[CITE: Daniel v. Johnston & Fultz Excavating (Lake Trust), 12 CADDNAR 264 (2010)]
[VOLUME 12, PAGE 264]
Cause #:09-130W
Caption: Daniel v. Johnston & Fultz Excavating (Lake Trust)
Administrative Law Judge: Lucas
Attorneys: Gallmeyer (Claimants); Cornelius, Laker (Johnston); Wyndham (DNR)
Date: September 29, 2010
FINAL ORDER OF SUMMARY JUDGMENT
No genuine issue of material fact exists regarding title. The dedication of public waters described in Finding 17 did not transfer title. DNR is the state agency which is now the trustee under IC 14-26-2 but is not the owner of the subject channel. The appropriate context for review is regulatory and not proprietary. The lawfulness of fill placed in the subject channel is not properly before the Commission in this proceeding. The only issue which is properly before the Commission is whether the subject permit authorizes the placement of a vinyl seawall. For administrative review, Johnston is the adjacent landowner with any resulting riparian rights, and the DNR is the trustee and permitting authority under the Lakes Preservation Act.
Findings
A. Statement of the Case and Jurisdiction
1. On July 16, 2009, Jack Daniel, Lorrie Daniel, Leo Helmuth, and Rita Helmuth (collectively, the “Claimants”) filed a petition (the “petition”), under Ind. Code § 4-21.5 (sometimes referred to as the “Administrative Orders and Procedures Act” or “AOPA”), and rules adopted by the Natural Resources Commission (the “Commission”) at 312 Ind. Admin. Code § 3-1 to assist in the administration of AOPA, for administrative review of a determination by the Department of Natural Resources (the “DNR”) to issue permit PL-21248 (the “subject permit”) to Richard M. Johnston (“Johnston”).
2. Stephen Lucas was appointed the Commission’s administrative law judge under AOPA. He served a “Notice of Prehearing Conference” on the Claimants, the DNR, Johnston, and James C. Brown, doing business as Fultz Excavating & Dredging, with a copy of the petition attached. James Brown is the consultant or contractor for Johnston but has not participated in the proceeding. The DNR, Johnston, and James C. Brown are collectively the “Respondents”. The Claimants and the Respondents are collectively the “Parties”. Based on a service list supplied by the DNR’s Division of Water, notice was also provided on other potentially interested persons, but none of them have intervened or been joined as Parties.
3. The subject permit granted authority to Johnston, under IC 14-26-2 (sometimes referred to as the “Lakes Preservation Act”) and rules adopted at 312 IAC 11-1 through 312 IAC 11-5 to assist with implementation of the Lakes Preservation Act, to place a vinyl seawall on a portion of the shoreline of Clear Lake, Clear Lake Township, Steuben County.
4. Clear Lake is a “public freshwater lake” as defined at IC 14-26-2-3 and 312 IAC 11-2-7 and is subject to the Lakes Preservation Act. Brown and Zeller, et al. v. DNR, 9 Caddnar 136 (2004).[1]
5. The DNR is the permitting authority for the placement of seawalls under the Lakes Preservation Act. The Commission is the “ultimate authority” for the DNR under AOPA with respect to administrative review of a permitting determination for seawalls under the Lakes Preservation Act. IC 4-21.5-1-15 and IC 14-10-2-3. Burke’s Vinyl Seawalls & Reynolds v. DNR, 11 Caddnar 345, 346 (2008).
6. Where at issue is the construction of a requirement for dedication of additional waters to the public, made as a condition to a DNR permit, the issue is subject to review under AOPA. Carter v. Nugent Sand Company, 925 N.E.2d 356 (Ind. 2010). As described infra, the construction of such a dedication is considered here.
7. The Commission has jurisdiction over the subject matter of a DNR permitting action, as well as over the subject matter of a dedication of additional waters to the public. Upon proper facts, either or both may be determined on administrative review. The Commission also has jurisdiction over the persons of the Parties.
B. Application of Summary Judgment
8. IC 4-21.5-3-23 governs summary judgment under AOPA and provides:
(a) A party may, at any time after a matter is assigned to an administrative law judge, move for a summary judgment in the party’s favor as to all or any part of the issues in a proceeding. The motion must be supported with affidavits or other evidence permitted under this section and set forth specific facts showing that there is not a genuine issue in dispute.
