Bellwether Props., LLC v. Duke Energy Ind., Inc.

• Citation: 87 N.E.3d 462
• Decision Date: 20 December 2017
• Docket Number: No. 53S04–1703–CT–121,53S04–1703–CT–121
• Parties: BELLWETHER PROPERTIES, LLC, Appellant (Plaintiff), v. DUKE ENERGY INDIANA, INC., Appellee (Defendant).
• Court: Indiana Supreme Court

87 N.E.3d 462

BELLWETHER PROPERTIES, LLC, Appellant (Plaintiff),

v.DUKE ENERGY INDIANA, INC., Appellee (Defendant).

No. 53S04–1703–CT–121

Supreme Court of Indiana.

FILED December 20, 2017

Attorneys for Appellant : William N. Riley, Joseph N. Williams, James A. Piatt, Anne Medlin Lowe, Riley Williams & Piatt, LLC, Indianapolis, IN, Lonnie D. Johnson, Pamela J. Hensler, Michael J. Potraffke, Clendening Johnson & Bohrer, P.C., Bloomington, IN

Attorneys for Appellee : Thomas L. Davis, Darren A. Craig, Maggie L. Smith, Frost Brown Todd LLC, Indianapolis, IN, Steven J. Moss, Duke Energy Business Services, LLC, Plainfield, IN

On Petition to Transfer from the Indiana Court of Appeals, No. 53A04–1511–CT–1880

Slaughter, Justice.

Dismissal under Trial Rule 12(B)(6) is rarely appropriate when the asserted ground for dismissal is an affirmative defense. To withstand a 12(B)(6) dismissal, the complaint need only allege such facts that, if proved, would entitle the plaintiff to obtain relief from the defendant. A complaint that survives that limited scrutiny states a claim for relief, even if there may lurk on the horizon an unassailable defense. Only where a plaintiff has pleaded itself out of court by alleging, and thus admitting, the essential elements of a defense does its complaint fail to state a claim on which relief can be granted. Here, the trial court found the statute of limitations had expired and dismissed the plaintiff's complaint with prejudice under Rule 12(B)(6). We hold the dismissal was premature because the face of the complaint did not establish that the asserted claim was time-barred. We thus reverse and remand.

Factual and Procedural History

Plaintiff, Bellwether Properties, LLC, owns real property in Bloomington, Indiana. In 1957, the property's prior owner granted a utility easement—an "Electric Pole Line Easement"—to the predecessor in interest of Defendant, Duke Energy Indiana, Inc. The easement, which is perpetual and runs with the land, granted the utility the right to build, remove, and maintain electrical lines, including necessary poles and wires, for transmitting electricity over a ten-foot-wide strip of the property. Thus, the easement's burden on the property was no more than ten feet in width.

In 2002, the Indiana Utility Regulatory Commission adopted the 2002 edition of the National Electrical Safety Code. 26 Ind. Reg. 328–29 (November 1, 2002) (codified at 170 Ind. Admin. Code 4–1–26(b) (2004) ). The Safety Code is published by the Institute of Electrical and Electronic Engineers, Inc., a private professional association. The Code establishes standards for safeguarding persons from hazards arising from "the installation, operation, or maintenance of overhead supply and communication lines." National Electric Safety Code, IEEE, 2002 at 59. The Commission did not reproduce the Safety Code's text within an administrative rule, but merely incorporated the Code by reference and advised that copies could be obtained from the Institute in New Jersey and the Commission in Indianapolis. 170 I.A.C. 4–1–26(b).

Of relevance here, the 2002 Safety Code establishes how close structures on the land can be to a utility's overhead lines. These minimum "strike" or lateral clearances vary with the types of lines and the amount of electrical current they carry. National Electric Safety Code, at 101–03. Table 234–1 of the Code provides that "Insulated communication conductors and cables; messengers; surge-protection wires; grounded guys; ungrounded guys exposed to 0 to 300 V; neutral conductors meeting Rule 230E1; and supply cables meeting Rule 230C1" require 1.40 meters of horizontal clearance to walls, projections, and guarded windows. Id. And "[o]pen supply conductors, over 750 V to 22 kV" require 2.30 meters of horizontal clearance. Id.

In 2015, Bellwether brought an inverse-condemnation action alleging that Duke Energy's maintenance of its electrical line on Bellwether's property, in accordance with the Safety Code, imposes a 23–foot-wide easement—thirteen feet more than the easement permits. According to Bellwether, this additional burden effected a taking of its property for a public use requiring the payment of just compensation. Duke Energy responded by filing a motion to dismiss under Rule 12(B)(6), arguing that Bellwether's claim was time-barred under the applicable six-year statute of limitations. The trial court agreed and granted Duke's motion, concluding that Bellwether's claim was untimely because more than six years had passed since adoption of the Safety Code in 2002.

