CADDNAR

[CITE: Peterson & Fultz v. DNR, 13 CADDNAR 16 (2012)]

 

 

[VOLUME 13, PAGE 16]

 

Cause #: 11-134W

Caption: Peterson & Fultz v. DNR

Administrative Law Judge: Lucas

Attorneys: did not participate (Peterson); pro se (Fultz); Wyndham (DNR)

Date: February 13, 2012

 

 

FINAL ORDER

 

Tim Fultz failed to meet his burden of proving James Peterson qualifies for a permit, under the Lakes Preservation Act and 312 IAC 11, to place an underwater beach within Lake Pleasant.  The shoreline is unaltered.  The site where the permit is sought is a “natural shoreline” as defined in 312 IAC 11-2-14.5.  Pursuant to 312 IAC 11-4-4(c), the Department of Natural Resources is prohibited from issuing a permit for the placement of an underwater beach along a natural shoreline.  Denial of the subject permit is affirmed.

 

 

Findings of Fact and Conclusions of Law

 

A. Statement of Case and Jurisdiction

 

1. On August 4, 2011, Tim Fultz (“Fultz”) filed correspondence with the Natural Resources Commission (the “Commission”) in which Fultz sought administrative review of the denial by the Department of Natural Resources (the “DNR”) of a permit (the “subject permit”) under IC 14-26-2 (sometimes referred to as the “Lakes Preservation Act”) and 312 IAC 11.  The antecedents to the Lakes Preservation Act were enacted by the Indiana General Assembly in 1947.

 

2. The application for the subject permit was identified by the DNR’s Division of Water as PL-21,751.  The DNR is the agency responsible for permitting under the Lakes Preservation Act and 312 IAC 11.  The Division of Water coordinates DNR’s permitting functions for the Lakes Preservation Act and 312 IAC 11.

 

3. Fultz is the contractor and agent for James Peterson (“Peterson”) for pursuit of the subject permit.  Peterson[1] sought DNR approval through the subject permit for the placement of a 20-feet-by-30-feet underwater beach across 30 feet of his 60 feet of shoreline along Lake Pleasant in Jamestown Township, Steuben County,[2] Indiana.  The underwater beach would consist of a uniform six-inch layer of pea gravel placed on the lakebed.  Respondent’s Exhibit A, DNR Denial Notice Public Freshwater Lake (July 25, 2011).  Peterson’s real estate is located at 95 Lane 101, Lake Pleasant, Fremont, Indiana.

 

4. The DNR’s stated reason for denial of the subject permit was that “the site is located along a natural shoreline as defined in 312 IAC 11-2-14.5; pursuant to 312 IAC 11-4-4(c) the [DNR] director or delegate shall not issue a license for the placement of an underwater beach along a natural shoreline.”  Respondent’s Exhibit A, DNR Denial Reasons.

 

5. The Commission appointed Stephen Lucas administrative law judge to conduct a proceeding to consider Fultz’s petition for administrative review under IC 4-21.5 (sometimes referred to as the “Administrative Orders and Procedures Act” or “AOPA”) and 312 IAC 3-1.

 

6. The Commission is the “ultimate authority” for proceedings under AOPA pertaining to the Lakes Preservation Act.  IC 14-10-2-3 and Lukis v. Ray, 888 N.E.2d 325 (Ind. App. 2008).

 

7. On August 8, 2011, the administrative law judge assigned Administrative Cause Number 11-134W to this proceeding and issued a “Notice of Prehearing Conference” with copies to the Peterson, Fultz, the DNR, and other potentially affected persons.  Peterson, Fultz, and the DNR are collectively the “parties”.  Peterson and Fultz are sometimes collectively referred to as the “Claimants”.

 

8. Lake Pleasant in Steuben County is a “public freshwater lake” as defined by IC 14-26-2-3 and 312 IAC 11-2-17.  See, also, “Listing of Public Freshwater Lakes”, Natural Resources Commission, Information Bulletin #61 (Second Amendment), 20110601-IR-312110313NRA (June 1, 2011), p. 8.  Lake Pleasant is subject to regulation under the Lakes Preservation Act and 312 IAC 11.