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(b) The motion must be served at least five (5) days before the time fixed for the hearing on the motion. The adverse party may serve opposing affidavits before the day of hearing. The administrative law judge may direct the parties to give oral argument on the motion. The judgment sought shall be rendered immediately if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits and testimony, if any, show that a genuine issue as to any material fact does not exist and that the moving party is entitled to a judgment as a matter of law. A summary judgment may be rendered upon fewer than all the issues or claims (such as the issue of penalties alone) although there is a genuine issue as to damages or liability, as the case may be. A summary judgment upon fewer than all the issues involved in a proceeding or with respect to fewer than all the claims or parties is not a final order. The administrative law judge shall designate the issues or claims upon which the judge finds no genuine issue as to any material facts. Summary judgment may not be granted as a matter of course because the opposing party fails to offer opposing affidavits or evidence, but the administrative law judge shall make a determination from the affidavits and testimony offered upon the matters placed in issue by the pleadings or the evidence. If it appears from the affidavits of a party opposing the motion that the party cannot for reasons stated present by affidavit facts essential to justify the party’s opposition, the administrative law judge may make any order that is just.
(c) If on motion under this section no
order is rendered upon the whole case or for all the relief asked and a hearing
is necessary, the administrative law judge at the hearing of the motion, by
examining the pleadings and the evidence before it and by interrogating any
person, shall if practicable ascertain:
(1) what material facts exist without substantial controversy; and
(2) what material facts are actually and in good faith controverted.
The administrative law judge shall then make an order specifying the facts that
appear without substantial controversy, including the extent to which the
amount of damages or other relief is not in controversy, and directing further
proceedings in the action as are just. Upon the hearing of the action, the
facts specified are established in the judge’s order under this subsection.
(d) Supporting and opposing affidavits
must:
(1) be made on personal knowledge;
(2) set forth facts that are admissible in evidence; and
(3) show affirmatively that the affiant is competent to testify to the matters
stated in the affidavit.
(e) The administrative law judge may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, further affidavits, or testimony of witnesses.
(f) If a motion for summary judgment is made and supported under this section, an adverse party may not rely upon the mere allegations or denials made in the adverse party’s pleadings as a response to the motion. The adverse party shall respond to the motion with affidavits or other evidence permitted under this section and set forth specific facts showing that there is a genuine issue in dispute. If the adverse party does not respond as required by this subsection, the administrative law judge may enter summary judgment against the adverse party.
9. As provided in 312 IAC 3-1-10, an administrative law judge may apply the Trial Rules if not inconsistent with AOPA. Reference may be made to Trial Rule 56 and to reported decisions based upon Trial Rule 56. If Trial Rule 56 is inconsistent with IC 4-21.5-3-23, the latter controls. Roebel, et al. v. Vorndran, et al., 11 Caddnar 250, 253 (2008).
10. The moving party on summary judgment bears the burden of showing prima facie that there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Terry v. Indiana State University, 666 N.E.2d 87, 90 (Ind. App. 1996). The purpose of summary judgment is to end litigation when no factual disputes are at issue. J.M. Corp. v. Roberson, 749 N.E.2d 567, 573 (Ind. App. 2001). The recipient of a motion for summary judgment may not rest upon bare allegations made in the pleadings but must respond with affidavits or other evidence setting forth specific facts showing there are genuine issues in dispute. If the recipient fails to meet this responsibility, then the moving party is entitled to summary judgment. Pierce v. Bank One-Franklin, 641 N.E.2d 647, 649 (Ind. App. 1994).
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11. Summary judgment should be granted if the evidentiary material shows there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Auto-Owners Insurance Co. v. United Farm Bureau Insurance Co., 560 N.E.2d 459 (Ind. App. 1990).
12. “A fact is ‘material’ for summary judgment purposes if it helps to prove or disprove an essential element of the plaintiff’s cause of action.” Graham v. Vasil Management Co., Inc. 618 N.E.2d 1349 (Ind. App. 1993). “A factual issue is ‘genuine’ for purposes of summary judgment if the trier of fact is required to resolve an opposing party’s different versions of the underlying facts.” York v. Union Carbide Corp., 586 N.E.2d 861 (Ind. App. 1992).
13. The initial prehearing conference was conducted on September 18, 2009. The parties agreed and the administrative law judge ordered a schedule for filing summary judgment motions and responses. The Parties sought and were granted extensions of the schedule while they engaged in settlement negotiations. Ultimately, the negotiations were unsuccessful, and the Claimants and Johnston filed timely summary judgment motions and responses as follows:
(1) On January 12, 2010, the “Claimants’ Motion for Summary Judgment and Designation of Evidence”, with attachments, and “Claimants’ Memorandum of Law in Support of Its Motion for Summary Judgment” were filed.
(2) On June 11, 2010, the “Respondent’s Cross-Motion for Summary Judgment and Designation of Evidence” and the “Respondent’s Brief in Opposition to Claimants’ Motion for Summary Judgment and in Support of Cross-Motion for Summary Judgment” were filed on behalf of Johnston.
(3) On July 21, 2010, Claimants’ Response to the Respondent’s Cross-Motion for Summary Judgment and Designation of Evidence” were filed
The DNR did not file any pleading or document pertaining to the summary judgment motions and responses.
