CADDNAR

[CITE: Manapogo Park v. DNR, 5 CADDNAR 115 (1990)]

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Cause #:89-171W
Caption: Manapogo Park, Inc. v. DNR
Administrative Law Judge: Teeguarden
Attorneys: James; McCoy, DAG
Date: October 29, 1990

ORDER

[DECISION WAS AFFIRMED BY THE STEUBEN CIRCUIT COURT IN CAUSE NUMBER 76C01-9 011-CP-507 ON DECEMBER 30, 1991. STEUBEN CIRCUIT COURT ORDER FOLLOWS ADMINISTRATIVE DECISION.]

Public Freshwater Lake Construction Permit application number PL-13,120 for the construction of 122 permanent piers on Lake Pleasant, Steuben County, is hereby denied, and the Claimants are ORDERED to remove all pilings already in place.

FINDINGS OF FACT

1. On August 18, 1989, Manapogo Park, Inc., ("Manapogo"), by counsel, filed a request for administrative review.

2. Said request dealt with a decision by the Natural Resources Commission ("NRC") delegates Joe Siener and John Simpson to follow the recommendation of the Advisory Council on Water and Mineral Resources ("Council") on July 20, 1989, to deny Manapogo's permit application to construct a boat docking facility along the shore of Lake Pleasant. The application was number PL 13, 120.

3. The Department of Natural Resources ("Department") is an agency as defined in IC 4-21.5-1-3. The NRC is the ultimate authority for the Department with respect to this proceeding.

4. IC 4-21.5 and IC 13-2 apply to this proceeding.

5. The subject matter of the permit in question deals with the construction of 122 permanent boat slips along the shore of Lake Pleasant in Steuben County. Lake Pleasant is a public freshwater lake within the meaning of IC 13-2-11.1.

6. Manapogo is a privately owned campground, primarily catering to mobile homes and campers along a portion of the shore of Lake Pleasant consisting of approximately 40 acres. There are a total of 300 sites and 80% of the sites are leased by the season or year.

7. Manapogo includes a small general store, a boat ramp accessible to the public upon payment of a fee, and a gas station for boats.

8. Manapogo has a beach area and had some temporary docks which were in a state of disrepair. The park has its own well and sewer system. In short, the area is a highly developed privately-owned vacation and tourist area.

9. In 1988, an administrative law judge found in Dafforn v. DNR, 3 CADDNAR 101 (1988) that this lake area receives much human use and is not a pristine area.

10. The evidence produced in this case confirms that finding.

11. At one time in the recent past, the shore area contained 105 temporary wooden boat slips which this permit application would replace by 122 permanent wooden piers and slips.

12. The permit application provides for 4 foot wide main piers and 2.5 foot wide finger piers.

13. The current plan calls for the project to include several slips designed for the handicapped.

14. The plans for the proposed project indicate that the piers would be located in a 200' x 200' channel which was dredged without a permit by the previous owners and the resulting channel was dedicated to the state and made part of the lake in 1980.

15. The plans also indicate that approximately 200 feet of shoreline extending into the main body of the lake would be used to construct permanent wooden pontoon boat piers and slips.

16. The area to the west of the proposed project is owned by Manapogo; and the area immediately east of the proposed project is a wetland area.

17. The slips and piers maintained by Manapogo are generally used only by the park residents as indicated by the fact that in 1989, 93 residents reserved space for the available 105 temporary piers.

18. In the late fall of 1988, the temporary docks that were in place were deemed generally unfit by the Manapogo management and Manapogo apparently discussed replacement of the piers with a representative of the Department.

19. Manapogo began replacing the temporary piers with permanent timber piles 8 inches wide and 16 feet deep driven into the lake bed before requesting a permit from the Department to do so.

20. After receiving

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complaints, the Department investigated and correctly determined the project to involve the construction of permanent piers.

21. The Department does not require permits for temporary piers that meet certain requirements.

22. The Department does require a permit for any permanent pier on the shore of a public freshwater lake.

23. Whether or not a pier is permanent depends on whether or not it can be removed by ordinary hand tools.

24. Manapogo contends, in part, that it was given permission by a representative of the Department to begin construction and not advised of the need for a permit, and thus the Department is estopped from requiring a permit. The Department contends that no representative from the Department gave Manapogo permission to construct permanent piers without first obtaining a permit.

25. Estoppel as a result of actions of government agents can be a valid defense.

26. This is not one of those cases.

27. If the matter in question involves the use of discretion, statements by employees of the Department can be used to avoid an adverse agency decision.

28. As pointed out in the Department's Brief, matters involving ministerial functions are not subject to the defense of estoppel. Middletown Motors, Inc. v. Ind. Dept. of Revenue (1978), 380 N.E.2d 79.

29. IC 13-2-11.1-3 requires a permit since it affects the natural shoreline. This requirement cannot be waived under any circumstances.

