[CITE: Wawasee Property Owners, et al. v. Wawasee Real Estate
& DNR, 11 CADDNAR 88 (2007)]
[VOLUME 11, PAGE 88]
Cause #: 06-020W
Caption: Wawasee
Property Owners, et al. v. Wawasee Real Estate & DNR
Administrative Law Judge: Lucas
Attorneys: Snyder; Lloyd; Knotek
Date: March 13, 2007
FINAL ORDER
The
issuance by the Department of Natural Resources of a license application
PL-20,318 to Wawasee Real Estate and Development, LLC is approved for a “group
pier” under the Lakes Preservation Act and 312 IAC 11.
FINDINGS OF FACT AND
CONCLUSIONS OF LAW
A. Statement of the Proceeding
and Jurisdiction
1.
In a letter dated January 19, 2006, Robert A. Dumford (“Dumford”) and Sherman
Goldenberg (“Goldenberg”) wrote to Michael Neyer, Director of the Division of
Water of the Department of Natural Resources, to express opinions concerning
application PL-20,318 issued and approved (the “subject license”) in favor of Wawasee
Real Estate and Development, LLC (“Wawasee RE”) by the Division of Water under
IC 14-26-2 (sometimes referred to as the “Lakes Preservation Act”).
2.
In a letter dated January 26, 2006, Larry Harkelroad, who indicated he was
President of Kanata Manyunk Johnson Bay Property Owners” (sometimes referred to
as “Kanata Manyunk”), wrote to Michael Neyer to express opinions concerning
issuance of the subject license.
3.
The subject license provides in substantive part (with notice of right to
administrative review and service list omitted):
Application #: PL-20318
Lake:
Applicant: Wawasee
Real Estate and Development, LLC
Donyel Byrd
Agent: JF New & Associates, Inc.
John Richardson
[VOLUME 11, PAGE 89]
Authority: IC 14-26-2 with 312 IAC 11
Description: Nineteen (19) temporary piers
will be placed along the shoreline of
a
common area to provide access and mooring facilities for 25 potential
residences. The common area shall be
owned and maintained by an association [known] as the Wawasee Harbor Estates
Property Owners Association. The piers
will extend a maximum of 34’ into the channel and will be perpendicular to the
shoreline. The spacing between the group
piers will be 22’. No more than one
family will utilize a pier space (one side of a pier) and no pier sections will
be allowed that run parallel to the shore.
Details of the project are contained in information received
electronically at the Division of Water on December 15, 2005, December 17,
2005, [and] January 9, 2006.
Location: Lots 37 and 38 in Country
Club Acres near
NE ¼, SE ¼, SE ¼ Section 10,
T34N, R7E,
UTM Coordinates: Downstream
4585186 North, 609138 East
Approved by: James J. Hebenstreit, P.E.,
Assistant Director
Division of Water
Approved on: January 20, 2006
GENERAL CONDITIONS
APPLICATION #: PL-20318
(1) If any archaeological
artifacts or human remains are uncovered during construction, federal law and
regulations (16 USC 470, et seq.; 36 CFR 800.11, et al) and State Law (IC
14-21-1) require that work must stop and that the discovery must be reported to
the Division of Historic Preservation and Archaeology within 2 business days. [address and telephone number omitted.]
(2) This permit must be
posted and maintained at the project site until the project is completed.
(3) This permit does not
relieve the permittee of the responsibility for obtaining additional permits,
approvals, easements, etc. as required by other federal, state, or local
regulatory agencies. These agencies
include, but are not limited to…US Army Corps of Engineers, Louisville District
[telephone number omitted;] Kosciusko County Drainage Board [telephone number
omitted;] Indiana Department of Environmental Management [telephone number
omitted; and] Local city or county planning or zoning commission.
(4) This permit must not be
construed as a waiver of any local ordinance or other state or federal law.
(5) This permit does not
relieve the permittee of any liability for the effects which the project may
have upon the safety of the life or property of others.
(6) This permit may be
revoked by the Department of Natural Resources for violation of any condition,
limitation or applicable statute or rule.
(7) This permit shall not be
assignable or transferable without the prior written approval of the Department
of Natural Resources…. [Contact information omitted.]
(8) The Department of Natural
Resources shall have the right to enter upon the site of the permitted activity
for the purpose of inspecting the authorized work.
(9) The receipt and
acceptance of this permit by the applicant or authorized agent shall be
considered as acceptance of the conditions and limitations stated on the pages
entitled “General Conditions” and “Special Conditions”.
