CADDNAR

[CITE: Adochio, et al. v. Kranz, et al. (Stay), 11 CADDNAR 396 (2008)]

 

[VOLUME 11, PAGE 396]

 

Cause #: 07-204W

Caption: Adochio, et al. v. Kranz, et al. (Stay)

Administrative Law Judge: Lucas

Attorneys: Kocher (Adochio); Gifford (Kranz); Bartoszek (pro se)

Date: June 27, 2008

 

 

[NOTE: A final agency decision was rendered in Adochio, et al. v. Kranz, et al., 11 Caddnar 400 (2008), on July 16, 2008.]

 

 

ENTRY DENYING REQUEST FOR STAY OF NONFINAL ORDER

 

The agency order that motivated the Claimants to seek administrative review from the Natural Resources Commission (the “Commission”) is outlined in the “Statement of Contentions” filed by the Department of Natural Resources (the “DNR”) on January 3, 2008.  Referring to an incident report and disposition by Conservation Office Brian Culbreth, the DNR stated:

 

Officer Culbreth determined from the deed creating the easement that included in the rights given to the Easement Holders [Claimants] was the right to use the easement as a path to the lake, but that the easement did not convey the right for them to place a pier in the waters of Bass Lake….  He advised them to seek a…determination construing the meaning of the grant of easement with the Natural Resources Commission….  He further advised that, pending a…determination, the easement pier could remain in the waters of Bass Lake to the end of the 2007 boating season, but was not to be placed in the waters of Bass Lake in Spring, 2008.

 

As reflected in October 15, 2007 correspondence from Nancy Adochio to initiate this proceeding:

 

Mr. Brian Culbreth from the DNR stopped by my home on Sunday, October 13, 2007, and told me that we only have a footpath to the lake and that we have no right to install a pier nor to have a boat on the lake, and that I would have to appeal this decision before the next boating season….

 

Bass Lake is a “public freshwater lake” and is governed by IC 14-26-2 (sometimes referred to as the “Lakes Preservation Act”) and by rules adopted by the Commission at 312 IAC 11-1 through 312 IAC 11-5 to assist with its implementation of the Lakes Preservation Act.  This proceeding is governed by IC 4-21.5 (the “Administrative Orders and Procedures Act” or “AOPA”) and rules adopted by the Commission at 312 IAC 3-1 to assist with its implementation of AOPA. 

 

AOPA includes opportunities to obtain a “stay” of an agency order pending administrative review.  Following a preliminary hearing, an administrative law judge may grant a stay from either an enforcement action or a licensure action pertaining to the Lakes Preservation Act.  IC 4-21.5-3-6 and IC 4-21.5-3-5.  Brown, et al. v. DNR (Order of Stay), 9 Caddnar 109, 115 (2003).

 

[VOLUME 11, PAGE 397]

 

From the initiation of the proceeding on October 26, 2007 through the conduct of a hearing on the merits on April 29, 2008, the Claimants never sought a stay of effectiveness of the order by Conservation Officer Culbreth.  At the time of the hearing, the subject pier was not in place.

 

On May 1, 2008, the administrative law judge emailed the parties to clarify and memorialize matters pertaining to the April 29 hearing.  Included was the following:

 

The parties are reminded no entry has been made to stay or modify any pending order from the Department of Natural Resources or a Conservation Officer for the Department of Natural Resources.  The Natural Resources Commission has entered no nonfinal or final order to set aside any prior order of the Department of Natural Resources.  The Commission has granted no relief from any restriction placed by the DNR on placement of the subject pier.  When a nonfinal order is entered…, a modification may result.  Until a nonfinal order is entered, any order issued by the DNR is unaffected.

 

On May 12, 2008, the attorney for Gunther Kranz stated his client had informed him the order from Officer Culbreth was being disregarded.  “[T]he pier maintained by the Homeowners Association has now been placed in the waters of Bass Lake.”  Kranz sought relief from the Commission but did not cite authority for a Commission mandate to enforce a DNR order.   None is known to exist.  Exemptions from AOPA set forth under IC 4-21.5-2-5(8) through IC 4-2.5-2-5(10) indicate administrative review is unavailable from agency determinations to issue or not to issue sanctions or to perform or not to perform inspections.  These are matters of prosecutorial discretion.  The Commission has no authority to mandate the enforcement of a DNR order.  The prerogative rests with the DNR.

 

On June 6, 2008, “Findings of Fact, Conclusions of Law and Nonfinal Order of Administrative Law Judge” were entered and served upon the parties.  Included in the Nonfinal Order was a provision which stated: “The effectiveness of this order is stayed until August 1, 2008.”  Although no evidence was in the record, the administrative law judge understood from the allegations by Kranz that the subject pier, boats, or both could have been placed within the easement subsequent to the hearing.  The DNR’s posture regarding this potentiality was unknown.  Filing of “objections” by one or more parties to the Nonfinal Order seemed likely, and timing for scheduling an AOPA Committee was undetermined.  With these uncertainties, a limited deferral of effectiveness of the Nonfinal Order until August 1 was determined to serve equity and administrative efficiency.

