Town of Georgetown v. Sewell, 22A04-0206-CV-289.

• Decision Date: 21 April 2003
• Docket Number: No. 22A04-0206-CV-289.,22A04-0206-CV-289.
• Citation: 786 N.E.2d 1132
• Parties: TOWN OF GEORGETOWN, Appellant-Defendant, v. James Timothy SEWELL, Randy Sewell and Denise Sewell, Appellees-Plaintiffs.
• Court: Indiana Appellate Court

786 N.E.2d 1132

TOWN OF GEORGETOWN, Appellant-Defendant, v. James Timothy SEWELL, Randy Sewell and Denise Sewell, Appellees-Plaintiffs.

No. 22A04-0206-CV-289.

Court of Appeals of Indiana.

April 21, 2003.

Christopher R. Whitten, A. Jack Finklea, Scopelitis Garvin Light & Hanson, Indianapolis, IN, Attorneys for Appellant.

Larry R. Church, Wyatt Tarrant & Combs, New Albany, IN, Attorney for Appellee.

OPINION

SHARPNACK, Judge.

The Town of Georgetown ("Georgetown") appeals the judgment of the trial court, which found that Georgetown committed a taking against Randy and Denise Sewell (collectively, "the Sewells") and James Timothy Sewell ("Timothy"). Georgetown raises several issues, which we consolidate and restate as:

I. Whether the trial court erred by granting Timothy's motion to amend the complaint to add the Sewells as party plaintiffs; and

II. Whether the trial court erred by finding that a taking had occurred with respect to tract one of the subject property.

We reverse.

The relevant facts follow. This matter involves property located on Old Lanesville Road in Floyd County (the "subject property"). During the late sixties and early seventies, the subject property was a landfill for the town of Georgetown. The Town Board of Georgetown capped the landfill sometime in the early seventies.

In June of 1985, Georgetown sold the subject property to Jerry Teeter for $2,300.00. When Teeter purchased the subject property, Georgetown had placed no restrictions upon the use of the land. Teeter owned the subject property for approximately eight to ten years. During that time, Teeter applied for and received both a septic system and building permit from Floyd County. He subsequently placed a mobile home on the subject property, where he lived for approximately three to four years.

In May of 1996, Teeter sold the subject property to Keith and Sherry Hertel (collectively, "the Hertels") for $40,000. The Hertels had lived across the street from the subject property for approximately ten years. The Hertels were aware that the subject property had been a landfill, but were unaware of any restrictions regarding the use of the subject property. The Hertels intended to build and sell homes on the subject property. On September 20, 1996, the Hertels obtained a new construction permit for a private sewage disposal system.

In May of 1998, the Sewells purchased a one acre tract of the subject property ("tract one") from the Hertels for $14,000. There is a dispute regarding whether the Hertels informed the Sewells that tract one had previously been a landfill. Keith Hertel claims that he told Randy Sewell that he "could only build a slab type home because [tract one] used to be a landfill." Transcript at 29. However, Randy Sewell stated in his deposition testimony, which was admitted into evidence at trial, that the Hertels never disclosed that tract one had been a landfill.

The Sewells purchased tract one because they intended to give the land to their son, Timothy. Specifically, they intended to build a house for him. The warranty deed indicates that the Hertels conveyed tract one directly to Timothy. On May 26, 1998, the Sewells obtained a new construction permit for a private sewage disposal system from the Floyd County Health Department. On June 3, 1998, the Sewells also obtained a building permit from Georgetown. Barbara Zoeller, the Deputy Clerk, authorized the building permit. When Zoeller issued the building permit she was not aware that tract one had once been a landfill. A few days after Georgetown issued the building permit, Zoeller received phone calls from citizens who were concerned that there was going to be some type of development on the subject property, which had been the Georgetown landfill. On June 17, 1998, Georgetown issued a stop work order for tract one.

In October of 1998, Georgetown scheduled a meeting at the subject property. Zoeller, Keith Hertel, representatives of Georgetown and Floyd County, Hershell Huff, a member of the Town Board between 1980 and 1984, and Rick Schroeder, a manager with the Indiana Department of Environmental Management ("IDEM"), attended this meeting. Schroeder's deposition testimony, which was admitted into evidence at trial, indicates that on the day of the meeting the subject property appeared normal and stable and was covered with grass and vegetation. However, during the meeting a backhoe operator dug holes in the land and in "every place that was suggested to probe, [they] observed solid waste." Id. at 181. Specifically, when discussing the dangers of building on solid waste, Schroeder stated, that:

If you breach the cover of any area that's been used for solid waste disposal, you increase the potential for precipitation to run through the waste to come in contact with the waste and generate a leachate which is for all practical purposes water that passes through waste and picks up some of it's constituents which then becomes a pollutant that [will] either [ ] go down into the water table or surface and go out to the surface waters of the state. . . . Also when you have water passing though waste, you can set the conditions for methane gas to be generated because methane gas is a by product of waste decomposing. And methane gas in a [confined] area, be it a crawl space underneath the house, or underneath a mobile home, if it's pinned in tightly, can be an explosive hazard if getting [an ignition] source.

