Moriarity v. Ind. Dep't of Natural Res.

Decision Date13 February 2018
Docket NumberCourt of Appeals Case No. 27A04–1612–PL–2731
Citation91 N.E.3d 642
Parties John E. MORIARITY and Mae E. Moriarity, Appellants–Petitioners, v. INDIANA DEPARTMENT OF NATURAL RESOURCES, Appellee–Respondent.
CourtIndiana Appellate Court

Attorney for Appellants : William M. Horne, Horne Law LLC, Indianapolis, Indiana

Attorneys for Appellee : Curtis T. Hill, Jr., Attorney General of Indiana, Kyle Hunter, Deputy Attorney General, Indianapolis, Indiana

Najam, Judge.

Statement of the Case

[1] John and Mae Moriarity (collectively "the Moriaritys") appeal the trial court's order in which the court affirmed the decision of the Natural Resources Commission ("the Commission") in favor of the Indiana Department of Natural Resources ("DNR") following the DNR's notice of violation issued to the Moriaritys and final order thereon. The Moriaritys present three issues for our review, which we restate as follows:

1. Whether the DNR erred when it exercised jurisdiction over the Moriaritys' dam.
2. Whether the DNR's determination that the Moriaritys' dam is a "high hazard" dam is supported by substantial evidence.
3. Whether the Moriaritys preserved for appellate review their claim that the DNR exceeded its statutory authority when it entered an order that did not expressly allow for the possibility that the Moriaritys could make modifications to their dam and lake to remove them from the DNR's jurisdiction.

[2] We affirm.

Facts and Procedural History1

[3] The Moriaritys own farm land in Grant County. Between 1997 and 2000, John constructed a dam and a lake on the farm, and he stocked that lake with fish. The dam is more than twenty feet high at some points, the lake has a surface area of approximately forty acres, and the lake contains more than 100 acre-feet of water.2

[4] During the course of the construction, the Moriaritys were in contact with the DNR about any relevant permits the Moriaritys might need, but the DNR did not instruct them to obtain any specific permits from the DNR. Nonetheless, between 2002 and 2008, the DNR issued to the Moriaritys a notice of violation ("NOV") with respect to the dam on at least three separate occasions. The Moriaritys either did not comply with those NOVs or had them subsequently dismissed by a trial court. On May 14, 2012, the DNR issued another NOV to the Moriaritys. The 2012 NOV alleged, in relevant part, that the Moriaritys' dam was in violation of Indiana's Dam Safety Act, Ind. Code Ann. §§ 14–27–7.5–1 to –16 (West 2011).

[5] The Moriaritys sought administrative review of the 2012 NOV. At an ensuing fact-finding hearing, the DNR presented expert testimony that streams existed on the Moriaritys' property. The DNR's experts further testified that the Moriaritys' lake was created by the damming of those streams.

[6] The DNR also presented the testimony of Kenneth Smith, the DNR's assistant director of the water division, who testified that the Moriaritys' dam was a "high hazard" dam. In particular, Smith testified that it is "not that hard to tell a High–Hazard Dam. You can stand on the dam, literally can look downstream of it and see things that are in harm's way." Appellants' App. Vol. II at 106. Smith further testified that, looking out from the Moriaritys' dam, it was "visually obvious" that that dam "was a High–Hazard Dam" due to the presence of several structures that, if a breach occurred, would be inundated "with great velocity and depth." Id. at 129. Similarly, George Crosby, a DNR geologist, testified that, if the dam "breaks above the house [of the Moriaritys' son, who lived nearby], it's likely that there could be some serious damage to that house and ... to other homes, too." Appellants' App. Vol. III at 45. Crosby further testified that, "even without the homes, ... this thing would still be considered High–Hazard ... due to [a downstream] road because of the traffic; that's a very high-traffic road." Appellee's App. Vol. III at 188.

[7] Following the fact-finding hearing and oral argument, the Commission entered its order for the DNR and against the Moriaritys, which the Commission supported with findings of fact and conclusions of law. The Commission's "Final Order" stated as follows:

1. [The Moriaritys] ... are hereby ordered to draw down the water level in the Moriarity impounded lake to an elevation of between 840 and 845 feet NAVD. They shall ... consult with a professional engineer duly licensed in Indiana ... to develop a safe and appropriate dewatering plan for accomplishing the draw down as herein ordered.
2. The water level of the impounded lake shall be maintained at between 840 and 845 feet NAVD until the Moriaritys ... have complied with the remainder of this Order as set forth below in Paragraphs 3 and 5.
3. [The Moriaritys] ... are hereby ordered to comply with I.C. [§] 14–27–7.5–9(a) by having their dam inspected by a professional engineer ... and submitting a report of that inspection to the DNR's Division of Water within ninety (90) days of the issuance of a final order in this proceeding....
4. [The Moriaritys] ... are hereby ordered to comply with I.C. [§] 14–27–7.5–9(b) by completing any maintenance, repair, or alteration as required to fulfill the usual and customary requirements of the DNR.
5. In lieu of compliance with Paragraphs 1 through 4 above, [the Moriaritys], ... under the direction of a professional engineer ... [may] dewater, breach, and permanently decommission the dam.
6. [The Moriaritys] ... are hereby ordered to pay [a total of $10,000 in] civil penalties for their violations of the Dam[ ] Safety Act....