[VOLUME 11, PAGE 90]
SPECIAL CONDITIONS
APPLICATION #: PL-20318
Permit Validity: This permit is valid for 24 months
from the “Approved On” date shown
on
the first page. If work has not been
completed by January 20, 2008 the permit will become void and a new permit will
be required in order to continue the work on the project.
This
permit becomes effective 18 days after the “MAILED” date shown on the first
page. If both a petition for review and
a petition for stay of effectiveness are filed before this permit becomes
effective, any part of the permit that is within the scope of the petition for
stay is stayed for an additional 15 days.
Conformance: Other than those measures
necessary to satisfy the “General Conditions”
and
“Special Conditions”, for the project must conform to the information received
by the Department of Natural resources on December 15, 2005, December 27, 2005
and January 9, 2006. Any deviation from
the information must receive the prior written approval of the Department.
(1) [M]inimize the movement
of resuspended bottom sediment from the immediate project area.
(2) [R]evegetate all bare and
disturbed areas landward of the shoreline with a mixture of grasses (except all
varieties of tall fescue) and legumes as soon as possible upon completion.
(3) [P]lace the piers in
conformance with the attached sketch; the piers shall extend no more than 34
feet lakeward of the legal shoreline.
(4) [I]nstall and remove the
piers by hand or use small tools; no heavy machinery.
(5) [S]upport the piers by
auger poles or other small diameter poles resting on the lake bottom, the poles
must be 3 inches or less in diameter; the poles must not be mounted in or
comprised in concrete or cement.
(6) [D]o not extent any pier
segments in a perpendicular direction from the piers, do not attach any
additional platforms to the sides of the piers.
[VOLUME 11, PAGE 91]
4.
Stipulated into evidence is a “Composite Site Map” dated September 1, 2006,
prepared by Richard J. Kemper, Indiana Registered Land Surveyor, which includes
measurements of the channel where the subject license is located. The parties agreed that the Composite Site
Map was true and correct for all purposes in the proceeding. Claimants’ Exhibit 68. The portion of the Composite Site Map that is
directed to the area covered by the subject license follows:
[VOLUME 11, PAGE 92]
5.
The letter described in Finding 1 and the letter described in Finding 2 were
forwarded to the Natural Resources Commission (the “Commission”) and processed
as potentially being requests for administrative review under IC 4-21.5
(sometimes referred to as the “Administrative Orders and Procedures Act” or
“AOPA”) of a licensure determination by the Department of Natural Resources
(the “DNR”).
[VOLUME 11, PAGE 93]
6.
On January 31, 2006, the Wawasee Property Owners Association, Inc. (“WPOA”),
Wawasee Area Conservancy Foundation (“WACF”), Dumford and Goldenberg, by their
attorney, filed with the Commission a “Petition for Administrative Review”
under AOPA that was directed to the subject license.
7.
Dumford, Goldenberg, Kanata Manyunk, WPOA and WACF are collectively referred to
as the “Claimants”. Wawasee RE and the
DNR are collectively referred to as the “Respondents”. The Claimants and the Respondents are
collectively referred to as the “Parties”.
8.
The Commission has adopted rules at 312 IAC 3-1 to assist with its
implementation of AOPA and at 312 IAC 11-1 through 312 IAC 11-5 to assist with
the implementation of the Lakes Preservation Act.
9. In addition, AOPA provides
in IC 4-21.5-3-32
that an agency is required to index final orders and may rely upon indexed
orders as precedent. A decision
interpreting the Lakes Preservation Act or 312 IAC 11 is also governed by IC
4-21.5-3-27(c). The Commission has
adopted Caddnar as its indexing of final orders under AOPA. Establishment
of Division of Hearings; Indexing of Final Adjudicative Agency Decisions;
Transcript Fees, Information Bulletin #1 (Second Amendment), DIN:
20061011-IR-312060438NRA, Indiana Legislative Services Agency (October 13,
2006). Decisions indexed in Caddnar will
be cited in the instant document.
10.
The letters described in Finding 1 and Finding 2 and the Petition for
Administrative Review described in Finding 6 were scheduled under AOPA and 312
IAC 3-1 for concurrent prehearing conferences to be held in
11.
The Commission is the “ultimate authority” for administrative review of a
licensure action under the Lakes Preservation Act. IC 4-21.5-1-15 and IC 14-10-2-3.
12.
The Commission has jurisdiction over the subject matter of the proceeding and
over the persons of the Parties.
B. Hearing de Novo and
Burden of Proof on Administrative Review
[VOLUME 11, PAGE 94]
13. Administrative review of
a DNR licensure determination is conducted de novo. Rather than deferring to the DNR
determination, de novo review requires the administrative law judge to consider
and apply proper weight to the evidence presented in a proceeding. Crafton,
et al. v
14. A de novo hearing under
AOPA is designed to provide a thorough examination of the evidence and to
assure affected persons with due process.
