Amberly Pointe Manufactured Home Cmty. v. Stucker Fork Conservancy Dist.

• Decision Date: 18 August 2022
• Docket Number: Court of Appeals Case No. 21A-EX-2805
• Citation: 195 N.E.3d 859
• Parties: AMBERLY POINTE MANUFACTURED HOME COMMUNITY, Appellant-Petitioner, v. STUCKER FORK CONSERVANCY DISTRICT, Appellee-Respondent
• Court: Indiana Appellate Court

195 N.E.3d 859

AMBERLY POINTE MANUFACTURED HOME COMMUNITY, Appellant-Petitioner,

v.STUCKER FORK CONSERVANCY DISTRICT, Appellee-Respondent

Court of Appeals Case No. 21A-EX-2805

Court of Appeals of Indiana.

FILED August 18, 2022

Attorneys for Appellant: Clifford R. Whitehead, L. Katherine Boren, Ziemer, Stayman, Weitzel & Shoulders, LLP, Evansville, Indiana

Attorneys for Appellee: J. Christopher Janak, Nikki Gray Shoultz, Bradley M. Dick, Bose McKinney & Evans LLP, Indianapolis, Indiana

Crone, Judge.

Case Summary

[1] Amberly Pointe Manufactured Home Community (Amberly Pointe) filed a complaint with the Indiana Utility Regulatory Commission (the Commission), seeking a determination of whether a bill payment rule enacted by the Stucker Fork Conservancy District (Stucker Fork) violates Indiana Code Section 8-1.5-3-8(l) and whether Stucker Fork's customer disconnect rules violate 170 Indiana Administrative Code (IAC) 6-1-16. The parties filed cross-motions for summary judgment. The Commission dismissed the cause for lack of subject matter jurisdiction, finding that Stucker Fork is not subject to either provision. Amberly Pointe now appeals, arguing that the Commission erred. We affirm.

Facts and Procedural History

[2] The relevant facts are undisputed. "Stucker Fork is a conservancy district that has elected to furnish water service to the public within its service territory under" Indiana Code Chapter 14-33-20. Appealed Order at 1. "Amberly Pointe is a manufactured home community that owns a number of residential properties located within Stucker Fork's water service territory." Id. at 2.

[3] In June 2006, the Commission issued an order approving a settlement agreement between Stucker Fork and the Indiana Office of Utility Consumer Counselor (the OUCC) "that provided for a new schedule of rates and charges regarding Stucker Fork's provision of water service." Id. The settlement agreement "also set forth Stucker Fork's agreement to revise its ‘existing bad-debt rules to comply with the current [Commission] standards.’ " Id. In a subsequent proceeding, "the OUCC asserted that Stucker Fork had not amended its bad debt rules as agreed to in the Settlement Agreement...." Id. In an October 2013 order, the Commission "noted that Stucker Fork [was] not required to comply with the Commission's regulations but required Stucker Fork to comply with the Settlement Agreement because it failed to offer any reason or explanation to justify why it should not do so." Id. "The Commission approved Stucker Fork's bad debt rules/policy on January 15, 2014." Id. "Stucker Fork's rules or policies governing the provision of water service to all properties within its service territory, including to businesses and rental properties, is that Stucker Fork will treat the property owner (not the tenant) as the customer." Id. "Consequently, if the water bill goes unpaid, Stucker Fork will hold the property owner responsible for bill payment." Id.

[4] In February 2021, Amberly Pointe filed an informal complaint with the Commission's consumer affairs division, and the complaint "was referred to the Commission for its consideration." Id. at 1. In an amended complaint, Amberly Pointe sought a determination as to whether Stucker Fork's bill payment rule violates Indiana Code Section 8-1.5-3-8(l) and whether its customer disconnect rules violate 170 IAC 6-1-16. Amberly Pointe and Stucker Fork filed cross-motions for summary judgment.¹ In November 2021, the Commission issued an order dismissing the cause for lack of subject matter jurisdiction, finding that neither Section 8-1.5-3-8(l) nor 170 IAC 6-1-16 applies to Stucker Fork. Amberly Pointe now appeals. Additional facts will be provided below.

Discussion and Decision

[5] Amberly Pointe argues that the Commission erred in dismissing this cause for lack of subject matter jurisdiction. The General Assembly created the Commission "primarily as a fact-finding body with the technical expertise to administer the regulatory scheme devised by the legislature." U.S. Steel Corp. v. N. Ind. Pub. Serv. Co. , 951 N.E.2d 542, 550 (Ind. Ct. App. 2011), trans. denied (2012). "The Commission can only exercise power conferred upon it by statute, and any doubts regarding the Commission's statutory authority must be resolved against the existence of such authority." Id. "[A]n administrative body generally possesses authority to determine initially whether a matter presented to it falls within the jurisdiction conveyed to that body." Guinn v. Light , 558 N.E.2d 821, 823 (Ind. 1990). "[A] party cannot confer jurisdiction upon an administrative agency by consent or agreement."

