Town of Linden v. Birge
| Decision Date | 18 April 2022 |
| Docket Number | Court of Appeals Case No. 21A-PL-1811 |
| Citation | 187 N.E.3d 918 |
| Parties | TOWN OF LINDEN, Indiana, Montgomery County, Indiana, Montgomery County Commissioners, Montgomery County Drainage Board, and Montgomery County Surveyor, Appellants-Defendants, v. Darrell BIRGE and Sandra Birge, Appellees-Plaintiffs. |
| Court | Indiana Appellate Court |
Attorneys for Appellant Town of Linden: Sheri Bradtke McNeil, Lizabeth R. Hopkins, Kopka Pinkus Dolin, PC, Crown Point, Indiana
Attorneys for Appellants Montgomery County, Montgomery County Commissioners, Montgomery County Surveyor, and Montgomery County Drainage Board: Brandon W. Ehrie, Kyle A. Lansberry, Lewis Wagner, LLP, Indianapolis, Indiana
Attorneys for Appellees: Michael L. Einterz, Michael L. Einterz, Jr., Einterz & Einterz, Zionsville, Indiana
[1] The Town of Linden ("the Town") and Montgomery County ("the County") (collectively "the Defendants") made improvements to an existing regulated drain to alleviate flooding issues in the Town and surrounding areas. Part of the drain runs through a pre-existing drainage easement on property ("the Property") belonging to Darrell and Sandra Birge ("the Birges"). The Birges alleged that the Property is now subject to frequent flooding caused by the improvements to the drain. They, therefore, refused to pay the assessment levied against them for the improvements to the drain and instead brought an action for inverse condemnation against the Defendants,2 claiming that the flooding of the Property constitutes a governmental taking of their property without compensation. The trial court entered an order finding that there had been a permanent physical invasion of the Property and setting the matter for a determination of damages.
[2] The Defendants bring this interlocutory appeal challenging the trial court's conclusion that there has been a taking and present several arguments, which we consolidate and restate as: (1) whether the trial court erred by admitting and considering evidence regarding the highest and best use of the Property; (2) whether the trial court erred in determining that the flooding issues on the Property were caused by the improvements to the drain; (3) whether the flooding on the Property was sufficient to support a finding of a taking; and (4) whether the trial court failed to consider the applicable drainage right-of-way statute. Concluding that the trial court erred by applying the wrong legal standard to its takings analysis, we reverse and remand. Because the other issues presented by the Defendants are likely to recur on remand, we address them as well.
[3] Defendants raise five issues, which we consolidate, reorder, and restate as:
[4] The drain involved in this case is a regulated drain3 known as the James Hose Drain ("the Drain"). The Drain was built in 1898 as an agricultural drain. The Drain carries water from the higher-elevated areas south of the Town, through the Town, then through a drainage easement, or right-of-way, located on lower-lying property belonging to the Birges, after which the Drain empties into the Stoddard Ditch. The following map depicts the location of the Drain in relation to the Town and the Property:
See Exhibits Vol. I p. 168, Vol. IV, p. 67.4 Mr. Birge is a farm drainage contractor with over forty years’ experience. Mr. Birge did not connect any lateral drains to the Drain and admitted that he would not do so until the instant litigation is completed.
[5] Although it was rebuilt in 1927, the Drain was never designed or intended to be an urban drain and had fallen into disrepair. Accordingly, the Drain had long been inadequate to drain the watershed it served. The lack of adequate draining resulted in frequent flooding in the watershed serviced by the Drain, especially in the Town, which had been built without its own storm sewer system and relied solely on the Drain to remove rainwater. This frequent flooding hampered development of the Town.
[6] Due to the drainage issues in the Town and the higher areas south of the Town, the County and the Town undertook a joint effort in 2006 to alleviate the flooding issues. In 2009, the County obtained a grant to hire an engineering firm to prepare a plan to improve the Drain. The County retained Banning Engineering, which prepared a report with three alternatives to address the flooding. The plan that was ultimately chosen, known as Alternative 2, called for the expansion of a water-detention area—also referred to as a ponded area, although it was only ponded during heavy rainfall—south of the Town; this plan would replace the existing Drain with a forty-two-inch pipe5 through the Town, and the construction of a structure at the north end of the Town to shift the Drain from the forty-two-inch pipe to two thirty-inch pipes.6 See Ex. Vol. I p. 35.
