Lake of the Woods v. Ralston

• Decision Date: 03 May 2001
• Docket Number: No. 50A04-0009-CV-390.,50A04-0009-CV-390.
• Citation: 748 N.E.2d 396
• Parties: In the Matter of the Change to the Established Water Level of LAKE OF THE WOODS, in Marshall County, Indiana, Appellant-Plaintiff, v. Calvin RALSTON, Donald Andrews and Richard Bean, Appellees-Respondents.
• Court: Indiana Appellate Court

748 N.E.2d 396

In the Matter of the Change to the Established Water Level of LAKE OF THE WOODS, in Marshall County, Indiana, Appellant-Plaintiff, v. Calvin RALSTON, Donald Andrews and Richard Bean, Appellees-Respondents.

No. 50A04-0009-CV-390.

Court of Appeals of Indiana.

May 3, 2001.

Martin R. Lucas, North Judson, IN, Attorney for Appellant.

Ralph R. Huff, Plymouth, IN, Attorney for Appellees.

OPINION

HOFFMAN, Senior Judge.

Petitioner-Appellant Lake of the Woods Property Owners Association (the "Association") appeals the trial court's dismissal of its petition pertaining to the water level of Lake of the Woods, a natural public freshwater lake located in Marshall County, Indiana. We reverse and remand.

The Association raises three issues for our review, which we consolidate and restate as: Whether Ind.Code § 14-26-8 should be interpreted to afford the Association procedural due process before a final determination regarding the propriety of the petition is made.

In 1999, the Association filed its petition to request a change in the established water level of Lake of the Woods. The parties agree that the Association, which is made up of approximately 223 members who possess a freehold interest in real property upon or within ¼ mile of the shoreline of the lake, is authorized to file the petition pursuant to Ind.Code § 14-26-8-3. The surface elevation of the lake was first set in 1948 at 803.85' mean sea level datum (MSLD). Litigation over the surface elevation resulted in a 1992 settlement agreement adopted by and made the order of the Marshall Circuit Court. The court's order retained the 803.85' MSLD elevation during the portion of the calendar year commencing May 15th and ending September 15th and required the lake to be drawn down a foot to a 802.85' MSLD elevation during a period beginning September 15th and ending on May 15th.

In its petition, the Association alleged that significant changes to the lake had occurred since the 1992 settlement. These alleged changes included the construction of sanitary sewers at all homes on or near the lake, increased value of lakefront property, increases in recreational use, and a decrease in the intensity of agricultural activity on the lowest elevation property. The Association also alleged that lowering the water level during the winter season "is detrimental to . . . fish and wildlife resources that depend on the lake, and materially diminishes the property values of lake area community property owners." (R. 12). The Association sought to maintain the 803.85' MSLD elevation throughout the year, a change in procedure that it alleged would need no construction work.

A remonstrance was filed in response to the petition by certain individuals with agricultural interests and also by certain individuals owning land within the watershed of the lake, but not within ¼ mile of the shoreline. A remonstrance was also filed by the Board of Commissioners of Marshall County. The Association does not question the authority of the remonstrators to challenge its petition.

The trial court appointed two viewers, the County Surveyor and a representative of the Department of Natural Resources (the "government viewers"), pursuant to Ind.Code § 14-26-8-8, and two additional viewers, reputable freeholders who were Marshall County residents (the "citizen viewers"), pursuant to Ind.Code § 14-26-8-9. The trial court also issued an order that prohibited either the Association or the remonstrators from initiating contact with the viewers without permission of the court.

After inspecting the lake and adjoining property, the viewers ultimately issued an amended final viewer's report. The report set forth the history of prior determinations pertaining to the water level and the types of evidence that the viewers found to be relevant to their present determination. In the report, the viewers stated that they "visited the lake and inspected the water level control structure, tributary ditches, and a number of tile inlets." (Finding of Fact # 9, R. 124). The report also stated that "[the DNR representative] subsequently met with representatives of the Divisions of Soil Conservation and Fish and Wildlife to discuss the possible impacts of the proposal on the lake ecosystem and the natural resources of the lake." (Finding of Fact # 10, R. 124). The report further stated that the viewers "reviewed the United States Geological Survey water level records for Lake of the Woods for the period from 1945 through present." (Finding of Fact # 12, R. 125).

