code Ann. § 36-7-4-918.1
(West 1997).
See footnote Indiana boards of zoning appeals are entrusted with the powers
to hear such matters, and they are in the best position to determine
on appeal from a decision of an administrative official where it is argued
that the official erroneously interpreted the ordinance.
Habig v. Harker, 447 N.E.2d
1114, 1116 (Ind. Ct. App. 1983). If Parker was dissatisfied with the
decision by the Board of Zoning Appeals, she could then seek judicial review
of its ruling. See Ind. Code Ann. § 36-7-4-1003 (West 1997); Shipshewana
Corp. v. LaGrange County, 656 N.E.2d 812, 812-13 (Ind. 1995).
It is well-established that, if an administrative remedy is available, it must be
pursued before a claimant is allowed access to the courts. See, e.g.,
Austin Lakes Joint Venture v. Avon Util., Inc., 648 N.E.2d 641 (Ind. 1995).
Failure to exhaust administrative remedies deprives the trial court of subject matter
jurisdiction. Greenbrier Hills, Inc. v. Boes, 473 N.E.2d 1040, 1042 (Ind. Ct.
App. 1985).
Parker argues that she should not have been required to apply for a
permit or appeal to the Board of Zoning Appeals because doing so would
have been futile. She reasons, It is undisputed that the moratorium would
have ma[d]e application for an improvement permit a useless exercise since the application
would be dead on arrival. (Appellees Br. at 20.)
Courts have said that exhaustion of administrative remedies may be excused where the
remedy would be futile. See Family & Social Serv. v. Methodist Hosp.,
669 N.E.2d 186, 189 (Ind. Ct. App. 1996). This case illustrates well,
however, that the exhaustion requirement is much more than a procedural hoop and
that it should not be dispensed with lightly on grounds of futility.
First, when the landowner has never actually sought a permit, neither the local
administrator nor the town board nor the reviewing courts can say with certainty
what would have been approved or disapproved. Neither the record of the
Town Board meeting where Don Parker appeared nor the record of the trial
inform us exactly what Mr. and Mrs. Parker want to do and on
what lots they want to do it.
See footnote
Second, it is not plain at all in this case that pursuing relief
with the Board of Zoning Appeals would have necessarily been futile. It is
apparent that the various lots owned by Mrs. Parker benefited from a variety
of utilities. Some lots had storm sewers. (R. at 118.)
Others had water service. (Id.) Some others had electric service nearby.
(R. at 282.) Some lots had none of these.
Testimony by zoning administrator Blaylock was to the effect that he had never
said he would refuse a permit on all of the Parker land.See footnote
He said that if it turned out that some parcels had what was
needed for a particular lot that he would issue the permit. (R.
at 362-63.) The only evidence in the record suggested that New Harmonys
zoning administrator was pretty accommodating:
I listen and Im very willing to take it to get a variance.
If what the citizen is requesting does not meet the ordinance, I
give them guidance the best of my knowledge how they can get around
it if they need to get a variance, you know. And its
not up to me to approve the variance. I have nothing to
do with that.
(R. at 354.)
The vitality of this requirement was made plain in
Penn Central, 438 U.S.
104, a landmark decision in the law of takings. In Penn Central,
developers were denied the permits to construct a fifty-story office tower above the
historic Grand Central Terminal. The Supreme Court upheld New York Citys Landmarks
Law and held that an unconstitutional taking had not occurred. The Court
also noted:
While the Commissions actions in denying applications to construct an office building in
excess of 50 stories above the Terminal may indicate that it will refuse
to issue a certificate of appropriateness for any comparably sized structure, nothing the
Commission has said or done suggests an intention to prohibit any construction above
the Terminal . . . . Since appellants have not sought approval for
the construction of a smaller structure, we do not know that appellants will
be denied any use of any portion of the airspace above the Terminal.
Id. at 136-37 (citations omitted).
This Court applied the reasoning of Penn Central on this point in Town
of Beverly Shores v. Bagnell, 590 N.E.2d 1059, 1064 (Ind. 1992). We
do not know whether New Harmony would have denied Parker any use of
her property since Parker did not seek approval for her plans. See
id.
Based on the foregoing, we conclude that Parker was required to exhaust her
administrative remedies before filing an action with the trial court. Thus, the
trial court lacked subject matter jurisdiction to decide whether refusal to issue permits
constituted a taking.
