City of Valparaiso v. Defler

• Decision Date: 18 May 1998
• Docket Number: No. 64A03-9704-CV-127,64A03-9704-CV-127
• Citation: 694 N.E.2d 1177
• Parties: CITY OF VALPARAISO and City of Valparaiso Board of Public Works, McMahon Associates, Inc., and Woodruff & Sons, Inc., Appellants-Defendants, v. Clark H. DEFLER and Joan H. Defler, Appellees-Plaintiffs.
• Court: Indiana Appellate Court

Page 1177

694 N.E.2d 1177

CITY OF VALPARAISO and City of Valparaiso Board of Public Works, McMahon Associates, Inc., and Woodruff &amp Sons, Inc., Appellants-Defendants, v. Clark H. DEFLER and Joan H. Defler, Appellees-Plaintiffs.

No. 64A03-9704-CV-127.

Court of Appeals of Indiana.

May 18, 1998.

Rehearing Denied July 14, 1998.

Steven P. Polick, Steven P. Polick & Associates, P.C., Highland, for City of Valparaiso.

Edward Volk, Newby, Lewis, Kaminski & Jones, LaPorte, for McMahon Associates, Inc.

Robert D. Truitt, South Bend, for Woodruff & Sons, Inc.

Sam J. Bernardi, Jr., Valparaiso, for McMahon Associates, Inc.

Brian W. Walker, Cheryl M. Knodle, Ball, Eggleston, Bumbleburg McBride Stapleton & Walkey, PC, Lafayette, for Clark H. & Joan H. Defler.

David C. Appel, Valparaiso, for Steven E. Divich.

OPINION

STATON, Judge.

This interlocutory appeal arises from a lawsuit filed by Clark and Joan Defler against the City of Valparaiso and its Board of Public Works ("City"), McMahon Associates, Inc. ("McMahon"), and Woodruff & Sons, Inc. ("Woodruff"). ¹ The Deflers allege that the City, McMahon, and Woodruff, in the course of designing and constructing a sewer lift station adjacent to their property, caused their land to subside. The City filed a motion for summary judgment which the trial court denied. The City raises two issues, which we have restated. McMahon and Woodruff have joined the City's appeal only with respect to the first issue. The issues are:

I. Whether a landowner's right to remove ground water from his own property shields him from liability for subsidence damage caused to adjoining landowners as a result of the water's removal.

II. Whether the City is immune from liability under the Indiana Tort Claims Act.

We affirm. ²

The facts most favorable to the non-movant reveal that the City became aware of environmental and performance problems with a sewer line. The City contracted with McMahon to recommend solutions to these problems. Based upon an evaluation of alternative solutions presented by McMahon, the City decided to install a sewer lift station. The City contracted with Woodruff to construct the lift station on a City-owned easement adjacent to the Deflers' property.

The lowest part of the lift station was designed to be approximately thirty feet below grade. Woodruff was required by the contract specifications to maintain the water level below the excavation. In order to accomplish this, Woodruff continuously pumped ground water out of the site. The Deflers allege that this continuous dewatering resulted in a substantial amount of ground water being removed from their property which in turn caused their land to subside.

When reviewing the grant or denial of summary judgment, we use the same standard used by the trial court. Ramon v. Glenroy Construction Co., 609 N.E.2d 1123, 1127 (Ind.Ct.App.1993), trans. denied. Summary judgment is appropriate only when the evidentiary matter designated by the parties shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Id.; Ind. Trial Rule 56(C). The movant bears the burden of establishing the propriety of summary judgment, and all facts and inferences to be drawn therefrom are viewed in a light most favorable to the non-movant. Ramon, 609 N.E.2d at 1127.

I. Liability for Subsidence Damage Caused by Ground Water Removal

The City argues that because it had a right to remove ground water from its own property, the City may not be held liable, as a matter of law, for the subsidence damage caused to the Deflers' land by removal of the water. In support of its argument, the City cites a line of Indiana cases regarding the ownership and use of ground water. See Wiggins v. Brazil Coal and Clay Corp., 452 N.E.2d 958 (Ind.1983), reh. denied; City of Greencastle v. Hazelett, 23 Ind. 186 (1864); and New Albany & S. R.R. v. Peterson, 14 Ind. 112 (1860). Although the City styles its argument as one involving a settled area of law, we believe the City's argument raises an issue of first impression in Indiana: whether a landowner's right to remove ground water from his property shields him from liability for subsidence damage to adjoining land caused by the water's removal.