The viewers found that many tile inlets upstream of the lake were below the 803.85' MSLD elevation. (Finding of Fact # 8, R. 124). They concluded that a permanent water level of 803.85' MSLD would be injurious to farmers and others who have drain tiles discharging into the drains that feed into the lake and that some tile outlets would be permanently underwater at the higher level. (Conclusion of Law # 1, R. 125). They also concluded that the higher level would have a detrimental effect on the roads around the lake. (Conclusion of Law # 2, R. 125). They further concluded that "[w]hile some [DNR] professionals believe there may be positive ecological benefits to maintaining the higher lake level year around, a more thorough understanding of lake ecology and hydrology would be necessary to make a more accurate determination of potential effects." (Conclusion Law # 3, R. 125).

The viewers filed their report with the trial court pursuant to Ind.Code § 14-26-8-18. The trial court then dismissed the Association's petition pursuant to Ind.Code § 14-26-8-19, which provides that the court shall dismiss the petition if the viewer's report indicates that the work proposed therein is "not practicable and of public need." At no time was the Association given an opportunity to (1) present written evidence in support of its petition to either the trial court or the viewers or (2) make its objections known to the viewers.

The Association contends that Ind.Code § 14-26-8, at least as apparently interpreted by the trial court and the viewers, resulted in the denial of the Association's petition without the benefit of the protections set forth in the Due Process Clause of the Federal Constitution and the analogous Due Course of Law Clause of the Indiana Constitution.¹ Specifically, the Association argues that it was denied due process because it was neither allowed to present evidence in support of its petition nor to cross-examine adverse witnesses. Accordingly, the Association asserts that the statutory procedure followed below deprived it of important real property rights.

The Due Process Clause and Due Course of Law Clause prohibit state action which deprives a person of life, liberty, or property without the "process" or "course of law" that is due, that is, a fair proceeding. Indiana High School Athletic Association v. Carlberg, 694 N.E.2d 222, 241 (Ind.1997). Thus, one claiming a violation of due process must show (1) that there was state action, i.e. a governmental involvement in the alleged deprivation and (2) that the state action resulted in the deprivation of a protected interest. In re Estate of Wilson, 610 N.E.2d 851, 856 (Ind.Ct.App.1993), trans. denied, cert. denied, Phipps v. Wilson, 510 U.S. 1072, 114 S.Ct. 879, 127 L.Ed.2d 75 (1994).

"Indiana courts have held that state action may be found if the State enforces activity which originates privately so long as a nexus exists between the government involvement and the particular activity being challenged or if evidence demonstrates that the State has become a joint participant in that activity." Haimbaugh, 653 N.E.2d at 106. In the present case, the Association contends that state action has occurred because Ind.Code § 14-26-8-8 provides for the appointment of government representatives as viewers. As noted above, the Marshall County Surveyor and a representative of the Department of Natural Resources were appointed by the trial court as viewers pursuant to the statute. It is clear from the findings of fact and conclusions of law that these government representatives were considered the "experts" on the question of water levels and that they functioned in the same manner as an administrative agency. We conclude that their involvement constitutes state action.

The Association contends that the interests involved in the present case are the property rights arising from their ownership of land. At common law, "riparian" rights were available to those freeholders who owned land that bordered a body of water. Tuesburg Land Co. v. State, 78 Ind.App. 327, 131 N.E. 530 (1921).² Public trust legislation has modified common law riparian rights by recognizing the public's right to preserve the natural scenic beauty of our lakes and to recreational values upon the lakes. See Ind.Code § 14-26-2-5.³ Riparian landowners, however, continue to possess their rights with respect to a public freshwater lake, but their rights are now statutory and must be balanced with the public's rights. Ind.Code § 14-26-8-3 provides riparian owners the statutory right to file a petition to stabilize, raise, or establish and maintain the level of the lake by various means. The statute also expands the common law class of riparian owners by giving the right to petition for a change in lake water level to the owners of land within ¼ mile of the shoreline or water line of a lake. We hold that the statute codifies a recognized protected right that may not be impinged absent procedural due process.

We now turn to the question of how to interpret Ind.Code § 14-26-8. We initially note that "[i]n our separation of powers democracy, the constitution empowers the legislative branch to make law." Baldwin v. Reagan, 715 N.E.2d 332, 337 (Ind.1999). Every statute stands before us clothed with the presumption of constitutionality unless clearly overcome by a contrary showing. Id. If there is more than one reasonable interpretation of ...