30. Manapogo submitted a permit application and supporting documentation upon request by the Department. Upon receipt, the Division of Water (DOW) forwarded copies to other Department divisions for comments.

31. The other divisions had no objection to the project.

32. The DOW recommended to the Council that the permit be denied on the basis that the proposed project is contrary to the NRC's opposition to the placement of permanent structures in a public freshwater lake.

33. Both the Council and the NRC delegates adopted this recommendation and the permit was denied.

34. Notice of the denial was mailed August 3, 1989, and specifically stated that the reason for denial was the fact that the proposed project is contrary to the NRC's opposition to the placement of permanent structures in a public freshwater lake.

35. IC 13-2-11.1-5 provides that the Department has the discretion to decide whether to issue a permit to alter the shoreline or bed of a public freshwater lake after investigating the merits of the written application.

36. At the time of the hearing on this matter, there were no public freshwater lake rules in 310 IAC.

37. There were, however, proposed rules which had been preliminary adopted by the NRC and which have currently been finally adopted.

38. 310 IAC 6-2-17 states that a permanent structure on the shoreline or bed of a public freshwater lake requires a permit.

39. Manapogo contends that the denial of a permit on the basis of what appears to be a policy against permanent construction projects is unreasonable and unenforceable.

40. The wording of IC 13-2-11.1-5 leads to the conclusion that the legislature did not intend to ban all permanent construction in public freshwater lakes.

41. The wording of the new rule 310 IAC 6-2-17, while not having the force of law at the time of hearing, clearly leads to the conclusion that the NRC does not intend to enact a rule banning all permanent construction.

42. Indeed, evidence was presented that in the past the Department has granted permits for the installation of permanent structures in public freshwater lakes.

43. The Department has allowed permanent piers under only three circumstances:

(a) where the permanent pier was in existence prior to the lake law (enacted in 1947);

(b) where the permittee is a public entity and the resulting pier will be open to the general public without a fee or where the permittee has agreed to transfer the property to a public entity so that the pier will be open to the general public; or

44. In the absence of any enacted rules to clarify matters, the standard which must be applied is whether the agency action is "reasonable or rational under the circumstances."

45. The Department has a statutory duty under IC 13-2-11.1-1,2 to preserve and protect all the public freshwater lakes of Indiana in their present state without manmade additions or alterations.

46. However, the Department also holds the waters of such lakes in trust for the use of all the State's citizens for recreational use as provided in IC 13-2-11.1-2(b).

47. The lake preservation law (IC 13-2-11.1 et seq.) also provides that no riparian owner on a public freshwater lake has the exclusive right to the use of any such lake or any part thereof. IC 13-2-11.1-2(c).

48. Appellate court decisions construing lake

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rights are few in number. The leading case is Bath v. Courts (1984), Ind.App., 459 N.E.2d 72. This case involved a dispute between adjacent riparian owners. One owner had built a single pier off his property which angled over and crossed the extended boundaries of the adjacent property owner. The Court of Appeals required the removal of the angled pier. The Court held that both riparian owners had a right to build and maintain a pier as part of their use and enjoyment of the property; however the pier rights of other riparian owners and the public have weight equal to the right of the riparian owner building the pier.

49. The Court in Bath v. Courts, supra, did not address the issue of temporary vs. permanent piers and, therefore, offers no guidance on this issue.

50. In DeMayo v. State ex rel. Dept. of Nat. Res. (1979), Ind.App., 394 N.E.2d 258, 261, the Court in discussing a patio-seawall which extended out into the lake five feet and which had been constructed by the DeMayos without a valid permit, said, "The Department of Natural Resources was concerned about the DeMayo structure because it was the first permanent obstruction into the lake and it diminished the area of the lake accessible to the public. The Court then ordered the DeMayos to remove the five feet of the obstruction which extended into the lake.

51. The location of the proposed project is in part of Pleasant Lake which is a public freshwater lake.

52. The proposed project would consist of 122 piers and pontoon slips placed permanently in a public freshwater lake while in Bath v. Courts, supra, the case dealt with a single pier.

53. The proposed project would permanently diminish the area of the lake accessible to the public constituting an exclusive use of a part of the lake by a riparian owner for profit.

54. Under Bath v. Courts, supra, this would interfere with the rightful use and enjoyment of the lake by the public, for which the waters are held in trust by the Department.

55. The Department has interpreted its conflicting statutory duty to preserve the public freshwater lakes in their natural state and to promote the recreational use of the lake by the public to allow piers of a temporary nature while allowing permanent piers only under limited circumstances.

56. Those circumstances where permanent structures are permitted include a grandfather clause, where the permanent structure will be built for and owned by or dedicated to the general public, or where the project is decidedly small-scale.

57. Permitting permanent structures under the above circumstances does not violate the Department's statutory duties in regard to public freshwater lakes.