In issuing its judgment, the trial court made the following finding of fact:
Parker, prior to filing this action, made demand on the Town of
New Harmony to fulfill its obligation to provide . . . services required
under Indianas statutes and the Town of New Harmony refused to do so
and continues to refuse to provide said services. (R. at 119.)
The evidence does not support this finding. Certainly, the Town did offer
to provide utilities to Parker, as attorney Bergers letter to her on the
Towns behalf demonstrated. It made this offer, however, with the stipulation that
Parker would be responsible for a portion of the cost of providing these
services. The trial court concluded that the Town had an obligation to
install these utilities on Parkers land at the expense of other taxpayers.
Parker asserts that the Towns refusal to provide services at the public expense
deprived her of economically viable use of her property. (Appellees Br. at
18.) This language is from the law of takings. While the
trial court did not specifically label the Towns failure to provide Parker with
an adequate plan for services a taking, it appointed appraisers to assess damages
under the eminent domain statutes, indicating that it believed a taking occurred.
See Schuh v. State, 251 Ind. 403, 408, 241 N.E.2d 362, 364 (1968).
There are two kinds of takings. One involves seizing private land for
public use, like building a fire station. The other sort of taking
occurs not through acquisition of title but through regulation. So-called regulatory takings
come in many forms. They may consist, for example, of regulations that
compel a property owner to suffer a physical invasion of his property, or
they may consist of regulations that deny all economically beneficial or productive use
of the land. Board of Zoning Appeals v. Leisz, 702 N.E.2d 1026,
1028-29 (Ind. 1998).
The Supreme Court has described the Takings Clause as designed to bar Government
from forcing some people alone to bear public burdens which, in all fairness
and justice, should be borne by the public as a whole. Penn
Central, 438 U.S. at 123. Deciding whether a taking occurred is an
ad hoc, factual inquiry focusing on several factors: the economic impact of
the regulation, its interference with reasonable investment-backed expectations, and the character of the
governmental action. Kaiser Aetna v. United States, 444 U.S. 164, 175 (1979);
Penn Central, 438 U.S. at 124.
Parker had no reasonable investment-backed expectation that must be recognized or compensated under
the Fifth Amendment. Property owners are charged with knowledge of ordinances that
affect their property. Leisz, 702 N.E.2d at 1030. When Parker purchased
her property, she was deemed aware of the ordinance and she testified that
she knew that the lots were not equipped with certain utilities.
See footnote The
only reasonable expectation was that the Town may, or may not, allow her
to develop the property.
The character of the governmental action points in the same direction, as it
takes nothing away from Parker.
See id. at 1031. Parker contends
that the Town has an obligation to provide municipal utilities to her lots
at no cost to her. This is not the case. Certain
services, such as fire and police protection, have traditionally been provided to all
citizens of a municipality, financed through property taxes. Certain other services, such
as water, sewer, gas, electric, and roads, were traditionally thought of as proprietary
and are still largely provided through assessments to the landowners of the parcels
benefiting from the installation of utilities.
For example, with respect to sewer service, Ind. Code § 36-9-2-16 provides:
A unit may regulate the furnishing of the service of collecting, processing, and
disposing of waste substances and domestic or sanitary sewage. This includes the
power to fix the price to be charged for that service. A
municipality may also charge a fee for connections to the sewer based on
the pro rata cost of constructing a local or lateral sewer sufficient to
serve the property. See Ind. Code Ann. § 36-9-23-29 (West 1997).
The same is true of new streets and roads. Under Ind. Code
§ 36-9-2-5, a municipal body has exclusive control over, and regulation of, its
streets. See Town of Syracuse v. Abbs, 694 N.E.2d 284, 286 (Ind.
Ct. App. 1998); Cason v. City of Lebanon, 153 Ind. 567, 572, 55
N.E. 768, 770 (1899). With this control comes the power to assess
property owners for improvements upon or maintenance of streets. See Ind. Code
Ann. § 8-23-6-5 (West Supp. 1999) (This chapter does not annul, limit, or
abridge the right of a city or town, either at its own expense
or at the expense of property owners subject to assessment, to improve the
sidewalks and curbs along a street . . . , to construct sewers
and drains, or to construct or maintain a part of the roadway of
the street not improved or maintained by the [Department of Transportation].) (emphasis added).
Regarding water, Ind. Code § 36-9-2-14 states that a unit may regulate and
furnish water to the public and establish, maintain, and operate waterworks. With
this power, we have long held, comes the power to assess the properties
benefiting from such service. See City of Angola v. Croxton, 185 Ind.
