Prohosky v. Prudential Ins. Co. of America

• Decision Date: 28 March 1984
• Docket Number: No. L 82-90.,L 82-90.
• Parties: Robert PROHOSKY, Wanda Prohosky, Bruce Summers, Mary Summers, E. Kenneth Mattocks, Marolyn Mattocks, Russell P. Spall, Ardis F. Spall, Ronald M. Prohosky, Elizabeth A. Prohosky, Max I. Stucker, George E. Kanne, R. Joanne Kanne, Merle L. Beaver, Charlene Beaver, Arthur Walker, Cynthia Walker, Edward Prohosky, Pearl Prohosky, Mildred Randolph Young, Candice L. Stetler, M. Sewellyn Cate, J. Tyke Randolph, Amanda E. Zacher, Henry Hubeny, Max E. Stowers, Delos Chuff, Wilma Chuff, Gary Woodke, Karen Woodke, RN, Inc., Edward L. Kosta, Joseph Lane, Estate of Harry E. Brunton, Paul Laird, Wallace Laird, Byron K. Callahan, Charles D. Schleman, Paula J. Schleman, Wayne Gratner, Sandra Gratner, Ray Hammond, Emma K. Hammond, Willie Conley, Sue Conley, Robert G. Chapman, Harold Kanne, Norman Prohosky, Carol L. Prohosky, Gerald Spall, Arthur Brinkman, Anita Evans, Marian B. Williams, Robert C. Laking, Anne Lakin, C.L. Corporation, Thomas L. Kuss, Alma Kuss, C. Mitchell Ockerman, Marcia A. Ockerman, M. Anastasia Stephenson, and Hanes Berenda, Plaintiffs, v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant.
• Court: U.S. District Court — Northern District of Indiana

584 F. Supp. 1337

Robert PROHOSKY, Wanda Prohosky, Bruce Summers, Mary Summers, E. Kenneth Mattocks, Marolyn Mattocks, Russell P. Spall, Ardis F. Spall, Ronald M. Prohosky, Elizabeth A. Prohosky, Max I. Stucker, George E. Kanne, R. Joanne Kanne, Merle L. Beaver, Charlene Beaver, Arthur Walker, Cynthia Walker, Edward Prohosky, Pearl Prohosky, Mildred Randolph Young, Candice L. Stetler, M. Sewellyn Cate, J. Tyke Randolph, Amanda E. Zacher, Henry Hubeny, Max E. Stowers, Delos Chuff, Wilma Chuff, Gary Woodke, Karen Woodke, RN, Inc., Edward L. Kosta, Joseph Lane, Estate of Harry E. Brunton, Paul Laird, Wallace Laird, Byron K. Callahan, Charles D. Schleman, Paula J. Schleman, Wayne Gratner, Sandra Gratner, Ray Hammond, Emma K. Hammond, Willie Conley, Sue Conley, Robert G. Chapman, Harold Kanne, Norman Prohosky, Carol L. Prohosky, Gerald Spall, Arthur Brinkman, Anita Evans, Marian B. Williams, Robert C. Laking, Anne Lakin, C.L. Corporation, Thomas L. Kuss, Alma Kuss, C. Mitchell Ockerman, Marcia A. Ockerman, M. Anastasia Stephenson, and Hanes Berenda, Plaintiffs, v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant.

No. L 82-90.

United States District Court, N.D. Indiana, Hammond Division.

March 28, 1984.

John R. Nesbitt, Rensselaer, Ind., for plaintiffs.

William M. Evans, Wayne C. Ponader, David R. Day, Linda E. Weaver, Indianapolis, Ind., J. Frederick Hoffman, Lafayette, Ind., for defendant.

MEMORANDUM AND ORDER

ALLEN SHARP, Chief Judge.

I.

The complaint in this case was filed on October 13, 1982. Jurisdiction is invoked on the basis of diversity of citizenship under 28 U.S.C. § 1332. Plaintiffs are citizens and residents of the State of Indiana, State of Illinois, and the State of Arkansas. Defendant is a corporation organized and existing under the laws of the State of New Jersey, having its principal place of business in New Jersey. The subject matter of the case involves land located in Newton and Jasper Counties, State of Indiana, and in this district.

There has been no certification of class under Rule 23 of the Federal Rules of Civil Procedure although the same was requested. Same was denied. See proceedings December 27, 1982. There has been, subsequent to the filing of the complaint, the intervention of additional plaintiffs. The complaint relates to irrigation activities of real estate previously purchased and now owned by Prudential consisting of approximately 23,000 acres. The complaint seeks injunctive relief as well as money damages.

A trial was held on the injunctive issues in Lafayette, Indiana, beginning on the 24th day of October, 1983 and continued for seven trial days ending November 3, 1983. Final arguments were heard on March 2, 1984. The case is now ripe for decision on the injunctive phase.

II.

This case is presently before the court on a motion for injunctive relief. Generally speaking, the standards requisite for the granting of injunctive relief are as follows: (1) a reasonable likelihood of prevailing on the merits; (2) an absence of an adequate remedy at law; (3) irreparable harm to the movant that outweighs any harm that might occur to the non-movant should the motion be granted; and, (4) the issuance of the injunction would serve the public interest. Syntex Ophthalmics, Inc., et al v. Tsuetaki et al, 701 F.2d 677 (7th Cir.1983); Machlett Laboratories, Inc. v. Techny Industries, Inc., 665 F.2d 795 (7th Cir.1981); Charles v. Carey, 627 F.2d 772 (7th Cir. 1980); Ekanem v. Health & Hospital Corp., 589 F.2d 316 (7th Cir.1978); Helene Curtis Industries, Inc. v. Church & Dwight Co., 560 F.2d 1325 (7th Cir.1977), cert. denied, 434 U.S. 1070, 98 S.Ct. 1252, 55 L.Ed.2d 772 (1978); Fox Valley Harvestore v. A.O. Smith Harvestore Products, Inc., 545 F.2d 1096 (7th Cir.1976); and Eaton Corporation v. Appliance Valves Corporation, 526 F.Supp. 1172, 1182 (N.D.Ind. 1981), aff'd by order (7th Cir. July 27, 1982).

