[CITE: Shaul v. DNR and Bailey, 13 CADDNAR 24 (2012)]
[VOLUME 13, PAGE 24]
Cause: 11-173W
Caption: Shaul v. DNR and Bailey
Administrative Law Judge: Lucas
Attorneys: pro se (Shaul); Wyndham (DNR); Snyder (Baileys)
Date: March 21, 2012
FINAL ORDER
Melvin Shaul, Sr. and Phyllis Shaul have failed to meet the burden of proof, by a preponderance of the evidence, to set aside any of the three reasons identified by the Department of Natural Resources for denial of permit application PL-21,797. More particularly:
(1) Pursuant to IC 14-26-2, the Department of Natural Resources is charged with preserving and protecting the waters of Sechrist Lake for the use of Indiana’s citizens and holds the waters of the lake in trust for use by the public. Placement of a seawall and fill in a channel of Seachrist Lake, that is adjacent to lands owned by the Shauls and by James D. Bailey and Barbara Bailey, would inappropriately remove the channel from public use.
(2) The placement of a seawall and fill in the channel would inappropriately deny the public use of the lake and would constitute a violation of IC 14-26-2-5(e) which states “A person owning land bordering a public freshwater lake does not have the exclusive right to the use of the waters of the lake or any part of the lake.”
(3) A portion of the area to be filled is within the riparian area of the Baileys and not the Shauls. The Baileys have not consented to placement of the seawall or to the placement of fill in the channel. In the absence of permission by the Baileys, granting the subject permit would adversely affect the interests of an adjacent landowner having property rights abutting Sechrist Lake.
Denial by the Department of Natural Resources of the subject permit is in all aspects affirmed.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
A. Statement of Case and Jurisdiction
1. On October 6, 2011, Melvin Shaul, Sr. and Phyllis Shaul (the “Shauls”) filed correspondence with the Natural Resources Commission (the “Commission”) in which the Shauls 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.
2. The application for the subject permit was identified by the DNR’s Division of Water as PL-21,797. 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. By their agent, Troy Ousley Seawall Construction, Inc., the Shauls sought approval through the subject permit for the construction of a “new seawall along the frontage of the [Shauls] on Sechrist Lake to deter shoreline erosion. The wall [would be] composed of 4 inch to 12 inch diameter glacial stone and [would be] approximately 40 ft. long. Its lakeward face [would be] at the shoreline of the lake. This glacial stone seawall [would] be put in after the 60 foot dead-end channel is filled in and [would] cover the 40 foot frontage of the filled in channel.” Respondent’s Exhibit A, p. 57.
4. The DNR’s reasons for denial of the subject permit were as follows:
(1) [P]ursuant to IC 14-26-2, the [DNR] is responsible for regulating most construction activities within Indiana’s public freshwater lakes; as such, the [DNR] is charged with preserving and protecting the waters of the lakes for the use of Indiana’s citizens and holds the waters of the lakes in trust for use by the public; placement of fill in this area removes it from public use.
(2) [T]he placement of fill denies the public use of the lake and would constitute a violation of IC 14-26-2-5(e) which states “A person owning land bordering a public freshwater lake does not have the exclusive right to the use of the waters of the lake or any part of the lake.”
(3) [A] portion of the area to be filled does not belong to the [Shauls] and therefore the filling of this area would adversely affect the riparian interests of an adjacent landowner having property rights abutting the public freshwater lake.
Respondent’s Exhibit A, p. 12.
5. The Commission appointed Stephen Lucas administrative law judge to conduct a proceeding to consider the Shauls’ 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 October 17, 2011, the administrative law judge assigned Administrative Cause Number 11-173W to this proceeding and issued a “Notice of Prehearing Conference” with copies to the Shauls, the DNR, and other potentially affected persons.
8. On October 25, 2011, James D. Bailey and Barbara Bailey (the “Baileys”) by their attorney filed a “Motion to Intervene” in which they averred they were “owners of real estate commonly known as 48 EMS B60D Lane, Warsaw, Indiana, which property is immediately adjacent to a channel which is the subject of this appeal…. Baileys are the owners of a portion of the land under the channel which is the subject of this appeal and have objected to the filling of such channel [as sought by the subject permit]. The property and riparian interests of Baileys are directly affected by the outcome of this matter.”