[7] A public hearing was held on the proposed reconstruction of the Drain, where a representative of Banning Engineering presented its report and its recommendation to proceed with Alternative 2, as the other two alternatives called for the acquisition of seven and ten acres of additional land. Alternative 2, in contrast, could be built along the existing easements and was, therefore, the least costly of the alternatives at an estimated price of $730,000.
[8] In September 2009, the Commissioners voted to approve Alternative 2. Due to financing concerns, however, the Town applied for a grant to fund the construction of the improvements to the Drain. Ultimately, the Town procured a grant of $600,000, with the remaining costs to be covered by the County's maintenance fund and a special assessment from the landowners within the watershed. In September 2011, the Drainage Board held a final public hearing on the project, including the assessments. The Birges were assessed benefits from the improved Drain in the amount of $7,679.23 and assessed no damages. Thereafter, the Drainage Board issued a reconstruction order and adopted the reconstruction report of the County Surveyor. The Birges filed no objection under Indiana Code Sections 36-9-27-52(d) to the proposed reconstruction.7
[9] The Town, as the receiver of the grant, was required to separately evaluate the reconstruction plan, and it also chose Alternative 2. When engineers began the field work on the project, they determined that, instead of a forty-two-inch pipe, the land could accommodate a larger forty-eight-inch pipe. Accordingly, when the request for bids were sent to contractors, there were two construction options: Option 1, the original plan calling for the forty-two-inch pipe; and Option 2, the newer plan calling for a forty-eight-inch pipe. On January 20, 2012, engineer Joe Miller of Banning Engineering presented the construction bids to the Town. The lowest bid for Option 1 was $574,146, and the lowest bid for Option 2 was $605,821. The Town chose Option 2 and awarded the project to Harvey Construction.
[10] The reconstruction of the Drain began in March 2012. During construction, a few changes were made due to unforeseen issues. One of these involved the enlargement of a water-detention area south of the Town and south of the Property. During construction of this area, existing underground utilities were found, which prohibited the planned enlargement of the water-detention area. Banning Engineering determined, based on computer modeling, that if the detention area was not enlarged as planned, the reconstructed Drain would still be adequate to drain the watershed. As part of the plan, a berm—an artificial ridge or embankment—was also constructed along the northern portion of the detention area that would prevent even a 100-year rain event from flooding the Town.
[11] The portion of the Drain where the forty-eight-inch pipe split into two thirty-two-inch pipes was located on the Property at a point referred to as Structure 101. A grated manhole, or inlet, was located at this area to allow water to move in and out of the Drain. When construction of this portion of the Drain was underway, the Birges complained about the grated opening on the inlet. On March 19, 2012, the Birges sent a formal notice of their disagreement with the design of the Drain on their property, especially the grated manhole at Structure 101. The Birges demanded that no manholes be installed or, if they were installed, that the manholes be buried sufficiently deep so that they would not impact farming on the Property.
[12] The Drainage Board asked Miller to determine how the lack of a manhole grate at that location would affect the Drain. On March 23, 2012, Miller presented his findings to the Drainage Board and concluded that the grated manhole structures were necessary due to the grade of the Property and that the manholes could not be buried as demanded by the Birges.8 The Drainage Board concluded that it had followed the legal procedures for the Drain improvement project and that the Birges had failed to timely raise any objections. The Drain was ultimately completed by the end of 2012.
[13] The Property is, as mentioned above, located on a lower-elevated area north of the Town. The Birges live in a home located on a portion of the Property and lease the remaining portion as farmland to Brian and Chuck Shelby. There was conflicting evidence regarding the extent of ponding or flooding of the Property prior to the improvements to the Drain. The trial court found, however, that the Birges had...
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Town of Linden v. Birge
...decision in Arkansas Game & Fish Commission v. United States, government-induced flooding need not be permanent to be a compensable taking. Id. (citing 568 U.S. 23, 34 (2012)). To resolve a takings claim in a temporary flooding case, the panel added, Arkansas Game directs courts to consider......