Howell v. Ind.-Am. Water Co. , 668 N.E.2d 1272, 1275 (Ind. Ct. App. 1996), trans. denied (1997). "Any act of an agency in excess of its power is ultra vires and void." Id. at 1276 (italics omitted). Summary judgment is a judgment on the merits, and it may not be rendered by an entity that lacks subject matter jurisdiction. Smith v. Gary Pub. Transp. Corp. , 893 N.E.2d 1137, 1140 (Ind. Ct. App. 2008), trans. denied (2009).

[6] "To the extent the issue turns on statutory construction, whether an agency possesses jurisdiction over a matter is a question of law for the courts." Walczak v. Labor Works-Ft. Wayne LLC , 983 N.E.2d 1146, 1152 (Ind. 2013) (quoting Ind. Dep't of Env't Mgmt. v. Twin Eagle LLC , 798 N.E.2d 839, 844 (Ind. 2003) ). That is, an issue of statutory construction dispositive on the question of an agency's jurisdiction "lies squarely within the judicial bailiwick." Id. at 1153. We review this issue de novo. U.S. Steel , 951 N.E.2d at 551.

Section 1 – Stucker Fork is not subject to Indiana Code Section 8-1.5-3-8(l).

[7] "A conservancy district is a special taxing district created for local public improvement." In re Petition for Establishment of Millpond Conservancy Dist. , 891 N.E.2d 54, 55 (Ind. Ct. App. 2008). A conservancy district may be established to provide "water supply, including treatment and distribution, for domestic, industrial, and public use." Ind. Code § 14-33-1-1(a). A conservancy district is governed by a board of directors, who are elected by the freeholders of the district. Ind. Code § 14-33-5-2.² Among other things, the board "[e]xercise[s] general supervision of and make[s] regulations for the administration of the affairs of the district[,]" "[s]upervise[s] the fiscal affairs and responsibilities of the district[,]" and has the capacity to sue and be sued. Ind. Code § 14-33-5-20(1), - (3), - (8).

[8] Indiana Code Section 14-33-20-5(b)(2) provides that a conservancy district "has the rights and powers granted by this article to the extent consistent with this chapter." Pursuant to Indiana Code Section 14-33-20-13(a), a conservancy district "shall furnish reasonably adequate services and facilities" for "reasonable and just" charges. "A reasonable and just charge for services is a charge that produces sufficient revenue to pay all the legal and other necessary expenses incident to the operation of the water facilities[.]" Id. A conservancy district's "rates may include a reasonable profit on the investment, so that the charges produce an income sufficient to maintain the water facilities in a sound physical and financial condition to provide adequate and efficient service." Ind. Code § 14-33-20-13(b). A conservancy district and its board "shall enforce the collection of the rates and charges" for water supply services and, "if necessary, may discontinue water service to a water user for the nonpayment of rates and charges." Ind. Code § 14-33-20-13(c).

[9] Indiana Code Section 14-33-20-14 provides that a conservancy district "shall file the initial schedule of rates and charges to patrons of the district with the [C]ommission" and that "[i]f changes in rates and charges are necessary, the district is subject to the jurisdiction of the [C]ommission in the same manner as provided by statute for the regulation of rates and charges of municipal water utilities." That "manner" is spelled out in Indiana Code Section 8-1.5-3-8, which governs rates and charges for municipal water utilities. See Ind. Code § 8-1.5-3-8(f) ("Rates and charges established under this section are subject to the approval of: (1) the municipal legislative body by ordinance; and (2) the [C]ommission, in accordance with the procedures set forth in IC 8-1-2. ") (emphasis added).

[10] Amberly Pointe argues that, by virtue of Section 14-33-20-14, Stucker Fork is also subject to subsection (l) of Section 8-1.5-3-8, which reads as follows:

With respect to property that is served by a municipally owned utility and that is occupied by someone other than the owner of the property, subsection (k)^[3] does not allow a municipal legislative body to impose a requirement that the owner of the property must:

(1) ensure the creditworthiness of the person occupying the property; or

(2) accept responsibility for charges incurred by the person occupying the property;

by cosigning an agreement or by any other method.

Amberly Pointe argues that Section 8-1.5-3-8(l) subjects Stucker Fork to the Commission's jurisdiction because the provision "regulates charges—namely, who may be charged for water service." Appellant's Br. at 18. But this argument ignores the inescapable fact that subsection (l) specifically applies only to municipal legislative bodies, and Stucker Fork is not a municipal legislative body.⁴ See Stucker Fork Conservancy Dist. v. Ind. Util. Regul. Comm'n , 600 N.E.2d 955, 958 (Ind. Ct. App. 1992) (noting that Indiana Code Chapters 8-1.5-1 through -3 "apply only to municipalities, except consolidated cities, that own or operate utilities" and that the legislature did not intend to classify conservancy districts as municipal utilities); Ind. Office of Util. Consumer Couns. v. Citizens Wastewater of Westfield, LLC , 177 N.E.3d 449, 457-58 (Ind. Ct. App. 2021) ("The goal of statutory construction is to determine, give effect to, and implement the legislature's intent. The...