Gpi at Danville v. West Cent. Conservancy
| Decision Date | 06 June 2007 |
| Docket Number | No. 32A01-0609-CV-395.,32A01-0609-CV-395. |
| Citation | 867 N.E.2d 645 |
| Parties | GPI AT DANVILLE CROSSING, L.P., Appellant-Plaintiff, v. WEST CENTRAL CONSERVANCY DISTRICT, Appellee-Defendant. |
| Court | Indiana Appellate Court |
Jeffrey R. Gaither, Paul D. Vink, Bryan H. Babb, Bose McKinney & Evans LLP, Indianapolis, IN, Attorneys for Appellant.
Alan M. Hux, Geoffrey Slaughter, John D. Papageorge, Debra M. Lynch, Sommer Barnard PC, Indianapolis, IN, Attorneys for Appellee.
GPI at Danville Crossing, L.P. ("GPI"), appeals from the trial court's entry of summary judgment in favor of West Central Conservancy District ("the District") on GPI's claim for injunctive relief. GPI presents two issues for our review:
1. Whether the trial court erred when it concluded that the District's classification of GPI as a "residential user" was not arbitrary and capricious.
2. Whether the trial court erred when it concluded, in effect, that the District's method of calculating penalties was not contrary to law.
We affirm in part, reverse in part, and remand with instructions.1
GPI owns an apartment complex in Danville called Settler's Run. In 2001, the District began to provide sewer service to Settler's Run, and the billing was at a metered rate based on volume. Indianapolis Water Company ("IWC") was the District's billing agent. Rather than having each Settler's Run tenant billed individually, GPI was billed by a single invoice for its tenants. IWC designated Settler's Run as a commercial customer. Until March 2002, the District billed all of its customers at a metered rate, regardless of their designation as commercial or residential customers.2
On February 19, 2002, the District adopted Resolution No. 02-02 ("Res.02-02"), which established new, higher rates for its sewer customers. Res. 02-02 included the following relevant definitions of user classifications:
(i) "Residential User" shall mean a user of the treatment works whose premises or building is used primarily as a residence for one or more persons, including all dwelling units, etc.
(ii) "Commercial User" shall mean any establishment involved in a commercial enterprise, business or service which, based on a determination by the District, discharges primarily segregated domestic wastes or wastes from sanitary conveniences.
Appellant's App. at 363. Those definitions are the same as those used under the previous rate schedule. Res. 02-02 provides that residential users are charged a $45 flat rate per "Residential Single Family." Commercial users, meanwhile, are charged based on a metered rate.
After the passage of Res. 02-02, the District instructed IWC to continue billing its customers using the same user classifications, but at the higher rates. Because IWC had classified Settler's Run as a commercial user, IWC continued to bill Settler's Run at a metered rate. But in July 2002, the District terminated its contract with IWC, and the District began billing its customers itself. On August 29, 2002, Ron Goff, the District's Manager, wrote a letter to John Hennessey of GPI. That letter read:
On February 19, 2002, the West Central Conservancy District Board of Directors approved Rate Resolution 02-02 that amended the terms and changes of previous rate resolutions for services rendered on and after the March billing cycle of the Indianapolis Water Company. Beginning July 2002, the West Central Conservancy District office assumed the billing for West Central customers and thus obtained all billing information for review purposes. The District's review of customer information and the billing for Settler's Run is the reason for this letter.
Pursuant to previous rate resolutions, Settler's Run was billed utilizing a master meter size charge and consumption charge. Rate Resolution 02-02 affects this past practice of billing.
Section 1(v)(I) defines Residential User as "a user of the treatment works whose premises or building is used primarily as a residence for one or more persons, including all dwelling units, etc." This definition includes apartment buildings and duplexes since the occupied premises in the building is used "primarily as a residence for one or more persons."
Section 3(B), 1(a) establishes the rate for residential single family units as $45.00 per billing cycle.
In accordance with Section 7(b) of the Rate Resolution, the District is electing to continue the billing of the owner of the premises.
Beginning with the September billing for sewer, Gibraltar Development Company will receive by invoice billing a total sewer charge equal to $45.00 times the number of apartment/duplex units in Settler's Run as outlined in the Rate Resolution.
Appellant's App. at 239 (emphasis added).