 

9. The Commission has jurisdiction over the subject matter and over the persons of the parties.

 

10. A hearing of the facts was commenced as scheduled and completed on January 6, 2012.  Following adjournment of the hearing, the parties provided brief oral arguments off the record.  The proceeding is ripe for disposition.

 

 

B. Burden of Proof by a Preponderance of the Evidence

 

10. [sic.] AOPA provides at IC 4-21.5-3-14(c) in pertinent part that “[a]t each stage of the proceeding, the agency or other person requesting that an agency take action…has the burden of persuasion and the burden of going forward with the proof of the request….”  The burden of persuasion and the burden of going forward are sometimes collectively referred to as the “burden of proof”.

 

11. A person seeking a permit under the Lakes Preservation Act has the burden of proof for entitlement to the permit.  Burke’s Vinyl Seawalls & Reynolds v. DNR, 11 Caddnar 345, 347 (2008), and, generally, Ind. DNR and NRC v. Krantz Bros. Const., 581 N.E.2d 935 (Ind. App. 1991).

 

12. Findings under AOPA must be based upon evidence that is “substantial and reliable”.  IC 4-21.5-3-27(d) and Citizens Action Coalition of Ind. v. N. Ind. Pub. Serv. Co., 796 N.E.2d 1264 (Ind. App. 2003).  The standard of review under AOPA is generally “preponderance of the evidence”.  Indiana Dept. of Natural Resources v. United Refuge Company, Inc., 615 N.E.2d 100 (Ind. 1993) and Burke’s Vinyl Seawalls at 347. 

 

[VOLUME 13, PAGE 17]

 

13. “Preponderance of the evidence” refers to evidence which, when considered and compared with that opposed to it, has more convincing force, and which produces in the mind of the trier of fact, a belief that what is sought is more likely true than not.  Bivens v. State, 642 N.E.2d 928 (Ind. 1994).  The trier of fact must be convinced from a consideration of all evidence that the issue for which a party has the burden is more probably true than not true.  Ken Schaefer Auto Auction v. Trustison, 198 N.E.2d 873 (Ind. App. 1964).

 

14. Fultz has the burden of proof to demonstrate, by a preponderance of the evidence, to demonstrate the DNR erred when the agency denied the application for the subject permit.

 

C. Refinement of the Issue

 

15. By rule, the Commission adopted a three-tiered regulatory approach for licensing the placement of seawalls in public freshwater lakes.  Most pristine are a “natural shoreline” and a “significant wetland”.  In these areas new seawall construction is limited to bioengineered materials.  An “area of special concern” has an intermediate condition, and here a new seawall may be constructed of bioengineered materials or of glacial stone.  312 IAC 11-4-2(c).  A “developed area” has the greatest human disruption, and in a developed area a new seawall may be constructed of bioengineered materials, glacial stone, riprap, or an approved bulkhead material. Burke’s Vinyl Seawalls & Reynolds v. DNR, 11 Caddnar 345, 349 (2008).  The Commission found this “regulatory approach seeks to preserve and protect public freshwater lakes for the enjoyment of all the public.  Portions of shorelines exhibiting ‘natural scenic beauty’, and which are least affected by manmade additions or alterations, are accorded greater protections than those more disrupted.  The approach is consistent with the Lakes Preservation Act and particularly IC 14-26-2-5.”  Patton and Sedgwick v. DNR, 12 Caddnar 20, 23 (2009).

 

16. Under 312 IAC 11-4-4, the Commission adopted a similar regulatory approach for licensing the placement of fill for an underwater beach.  The section provides:

 

     Sec. 4. (a) A written license under IC 14-26-2 and this rule is required to place material for an underwater beach within a public freshwater lake.

     (b) The director or a delegate shall not issue a license for the placement of:

(1) filter cloth; or

(2) an impermeable material;

beneath or in an underwater beach.