Ordinarily, a properly conducted de novo hearing cures a deficiency
alleged in a licensure process, including a deficiency arising from the conduct
of a pre-licensure public hearing under IC 14-11-4 and 312 IAC 2-3. Pendleton
v. DNR and Campbell, 6 Caddnar 145 (1993).
To similar effect is Roberts, d/b/a,
15. At each stage of a
proceeding, the party requesting that an agency take action or asserting an
affirmative defense has the burden of going forward and the burden of
persuasion (sometimes collectively referred to as the burden of proof) with the
evidence. IC 4-21.5-3-14(c).
16. Where the DNR issues a
license authorizing activities along or within a watercourse, “the burden of
proof rests with the person seeking to set aside the permit.” Shoaff,
Mullin, and DeVille v.
17. In this proceeding, the
Claimants have the burden of proof except as to any affirmative defenses raised
by Wawasee RE or the DNR.
18. Wawasee RE identified
four affirmative defenses in its “Answer and Affirmative Defenses” filed on
March 22, 2006:
1.
Wawasee RE has satisfied all criteria for the issuance of the subject license
under 312 IAC 11-3-3.
2. WPOA,
WACF and Kanata
Manyunk are not aggrieved or adversely affected by the issuance of the subject
license and cannot seek administrative review under 312 IAC 3-1-9(b)(3) and IC
4-21.5-3-7(a)(1).
3. Kanata Manyunk has failed to file a valid
petition for administrative review under AOPA or 312 IAC 3-1-3.
4. To the extent Kanata Manyunk’s February 24, 2006
letter is deemed a petition for administrative review, the letter was not
timely filed under IC 4-21.5-3-7(a)(3) and 312 IAC 3-1.
To the
extent these matters are not elements that must be met by Claimants in seeking
to set aside the permit, Wawasee RE has the burden of proof for its affirmative
defenses.
[VOLUME 11, PAGE 95]
19.
As more particularly described later in these Findings, the evidence is that
Kanata Manyunk was not aggrieved or adversely affected by the issuance of the
subject license. In all other aspects,
the preponderance of the evidence does not support a finding that Wawasee RE is
entitled to relief based upon its alleged affirmative defenses.
20.
The DNR identified no affirmative defenses.
C. Claimants’ Standing to
Obtain Administrative Review of the Subject License
21.
WPOA is an
22.
WPOA’s members include those who own lots in the Plats of County Club Acres,
Phases 1, 2 and 2A, and
23.
The Plat of Country Club Acres, Phase 1, was signed by Donald G. Byrd on May 3,
1978 and recorded in the Kosciusko County Recorder’s Office on June 13, 1978 at
Plat Book 7, Page 67. The Plat of
Country Club Acres, Phase 2, was signed by Donald G. Byrd on December 23, 1980
and recorded in the Kosciusko County Recorder’s Office on January 7, 1981 at
Plat Book 8, Page 2. The “Replat of Lots
Number 56 & 57 and Part of Constitution Drive, Being in Country Club Acres,
Phase 2, in
24.
WPOA’s purposes include protecting and preserving
25.
Kay Young, President of the WPOA, testified on direct examination that she
learned of the application for the subject license about Christmas 2005 in an
email from a member. On cross-examination
by the DNR, she testified the WPOA may have also received a notification from
the agency. In any event, upon receipt of
the member’s email about Christmas 2005, Young promptly inquired by email of
available board members as to whether the WPOA should take action relative to
the application for the subject license.
By email, the board members responded that they wished to send a letter
to DNR expressing opposition to the project and to take other action that was
appropriate.
[VOLUME 11, PAGE 96]
26.
Cross-examination from Wawasee RE sought to elicit testimony from Young as to
whether she was entitled to take action for WPOA in her capacity as its
President. Young testified she believed
her action was authorized but was uncertain as to what the by-laws of WPOA
specified. She was also uncertain
whether a resolution had been passed to oppose the subject license and that she
would need to reference the minutes in order to respond. When asked whether she had previously provided
the minutes to Wawasee RE or the DNR, Young responded that she was never
requested to provide them by either of the Respondents.
27.
The preponderance of the evidence supports the conclusion that the WPOA took
official action in writing to express its opposition to the subject license and
in pursuing this proceeding.
28.
WACF is an
29.
WACF owns a significant amount of real estate in the Wawasee area watershed,
including real estate adjoining
30.
WACF’s purposes include protecting and preserving the water quality of
31.