A divided Court of Appeals reversed. It held that Indiana's discovery rule tolled the running of the statute of limitations because "the circumstances here are too attenuated to conclude that the taking was ascertainable by Bellwether". Bellwether Properties, LLC v. Duke Energy Indiana, Inc., 59 N.E.3d 1037, 1046 (Ind. Ct. App. 2016) (footnote omitted). The dissent relied on our opinion in Tiplick v. State, 43 N.E.3d 1259 (Ind. 2015), in concluding that Bellwether "must be charged with knowledge" of the taking and that the trial court was correct to dismiss its complaint as untimely. 59 N.E.3d at 1051 (May, J., dissenting). Duke Energy then sought transfer, which we granted, thereby vacating the Court of Appeals' opinion. Like the Court of Appeals, we also reverse the trial court's dismissal, but do so on different grounds.

Standard of Review

A motion to dismiss under Rule 12(B)(6)"tests the legal sufficiency of the [plaintiff's] claim, not the facts supporting it." Thornton v. State, 43 N.E.3d 585, 587 (Ind. 2015) (citation omitted). Dismissals are improper under 12(B)(6) "unless it appears to a certainty on the face of the complaint that the complaining party is not entitled to any relief." State v. American Family Voices, Inc., 898 N.E.2d 293, 296 (Ind. 2008) (citations omitted). This Court reviews a 12(B)(6) dismissal de novo, giving no deference to the trial court's decision. Veolia Water Indianapolis, LLC v. Nat'l Trust Ins. Co., 3 N.E.3d 1, 4 (Ind. 2014). In reviewing the complaint, we take the alleged facts to be true and consider the allegations in the light most favorable to the nonmoving party, drawing every reasonable inference in that party's favor. Id. at 4–5.

Discussion and Decision

I. Dismissal under Trial Rule 12(B)(6) was improper because the limited record here does not establish when Bellwether's cause of action accrued.

The trial court dismissed Bellwether's complaint with prejudice under Rule 12(B)(6) after concluding "the [six-year] statute of limitations provides a complete defense to [the] complaint." The court premised the dismissal on its determination that "any amendment of the complaint pursuant to Trial Rule 12(B) would not change that underlying fact."

A 12(B)(6) motion to dismiss tests the complaint's legal sufficiency. A complaint states a claim on which relief can be granted when it recounts sufficient facts that, if proved, would entitle the plaintiff to obtain relief from the defendant. The plaintiff "need not anticipate a statute of limitations defense and plead matter[s] in avoidance in the complaint." Nichols v. Amax Coal Co., 490 N.E.2d 754, 755 (Ind. 1986) (adopting statement of Judge Ratliff, who dissented from denial of rehearing in Nichols v. Amax Coal Co., 482 N.E.2d 776, 778 (Ind. Ct. App. 1985) ). Thus, a complaint does not fail to state a claim merely because a meritorious defense may be available. But a plaintiff may plead itself out of court if its complaint alleges, and thus admits, the essential elements of a defense. An example is where the "complaint shows on its face that the statute of limitations has run". 490 N.E.2d at 755 (same).

The face of Bellwether's complaint does not establish that the statute of limitations had run on its inverse-condemnation claim. Duke Energy argues the claim accrued by operation of law when the Commission adopted the 2002 edition of the National Electric Safety Code. According to Duke Energy, the 2002 Safety Code unambiguously expanded the required safety clearance beyond the ten feet allowed by the 1957 utility easement on Bellwether's property and thereby effected a taking immediately upon the Safety Code's incorporation into the administrative code. Bellwether counters that the claim did not accrue until the Safety Code expanded the easement, and that the expansion was not automatic but occurred only when there was a sufficiently high voltage associated with Duke Energy's operation of its electrical lines.

Bellwether's claim accrued, conceptually, when the regulatory burden on its property exceeded the ten-foot clearance permitted by the original easement. At this stage, all we know factually is what the complaint alleges, which is that Duke Energy's maintenance of the electrical lines "currently" imposes a total burden of 23 feet—thirteen feet more than the easement authorized.

The complaint does not recite when the additional burden first occurred, only that it was in effect when Bellwether filed its complaint in August 2015. Given the limited factual allegations, we cannot discern whether (or when) any additional burden on Bellwether, beyond the 1957 easement restriction, occurred by operation of law. Because the complaint does not establish that the statute of limitations had already run when Bellwether sued, Duke Energy jumped the gun by arguing the claim's untimeliness in a motion to dismiss. Based on the current record, we are unable to conclude that Bellwether's allegations would not entitle it to relief against Duke Energy under any circumstances. We thus reverse the trial court's judgment dismissing Bellwether's complaint with prejudice.

II. All persons are charged with knowing the law, but the law must be reasonably accessible to those having to obey it.

Rather than concluding our opinion here, we elect to raise an additional issue sua sponte that the parties and the trial court may wish to consider on remand: whether the 2002 Safety Code...