     (c) The director or a delegate shall not issue a license for the placement of an underwater beach:

(1) in a significant wetland; or

(2) along a natural shoreline.

     (d) To qualify for a license to place an underwater beach in an area of special concern, the underwater beach must:

(1) not exceed six hundred twenty-five (625) square feet;

(2) not extend:

     (A) more than thirty (30) feet lakeward of the shoreline or water line; or

     (B) to a depth of six (6) feet;

whichever occurs earlier;

(3) be placed on not more than one-half (½) the length of the shoreline or water line of the riparian owner;

(4) be comprised of clean, nontoxic pea gravel;

(5) not exceed six (6) inches in thickness; and

(6) be thin enough or tapered so the shoreline or water line will not be extended lakeward.

     (e) To qualify for a license to place an underwater beach in a developed area, the underwater beach must:

(1) be comprised of clean, nontoxic pea gravel;

(2) not exceed six (6) inches in thickness;

(3) be placed on not more than one-half (½) the length of the shoreline or water line of the riparian owner;

(4) extend not:

     (A) more than fifty (50) feet lakeward from the shoreline or water line; or

     (B) beyond a depth of six (6) feet;

whichever occurs earlier; and

(5) be thin enough or tapered so the shoreline or water line will not be extended lakeward.

     (f) If beach material has been placed previously under this section, the additional material must not:

(1) extend beyond the limits of the previous beach material; and

(2) exceed the size restrictions specified in subsections (d) and (e).

     (g) Erosion from disturbed areas landward of the shoreline or water line must be controlled to prevent its transport into the lake.

 

17. The Commission found the tiered approach for the licensure of fills for underwater beaches is also consistent with the Lakes Preservation Act and IC 14-26-2-5.  Majewski v. DNR, 12 Caddnar 299, 303 (2011).

 

18. With the adoption of 312 IAC 11-4-4, the Commission made a policy determination the placement of pea gravel for an underwater beach is likely to have more than a minimal potential for harm.  But within all but the most sensitive environmental areas (significant wetlands and unaltered shorelines, where the DNR director is prohibited from approving an underwater beach by 312 IAC 11-4-4(c)), permitting is authorized to support the recreational enjoyment of riparian owners.  Id. 

 

19. For this proceeding, the Claimants seek to place pea gravel pursuant to the terms of 312 IAC 11-4-4(b) that apply within an area of special concern.  The DNR does not assert the presence of significant wetlands.  The issue for consideration is narrowed to whether approval of the subject permit is prohibited by 312 IAC 11-4-4(c)(2):

 

     (c) The director or a delegate shall not issue a license for the placement of an underwater beach:

(1) ….

(2) along a natural shoreline.

 

[VOLUME 13, PAGE 18]

 

20. For purposes of the Lakes Preservation Act and 312 IAC 11, “natural shoreline” is defined at 312 IAC 11-2-14.5 to mean “a continuous section of unaltered shoreline or water line[3] where the distance between lawful permanent structures is at least two hundred fifty (250) feet.”

 

21. During a telephone status conference held on November 1, 2011, Fultz and the DNR refined the issues further.  Fultz stated Peterson’s real estate is not located within 250 feet between lawful permanent structures.  Fultz and the DNR agreed the potential presence of other underwater beaches in the vicinity of Peterson’s real estate is irrelevant since underwater beaches are alterations to the bed of Lake Pleasant as contrasted to alterations to the shoreline of Lake Pleasant.  “Report of Telephone Status Conference, Notice of Second Telephone Status Conference, and Notice of Hearing” (November 1, 2011).

 

22. The issue for this proceeding is thus narrowly defined.  If Peterson’s real estate is located along a “continuous section of unaltered shoreline”, the site qualifies as a “natural shoreline” and is disqualified from the placement of an underwater beach.  If Peterson’s real estate is located along an altered shoreline, the site qualifies as an “area of special concern” and qualifies for the placement of an underwater beach that conforms to 312 IAC 11-4-4(c).  Reduced to the most basic terms, the issue may be stated:  Is the shoreline in the vicinity of Peterson’s real estate altered or unaltered?