WACF has identified, in part, the following as posing threats to the Wawasee
area watershed:
A.
Runoff from Property on the Lakes: This threat includes both homes and the
other facilities directly on or very near any of the lakes. Homeowners who fertilize their lawns
contribute to nutrient runoff. The South
Shore Golf Club and Maxwelton Golf Club are two major sources of chemical and
nutrient runoff into the watershed, which is a serious threat to water quality.
B.
Runoff from Homes within the Watershed but not directly on the Lakes: These
homes contribute to water quality degradation just as those directly on the
lakes. Since they are not on the lakes,
it is generally more difficult to educate the community about the effects of
their actions on water quality.
C.
Development of Wetland Areas: This threat includes past and present development
on or near wetlands. Many highly
developed areas in the watershed are past wetlands that have been filled or
altered in some way. Prevention of
further wetland destruction and restoration of wetland function are two ways of
improving water quality.
[VOLUME 11, PAGE 97]
D.
Development of Non-Wetland Areas: Development of land and clearing of
vegetation leads to increased runoff of nutrients into the watershed from
surrounding land. Better management of
these cleared areas helps prevent excessive runoff.
E.
Increased Boat Traffic: The increased number of boats as well as the greater
number of large boats has negative effects on water quality. Heavy boat traffic, especially along the
margins of the lakes near the wetlands, contributes to increased wave energy
that decreases the extent of wetland vegetation. In addition, larger boats and boats that are
driven at a speed that causes a deep draw and low prop stir up the bottom of
the lakes and contribute to increased particles in the water.
F.
Abuse of Lakes by Boaters and Other Users: The heightened use of the lakes in
the watershed, especially
32.
Dr. David Brandes, President of the Executive Board, was called as a witness
for the Claimants. He testified a
January 6, 2006 letter to DNR from Bob Myers, Acting Ecology Committee Chairman
for the WACF, which opposed the project, was approved by the Board of
Directors. Brandes was unaware of
whether there were minutes to memorialize the authorization. He acknowledged that a special meeting of the
Executive Committee was not called to consider action, regarding the subject
license, since many of its members were outside
33.
The preponderance of the evidence supports the conclusion that the WACF took
official action in writing to express its opposition to the subject license and
in pursuing this proceeding.
34.
Brandes also testified a basis of WACF’s request for review was that the DNR
failed to given WACF proper notification of the agency’s determination
regarding the subject license.
35.
On cross examination by Wawasee RE, Brandes testified he did not know whether
WACF had requested the DNR to provide his organization of notice of licensure
determinations within the Wawasee area watershed.
36.
AOPA governs notification requirements for most licensure requirements,
including those under the Lakes Preservation Act, at IC 4-21.5-3-5(b). The only subdivision of this subsection that
appears to apply to WACF is IC 4-21.5-3-5(b)(4). Under subdivision (4), the DNR would be
required to provide notice to the following:
[VOLUME 11, PAGE 98]
(4) Each person who has provided the agency with a
written request for notification of the order [regarding licensure], if the
request:
(A) describes the subject of the
order with reasonable particularity; and
(B) is delivered to the agency at
least seven (7) days before the day that notice
is given under this section.
37.
WACF has not sustained its burden of proving that the DNR failed to provide
WACF with the required notice regarding action on the subject license.
38.
Goldenberg is the owner of
39.
The Goldenberg Real Estate is located on the channel that includes the project
anticipated by the subject license and through which boaters would navigate
from Johnson’s Bay to the project anticipated by the subject license. Goldenberg and his family use the portion of
the channel that abuts the Goldenberg Real Estate for boating, fishing and
swimming. Goldenberg testified he believed
the anticipated project “would more than double, at times, the traffic” passing
by the Goldenberg Real Estate. In the
summer boating “season it would probably change to a great extent our
environment that we’re used to: the number of boats, the wave action (although
it’s all seawall)…, the turbidity of the water, kids in the water swimming,
[and] people fishing where boats are going through their lines.” Goldenberg also expressed concerns for
pollution resulting from an increased number of motorboats, including “big
time” concerns for the lack of marine facilities for the collection of wastewater
from boats, as well as for petroleum spills.
40.
Star Builders by Lengacher, Inc. conveyed title to the Goldenberg Real Estate
to Goldenberg by Corporate Deed dated September 5, 1989. Star Builders by Lengacher, Inc. had
previously acquired title to the Goldenberg Real Estate by Warranty Deed dated
August 1, 1989.
41.
Goldenberg is a member of WPOA and a Board Member of WACF.
42.
Dumford is the owner of
43.
