City of Hobart Sewage Works v. McCullough

Decision Date27 October 1995
Docket NumberNo. 45A03-9411-CV-416,45A03-9411-CV-416
Citation656 N.E.2d 1185
PartiesCITY OF HOBART SEWAGE WORKS, Appellant-Defendant, v. Joseph and Tracy H. McCULLOUGH, Appellees-Plaintiffs.
CourtIndiana Appellate Court
OPINION

HOFFMAN, Judge.

Appellant-defendant City of Hobart Sewage Works (City) appeals from a small claims court judgment in favor of appellees-plaintiffs Joseph and Tracy H. McCullough. The facts relevant to this appeal disclose that the McCulloughs purchased a residence at 3845 Maitlan, Hobart, Indiana in September of 1979. The McCulloughs lived at the residence for seven years and then leased the property. In June of 1993, the McCulloughs' tenants informed them that the sewer system had backed up. Prior to purchasing the residence, the McCulloughs had been informed that the property was serviced by the city sewer. Further, the McCulloughs were also billed by the City for monthly usage of the sewage system.

In an attempt to remedy the problem, the McCulloughs contacted a company to clean out the line leading from the residence. The line, however, extended out only twenty feet. On June 15, 1993, while attempting to find what was believed to be a broken sewer tile, the McCulloughs discovered that the residence was not, in fact, connected to the city sewer system but rather was still on a septic system. The McCulloughs immediately informed the City of their findings.

The McCulloughs discovered their property was originally owned by Alan and Helen Davies. In 1972, the date the city sewer line was installed to service the property, the Davieses applied for and received from the City a contract to pay for the connection ("tap-on fee") in installments and waived any objection to the sewer assessment. The Davieses failed to make the installment payments. The second owners of the house, the Foits, thereafter paid the tap-on fee sometime in the latter part of 1979 or early 1980. However, no additional steps were taken to connect the residence with the city sewer system. During the fourteen years that the McCulloughs owned the property, the City billed the McCulloughs for sewer service despite the fact that the residence was never, in fact, connected to the sewer.

On October 13, 1993, the McCulloughs filed a "Notice of Claim" against the City in the Lake Superior Court, Small Claims Division, for reimbursement of money paid to the City for sewer services from September of 1979 to June 15, 1993. Thereafter, City filed a motion to dismiss, affirmative defenses, and a counter-claim. The City's counter-claim alleged that it was injured and would incur expenses due to the McCulloughs' violations of City Ordinance number 1798(2)(g) and (h), (Hobart Municipal Code § 17-2(G) and (H)) by maintaining a septic tank on their property and by failing to connect the residence to the city sewer system. On February 15, 1994, the trial court entered a judgment in favor of the McCulloughs and against City on its counter-claim. The City now appeals.

Rephrased, the issues for review are:

(1) whether the trial court erred in entering judgment in favor of the McCulloughs;

(2) whether the notice given by the McCulloughs was sufficient to comply with the Indiana Tort Claim Act § 34-4-16.5-7;

(3) whether the McCulloughs' claim is barred by the applicable statute of limitations; and

(4) whether the trial court erred in denying the City's counter-claim.

In part, the McCulloughs asserted at trial that the City negligently billed them for sewer services for a fourteen-year period despite the fact that their property was never connected to the city sewage system. The City argues that it can assess fees to a parcel that is "served" by the sewage works pursuant to IND.CODE § 36-9-23-25(c)(2) (1993 Ed.); thus, it was authorized to charge usage fees to the McCulloughs.

IND.CODE § 36-9-23-25 asserts in part:

"(a) The municipal legislative body shall, by ordinance, establish just and equitable fees for the services rendered by the sewage works, and provide the dates on which the fees are due."

This Court need not determine whether the term "served" authorizes such a charge. The Hobart Municipal Code clearly distinguishes between fees charged for sewer connections and usage. Article IV entitled "Sewer Charges" provides:

"For the use of the services rendered by sewage works, rates and charges shall be collected from the owners of each and every lot, parcel of real estate or building that is connected with the city sanitary system or otherwise discharges sanitary sewage, industrial wastes, water or other liquids, either directly or indirectly, into the sanitary sewage system of the city. Such rates and charges include user charges, debt service costs, excessive strength surcharges and other service charges, which rates and charges shall be payable as hereinafter provided and shall be in an amount determinable as follows: ...."

(Emphasis added.) Hobart Municipal Code § 17-52. This ordinance provides that usage fees are only charged and collected from owners that are actually connected to or discharge waste into the city sewer system. The sections of the ordinance relied upon by the City, Hobart Municipal Code §§ 17-22 and 17-26, pertain only to tap-on fees, that is fees for the actual connection to the city sewer line. The rules set forth relating to statutory construction are equally applicable to construing ordinances. Hobble by and through Hobble v. Basham (1991), Ind.App., 575 N.E.2d 693, 697. In construing statutes, effect is given to the plain and ordinary meaning of the language used. Jones v. Hendricks County Plan Commission (1982), Ind.App., 435 N.E.2d 82, 83-84. Pursuant to the ordinance, the City could not charge the McCulloughs for the cost of operation and maintenance of the sewer works.

The City also contends the contract entered into by the original owners, the Davieses, waived all objections to any illegality or irregularity of assessment. The contract, however, only waives an objection to the tap-on fee, not the monthly user fees.

Further, the City asserts that it is immune from liability for any loss which resulted from the adoption and enforcement of or failure to adopt or enforce a law. See IND.CODE § 34-4-16.5-3(7) (1993 Ed.). The City's attempt to rely on this subsection is misplaced. The McCulloughs' claim did not arise from the City's decision whether or not to investigate a possible ordinance violation or to charge a particular individual with a violation of an ordinance.

Additionally, the City argues that it is immune from any liability caused by its failure to inspect the property or for its unintentional misrepresentation. See IND.CODE § 34-4-16.5-3(11) and (13). The City raises these issues for the first time on appeal, thereby, waiving any arguments it may have had on appeal. See W & W Equipment Co., Inc. v. Mink (1991), Ind.App., 568 N.E.2d 564, 576, trans. denied.

The City also contends the McCulloughs' action is barred by their failure to give a tort claim notice. IND.CODE § 34-4-16.5-7 requires notice as a condition precedent to the institution of a claim for money damages against a political subdivision within 180 days after the loss occurs.

The contents of the notice of tort claim require a short and plain statement of facts on which the claim is based including:

"the circumstance which brought about the loss, the extent of the loss, the time and place the loss occurred, the names of all persons involved...

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