58. The proposed project in this case cannot be grandfathered in. The structure is not going to be owned by or dedicated to the general public, but is to be built for private profit; and the project is not small-scale because it involves over 120 permanent piers.

59. The agency action in denying Manapogo's permit application was rational and reasonable under the circumstances.

_____________________________________________________________________

[NOTE: Caddnar citation does not apply to the Steuben Circuit Court entry.]

STEUBEN CIRCUIT COURT

FINDINGS

1. This cause was filed by Manapogo Park seeking judicial review of the Natural Resources Commission's decision, pursuant to IC 4-21.5 and IC 13-2, to deny Manapogo's application for a permit, number PL 13,120, to construct a boat docking facility along the shore of Lake Pleasant.

2. The Indiana Department of Natural Resources ("IDNR") is an agency of the State of Indiana and the Natural Resources Commission ("NRC") is the ultimate authority for the determination of the administrative action reviewed herein.

3. The NRC's order was entered after a full administrative adjudication of Manapogo's appeal of the denial of Manapogo's permit application.

4. The IDNR has full power over, and control of, all public freshwater lakes in the State of Indiana. IC 13-2-11.1-2.

5. The IDNR's mechanism for administering said authority is provided by IC 13-2-11.1-5, which requires that one must apply in writing for, and secure, a written permit before changing the area, depth or scenic beauty of a public freshwater lake.

6. Lake Pleasant is a public freshwater lake within the meaning of IC 13-2-11.1.

7. In the late 1970's Manapogo Park began dredging and reinforcement of a channel where certain of the proposed boat slips are located. That construction began before any permit was issued, and that unauthorized construction gave rise to an administrative action between Manapogo and IDNR. As part of the settlement of that cause, Manapogo executed a written Dedication of the channel, recorded at Record No. 38, Page 128, on June 23, 1989. The channel has always constituted part of the public freshwater lake and Manapogo Park has contractually acknowledged that fact.

8. Manapogo Park is a privately-owned campground, primarily catering to mobile homes and campers along a portion of the shore of Lake Pleasant consisting of approximately 40 acres. There are a total of 300 sites and 80% of the sites are leased by the season or year. Manapogo Park includes a small general store, a boat ramp accessible to the public upon payment of a fee, and a gas station for boats. It has a beach area and had some temporary docks which were in a state of disrepair. The park has its own well and sewer system. It is a privately-owned vacation and tourist area.

9. At one time in the recent past, the shore area within Manapogo Park contained 105 temporary wooden boat slips. The permit application which is the subject of this case seeks to replace the temporary wooden boat slips with 122 wooden piers and slips.

10. The permit application provides for 4 foot wide main piers with 2.5 foot wide finger piers. The current plan calls for the current project to include several slips designed for the handicapped. The plans for the proposed project indicate that the piers would be located in the channel which was described in paragraph 7 above. The plans also indicate that approximately 200 feet of shore line extending into the main body of Lake Pleasant would be used to construct wooden pontoon boat piers and slips.

11. The plans call for the piers to consist of utility poles which are permanently installed into the lake bed using a heavy pile-driving machine. The piers would remain installed in the lake bed for the foreseeable future and would not be removed and then reinstalled with the changing of the seasons.

12. The proposed boat slips would be maintained by Manapogo Park and would be generally used only by park residents although they would be available to the public for lease by payment of a fee.

13. Evidence was introduced by both parties regarding a conversation between the park manager and an IDNR lake inspector regarding whether any further permits would be required for construction in the channel. Both men testified at the hearing and the evidence was clear that the IDNR lake inspector did not know that Manapogo proposed to construct 122 permanent boat slips at the time of the conversation. The record shows that Manapogo did not manifest its intention to install permanent boat slips before proceeding with construction.

14. Manapogo subsequently, without a permit, constructed sixty-six boat slips in the dedicated channel and the main body of the lake. It thereafter filed an after-the-fact permit application for the sixty-six boat slips already completed, and for a further fifty-two similar boat slips.

15. The permit application was denied. Notice of the denial was mailed August 3, 1989 and specifically stated that the reason for denial was the fact that the proposed project is contrary to the Natural Resources Commission's opposition to the placement of any permanent structures in a public freshwater lake.

16. Evidence was presented that in the past the Department of Natural Resources has granted permits for the installation of permanent structures in public freshwater lakes. The Department has allowed permanent piers only under 3 circumstances:

a. Where the permanent pier was in existence prior to the lake law (enacted in 1947);
b. Where the permitee is a public entity and the resulting pier will be open to the general public without a fee; or where the permitee has agreed to transfer the property to a public entity so that the pier will be open to the general public; or
c. Where the proposed project is extremely small scale (e.g. two pilings allowed to be driven).