Appellant's App. Vol. II at 56–57. The Moriaritys filed a petition for judicial review thereafter, and the trial court affirmed the Commission's decision. The Moriaritys filed a motion to correct error with the trial court, which was subsequently deemed denied. This appeal ensued.

Discussion and Decision
Standard of Review

[8] Our standard of review is well settled:

Pursuant to Indiana's Administrative Order[s] and Procedures Act ("AOPA"), we may set aside an agency action only if it is
(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) contrary to constitutional right, power, privilege, or immunity; (3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; (4) without observance of procedure required by law; or (5) unsupported by substantial evidence.
Ind. Code § 4–21.5–5–14(d) (Supp. 2012). The party seeking judicial review bears the burden of proving the agency action is invalid for one of the above five reasons. Id. § 4–21.5–5–14(a).
Further, when reviewing a challenge to an administrative agency's decision, "this Court will not try the facts de novo nor substitute its own judgment for that of the agency." State Bd. of Registration for Prof'l Eng'rs v. Eberenz , 723 N.E.2d 422, 430 (Ind. 2000) (citing Ind. Dep't of Envtl. Mgmt. v. Conard , 614 N.E.2d 916, 919 (Ind. 1993) ). Rather, we defer to the agency's findings if they are supported by substantial evidence. Ind. Dep't of Envtl. Mgmt. v. West , 838 N.E.2d 408, 415 (Ind. 2005).
On the other hand, we review an agency's conclusions of law de novo. Nat. Res. Def. Council v. Poet Biorefining–N. Manchester, LLC , 15 N.E.3d 555, 561 (Ind. 2014).

Jay Classroom Teachers Ass'n v. Jay Sch. Corp. , 55 N.E.3d 813, 816 (Ind. 2016).

Issue One: DNR's Jurisdiction

[9] The Moriaritys first contend that the DNR erred when it exercised jurisdiction over their dam. In particular, the Moriaritys assert that the DNR misinterpreted the Indiana Code; that the DNR's assertion of jurisdiction under the Dam Safety Act here is not supported by substantial evidence; and that the DNR's erroneous exercise of jurisdiction denied the Moriaritys due process and resulted in an arbitrary and capricious decision. We address each of the Moriaritys' arguments in turn.

Statutory Construction

[10] We first turn to the Moriaritys' claim that the DNR misinterpreted its jurisdiction under the Indiana Code. In particular, the Moriaritys allege that the "DNR's jurisdiction hinged on whether the fish pond—or, more technically, its ‘structure’—was built ‘in, on, or along’ a stream." Appellants' Br. at 21. " ‘To the extent the issue turns on statutory construction, whether an agency possesses jurisdiction over a matter is a question of law for the courts.’ " Walczak v. Labor Works–Ft. Wayne LLC , 983 N.E.2d 1146, 1152 (Ind. 2013) (quoting Ind. Dep't of Envtl. Mgmt. v. Twin Eagle LLC , 798 N.E.2d 839, 844 (Ind. 2003) ).

[11] As the Indiana Supreme Court has explained:

When construing a statute our primary goal is to ascertain the legislature's intent. Adams v. State , 960 N.E.2d 793, 798 (Ind. 2012). To discern that intent, we look first to the statutory language itself and give effect to the plain and ordinary meaning of statutory terms. Pierce v. State , 29 N.E.3d 1258, 1265 (Ind. 2015). "If a statute is unambiguous, that is, susceptible to but one meaning, we must give the statute its clear and plain meaning." State v. Evans , 810 N.E.2d 335, 337 (Ind. 2004) (quotation omitted).

Suggs v. State , 51 N.E.3d 1190, 1193–94 (Ind. 2016).

[12] Indiana Code Section 14–27–7.5–8(a)(1) (2017) provides in relevant part that the DNR has "jurisdiction ... over the maintenance and repair of structures in, on, or along ... streams." The statute does not define "streams." But that term has a plain and ordinary meaning, namely, "a body of running water flowing in a channel on the surface of the ground [.]" Webster's 3d New Int'l Dictionary 2258 (2002). And the Commission used that plain and ordinary meaning here:

[t]he DNR's witnesses all provided definitions of "stream" as flowing water through a defined channel. The DNR's definition is consistent with the definitions provided by the parties as Exhibit 3, which includes definitions from both standard English dictionaries and technical dictionaries. The Moriaritys argue that [the definition proffered by their expert witness,
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