The Dumford Real Estate is located on the channel that includes the project
anticipated by the subject license and through which boaters would navigate
from Johnson’s Bay to the project anticipated by the subject license. Dumford has a pier and boat lift within the
channel and adjacent to the Dumford Real Estate. Dumford testified that his pier and most
others in the channel were parallel to the shoreline rather than perpendicular
because of its narrow width. He
expressed concerns (1) for increased turbidity resulting from the movement of
the additional boats moored at the facilities authorized by the subject
license; (2) water pollution resulting from leaking motorboat fuel; (3) the
inappropriate disposal of wastewater, or what he termed “black water”, from
boats; and, (4) the lack of facilities landward of the shoreline for the
collection of trash and restrooms for the beneficiaries of the subject license.
[VOLUME 11, PAGE 99]
44.
Dumford acquired title to the Dumford Real Estate by Warranty Deed dated June
1, 2001.
45.
Dumford’s personal experience with
46.
Harkleroad is the owner of
47.
The Harkleroad Real Estate is located on the channel for the subject
license. Harkleroad testified the
Harkleroad Real Estate is approximately a two-minute boat ride from the site of
the subject license.
48.
Kanata Manyunk is an unincorporated association of lot owners located in the
Plat of Kanata Manayunk First Section.
Harkleroad testified that Kanata Manyunk has existed since the early
1970s. His concept of its purpose is to
maintain a “quiet, clean neighborhood.”
49.
Harkleroad testified he has served as President of Kanata Manayunk at all times
relevant to this proceeding.
50.
Kanata Manayunk maintains a list of members and generates Treasurer’s Reports
reflecting payment of dues by such members.
Kanata Manayunk also maintains and manages bank accounts for deposits of
dues and other amounts received from members and other sources and for the payment
of its expenses.
51.
Harkleroad testified official action the By-Laws of
52.
The preponderance of the evidence does not support the conclusion that the
Kanata Manayunk took official action to express its opposition to the subject
license and in pursuing this proceeding.
[VOLUME 11, PAGE 100]
53.
Goldenberg, Dumford and Harkelroad testified to concerns that the project
anticipated by the subject license would have some adverse affect upon
neighborhood property values.
54.
To qualify for administrative review under AOPA, IC 4-21.5-3-7(a) requires that
a claimant establish facts to show that the claimant is one of the following:
(1) a person to whom an agency order
is specifically directed.
(2) a person who is aggrieved or
adversely affected by the order.
(3) a person who is entitled to
review under any law.
55.
The subject license was specifically directed to the license applicant, Wawasee
RE. None of the Claimants would qualify
for standing under this provision. They
must show either that they were “aggrieved or adversely affected” by the
subject license or that they are “entitled to review under any law”.
56.
To be “aggrieved or adversely affected”, a person “must have suffered or be
likely to suffer in the immediate future harm to a legal interest, be it a
pecuniary, property, or person interest.”
Huffman v. Office of Environmental
Adjudication, 811 N.E.2d 806, 810 (
57.
The testimonies of Goldenberg and Dumford indicate they have standing because,
as described later in these Findings, the project anticipated by the subject
license is likely to cause them both to suffer harm to a legal interest in the
immediate future.
58. Also, as provided in the
Lakes Preservation Act, each member of the public has a vested right in the
preservation, protection, and enjoyment of public freshwater lakes, including
59. Interpreting another
statute employing the phrase “vested right”,
60. Goldenberg and Dumford are members of the
public of
[VOLUME 11, PAGE 101]
61. Goldenberg and Dumford
are entitled to review under the governing law, the Lakes Preservation Act.
62. Membership associations
such as WACF, WPOA and Kanata Manyunk may also possess “associational standing”
if requisite criteria are satisfied. Save the Valley v. Indiana-Kentucky Electric
Corporation, 820 N.E.2d 677 (
63. Goldenberg is a member of
both WACF and WPOA, and Dumford is a member of WPOA. The interests WACF and WPOA seek to protect
are germane to those organizations’ purposes.
Neither the claims asserted nor the relief requested requires the
participation of individual members in the requests for administrative review.
64. The NRC recently declined
to approve associational standing in Hoosier Environmental Council v. DNR and Indianapolis
Power and Light Company, 10 Caddnar
252 (2006). There the facts differ from
those in this proceeding. In Hoosier Environmental Council, no individual
member of the association was identified who had the requisite standing at the
time administrative review was sought.
In this proceeding, both Goldenberg and Dumford are individuals who
enjoyed the requisite standing and who were members of WACF or WPOA when those
associations sought administrative review.
65. WACF and WPOA are
entitled to obtain administrative review of the subject license under the
concept of associational standing.