[VOLUME 13, PAGE 25]
9. In the Shauls’ October 6, 2011 request for administrative review, they conceded a “small portion” of the channel was owned by the Baileys.
10. On October 25, 2011, the administrative law judge entered an “Order to Add as Parties James D. Bailey and Barbara Bailey” in which the Baileys were made Respondent Intervenors.
11. The Shauls, the DNR, and the Baileys are collectively the “parties” to this proceeding.
12. The Shauls’ lot and the channel are depicted in a survey performed by Walker & Associates (Kevin R. Michael, Registered Indiana Land Surveyor). The Baileys’ lot is southeast of and adjacent to the Shauls’ lot. The survey also depicts the channel. The survey drawing was provided to the DNR as part of the application for the subject permit and is as follows:
Respondent’s Exhibit A, p. 34.
13. A determination of whether the interests of the Shauls and the Baileys in the bed of the channel are those of fee owners or those of riparian owners is unnecessary to this proceeding. Although the respective interests of the Shauls and the Baileys are geographically distinct, they are legally equivalent. Both the Shauls and the Baileys have proprietary interests as depicted in the survey drawing described in Finding 12.
14. Sechrist Lake in Kosciusko County, Indiana is a “public freshwater lake” as defined by IC 14-26-2-3 and 312 IAC 11-2-17. Testimonies of the parties. See, also, “Listing of Public Freshwater Lakes”, Natural Resources Commission, Information Bulletin #61 (Second Amendment), 20110601-IR-312110313NRA (June 1, 2011), p. 3. Sechrist Lake is subject to regulation under the Lakes Preservation Act and 312 IAC 11.
15. At the request of the Shauls, the administrative law judge conducted a site view on December 6, 2011. The Shauls and the Baileys attended.
16. A hearing of the facts was commenced as scheduled and completed on January 11, 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
17. 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”.
18. 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).
19. 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.
20. “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).
21. The Shauls have the burden of proof to demonstrate, by a preponderance of the evidence, their entitlement to the subject permit.
C. Characterization of the Channel
22. The Shauls have contended consistently that the channel where they wish to exercise the subject permit is a “private” watercourse and separate from Sechrist Lake.
23. For most purposes, and as applicable to this proceeding, the Commission’s jurisdiction is limited to along and within the “shoreline or water line” of a public freshwater lake. The “shoreline or water line” is defined, for purposes of the Lakes Preservation Act, at IC 14-26-2-4 to mean:
[VOLUME 13, PAGE 26]
24. The Shauls offered no evidence at hearing as to whether the water level for Sechrist Lake has been legally established.[1] While they testified the level of the lake fluctuates considerably, and this testimony is seemingly undisputed by the parties, they also offered no evidence as to the average lake level.
25. Melvin Shaul, Sr. testified the channel received surface runoff from nearby properties. This testimony is unremarkable and unproductive to determining the relationship of the channel to Sechrist Lake. A reasonable expectation, and probably a truism, is that the shoreline of Sechrist Lake and any channel attached to Sechrist Lake would receive surface runoff.
26. Melvin Shaul also testified to the existence of a developing sandbar near the mouth of the channel on Sechrist Lake. Although a sandbar might ultimately separate a channel from the main body of a lake, the presence of a sandbar when a lake is below its legal or normal level is not legally significant. Shaul offered no correlation to a lake level when he observed a sandbar. No reasonable basis was afforded to evaluate the impediment imposed by a sandbar even at low water.
27. The most persuasive evidence concerning the current relationship of the channel to the main body of Sechrist Lake was provided by Heather Lyn Schuler, a geologist who is employed by the DNR’s Division of Water and who assisted with evaluation of the subject permit. She conducted a site inspection on June 23, 2011. Schuler testified the shoreline of the channel appeared to be part of the shoreline of the lake and included waters from the lake. She observed no barrier between the waters of Sechrist Lake and the waters of the channel. Schuler testified the channel was generally one-to-one-and-a-half feet deep. “It appeared to be water was all the way to the very end of the channel.” She testified to observing “a significant amount of lily pads” within the channel and that she believed a person could canoe into the channel. On cross-examination by the Shauls, Schuler testified the lake level “looked to be normal” at the time of her site inspection.