14. The proceeding is ripe for disposition upon summary judgment.
C. Dedication of Public Waters
15. For consideration is real estate commonly known as 180 Lake Drive Clear Lake, Fremont, Indiana 46737 and more particularly described in a Warranty Deed from Janet R. Petersilge to Johnston recorded on September 17, 1997:
A resurvey of land described in Deed Record 219, page 21 and Deed Record 225, page 190, more recently described as follows:
A part of the Southwest Quarter of the Northeast Quarter of Section 19, Township 38 North, Range 15 East, Clear Lake Township, Steuben County, Indiana, described as follows:
Commencing at a point 477.5 feet East and 392.3 feet south of the Northwest corner of the Southwest quarter of the Northeast Quarter of said Section 19, and being a point on the East line of a public roadway, thence North 28 degrees 44 minutes 00 seconds West (assumed bearing) 80.00 feet along said East line to an iron pipe at the true point of beginning of this description; thence continuing North 28 degrees 44 minutes 00 seconds West 83.02 feet along said East line to a point on the South shoreline of a channel to Clear Lake; thence North 67 degrees 01 minutes 46 seconds East 111.11 feet along said channel shoreline to a point on the shoreline of Clear Lake; thence South 29 degrees 53 minutes 06 seconds East 68.24 feet along said Lake shoreline; thence South 59 degrees 24 minutes 23 seconds West 112.00 feet back to the true point of beginning, containing 0.19 acres, more or less, subject to all legal highways and easements of record.
This real estate is the “Johnston property”.
16. Johnston obtained the Johnston property as successor to a chain of title derived from J.C. McNaughton and Bertha McNaughton (the “McNaughtons”).
17. As a condition for obtaining a permit from the Indiana Department of Conservation[2] to construct a water channel or channels to “connect with, encroach upon, and cut into the shore line and bed of Clear Lake,” the McNaughtons dedicated “to the State of Indiana for the benefit of the public the right to use as long as it may exist” a water channel described as follows:
a channel 5-6 feet deep as measured below the average normal water level of said lake, 1037.38 feet sea level datum or 7.38 feet gage reading 50 ft. wide and 2,000 feet long both ends extending from said lake on grantors’ land described as follows (Legal description of lot or tract of land): The NW ¼ of the NW ¼ and SE ¼ of the NW ¼ and the NE ¼ of the NW ¼ of Sec. 19, T. 38 N., R. 15 E; also all of Lot 1 and all of Lot 2, both in Sec. 19, T. 38 N., R. 15 E. with the same rights of public use therein which the public enjoys in the use of said lake.
It is expressly agreed that nothing in this instrument shall prevent the grantors, their heirs, successors, or assigns from filling up said water channel or channels and restoring the shore line of the lake in which event all rights herein granted to the public shall terminate.”
The dedication was recorded with the Recorder of Steuben County on October 31, 1950. This channel is the “subject channel” and was constructed at about the time of the dedication.
18. Subsequent to construction, but before his purchase of the Johnston property, predecessors in title to Johnston filled a portion of the subject channel and a lesser portion of the main body of Clear Lake. The fill is depicted as a hatched area in a drawing for a survey by Ross K. Ruckel, Indiana Register Land Surveyor, dated September 5, 1997 (the “Ruckel Survey”):
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19. As used in the Lakes Preservation Act, “lake” means a reasonably permanent body of water that:
(1) existed on March 12, 1947;
(2) is substantially at rest in a depression in the surface of the earth that is naturally created;
(3) is of natural origin or part of a watercourse, including a watercourse that has been dammed; and
(4) covers an area of at least five (5) acres within the shoreline and water line, including bays and coves. IC 14-26-2-1.5.
20. Unless a person obtains a DNR permit, and conducts the activities according to the terms of the permit, a person must not place fill over, along, or lakeward of the shoreline or water line of a public freshwater lake. IC 14-26-2-23(a)(1)(B).
21. In determining the shoreline or water line, a manmade channel of a public freshwater lake is included if the channel:
“(A) existed on March 12, 1947;
(B) as a condition of a department license, was required to conform to IC 14-26-2-9 (or, before their repeals, to conform to IC 13-2-11-2 or IC 13-2-11.1-5); or
(C) was constructed without a department license required under IC 14-26-2 (or, before their repeals, under IC 13-2-11or IC 13-2-11.1).” 312 IAC 1-1-21(e)(2).
22. The shoreline or water line of a public freshwater lake is formed when the lake is at its established legal elevation. Bays, coves, and manmade channels included within the close of a public freshwater lake are part of the lake and subject to the Lakes Preservation Act. Sims, et al. v. Outlook Cove LLC, et al., 10 Caddnar 258, 265 (2006).