250, 112 N.E. 385 (1916).
The reasoning behind the power of assessment was explained in Baldwin v. Moroney,
173 Ind. 574, 579, 91 N.E. 3, 5-6 (1910) (internal quotations omitted) where
we stated:
Every one who acquires an interest in land takes it subject to the
right of the sovereign to lay general taxes upon it and to impose
upon it the burden of paying the expenses of public improvements which confer
upon the land a special benefit. . . . Whoever holds an
interest in the land profits by the appurtenance, and ought, in justice, to
be subjected to the lien which secures the assessment.
Here , the Town responded appropriately to Parkers request for installation of utilities, by
offering to provide Parker with various pieces of beneficial infrastructure under the condition
that she assume responsibility for some of the cost of the improvements pursuant
to the Barrett Law, Ind. Code § 36-9-36-1.
See footnote This plan proposed to
bring appropriate utilities to Parkers property without requiring users to pay the bill.
We conclude that the trial court erred in finding the Towns proposed improvement
plan inadequate and in appointing appraisers to assess damages.
Accordingly, we reverse the trial court.
Dickson, Sullivan, Boehm, and Rucker, JJ., concur.
Here, the Town claims that there was unreasonable delay because Parker purchased her
property in 1982 and 1990, yet failed to bring an action against the
Town until 1996. The record reveals, however, that in 1975 the Town
began pursuing the issue of providing municipal services to Parkers lots and began
seeking funds to that effect. (R. at 274-83.) Between 1975 and
the present time, the Town has extended water services to some of the
lots, (R. at 223, 361, 413-14), and constructed storm sewers for other lots,
(R. at 287). It appears that up until the time Parker filed
her complaint, there was still a dispute about whether the Town was going
to provide additional services. (R. at 353-54.) Therefore, Parkers delay in
filing a complaint was not unreasonable, and the facts do not suggest that
she acquiesced in the Towns failure to provide services. Moreover, the Town
does not demonstrate prejudice. Parkers claim is not barred by laches.
A board of zoning appeals shall hear and determine appeals from and review:
any order, requirement, decision, or determination made by an administrative official, hearing officer,
or staff member under the zoning ordinance;
any order, requirement, decision, or determination made by an administrative board or other
body except a plan commission in relation to the enforcement of the zoning
ordinance; . . . .
Ind. Code Ann. § 36-7-4-918.1 (West 1997).
Do you remember which lot it was that this discussion about the trailer
park took place?
No I dont.
Mr. Shively: Objection. He didnt there wasnt a discussion about
a trailer park.
Mr. Bodkin: Sorry. Ill withdraw that.
Mr. Shively: There was a discussion about one unit.
Q. Do you recall which lot it was the discussion about the
house
trailer took place?
No, I do not.
(R. at 359.)
When you acquired these parcels, Mrs. Parker, did you go look at them
before you paid the money to get the deeds?
I certainly did.
And you were aware that at the time that you acquired lots eleven
and seventeen and half of ten in 1982 that there were no paved
streets there.
Right.
No sidewalks.
Right.
No water.
Right.
No gas.
Right.
No electric.
Right.
No street lights.
Right. When I purchased
Yes.
May I answer?
When you purchased the lots.
When I purchased the lots there was also two more lots that had
a house on it, and I bought it for the house and the
lots.
I see. All right. That wouldve been what street was
the house on?
That house was on Steam Mill.
I see. And Steam Mill is a paved street
Right.
that has all municipal facilities there.
Uh-huh.
And when you acquired lots one through eight in 1990
Right.
you went and looked at the ground.
Sure.
And you were aware at the time you bought the lots that there
was no municipal facilities available to those lots.
Right.
(R. at 227-29.)
It was the purpose, spirit, and language of the [Barrett Law] to enable
the city to require improvements, . . . to dictate the character of
the improvements; to contract for the improvements; to enforce the payment of benefits
by the property owners, to aid the property-owner in deferring such payments by
issuing the bonds of the city, from the proceeds sales of which to
pay the contractor, and from the annual payments of the property owner upon
his assessments to meet the maturing bonds.
Porter v. City of Tipton, 141 Ind. 347, 350, 40 N.E. 802, 803
(1895).
This statute covers the following improvements by a municipality: sidewalks, curbs, streets,
alleys, paved public places, lighting, and a water main extension for a municipality
that owns and operates a water utility. Ind. Code Ann. § 36-9-36-2(b)
(West 1997).