At the District Board's regular monthly meeting in October 2002, counsel for GPI requested that the Board "change the User Classification of the apartment complexes from residential to commercial user." Id. at 266. One Board member moved to approve that change, but no one seconded the motion, and it failed. Because GPI did not agree with that classification, it unilaterally decided to pay only an amount commensurate with what its bill would have been at the metered rate. As a result of its failure to pay the bills in full each month, the District has assessed penalties against GPI totaling approximately $14 million to date.3
On May 22, 2003, GPI and Crossman Properties, L.L.C.,4 filed a complaint for injunctive relief against the District, and on January 8, 2004, they filed an amended complaint and application for injunctive relief. The District filed an answer and counterclaim for unpaid sewer fees and attorney's fees. On May 28, 2004, the District filed a motion for partial summary judgment as to all issues raised in GPI's amended complaint, but not as to its counterclaim. GPI filed a cross-motion for summary judgment. Following a hearing, the trial court ordered the parties to mediation, which was unsuccessful.
On March 14, 2006, GPI filed a motion for partial summary judgment on the issue of the District's method of calculating penalties for non-payment of fees. Following a hearing, the trial court entered summary judgment in favor of the District on all pending issues. That order is a final, appealable order pursuant to Indiana Trial Rule 54(B). This appeal ensued.
When reviewing summary judgment, this court views the same matters and issues that were before the trial court and follows the same process. Estate of Taylor ex rel. Taylor v. Muncie Med. Investors, L.P., 727 N.E.2d 466, 469 (Ind.Ct. App.2000), trans. denied. We construe all facts and reasonable inferences to be drawn from those facts in favor of the non-moving party. Jesse v. Am. Cmty. Mut. Ins. Co., 725 N.E.2d 420, 423 (Ind.Ct.App. 2000), trans. denied. Summary judgment is appropriate when the designated evidence demonstrates that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. Ind. Trial Rule 56(C). The purpose of summary judgment is to terminate litigation about which there can be no material factual dispute and which can be resolved as a matter of law. Zawistoski v. Gene B. Glick Co., 727 N.E.2d 790, 792 (Ind.Ct.App.2000).
The trial court entered findings and conclusions in support of summary judgment. Although we are not bound by the trial court's findings and conclusions, they aid our review by providing reasons for the trial court's decision. See Ledbetter v. Ball Mem'l Hosp., 724 N.E.2d 1113, 1116 (Ind.Ct.App.2000), trans. denied. If the trial court's entry of summary judgment can be sustained on any theory or basis in the record, we must affirm. Id.
Our standard of review of the District's actions is whether it acted arbitrarily, capriciously, or contrary to law.5 Bd. of Dirs. of Bass Lake Conservancy Dist. v. Brewer, 839 N.E.2d 699, 701 (Ind. 2005). Under this narrow standard of review, we "will not intervene in a local legislative process[, if it is] supported by some rational basis." Id. (citing Borsuk v. Town of St. John, 820 N.E.2d 118, 122 (Ind.2005)). We will find a municipal entity's action arbitrary or capricious only if it is patently unreasonable. Id. In short, judicial review of whether a governmental agency has abused its rulemaking authority is highly deferential. Id.
GPI first contends that the definitions of residential user and commercial user in Res. 02-02 unambiguously show that GPI should be classified as a commercial user. GPI also maintains that, contrary to its intent to continue billing GPI at a metered rate, the District "reclassified" GPI as a residential user, thereby imposing a flat fee. In addition, GPI asserts that the District's stated reliance on a study of sewer usage, called the Umbaugh Report, requires that the District classify GPI as a commercial user. In essence, GPI alleges that the District's conduct evinced its intent that GPI be classified as a commercial user under Res. 02-02 and, thus, the District's decision to classify GPI as a residential user cannot stand.
The District responds that it never intended to classify GPI other than as a residential user and that GPI clearly fits within the definition of a residential user rather than a commercial user. Further, the District emphasizes that it only "considered" the Umbaugh Report and that, regardless, the report is consistent with the District's classification of GPI. The District contends that IWC's continued billing of GPI at a metered rate following the passage of Res. 02-02 was a mistake, which the District promptly corrected after it took over billing from IWC.
Initially, we address the District's contention that GPI has failed to exhaust its administrative remedies under Indiana Code Section 36-9-23-26.1, which provides:
(a) Owners of property connected or to be connected to and served by the...
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