 

 

C. Altered or Unaltered

 

23. Under principles of statutory construction, words and phrases shall be given their plain and ordinary meaning, although technical words and phrases having peculiar and appropriate meaning shall be understood according to their technical import.  Hendricks County Bank & Trust Co. v. Guthrie Bldg. Materials, Inc., 663 N.E.2d 1180 (Ind. App. 1996).  Technical terms shall be given their technical meaning.  Wilson v. Brown, 461 N.E. 2d 1162, opinion amended 464 N.E.2d 1332 (Ind. App. 1984).  Clear and unambiguous administrative rule provisions are not open to statutory construction.  Indiana Alcoholic Beverage Commission v. Osco Drug, Inc., 431 N.E.2d 823 (Ind. App. 1982) cited in Faulk v. DNR, 11 Caddnar 272, 277 (2008).

 

24. The plain and ordinary meaning of “alter” is “to make different in some particular.”  Webster’s College Dictionary (Random House, New York, 2000).

 

25. A shoreline alteration is one that makes a shoreline “different in some particular”. 

 

26. For purposes of the Lakes Preservation Act, the Commission has determined by rule an unaltered shoreline is one that does not include lawful permanent structures.  312 IAC 11-2-26 and Herr v. DNR, 9 Caddnar 11 (2001).

 

27. The purposes of the Lakes Preservation Act and 312 IAC 11 require, in determining whether a shoreline is a “natural shoreline”, that an alteration be caused by a human rather than a natural forces.  This statutory construction is consistent with the design to identify a natural shoreline, as well as with the consequences of having permanent structures nearby.  Structures are manmade.  

 

28. James J. Hebenstreit, Assistant Director for DNR’s Division of Water, has a Bachelor of Science from Purdue University and is an Indiana Registered Professional Engineer.  He has served as a Division of Water Assistant Director for more than 20 years.  He has been employed with the Division of Water for more than 38 years, including early responsibilities as an inspector on public freshwater lakes.

 

29. Hebenstreit testified that dredging “can move the shoreline.”  If dredging moves a shoreline, “dredging could alter the shoreline.”  Also, ditches can cause sediments to move into a lake.  The sediments can accumulate in front of properties adjacent to a lake causing “either shallow areas, or, in some cases, actual land.”  He added the DNR sometimes issues permits under the Lakes Preservation Act to remove sediments and to “return the shoreline to its natural condition.”

 

30. Hebenstreit’s testimony is persuasive.  Dredging that moves a shoreline can cause a shoreline to be altered.  The accumulation of sediments from a ditch, or other another watercourse modified by human intervention, can alter a shoreline if land is formed that changes a shoreline from its natural condition. 

 

31. A shoreline is altered if the distance between lawful permanent structures is not more than 250 feet.  A shoreline is altered if the shoreline is moved by dredging.  A shoreline is altered if sediments, attributable to a ditch or other watercourse as a result of human intervention, form new land along the former natural shoreline.

 

 

D. Consideration of the Evidence

 

32. In support of his contention the shoreline at the vicinity of Peterson’s real estate is altered, Fultz relied almost entirely upon the interpretation of two aerial photographs.  Exhibit One[4] demonstrates the shoreline as it existing in 1939 and as augmented by digital overlays by the Steuben County Surveyor showing current lot lines:

 

 

[VOLUME 13, PAGE 19]

 

33. Exhibit Two demonstrates the shoreline as it existed in 2008 and is also augmented by digital overlays by the Steuben County Surveyor showing current lot lines:

 

 

34. The evidence is persuasive that in 2011, when the DNR acted upon the subject permit, the shoreline did not differ materially from the condition depicted in 2008 by Finding 33.  Peterson’s real estate is identified as Lot 6 on both Exhibit One and Exhibit Two.