17. In its decision the Natural Resources Commission concluded that the proposed project by Manapogo Park would permanently diminish the area of Lake Pleasant accessible to the public and would, therefore, constitute an exclusive use of a part of the lake by a riparian owner for profit, contrary to IC 13-2-11.1-2(c).

18. The Natural Resources Commission also concluded that the proposed project would interfere with the rightful use and enjoyment of the lake by the public for which the waters are held in trust by the Department of Natural Resources contrary to IC 13-2-11.1-2(a)(b).

CONCLUSIONS OF LAW:

1. IC 13-2-11.1-2 provides that:

(a) The natural resources and the natural scenic beauty of Indiana are a public right, and the public of Indiana has a vested right in the preservation, protection, and enjoyment of all the public freshwater lakes of Indiana in their present state, and the use of such waters for recreational purposes.
(b) The state has full power and control of all of the public freshwater lakes in Indiana both meandered and unmeandered; it holds and controls all of such lakes in trust for the use of all of its citizens for recreational purposes.
(c) No person owning lands bordering a public freshwater lake has the exclusive right to the use of waters of any such lake or any part thereof.

2. The public rights provided in IC 13-2-11.1-2 are administered by IDNR pursuant to the permit system provided by IC 13-2-11.1-5, as follows: Upon application by the owner of land abutting a public freshwater lake, the department may issue a permit to change the shoreline or alter the bed of a public freshwater lake after investigating the merits of a written application; however, as a condition precedent to granting such a permit, the applicant must, in writing acknowledge that all additional water area so created is a part of the lake and dedicate it to the general public use. The application must be accompanied by a nonrefundable fee of twenty-five dollars ($25.00).

3. "Generally, administrative decisions must be based upon ascertainable standards .... This ensures that agency action will be orderly and consistent. The standards should be stated with sufficient precision as to provide those having contact with the agency fair warning of the criteria by which their petitions will be adjudged. Where standards are stated with sufficient precision in the statute itself, it is not necessary for the administrative agency to provide additional clarification." Mugg v. Staton (1983), Ind.App., 454 N.E.2d 867.

4. So long as a standard is provided, an agency may properly determine the existence of facts and determine what is or is not reasonable under those facts. Bd. of Com. of Allen County v. Jones (1983), Ind.App., 457 N.E.2d 580.

5. The Indiana Natural Resources Commission did not base its decision to deny the permit application of Manapogo Park on an unpublished, unpromulgated policy or rule, even if such an unpublished, unpromulgated policy or rule existed.

6. The decision of the Indiana Natural Resources Commission was based upon and is well supported by evidence in the record that Manapogo Park sought to change the shoreline and alter the bed of a public freshwater lake by the construction of 122 permanently installed boat slips and that the installation of such boat slips would interfere with the vested right of Indiana citizens to the enjoyment and use of the waters of the public freshwater lake and that such boat slips would usurp for Manapogo Park, Inc., a private entity, the exclusive right to the use of the waters of the public freshwater lake lying underneath and around the boat slips.

7. In the context of the permit application in this case, the standards set forth in IC 13-2-11.1-2 and IC 13-2-11.1-5 are clear and sufficiently precise to give fair warning to the applicant as to what the agency will consider in making its decision upon the application.

8. IC 13-2-11.1-2(c) is a statute generally prohibiting certain acts, not one which generally authorizes certain acts. The burden of proof in the consideration of the permit application and in this cause of action is upon the applicant. There is no evidence in the record supporting the proposition that the proposed project would not amount to the exclusive use of the waters of Lake Pleasant for the sole benefit of Manapogo Park, Inc., a private entity.

9. If the permit application had been granted and the proposed project approved, the decision of the administrative agency would have been arbitrary, capricious, and an abuse of discretion and not in accordance with law; it would have been a violation of the public trust granted by IC 13-2-11.12; and it would have been unsupported by substantial evidence. Such a decision should be reversed by the Court if based upon the facts as determined in this cause.

10. The Indiana Department of Natural Public Resources cannot be estopped from denying a permit which it may not otherwise lawfully grant.

11. Equitable estoppel against the state in this cause would be contrary to the public interest and would require an act contrary to law.

12. The Indiana Department of Natural Resources cannot be estopped from enforcing the law to protect the public's right to the use of a public freshwater lake.

13. It is appropriate for a Court to order that existing, unpermitted structures within a public freshwater lake be removed. As the Indiana Department of Natural Resources appropriately applied the clear statutory standard in denying Manapogo's application for the permanent piers, the existing, unpermitted piers should be removed.

14. The law is with Respondent and against the Petitioner on both the Petition and the Counterclaim.

JUDGMENT

1. The Natural Resources Commission's order of October 29, 1990 is upheld and permit application number PL 13,120 is denied.

2. Manapogo Park, Inc. is hereby ordered to remove the existing permanent piers before June 1, 1992.