66. Harkleroad is a member of
Kanata Manayunk, and the preponderance of the evidence is that he would have
standing to sue in his own right. The
preponderance of the evidence does not support that the interests Kanata
Manyunk seek to protect are germane to the organization’s lawful purposes. Those purposes seem directed primarily to
internal property management of the subdivision. There is insufficient evidence to find the
claims asserted or the relief requested requires the participation of
individual members in the requests for administrative review. The preponderance of the evidence does not
support a finding that Kanata Manayunk has associational standing to pursue
administrative review in this proceeding.
67. Goldenberg and Dumford
individually have standing to pursue administrative review in this proceeding. WACF and WPOA have associational standing to
pursue administrative review in this proceeding.
[VOLUME 11, PAGE 102]
D. Pre-Licensure Actions that Apply to the Lakes
Preservation Act
68. The DNR employs an
informal process called “pre-application review” by which the agency meets with
a potential license applicant before filing an application. During pre-application review, the DNR may
express an opinion whether a license is required or whether the anticipated
project appears to be one for which the agency would likely give approval.
69. Pre-application review
might have the practical effect of discouraging an applicant from pursuing a
project unlikely to receive approval or of modifying a project so that the
chances for the presentation of an approvable project are enhanced. The process supports administrative
efficiency. An agency opinion following
pre-application review is not binding, however, on either a potential applicant
for or a potential remonstrant against the application.
70. For the subject license,
the DNR expressed the perspective that an individual license[1]
would be required for the project anticipated by Wawasee RE because it would
result in the construction of a “group pier”.
The DNR also expressed the perspective that the application for a group
pier would be approvable.
71. Conduct of a
pre-application review prior to an application for a license under the Lakes
Preservation Act does not result in an order that is subject to AOPA. An expression of opinion by the DNR is merely
advisory and does not constitute an action that is subject to administrative
review by the Commission. Neither is the
DNR required to provide notice or to engage persons other than an applicant in
a pre-licensure review.
72. IC 14-11-4 does address citizen
notice procedures for certain applications prior to DNR action on licensure,
including licenses that are issued under the Lakes Preservation Act. IC 14-11-4-1(2). According to IC 14-11-4-4:
The
[DNR] may not issue a license until thirty (30) days after the notice required
by [IC 14-11-4] has been given. Notice
may be given at any time after an application for a license filed with the
[DNR]. The [DNR] may require by rule that
notice under [IC 14-11-4-5] be provided by the license applicant.
73. As provided in IC
14-11-4-5(a):
(a) If a
license application affects real property, notice of the application is
required as follows:
(1) The applicant must notify at
least one (1) of the owners of each parcel of real property reasonably known to
be adjacent to the affected real property.
(2) The [DNR] shall notify the
persons who have requested notification of a license application that:
(A) affects the specific
real property to which the application relates;
or
(B) is of the same type
as the application.
[VOLUME 11, PAGE 103]
74. The Commission has
adopted rules at 312 IAC 2-3 to assist with its implementation of IC
14-11-4.
75. An applicant is required
to give notice of a license application to property owners that are “adjacent”
to the “real estate” described in 312 IAC 3-3(e). 312 IAC 11-3-3(d)(2) and 312 IAC
2-3-3(c)(1).
76. “Adjacent” means property
that is both within one-fourth of a mile of where the licensed activity would
take place and that has a border or point in common with the exterior boundary
of the property where the licensed activity would take place. 312 IAC 2-3-2.
77. “Real estate” refers to
the property on which a licensed structure would be located or that the
licensed structure would benefit. 312
IAC 3-3(e).
78. The Claimants urge that
group piers to be authorized under the subject license would benefit numerous
lots located in the Plats of Country Club Acres, Phase 1 and 2. Wawasee RE did not provide notice to all
property owners adjacent the Plats of Country Club Acres, Phase 1 and 2, and so
its notification under the rule was fundamentally flawed. Claimants’ proposed “Findings of Fact and
Conclusions of Law with Nonfinal Order”.
79. The DNR urges that the
purpose for requiring notice to properties adjacent to a property, which would
benefit from a licensed structure, in addition to the property where the
structure is located, is to provide reasonable notice where a licensed
“structure might not be located on or touching” an applicant’s property. The DNR referenced the testimony of James
Hebenstreit and his illustration of a “boat lift” as an appropriate
implementation of the reference to a benefited structure. “Respondent Department of Natural Resources’
Post-Hearing Proposed Findings of Fact, Conclusions of Law and Order”.
