Ryt v. Peace (In re Peace), Case No. 13–10430

• Decision Date: 02 October 2015
• Docket Number: Case No. 13–10430,Adversary Case No. 13–1041
• Parties: In Re Robert A. Peace, Jr., Jaime L. Peace, Debtors James Vande Ryt, Karen Vande Ryt, Jeff Winningham, Plaintiffs v. Robert A. Peace, Jr., Defendant
• Court: United States Bankruptcy Courts. Sixth Circuit. U.S. Bankruptcy Court — Southern District of Ohio

546 B.R. 65

In Re Robert A. Peace, Jr., Jaime L. Peace, Debtors

James Vande Ryt, Karen Vande Ryt, Jeff Winningham, Plaintiffs

v.Robert A. Peace, Jr., Defendant

Case No. 13–10430

Adversary Case No. 13–1041

United States Bankruptcy Court, S.D. Ohio, Western Division.

Signed October 2, 2015

Entered October 5, 2015

James E. Kolenich, Cincinnati, OH, for Plaintiffs.

Brian D. Flick, The Dann Law Firm, Cincinnati, OH, for Defendant.

MEMORANDUM OF DECISION

Jeffery P. Hopkins, United States Bankruptcy Judge

Plaintiffs James Vande Ryt, Karen Vande Ryt, and Jeff Winningham (hereinafter referred to collectively as "the Vande Ryts") filed this adversary action against their former next-door neighbor Defendant–Debtor Robert Peace, Jr. (hereinafter as "Defendant Peace"), seeking a determination that an alleged debt predicated upon water run off damage to their former homestead is nondischargeable pursuant to 11 U.S.C. § 523(a)(6). Following a two-day trial the parties filed post-trial briefs (ECF Nos. 60 and 61) containing citations to the trial transcript (ECF Nos. 56 and 57). This memorandum constitutes the Court's findings of fact and conclusions of law required by Fed. R. Bankr.P. 7052.

SUMMARY OF DISPUTE

The Vande Ryts allege in the adversary complaint that the Defendant Peace altered two parcels of land, each bordering the property where the Vande Ryts resided, resulting in a diversion of surface water that caused significant property damage to their yard and driveway.

JURISDICTION

The Court has jurisdiction over this action pursuant to 28 U.S.C. § 1334(a)and (b). This proceeding arises in a case referred to this Court by the Standing Order of Reference entered in this District. Pursuant to 28 U.S.C. § 157(b)(2)(I), the determination of the dischargeability of the debt is a core proceeding in which the Court is authorized to enter final judgment. The liquidation of the underlying debt is a related proceeding over which this Court possesses jurisdiction, see In re McLaren , 3 F.3d 958, 965–66 (6th Cir.1993)(bankruptcy courts possess jurisdiction to liquidate underlying debt in dischargeability action), and in which the Court is authorized to enter final judgment. See 28 U.S.C. § 157(c)(2)(upon consent of the parties bankruptcy court can enter final judgment in related proceedings).¹

DOES A DEBT EXIST?

The Vande Ryts' claim is unliquidated. If so, the threshold issue in a dischargeability action is whether a debt exists. Lawson Conley (In re Conley), 482 B.R. 191, 207 (Bankr.S.D.Ohio 2012); Weidle Corp. v. Leist (In re Leist), 398 B.R. 595, 601 (Bankr.S.D.Ohio 2008). The answer is determined by applicable nonbankruptcy law. See Grogan v. Garner, 498 U.S. 279, 283–84, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991).

Under Ohio law, liability for interference with the flow of surface water requires proof of negligence. Franklin Co. Dist. Board of Health v. Paxson, 152 Ohio App.3d 193, 203, 787 N.E.2d 59 (2003). Did the defendant breach a duty of care that proximately caused injury to the plaintiff? Id. With respect to an interference with the flow of surface water, a breach of duty of care occurs only if the interference is unreasonable. McGlashan v. Spade Rockledge Terrace Condo Dev. Corp., 62 Ohio St.2d 55, 60, 402 N.E.2d 1196 (1980). The reasonableness of the interference is determined by balancing the gravity of the harm against the utility of the conduct. Id. ; Paxson, 152 Ohio App.3d at 203, 787 N.E.2d 59.

For the reasons that follow, Defendant Peace proximately caused injury to the Vande Ryts by unreasonably interfering with the flow of surface water.

THE PARTIES

Plaintiffs Karen Vande Ryt ("Karen") and Jeff Winningham ("Jeff") are married, and they have a son and stepson, Plaintiff James Vande Ryt ("James"). From 1990 through 2011, Karen and Jeff resided at 4684 East Miami River Road ("the Vande Ryt Property"). However, in 2007, James purchased the Vande Ryt Property from Karen.