 

For the first time on June 23, 2008, the Claimants requested a stay with their filing of a “Motion to Stay Non Final Order”.  The motion sought the following relief:

 

Claimants request an additional thirty (30) days for reason that the summer boating season can be completed; for adequate time to secure necessary documentation and permit applications; for application for individual license for placement of pier and satellite shore station with the Department of Natural Resources; and to allow additional time for securing qualified personnel for actual removal of the pier.

 

[VOLUME 11, PAGE 398]

 

… Claimants request said Non Final Order be stayed until September 2, 2008.  [Emphasis added.]

 

The person seeking a “stay” has the burden of proof for establishing entitlement. Brown, et al. v. DNR (Order of Stay) cited previously.  The Claimants have the burden of establishing entitlement to the stay they requested on June 23.

 

The appropriate standard for determining whether to grant a stay in civil law is the equitable standard applicable for whether to grant a preliminary injunction.  State ex rel. Indiana Alcoholic Beverage Commission v. Lake Superior Court,  Room 4, 259 Ind. 123, 284 N.E.2d 746 (Ind. 1972).

 

The relief provided in AOPA by a stay process has similarly been characterized as “quasi-equitable” or “administrative equitable”.  Indiana Administrative Practice, “Administrative Hearings”, (Professional Education Systems, Inc., Eau Claire, Wisconsin, 1990), p. 37.  In evaluating a stay under AOPA, the common law may be applied.  Brown v. DNR and Peabody Coal Company, 6 Caddnar 136 (1993).

 

An element of the equitable standard is the likelihood of success on the merits by the person seeking the stay.  Indiana State Department of Public Welfare v. Stagner, 410 N.E.2d 1348, (Ind. App. 1980).  To obtain a stay, the moving party must show some likelihood of success on the merits, no adequate remedy at law, and irreparable harm if the relief is denied.  Anderson v. U.S.F. Logistics (IMC), Inc., 274 F.3d 470 (C.A. 7th Cir., Ind. 2001); and, Standard Register Co. v. Cleaver, F. Supp. 2d 1084 (N.D. Ind., 1998). A stay is an extraordinary remedy intended to preserve the status quo until the merits of the case may be resolved.  Indiana Civil Liberties Union v. O’Bannon, 259 F.3d 766 (C.A. 7th Cir., Ind.), rehearing en banc denied, certiori denied 122 S. Ct. 1173, 152 L. Ed. 2d 117.

 

A party which seeks equitable relief must be free of wrongdoing in the matter before the court.  Shriner v. Sheehan, 773 N.E.2d 833 (Ind. App. 2002), transfer denied.  A person who seeks equity must do so with clean hands.  An intentional activity by the person which is wrongful demonstrates unclean hands.  Lake County Trust Co. v. Wine, 704 N.E.2d 1035 (Ind. App. 1998). 

 

The Claimants do not cite particular language in AOPA to support the issuance of a stay by an administrative law judge from a nonfinal order under IC 4-21.5-3-27 which is subject to affirmation, modification or dissolution by the agency’s “ultimate authority” under IC 4-21.5-3-29(b).  Even so, the authority is believed an essential element of the legislative mandate that the Commission establish a division of hearings and appoint administrative law judges to implement AOPA.  IC 14-10-2-2.  Consideration of relief by an administrative law judge would be interlocutory and subject to scrutiny by the AOPA Committee.  As the ultimate authority in this proceeding, the AOPA Committee has clear authority to issue a stay.  As provided in IC 4-21.5-3-31(b):

 

[VOLUME 11, PAGE 399]

 

(b) A party may petition the ultimate authority for an agency for a stay of effectiveness of a final order.  The ultimate authority or its designee may, before or after the order becomes effective, stay the final order in whole or in part.

 

In this proceeding, the administrative law judge is unconvinced the record currently supports the extension of effectiveness of the Nonfinal Order from August 1, 2008 until September 2, 2008.  The Claimants have the burden of proof.  There is no basis for determining that they placed the subject pier other than with disregard for the order by Officer Brian Culbreth.  Absent some mitigating factor, and none is currently before the Commission, the Claimants have unclean hands and would not be entitled to equitable relief.  This conclusion is made with the knowledge that the AOPA Committee is scheduled to review this proceeding on July 14, 2008, and the AOPA Committee has broad and explicit authority under IC 4-21.5-3-31(b) to grant the stay, in whole or part, if the AOPA Committee is inclined. 

 

One point of clarification is required.  Exhibit “A” is a photograph attached to the “Objections to Non Final Order and Findings of Fact” by Gunther Kranz and Carol Kranz.  This exhibit played no part in the consideration of the instant Entry.  The Kranzes have not moved to admit the exhibit, and it is not in evidence.  There is no context for time or date, the identities of the persons are not provided, and there is no basis for determining the circumstances of their presence.  The inference may be that the persons depicted in the photograph are trespassers, but the Commission has no jurisdiction over civil trespass or over criminal trespass.  The exhibit is inflammatory, and it has no probative value.

 

BEING DULY ADVISED, the Claimants’ “Motion to Stay Non Final Order” is denied.  The denial is made with the understanding that the AOPA Committee has broad and explicit authority to reconsider the denial during oral argument on July 14, 2008 or as the AOPA Committee may otherwise decide.