80. A review of Caddnar
suggests the interpretation of this rule section is a matter of first
impression. There are good policy
reasons to support either the Claimants’ or the DNR’s interpretation. The Claimants have not established that any of
them were substantially prejudiced, however, by a lack of notice under their
interpretation of the rule.
81. As part of its
application for the subject license, the preponderance of the evidence is that Wawasee
RE gave notice to the persons to whom notice Wawasee RE reasonably anticipated must
be given under IC 14-11-4 and 312 IAC 2-3.
In addition to the minimum notice requirements, Wawasee RE also gave
notice to seven other nearby property owners.
[VOLUME 11, PAGE 104]
82. Upon the request of
interested persons, a pre-licensure public hearing may be required under IC
14-11-4 and 312 IAC 2-3. This public
hearing is an informal mechanism intended to assist with fact-finding by the
DNR. The individual authorized to take
DNR licensure action shall consider a hearing officer’s report of the
pre-licensure public hearing but “is not limited to the facts and information
received by the hearing officer”.
Neither does a pre-licensure public hearing limit the scope of
administrative review under AOPA and 312 IAC 3-1. 312 IAC 2-3-6.
83. In this instance, the DNR
received comments from interested persons prior to making its determination to
issue the subject license. These
included a letter from WACF dated January 6, 2006 and a January 2006 letter
from WPOA, both of which opposed the project.
The DNR reviewed these letters and determined they did not warrant
further investigation or the denial of the license application.
84. A remand of a DNR
licensure action is appropriate only where compliance with pre-licensure notification
requirements is so fundamentally flawed as to preclude affected persons from
meaningful participation in the DNR licensure process. Wheeler,
et al. v. Peabody, DNR, and Town of Zionsville (Intervenor), 9 Caddnar 193
(2004) citing Fair, et al. v. Noble
County Drainage Board and DNR, 9 Caddnar 82 (2002) and Citizens Against the Pit, by Rebecca L. Tenill v. DNR and Silver Creek
Sand and Gravel Co., Inc., 7 Caddnar 140 (1996).
85. The DNR employs a process
called “quick action” by which the agency attempts to process an application as
quickly as practicable after the completion of the pre-licensure public notice
period. The process is intended to
reduce the DNR’s turn-around time on license application reviews. This process is conceptually compatible with
IC 14-11-4 and 312 IAC 2-3 pertaining to pre-licensure review of an application
under the Lakes Preservation Act. More
specifically, in the DNR’s consideration of the subject license, this process
was applied consistently with the governing statutes and rules.
86. The evidence in this
proceeding does not support a remand based upon a failure by Wawasee RE or the
DNR to comply with pre-licensure notification requirements. Adequate notice was provided to adjacent
property owners and other interested persons.
The DNR received and considered comments from persons opposed to the
project before the DNR determined to issue the subject license. Any procedural deviations that might have
occurred were minor or technical and cured by the Commission’s hearing de novo
on administrative review.
E. Natural Resources under the Lakes Preservation Act
87. The “natural resources”
of
[VOLUME 11, PAGE 105]
88. As used in the Lakes
Preservation Act, “natural resources” refers to the water, fish, plant life and
minerals in a public freshwater lake. IC
14-26-2-2.
89. Jed Pearson is a
fisheries biologist with the DNR’s Division of Fish and Wildlife. He has a BS from
90. Pearson testified he had
been to the site of the subject license “many times over the years and was very
familiar with it.”[2]
91. Pearson testified the
DNR’s Division of Fish and Wildlife considered the site condition of a public
freshwater lake as an important factor in the assessment of what impact a
project was likely to have on fish and plant life. A natural area along the natural shoreline,
such as a “significant wetland”, would be afforded a higher level of regulatory
scrutiny than would a manmade channel.
92. Pearson testified he
understood that boats traveling from the site of the subject license to the
main body of
93. Although other witnesses
for the Claimants offered views that differed from Pearson, none of the
witnesses was qualified by training or experience to testify as a biologist. Pearson was the only biologist to testify in
this proceeding.
94. The Claimants have not
sustained the burden of proof that the subject license should be set aside
based upon a determination that adverse biological consequences are likely to
result to the natural resources of
E. Licensure of Temporary Piers and the Public Trust
[VOLUME 11, PAGE 106]
95. IC 14-26-2-23 was
enacted in 2000 in response to Ind. Dept.