Two general theories have developed in the United States regarding the ownership and use of ground water. ³ See 78 AM.JUR.2D Waters § 156 (1975); Kristine Cordier Karnezis, Annotation, Liability of Landowner Withdrawing Ground Water from Own Land for Subsidence of Adjoining Owner's Land, 5 A.L.R.4th 614 (1981). The first theory, known as the English Rule or the absolute dominion rule, provides that ground water is part of the land and the landowner has the absolute right to use the water as he wishes. 78 AM.JUR.2D Waters § 157 (1975); 3 WATERS AND WATER RIGHTS, §§ 20.01 and 20.03 (Robert E. Beck ed., 1991) [hereinafter WATERS]. This absolute right allows the owner of land to remove ground water regardless of the damage caused to neighboring property owners. 78 AM.JUR.2D Waters § 157 (1975); 3 WATERS, supra, § 20.01. To this end, some jurisdictions following the English Rule have refused to impose liability on landowners who, in the course of withdrawing ground water, have caused adjoining property to subside. Karnezis, supra, at 615 (citing Finley v. Teeter Stone, Inc., 251 Md. 428, 248 A.2d 106 (1968); Friendswood Dev. Co. v. Smith-Southwest Indus., Inc., 576 S.W.2d 21 (Tex.1978)).

The second theory regarding the ownership and use of ground water is known as the American Rule or the reasonable use rule. 78 AM.JUR.2D Waters § 158 (1975); 3 WATERS, supra, § 23.01. ⁴ The American Rule provides that where the rights of others are affected by a landowner's use of ground water, his use is limited to a "reasonable and beneficial use" or to "some useful purpose connected with its occupation and enjoyment." 78 AM.JUR.2D Waters § 158 (1975). Under this rule, the effect that a landowner's use of ground water has on neighboring landowners is taken into consideration. Id. Some jurisdictions following the American Rule, or a variation thereof, have held landowners liable for the negligent use of ground water which causes adjoining property to subside. Karnezis, supra, at 615-16.

Although the English Rule was followed in nearly all of the early American cases, 78 AM.JUR.2D Waters § 157 (1975) (citing cases), only ten states continue to follow the English Rule. See 3 WATERS, supra, § 21.01. A majority of states now follow the American Rule or the correlative rights rule. See 78 AM.JUR.2D Waters § 158 (1975) (citing cases); 3 WATERS, supra, §§ 22.01--23.03. Despite the modern trend toward adoption of the American Rule, Indiana continues to follow a version of the English Rule. See New Albany, 14 Ind. at 114; see also Note, Water Rights in Indiana, 32 IND. L.J. 39, 47 (1956); 3 WATERS, supra, § 21.04.

Indiana first adopted a version of the English Rule in 1860. New Albany, 14 Ind. at 114. More recently, the Indiana Supreme Court reaffirmed this state's adherence to the rule in Wiggins v. Brazil Coal and Clay Corp., 452 N.E.2d 958 (Ind.1983). Pursuant to the rule set out in Wiggins and New Albany, the City argues that a landowner may not be held liable for damage of any kind, including subsidence damage, to neighboring property where the damage was caused by the removal of ground water and where the water was not removed gratuitously or with the intent to harm neighboring landowners.

If Indiana followed the English Rule in its purest form, we would be forced to agree with the City. Strictly applied, the English Rule shields a landowner from liability for all types of damage caused by the removal of ground water, including subsidence damage. ⁵ Our cases reveal, however, that Indiana has not adopted such a strict version of the English Rule.

Our supreme court has never applied the English Rule so broadly as to shield a landowner from liability for the type of damage incurred by the Deflers. A close reading of New Albany and Wiggins reveals that the type of loss suffered by the plaintiffs in those cases is distinctly different from subsidence damage.

In New Albany, a railroad company was building a railroad bed adjacent to the plaintiff's property. In the course of digging the road-bed, the company cut off the plaintiff's well from a spring which supplied it. The plaintiff's well subsequently went dry, and he sued to recover damages. On appeal, our supreme court held that the plaintiff could not recover because the railroad company, as the owner of the property on which it was digging, had the right to use the property beneath the surface in any manner it wished. 14 Ind. at 114.

In Wiggins, the plaintiffs were the owners of an abandoned strip mining pit which had filled with water and which they used for recreational purposes. The defendant coal company conducted a strip mining operation on its own property near the plaintiffs' pit. During the course of a dig, water began rushing into the coal company's strip pit. The coal company proceeded to pump the water out, but as it did so, the water level of the plaintiffs' pit began to fall. It was determined that the water from the plaintiffs' pit was moving through natural and artificial fissures to the coal company's pit. The coal company continued to pump water, which eventually resulted in all of the water being emptied from the plaintiffs' pit.

The Indiana Supreme Court held that the coal company was not liable to the plaintiffs for causing their strip pit to lose all of its water. Wiggins, 452 N.E.2d at 964. In so holding, the court applied the English Rule, as limited by cases decided subsequent to New Albany. Id. at 962-63. The court held:

Water which percolates away underground through porous earth from beneath one lot to surrounding lands, no longer belongs to the owner of the lot. Such water is regarded as lost water and is considered at any given time to be part of...