 

35. Fultz testified Exhibit One shows a drainage ditch emptied into Lake Pleasant in 1939, but “that ditch is gone now.”  He testified the ditch was “the cause of all that being silted in.”  Fultz added the “drainage ditch comes out just about exactly where Mr. Peterson’s house is today.”  He later clarified discharge from the ditch would have been at what is now “the lot just east of” Peterson’s real estate”, identified on Exhibit One and Exhibit Two as Lot 5.[5]

 

36. Fultz testified white areas within Lake Pleasant, as illustrated in Exhibit One, indicated a new shoreline.  He testified on cross-examination the areas “behind” the white areas (in other words, toward the shoreline of Lake Pleasant) were not dry land but rather “a swampy, marshy type area.  You can see [in Exhibit One] how wet it was.” 

 

37. Fultz testified to a belief the area between the white area and Lot 6 was largely silted in, and when dredged, the dredged materials were placed landward of the shoreline.  This testimony was mostly or entirely based upon hearsay and was not supported by direct evidence.

 

38. Nathan Thomas is the lakes permitting biologist for DNR’s Division of Fish and Wildlife.  He has a Bachelor of Science and a Master of Science in biology from Ball State University and has been employed as a lakes permitting biologist for approximately two years.

 

39. Thomas performed a site inspection on Lake Pleasant for the subject permit on September 7, 2011.

 

40. Thomas testified he observed no permanent structures in the vicinity of Peterson’s real estate.  He observed no evidence of dredging either along the shoreline or in the vicinity of Peterson’s real estate from the bed of Lake Pleasant.

 

41. On direct examination, Hebenstreit testified no record for a Lakes Preservation Act permit was found that authorized dredging the shoreline in the vicinity of the Peterson real estate.  If dredging occurred, he expressed the opinion that dredging was most likely limited to the lakebed.

 

42. Hebenstreit was asked to compare conditions as they appeared in 1939 on Exhibit One with those in 2008 in Exhibit Two.  Hebenstreit testified, “It’s hard to tell what the coloration [within Lake Pleasant] represents.  To me the shoreline appears to be in generally the same location, so if the area was dredged, I don’t believe the shoreline was moved.”

 

43. Fultz, Thomas, and Hebenstreit all provided forthright and credible testimony.[6]

 

44. Taking the evidence as a whole, and providing reasonable inferences, the conclusion is more likely than not dredging has occurred within Lake Pleasant and in the vicinity of Peterson’s real estate.  The absence of obvious current visual reminders of dredging, and the lack of a permitting record for dredging, support a conclusion dredging occurred several years ago and was confined to the bed of Lake Pleasant.  The most likely possibility is that dredging occurred before 1947 when the antecedents to the modern Lakes Preservation Act became effective.

 

45. Exhibit One and Exhibit Two illustrate a shoreline in the vicinity of the Peterson’s real estate that was generally in the same location in 1939 as in 2008.  The shoreline in 2008 did not differ materially from the shoreline when the subject permit was sought in 2011.  The record is devoid of evidence, such as surveys or borings, to otherwise support a finding the shoreline in 2011 is substantially different from the shoreline that existed in 1939. 

 

46. In 1939, a drainage ditch entered Lake Pleasant in the lot that is adjacent to and immediately east of the Peterson’s real estate.  The ditch no longer entered Lake Pleasant at this location in 2008.  A reasonable inference is the drainage ditch contained sediments and discharged sediments into Lake Pleasant.  The evidence is inclusive whether the white areas shown on Exhibit One are sediments attributable to the drainage ditch. 

 

47. Even if sediments from the drainage ditch formed the white areas, the white areas did not form a new shoreline.  The area between the white areas and the natural shoreline of Lake Pleasant was swampy or marshy (in other words, a “wetland”) and part of Lake Pleasant.  The preponderance of the evidence is that dredging was limited to the bed of Lake Pleasant and did not impact the shoreline. 

 

48. Fultz has not satisfied his burden of proof to demonstrate the DNR erred in denying the subject permit.  The denial should properly be affirmed.