28. Both James D. Bailey and Schuler testified the channel was not separated from Sechrist Lake by a sandbar. Aerial photographs in the DNR’s file for the subject permit do not support a finding the channel is separated from the main body of Sechrist Lake by a sandbar. See particularly area within purple parallelogram, near the center of Respondent’s Exhibit A, p. 21, as follows:
29. The channel between the Shauls and the Baileys property appears to be manmade and is similar to other channels in the same vicinity of Sechrist Lake. The evidence does not reveal exactly when the channel was constructed, but Melvin Shaul testified to a belief construction took place in the late 1940s.
30. Today’s Lakes Preservation Act originated with 1947 legislation that was approved on March 13, 1947. Acts 1947, c. 181; and, Acts 1947, c. 301.
31. After March 13, 1947, a person seeking to construct a channel to Sechrist Lake was subject to the regulatory requirements of this legislation. The channel was constructed at about the time of the 1947 legislation and might have required a permit. The evidence is that no permit was sought and none was granted by the DNR. A determination of the exact timing of construction is unnecessary to this proceeding. The channel has a considerable history, and the Shauls knew of the channel when they purchased their lot.
32. The shoreline of a public freshwater lake is “any point in which the lake’s water creates a mark on the land.” The Lakes Preservation Act governs construction along an island, to change an island to a peninsula, and within the shoreline whether or not a person performing construction seeks a permit from the DNR. Bowyer v. Department of Natural Resources, 944 N.E.2d 972, 989 (Ind. App. 2011).
33. To similar effect, the Commission determined a cove connected to a public freshwater lake was part of the public freshwater lake where the shoreline formed an uninterrupted close that included both the main body of the lake and the cove. Sims, et al. v. Outlook Cove LLC, et al., 10 Caddnar 258, 266 (2006), affirmed on judicial review by LaPorte Superior Court 4, 46D04-0608-MI-253 (2007).
34. In addition, James D. Bailey testified fish came into the channel from Seachrist Lake and spawned. Historically, he fished both on his side of the channel and on the side of the channel now owned by the Shauls. Boats could easily be put in and taken out of the channel when he purchased his lot in 1989. A pier was located in the channel and mounted on the top of a concrete seawall by the predecessors-in-title to the Shauls. Tenants to the Shauls’ predecessors moored a fishing boat to the pier and navigated from there to the main body of Seachrist Lake. He testified that from 1989 until about 2000 persons would troll around the lake, come into the channel, and back out. Bailey’s testimony as summarized in this Finding is not refuted and is convincing.
35. On a private lake, “each owner has the right to the free and unmolested use and control of his portion of the lake bed and water thereon for boating and fishing.” Carnahan at 441 quoting Sanders v. De Rose, 207 Ind. 90, 95, 191 N.E. 331, 333 (1934).
If different persons own separate parcels in a private lake, competing lakebed owners may exclude other lakebed owners from their respective parcels. Carnahan at 441 citing Trowbridge v. Torabi, 698 N.E.2d 622, 627 (Ind. App. 1998).
36. If the channel were a private watercourse, separate and distinct from Sechrist Lake, the use by riparian owners would be restricted to their respective private parcels of water-covered land. Historic usage of the channel is entirely inconsistent with the lawful usage of a private watercourse. Historic usage of the channel is consistent with its status as a public watercourse and as part of Sechrist Lake.
37. The Shauls’ contention that the channel is a private watercourse is not supported by the evidence or by the law. The channel is a public watercourse and is part of Sechrist Lake, a public freshwater lake.
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D. Protection of the Public Trust
38. As stated in Finding 4, the DNR identifies three reasons for its denial of the subject permit. The first reason is as follows:
[P]ursuant to IC 14-26-2, the [DNR] is responsible for regulating most construction activities within Indiana’s public freshwater lakes; as such, the [DNR] is charged with preserving and protecting the waters of the lakes for the use of Indiana’s citizens and holds the waters of the lakes in trust for use by the public; placement of fill in this area removes it from public use.