23. All the fill depicted in the Ruckel survey is within the shoreline or water line of Clear Lake and subject to permitting under the Lakes Preservation Act, regardless of whether the fill was in the subject channel or in the main body of Clear Lake.
24. A person who borders a public freshwater lake generally has riparian ownership. The rights associated with riparian ownership include: (1) the right of access to navigable water; (2) the right to build a pier to the line of navigability; (3) the right to accretions; and, (4) the right to reasonable use of the water for general purposes such as boating and domestic use. Parkison v. McCue, 813 N.E.2d 118, 128 (Ind. App. 2005).
25. The Lakes Preservation Act does not eliminate riparian rights. Zapffe v. Srbeny, 587 N.E.2d 177 (Ind. App. 1992) and Bath v. Courts, 459 N.E.2d 72 (Ind. App. 1984). “Riparian landowners...continue to possess their rights with respect to a public freshwater lake, but their rights are now statutory and must be balanced with the public’s rights.” Lake of the Woods v. Ralston, 748 N.E.2d 396 (Ind. App. 2001).
26. The State of Indiana is not the owner of public freshwater lakes, but rather the Lakes Preservation Act gives the State “the right only to regulate and control, and hold in trust ‘public freshwater lakes’ for the use of all citizens of Indiana.” Indiana Department of Natural Resources v. Lake George Cottagers Association, 889 N.E.2d 361, 364 (Ind. App. 2008). Emphasis omitted.
27. Johnston has riparian rights in Clear Lake based on his ownership of the Johnston property. As the agency charged with administering the Lakes Preservation Act, the DNR has the right to regulate and control, and to hold in trust, Clear Lake for the use of all citizens of Indiana.
28. A person who has a street platted, and causes the plat to be recorded and approved by a governmental entity, executes a dedication in which the governmental entity becomes the trustee for the public. Bass v. Salyer, 923 N.E.2d 961, 966 (Ind. App. 2010). Where there is a dedication to public use, the fee of the dedicated real estate remains in the dedicator. Clark v. City of Huntington, 128 N.E. 453, 74 Ind. App. 437 (Ind. App. 1920).
29. The Claimants cite Smith v. State, 29 N.E.2d 786 (Ind. 1940) as standing for the proposition the dedication described in Finding 17 transferred title to the State of Indiana. Their reliance is misplaced because the dedication in Smith was by common law, and the dedication here is by statute. More importantly, the governing statute did not place title to public freshwater lakes in the State of Indiana but rather made the DNR the trustee. The result would be incongruous if the Lakes Preservation Act authorized the DNR to act as trustee for the main body of a public freshwater lake but as the title holder for a manmade channel added to the lake. Nothing in the history of the Lakes Preservation Act supports this interpretation of legislative intent.
30. When the McNaughtons executed the dedication described in Finding 17, they did not relinquish their riparian ownership. They caused the dedicated waters of the subject channel to gain the same legal status as other adjoining waters of Clear Lake. The DNR became the trustee under the Lakes Preservation Act, and the McNaughtons had whatever riparian rights were associated with their ownership of adjoining land. Johnston is the successor in interest to the McNaughtons.
D. Placement of Fill
31. The Parties have not identified a Department of Conservation permit or a DNR permit for the fill referenced in Finding 18.
32. If a permit was required, the fill may have been placed unlawfully by predecessors in interest to Johnston.
33. Whether a permit was required may depend upon the proper construction of the dedication described in Finding 17. An instrument constituting a dedication should be construed as a whole and effect given to all language. If the instrument is ambiguous, the language is generally construed against the grantor and in favor of the grantee. 26 C.J.S. Dedications § 66 (2001).
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34. Assuming arguendo that the fill was placed unlawfully, the DNR could pursue an enforcement action. Enforcement actions and other sanctions are addressed in AOPA primarily at IC 4-21.5-3-6 and IC 4-21.5-3-8. Administrative enforcement actions that can be applied by the DNR to violations of the Lakes Preservation Act, and which are governed by AOPA, include IC 14-25.5-4 and IC 14-10-2-6. See IC 14-26-2-19 and 312 IAC 2-2-3.
35. But exempted from AOPA is a “decision to issue or not issue a complaint, summons, or similar accusation.” IC 4-21.5-2-5(8). A remedy is not provided to a person who is dissatisfied with an agency decision to pursue or not to pursue enforcement. The Indiana General Assembly “has excepted from administrative review an agency's exercise of prosecutorial discretion.” Ford & Guenther v. DNR in re Matthew, 10 Caddnar 21 (2005).
36. In the absence of a DNR enforcement action pertaining to the fill, and administrative review of the action by an affected person, the Commission lacks authority to consider the propriety of the fill.