Natural Resources v. Town of Syracuse, 686 N.E.2d 410 (Ind. App. 1997). The Appeals Court of Indiana had determined in
Town of Syracuse that the Lakes
Preservation Act did not authorize the DNR to regulate temporary piers, at
least those placed on auger poles for individual use. The original draft of the
new statutory section was developed by the Indiana Lakes Management Work Group
to direct the DNR to regulate both permanent structures and temporary
structures through rules adopted by the Commission. In enacting IC 14-26-2-23, the Indiana General
Assembly approved language that was very similar to the recommendations of the
Work Group. See discussion of Category
21 in “The Public Trust Doctrine and Navigable Waters and
96. Pursuant to IC
14-26-2-23(a)(1)(C), a person must obtain a permit from the DNR to “place,
modify, or repair a temporary or permanent structure” on a public freshwater lake.
97. As applicable to
temporary piers when the subject license was issued, IC 14-26-2-23(b) directed
the Commission to “adopt rules… to…[p]rovide objective standards for
licensing…the placement of a temporary…structure…. The standards shall exempt any class of
activities from licensing if the [C]omission finds that the class is unlikely
to pose more than a minimal potential for harm to the public rights described”
in IC 14-26-2-5. The public rights
described in IC 14-26-2-5 are
98. When the subject license
was issued, IC 14-26-2-6 and IC 14-26-2-9 provided:
IC 14-26-2-6:
A person
may not change the level of the water or the shoreline of a public freshwater
lake by:
(1) Excavating;
(2) Filling in; or
(3) Otherwise:
(A) Causing a change in
the area or depth of; or
(B) Affecting the
natural resources, scenic beauty, or contour of;
The lake
below the waterline or shoreline without having a written permit issued by the
[DNR].
IC 14-26-2-9(a):
(a) Upon written application by the
owner of land abutting a public freshwater lake and payment of a nonrefundable
fee of one hundred dollars ($100), the [DNR] may issue a permit to:
(1) change the shoreline; or
(2) alter the bed;
of a public freshwater lake after
investigating the merits of the application.[3]
[VOLUME 11, PAGE 107]
99. 312 IAC 11-1-2(c) assists
in the implementation of the Lakes Preservation Act:
Before
issuing a license under this rule, the [DNR] shall consider the following:
(1) The public trust doctrine….
(2) The likely impact upon the
applicant and other affected persons, including
the accretion or erosion of sand or sediments.
100. Lt. John Sullivan has
been employed with the DNR’s Division of Law Enforcement since approximately
1975. He is the Commander for the
Division’s District 1, the District that covers the central portion of
101. Sullivan testified that
as part of his responsibilities with the Division of Law Enforcement, he or his
subordinate officers routinely review project applications under the Lakes
Preservation Act to determine whether those projects present navigational or
safety hazards.
102.
103. The review by the DNR’s
Division of Law Enforcement, for navigation or safety hazards that may be posed
by the licensure of group piers, is essential to protection of the public
trust, and more particularly to the protection of public opportunities for
boating, under the Lakes Preservation Act.[4]
[VOLUME 11, PAGE 108]
104. Sullivan testified he personally
performed the review for the subject license and determined the group pier as
proposed by Wawasee RE would not pose a hazard to navigation or safety.
105. Sullivan testified that
an important factor considered in evaluating navigational and safety hazards,
which could be posed by the subject license, is that the group pier would be
located at the end of the channel.
106. Sullivan also testified
that, with the narrow width of the channel, another factor he considered is the
lawful operation of boats would be limited to “idle speed”.
107. The operation of a
motorboat is statutorily limited to idle speed within 200 feet of the shoreline
of a lake. IC 14-15-3-17(b). “Idle speed” means the slowest speed, not
exceeding five miles per hour, which maintains steerage so that the wake or
wash created by a boat is minimal. IC
14-8-2-129.
108. Sullivan testified that
he was aware that several residences were served by the channel as the access
to Johnson’s Bay and the main body of
109. Sullivan testified he reviewed documents
pertaining to the application for the subject license, which were received by
email from DNR in
110. Other witnesses for the
Claimants offered views that differed from those of Sullivan concerning the
navigation of boats into or from the group piers, including witnesses who are
experienced boaters. None of the other
witnesses hold professional credentials that are equivalent to those of
Sullivan. Lt. Sullivan was the only law
enforcement officer to testify in this proceeding regarding navigational or
boating safety. His testimony is
persuasive.
[VOLUME 11, PAGE 109]
111. The Claimants also
offered testimony that approval of the subject license would result in
increased boat traffic within the channel and pose a greater hazard to public
safety for users of the channel. This
testimony is almost a truism and cannot form a basis for a determination to
deny the subject license. The addition
of people and boats to the channel, and to
112. The Claimants have not
sustained the burden of proof that the subject license should be set aside
based upon a determination that the proposed group pier is likely to pose a
hazard to navigation or safety.