Id. at 182. He stated that a house could safely be built on solid waste; however, the landowner would need to "excavate all the solid waste out, [and] bring back in fill dirt." Id. at 183. He suspected that this option was not economically practical. When asked whether there was anything that the landowners could do with the subject property, he stated, that, "[i]t can be used for recreational purposes, for grazing purposes, you could put a concrete slab building out there, like a tool shed, [the] type of structure where you wouldn't have the potential for accumulation of gas in a crawl space or a basement." Id. at 184.

The Hertels and Timothy appealed the issuance of the stop work order for the subject property to the Georgetown Board of Zoning Appeals ("Board of Zoning Appeals"). At one of the Board of Zoning Appeals meetings, the Hertels questioned why Georgetown had sold the subject property in 1985 if it was not suitable for development. According to Mrs. Hertel, one of the women at the meeting acknowledged that possibly Georgetown should not have sold the property, and a gentleman at the same meeting stated that Georgetown initially sold the subject property so that it could purchase a police car. Moreover, Huff testified that Georgetown did not have IDEM inspect the subject property and placed no restrictions upon the subject property, because "everyone on the board at that time and, ninety nine per cent of the population knew that that was the Town dump." Id. at 129. He also stated that, "we put [the subject property] up for bids because we needed the money out of the land . . . for a garbage truck." Id. at 128. The Board of Zoning Appeals subsequently denied the Hertels' and Timothy's appeal, because "it didn't think it would be proper to allow any homes to be built there." Id. at 148.

On January 19, 2000, the Hertels and Timothy filed a complaint for damages from inverse condemnation. On April 16, 2002, after a bench trial, the trial court issued its order. Specifically, the trial court granted Timothy the right to amend his complaint and add the Sewells as party plaintiffs. The trial court also determined that Timothy and the Sewells established that a taking had occurred with respect to tract one.¹ This appeal ensued.

I.

The first issue is whether the trial court erred by granting Timothy's motion to amend the complaint to add the Sewells as party plaintiffs. The parties disagree regarding the appropriate standard of review. The Sewells argue that we should review the trial court's grant of Timothy's motion to amend the complaint for an abuse of discretion. An abuse of discretion occurs if the trial court's decision is clearly against the logic and effect of the facts and circumstances before the court, or if the court has misinterpreted the law. SLR Plumbing & Sewer, Inc. v. Turk, 757 N.E.2d 193, 197 (Ind.Ct.App. 2001). However, Georgetown argues that we should review the trial court's decision de novo because it involves pure questions of law, namely whether the Sewells are real parties in interest and ultimately whether they have standing. Regardless of which standard of review is applicable, we find that the trial court erred by granting Timothy's motion because the Sewells are not real parties in interest.

Standing is a judicial doctrine that centers upon whether the complaining party is the proper party to invoke the court's jurisdiction. Shourek v. Stirling, 621 N.E.2d 1107, 1109 (Ind. 1993). The plaintiff "must demonstrate a personal stake in the outcome of the lawsuit and must show that he or she has sustained or was in immediate danger of sustaining, some direct injury as a result of the conduct at issue." Higgins v. Hale, 476 N.E.2d 95, 101 (Ind.1985). Standing is similar to, although not identical to, the real party in interest requirement of Ind. Trial Rule 17.² Pence v. State, 652 N.E.2d 486, 487 (Ind.1995), reh'g denied. A real party in interest is the person who is the true owner of the right sought to be enforced. E & L Rental Equip., Inc. v. Gifford, 744 N.E.2d 1007, 1011 (Ind.Ct. App.2001). Specifically, he or she is the person entitled to the fruits of the action. Id.

For example, in Reinking v. Metro. Bd. of Zoning Appeals of Marion County, 671 N.E.2d 137, 140 (Ind.Ct.App.1996),reh'g denied, we addressed the issue of standing and real party in interest in the context of property ownership. There, we confronted the issue of whether a subsequent purchaser of property could challenge the constitutionality of a...