North Vernon v. Jennings Northwest Regional

• Decision Date: 14 June 2005
• Docket Number: No. 40S01-0404-CV-184.,40S01-0404-CV-184.
• Citation: 829 N.E.2d 1
• Parties: CITY OF NORTH VERNON, Indiana, Appellant (Defendant below), v. JENNINGS NORTHWEST REGIONAL UTILITIES; Vance D. Funkhouser, Max A. Wiley, Norma Teeple, Donald McCauley, Lynn H. Clark, Jolene McQueen and Paul Michael Irwin, in their Capacity as Trustees of the Jennings Northwest Regional Utilities, Appellees (Plaintiffs below).
• Court: Indiana Supreme Court

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829 N.E.2d 1

CITY OF NORTH VERNON, Indiana, Appellant (Defendant below), v. JENNINGS NORTHWEST REGIONAL UTILITIES; Vance D. Funkhouser, Max A. Wiley, Norma Teeple, Donald McCauley, Lynn H. Clark, Jolene McQueen and Paul Michael Irwin, in their Capacity as Trustees of the Jennings Northwest Regional Utilities, Appellees (Plaintiffs below).

No. 40S01-0404-CV-184.

Supreme Court of Indiana.

June 14, 2005.

Corinne R. Finnerty, McConnell & Finnerty, North Vernon, for Appellant.

Bette J. Dodd, Lewis & Kappes, P.C., Jo Angela Woods, Indiana Association of Cities & Towns, Indianapolis, for Amici Curiae.

Mary Ann Gay, Versailles, Adam Arceneaux, Brian Bailey, Ice Miller, Indianapolis, for Appellees.

RUCKER, Justice.

This case requires us to determine what happens when there is an overlap between the sewage service area of a regional sewer district and the sewage service area of a municipality. Under the facts presented we conclude the municipality prevails.

Facts and Procedural History

Located in Jennings County, the City of North Vernon ("the City") operates a wastewater treatment and collection facility. The City has the statutory authority to provide wastewater services inside its corporate boundaries as well as within a ten-mile radius outside its corporate boundaries. In 1996, the Jennings County Commissioners filed a petition with the Indiana Department of Environmental Management ("IDEM") requesting IDEM to form a regional water and sewer district for the northwest portion of Jennings County. IDEM granted the petition and entered an order establishing Jennings Northwest Regional Utilities ("JNRU"). Among other things the order authorized JNRU to provide sewer services to Geneva Township, Center Township, Spencer Township, and portions of Sand Creek Township.

The order excluded the City's corporate boundaries from JNRU's service area. But at the time the order was entered, the City was already providing sewer services to areas of the county that IDEM identified as JNRU's service district. Those areas are within ten miles outside of the City's corporate boundaries. Sand Creek Elementary School ("the School"), which was then in the planning stages for construction, is located within that ten-mile radius.

Both JNRU and the City approached the School about connecting to their respective sewer lines and providing sewer services. Over JNRU's objection, School officials entered into a thirty-year service agreement with the City. The City is currently servicing the School and has done so since the School opened in the year 2000. Although JNRU eventually plans to do so, it had not constructed sewer facilities for the School as late as May 2004.

JNRU filed a complaint against the City seeking a declaratory judgment that JNRU had the exclusive right to serve the School and that the City did not. The City moved to dismiss JNRU's complaint and attached various exhibits in support. As a result, the trial court treated the City's motion as a motion for summary judgment. See Ind. Trial Rule 12(B)(8). JNRU responded with its own motion for summary judgment. After conducting a hearing, the trial court entered summary judgment in JNRU's favor. Among other things the trial court concluded: (i) the City's right to provide sewer services to Sand Creek Elementary School is contingent upon JNRU's consent and agreement, (ii) JNRU has never agreed or consented to the City's exercise of power to provide sewer services to the School, and (iii) without JNRU's consent or agreement, the City has no right to provide sewer services to the School. On review the Court of Appeals affirmed the judgment of the trial court. See North Vernon v. Jennings Northwest Regional Utilities, 799 N.E.2d 1068 (Ind.Ct.App.2003). Having previously granted transfer, we now reverse the trial court's judgment.

When reviewing a grant or denial of summary judgment our well-settled standard of review is the same as it is for the trial court: we examine whether there is a genuine issue of material fact, and whether the moving party is entitled to judgment as a matter of law. Indiana Univ. Med. Ctr., Riley Hosp. for Children v. Logan, 728 N.E.2d 855, 858 (Ind.2000). Summary judgment should be granted only if the evidence sanctioned by Indiana Trial Rule 56(C) shows that there is no genuine issue of material fact and the moving party deserves judgment as a matter of law. Gunkel v. Renovations, Inc., 822 N.E.2d 150, 152 (Ind.2005). All evidence must be construed in favor of the opposing party, and all doubts as to the existence of a material issue must be resolved against the moving party. Tibbs v. Huber, Hunt & Nichols, Inc., 668 N.E.2d 248, 249 (Ind.1996).