A district court deciding whether a permanent injunction should issue must undertake a three stage inquiry. First, the court must decide whether plaintiffs have actually succeeded on the merits of their claim. Second, the court must decide whether the "balance of equities" favors the granting of injunctive relief. Finally, the court needs to decide what form the injunctive remedy should take. Philadelphia Welfare Rights Organization v. O'Bannon, 525 F.Supp. 1055, 1057 (E.D.Pa. 1981); Sierra Club v. Alexander, 484 F.Supp. 455, 471 (N.D.N.Y.1980), aff'd, 633 F.2d 206 (2d Cir.1980).

Particularly when balancing the equities, a district judge should exercise his discretion in determining the propriety of injunctive relief. Among the factors traditionally considered in this balance are: the adequacy of another remedy; the benefit to the plaintiff if injunctive relief is granted and hardship if such relief is denied; the hardship on the defendant if injunctive relief is granted; the hardship on third parties; the convenience and effectiveness of administration; and the public and social consequences of either granting or denying injunctive relief. Philadelphia Welfare Rights Organization, supra, 525 F.Supp. at 1058.

III.

A part of the historical background relating to the purchase of this real estate is found in Coldwell Banker & Co. v. Karlock, 686 F.2d 596 (7th Cir.1982).

In this case it is desirable to first consider the substantive law of Indiana, both ancient and modern, both common law and statutory law, in order to fulfill this court's obligation under Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), to apply the substantive law of Indiana. See also, Bank of Waukegan v. Freshley, 421 F.Supp. 1033 (N.D.Ind.1976). Courts of the United States sitting in diversity jurisdiction cases are required to apply the constitutional, statutory and common law of the state in which they sit whenever faced with a non federal question of law. Gintert v. Howard Publications, Inc., 565 F.Supp. 829, 837 (N.D.Ind.1983); Commonwealth Edison Co. v. Gulf Oil Corp., 541 F.2d 1263, 1272 (7th Cir.1976); Seaboard Finance Co. v. Davis, 276 F.Supp. 507, 513 (N.D.Ill.1967).

In fulfillment of this obligation this court must first carefully examine the common law of Indiana as it has evolved during the last century and a quarter.

In the first Indiana case, New Albany and Salem Railroad Company v. Peterson, 14 Ind. 112 (1860), the railroad company, in the course of constructing the railroad, caused ground water to be diverted from plaintiff's well. The Supreme Court of Indiana applied the English Rule of Absolute Ownership to absolve the railroad company from liability, saying:

We think the present case, for the reasons above given, is not to be governed by the law which applies to rivers and flowing streams, but it rather falls within that principle which gives to the owner of the soil all that lies beneath his surface; that the land immediately below is his property, whether it is solid rock, or porous ground, or venous earth, or part soil part water; that the person who owns the surface may dig therein, and apply all that is there found to his own purpose, at his free will and pleasure; and that if in the exercise of such right, he intercepts or drains off the water collected from underground springs in his neighbor's well, this inconvenience to his neighbor falls within the description of damnum absque injuria, which cannot become the ground of an action.

Id. at 114.

The next case to be decided was City of Greencastle v. Hazelett, 23 Ind. 186 (1864) in which the Supreme Court of Indiana again applied the English rule to a case when the quality of the neighbor's water rather than the quantity was adversely affected by the defendant's activities. The plaintiff in City of Greencastle alleged that the use of the city's land for burial purposes would destroy the use of the plaintiff's spring for domestic purposes, but the court concluded that because the city was the owner of the property, the use of that property was for the city to determine. The fact that a cemetery might cause subsurface water to be rendered impure, thereby destroying the use of the spring, would not be a sufficient ground for the granting of a temporary injunction.

The English rule of absolute ownership was again recognized in Taylor v. Fickas, 64 Ind. 167 (1878), although Taylor was a surface water case, and in People's Gas Co. v. Tyner, 131 Ind. 277, 31 N.E. 59 (1891), and Ohio Oil Co. v. Indiana, 177 U.S. 190, 20 S.Ct. 576, 44 L.Ed. 729 (1900), although People's Gas and Ohio Oil were gas cases. In People's Gas, the court cited with approval the following language:

Petroleum oil, like subterranean water, is included in the comprehensive idea which the law attaches to the word land, and is a part of the soil in which it is found. Like water, it is not the subject of property except while in actual occupancy, and a grant of either water or oil is not a grant of the soil or of anything for which ejectment will lie.

* * * * * *

Water and oil, and still more strongly gas, may be classed by themselves, if the analogy be not too fanciful, as minerals ferae naturae. In common with animals, and unlike other minerals, they have the power and the tendency to escape without the volition of the owner.... They belong to the owner of the land, and are part of it, so long as they are on or in it, and are subject to his control; but when they escape, and go into other land, or come under another's control, the title of the former owner is gone. Possession of the land, therefore, is not necessarily possession of gas. If an adjoining, or even a distant, owner, drills his own land, and taps your gas, so that it comes into his well and, under his control, it is no longer yours, but his. 131 Ind. 281, 31 N.E. 59.

In 1904, the Supreme Court of Indiana chose not to apply literally the English Rule of Absolute Ownership in Gagnon v. French Lick Springs Hotel Co., 163 Ind. 687, 72 N.E. 849 (1904). In that case Gagnon and...