The Debtor, Robert A. Peace, Jr. ("Defendant Peace"), resided next door to the Vande Ryt Property at 4692 East Miami River Road ("the Peace Property") from 2007 through 2013. Defendant Peace purchased the Peace Property from his dad, Robert Allan Peace ("Allan"), who is not a party to this action.²

THE PROPERTIES

The Vande Ryt Property and the Peace Property are side-by-side, as viewed from East Miami River Road, sharing a 290 foot boundary line from front to back. The properties are located on the southeast side of East Miami River Road. A map of the properties, Defendant's Exhibit T, is attached hereto.³

Both properties slope upward from the road, being higher in the back than the front. In fact, the properties are located on a hillside. Defendant Peace's aunt, also Allan's sister-in-law, Hester Peace, owns the land behind the properties ("the Uphill Property"). The Uphill Property, where it borders the Vande Ryt Property and the Peace Property, slopes uphill at a one to three slope (one foot vertically for every three feet horizontally). It is a steep slope.

2005 CONDITION OF THE PEACE PROPERTY

Allan purchased the Peace Property in 2005 following a foreclosure. At the time of the foreclosure the property was condemnable due to massive water damage. The Peace Property sat lower than the Vande Ryt Property. Surface water naturally gravitated to the Peace Property and collected there. According to Allan: (1) water flowed from the Vande Ryt Property into the basement window well of the Peace Property; and (2) dirt washed down the Uphill Property to the back door of the Peace Property.

WATERPROOFING BEGINS ON THE PEACE PROPERTY

Beginning in the summer of 2005, Allan began to make significant changes to the Peace Property. At the time, he owned several pieces of earth-moving equipment: a backhoe, an excavator, a skid steer, and a bulldozer. Allan excavated around the foundation of the house, digging down to the footer level. He repaired the foundation, added drain pipes, and back-filled with heavy stone to improve drainage.

2005 CONDITION OF THE VANDE RYT PROPERTY

The Vande Ryt Property was free from water damage when the work on the Peace Property began. A photo of the excavation on the Peace Property, Plaintiffs' Exhibit 2, is attached hereto. The photo is taken from the Vande Ryt Property. The photo reveals healthy trees and grass on the Vande Ryt Property. Karen testified that the Vande Ryt Property had never experienced any water damage up to this point in time.

2009 CONDITION OF THE VANDE RYT PROPERTY

In 2009, Paul Cooper visited the Vande Ryt Property. Mr. Cooper is the owner of a landscaping business.

Mr. Cooper testified about the condition of the property as follows:

A: The front yard was decimated. There was no grass to be seen. Mostly it was mud and/or clay. Very few shrubs. There were a few patches of grass here and there. But most of it was just, it was gone.

Q: ... [D]id you have an occasion to continue your inspection of the property up the hill towards the back end of the property?

A: I did.... I observed a lot, a lot of water damage. Deep ruts, they looked like veins in the yard with no, nothing, no soil, no trees.

Q: Were the trees at that point dead?

A: They were predominantly dead. I believe, if my memory serves me, there were 11 to 12 trees that the leaves were almost gone. There were a couple of pine trees where the roots were showing underneath where the [soil] had been washed out of the entire root system.

Karen described the property as a full acre of mud with dead trees. According to Karen and Jeff, it looked like a bomb exploded on the Vande Ryt Property. Plaintiffs' Exhibit 24, attached hereto, is indicative of the condition described.

DAMAGES TO THE VANDE RYT PROPERTY: TREES, SOIL, AND GRASS

Mr. Cooper testified about the work necessary to restore the Vande Ryt Property. Two pine trees and eleven or twelve deciduous trees needed to be removed and replaced. They were either dead or going to die. Fifty to sixty tons of topsoil needed to be added. Grass needed to be planted. Lastly, to enable the new trees and grass to grow without being washed away by surface waters, a drain tile needed to be installed. Mr. Cooper testified that it would cost $30,000 to complete the remediation.

The record suggests that the Vande Ryt Property may have sustained further damages. For example, there is proof that the driveway was ruined. However, there is no proof of the cost to repair the driveway or quantification of any other damages. Therefore, the Court will limit its analysis to the loss of trees, soil, and grass.

WHAT CAUSED THE LOSS OF THE TREES, SOIL, AND GRASS?

The Vande Ryts offered the expert testimony of Craig Abercrombie. Mr. Abercrombie works for Abercrombie and Associates, Inc. ("AA"), a civil engineering and land surveying business. Among other things, AA specializes in drainage issues related to private development.

According to Mr. Abercrombie, three separate events caused the damage to the Vande Ryt Property. One event occurred on the Peace Property and two events occurred on the Uphill Property.

1. Creation of an Embankment on the Peace Property

Mr. Abercrombie discovered that a man-made embankment had been created on the Peace Property, along the property line that the Peace Property shares with the Vande Ryt Property. Plaintiff's Exhibit 27A, attached hereto, is a map of the properties that identifies the embankment as a pink line located on the property line between the driveways.⁴ According to Mr. Abercrombie, surface water would normally flow over the Vande Ryt Property and onto the Peace Property at the location of the embankment. The embankment redirected surface water traveling toward the Peace Property back onto the Vande Ryt Property in a concentrated flow that resulted in erosion.

2. Creation of a Swale on the Uphill Property

Mr. Abercrombie sent a survey crew to the Vande Ryt Property. The crew used survey equipment to take elevation readings of the surrounding land. Those readings revealed a swale, or ditch, on the Uphill...