Discussion

JNRU was created under the auspices of Indiana Code section 13-26-1-1 et seq., which governs the establishment of regional water and sewer districts. The statute provides in relevant part, "Any area may be established as a regional water, sewage, or solid waste district under this article for one (1) or more of the following purposes: ... (2) To provide for the collection, treatment, and disposal of sewage inside and outside the district." Ind.Code § 13-26-1-1. Once established, a regional district is an "independent municipal corporation" that has only such power and authority as expressly conferred by statute. Ind.Code §§ 13-26-2-10; 13-26-5-1 to -2.

The City is a municipality as defined by Indiana Code section 36-1-2-11. A municipality has the authority to "acquire, construct, improve, operate, and maintain sewage works under this chapter." Ind.Code § 36-9-23-2(1). With exceptions not applicable here, this authority includes providing sewer services "in areas within ten (10) miles outside its corporate boundaries." Ind.Code § 36-9-23-36. Also applicable in this case is Indiana's Home Rule Act — Indiana Code sections 36-1-3-1 to -9. The Act abrogated the traditional rule that local governments possessed only those powers expressly authorized by statute. Instead the Act expressly broadened a governmental unit's authority to include not only all powers granted to it by statute, but also "all other powers necessary or desirable in the conduct of its affairs, even though not granted by statute." Ind.Code § 36-1-3-4(b)(2). See also City of Gary v. Indiana Bell Tel. Co., Inc., 732 N.E.2d 149, 153 (Ind.2000); City of Crown Point v. Lake County, 510 N.E.2d 684, 685-86 (Ind.1987).

Relying on the express statutory authority to provide sewer services within ten miles outside of its corporate boundaries, as well as on the broad provisions of the Home Rule Act, the City contends that it has the exclusive authority to provide sewer services to the School. JNRU acknowledges that the School is located within ten miles outside of the City's corporate borders. However, JNRU counters that the Home Rule Act itself limits the City's authority. In relevant part the Act provides, "a unit¹ may exercise any power it has to the extent that the power: (1) is not expressly denied by the Indiana Constitution or by statute; and (2) is not expressly granted to another entity." Ind.Code § 36-1-3-5(1)-(2) (emphasis added). JNRU argues that because IDEM has expressly granted it the authority to provide sewer services to an area within ten miles outside of the City's corporate boundaries, the City must first obtain JNRU's permission before the City can exercise its authority to provide such services within the area. Thus, according to JNRU the trial court correctly entered summary judgment in its favor on this point.

The first step in interpreting a statute is to determine whether the Legislature has spoken clearly and unambiguously on the point in question. Rheem Mfg. Co. v. Phelps Heating & Air Conditioning, Inc., 746 N.E.2d 941, 947 (Ind.2001). When a statute is clear and unambiguous, we need not apply any rules of construction other than to require that words and phrases be taken in their plain, ordinary, and usual sense. Poehlman v. Feferman, 717 N.E.2d 578, 581 (Ind.1999). Clear and unambiguous statutes leave no room for judicial construction. Id. However when a statute is susceptible to more than one interpretation it is deemed ambiguous and thus open to judicial construction. Amoco Production Co. v. Laird, 622 N.E.2d 912, 915 (Ind.1993). And when faced with an ambiguous statute, other well-established rules of statutory construction are applicable. One such rule is that our primary goal of statutory construction is to determine, give effect to, and implement the intent of the Legislature. Indiana Civil Rights Comm'n v. Alder, 714 N.E.2d 632, 637 (Ind.1999). To effectuate legislative intent, we read the sections of an act together in order that no part is rendered meaningless if it can be harmonized with the remainder of the statute. AlliedSignal, Inc. v. Ott, 785 N.E.2d 1068, 1078 (Ind.2003). We also examine the statute as a whole. Matter of Lawrance, 579 N.E.2d 32, 38 (Ind.1991). And we do not presume that the Legislature intended language used in a statute to be applied illogically or to bring about an unjust or absurd result. State ex rel. Hatcher v. Lake Super. Ct., Rm. Three, 500 N.E.2d 737, 739 (Ind.1986).

At first blush the Home Rule Act appears to be clear and unambiguous. A municipality "may exercise any power it has to the extent that the power ... is not expressly granted to another entity." Ind.Code § 36-1-3-5(a). But a strict interpretation of this provision, in the context of the facts before us, would produce an absurd result. More specifically, such an interpretation is at odds with the express grant of statutory authority given municipalities to operate sewer facilities within and without its corporate boundaries, and at odds with other provisions of the Act as well. For example the Act also provides, "[T]he policy of the state is to grant units all the powers that they need for the effective operation of government as to local affairs." Ind.Code. § 36-1-3-2. By unequivocal language the...