39. DNR administers the Lakes Preservation Act. IC 14-26-2-5(d) provides that the state:
(1) has
full power and control of all of the public freshwater lakes in Indiana…; and
(2) holds and controls all public freshwater lakes in trust for the use of all
of the citizens of Indiana for recreational purposes.
If the DNR granted the subject permit, and the Shauls filled in the channel and placed a seawall at its entrance to Seachrist Lake, the public trust would be terminated. Indiana citizens would be denied any use of the channel for recreational purposes.
40. During oral argument, the Shauls urged the channel is an unhealthy “cesspool”.[2] A degree of hyperbole is probably expected in oral argument, but the record is devoid of evidence to support a finding the channel is a less healthy place than any other channel or cove of Sechrist Lake. The Shauls also urged the channel could pose a safety hazard to children or pets. Inherent to any watercourse is the potential for danger to humans and domesticated animals. In enacting the Lakes Preservation Act, the Indiana General Assembly was no doubt aware of the potential, and it determined the preservation of public freshwater lakes was worthy of some risk. Neither argument by the Shauls provides a convincing basis for overriding the purposes of IC 14-26-2-5(d).
41. The Shauls have failed to meet their burden of proving the DNR erred in denying the application for the subject permit for the reason set forth in Finding 38.
E. Conversion of the Public Channel to Private Use
42. The second reason stated by the DNR for denial of the subject permit is as follows:
[T]he placement of fill denies the public use of the lake and would constitute a violation of IC 14-26-2-5(e) which states “A person owning land bordering a public freshwater lake does not have the exclusive right to the use of the waters of the lake or any part of the lake.”
43. If the DNR granted the subject permit, and the Shauls filled in the channel and placed a seawall at its entrance to Seachrist Lake, they would convert public waters of Sechrist Lake into their own private land.
44. IC 14-26-2-5(e) is not a repudiation of the property rights of riparian owners. 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). The Lakes Preservation Act is “[p]ublic trust legislation” intended to recognize “the public’s right to preserve the natural scenic beauty of our lakes and to recreational values upon the lakes.” Also, “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).
45. Upon proper facts, a portion of a public freshwater lake might be filled to balance properly public rights with private riparian rights. The Shauls have not demonstrated facts that would support filling the channel to balance their riparian rights with rights of the public. They have not met their burden of proving the DNR erred in denying the application for the subject permit for the reason stated in Finding 42.
F. Nonconsensual Impacts to the Riparian Interests of an Adjacent Landowner
46. The third reason stated by the DNR for denial of the subject permit is as follows:
[A] portion of the area to be filled does not belong to the [Shauls] and therefore the filling of this area would adversely affect the riparian interests of an adjacent landowner having property rights abutting the public freshwater lake.
47. In her testimony, Phyllis Shaul equivocated concerning the accuracy of the survey drawing contained in Finding 12 with respect to proprietary rights of the Baileys. The Shauls offered no evidence to support a result that differs from the survey, however, and not a scintilla of evidence to refute the Bailey’s ownership of riparian rights for a portion of the channel.
48. Melvin Shaul testified to discussions with James Bailey by which the Shauls sought to achieve an agreement with the Baileys to fill the channel and to place a seawall at the mouth of the channel on Seachrist Lake. Testimony of the Shauls and James Bailey concerning these discussions differ somewhat, but there is no basis on which the Commission could reasonably find that the Baileys previously agreed or now agree to the terms of the subject permit.
49. The length of riparian shoreline of the Baileys would be reduced by roughly 60 feet if the channel is filled and the seawall placed. The riparian interests of the Baileys would be significantly modified if the subject permit is granted and the Shauls exercise its authority. In the absence of consent, reduction of the Baileys’ riparian shoreline adversely affects the Baileys’ riparian interests.
50. In determining the merits of the application for the subject permit, the DNR is obliged to consider factors that include the interests of a landowner having property rights abutting a public freshwater lake or rights to access a public freshwater lake. IC 14-26-2-23(c) and 312 IAC 11-1-2.
51. The Shauls have demonstrated no facts that would support reducing the Baileys’ riparian shoreline, by approximately 60 feet, in the absence of the Baileys’ consent. They have not met their burden of proving the DNR erred in denying the application for the subject permit for the reason stated in Finding 46.