Util. Ctr., Inc. v. City of Fort Wayne

• Decision Date: 11 April 2013
• Docket Number: No. 90S04–1208–PL–450.,90S04–1208–PL–450.
• Parties: UTILITY CENTER, INC. d/b/a Aqua Indiana, Inc., Appellant (Petitioner below), v. CITY OF FORT WAYNE, Indiana, Appellee (Respondent below).
• Court: Indiana Supreme Court

985 N.E.2d 731

UTILITY CENTER, INC. d/b/a Aqua Indiana, Inc., Appellant (Petitioner below),

v.CITY OF FORT WAYNE, Indiana, Appellee (Respondent below).

No. 90S04–1208–PL–450.

Supreme Court of Indiana.

April 11, 2013.

William T. Hopkins, Matthew M. Hohman, Barnes & Thornburg LLP, Fort Wayne, IN, Misty Smith Kelley, Baker Donelson Bearman Caldwell & Berkowitz PC, Chattanooga, TN, Attorneys for Appellant.

Briane M. House, Matthew E. Melton, Norris Choplin Schroeder LLP, Indianapolis, IN, Attorneys for Amicus Curiae Indiana Chapter of the National Association of Water Companies.

Robert T. Keen, Jr., Larry L. Barnard, Richard Paul Samek, Carson Boxberger LLP, Fort Wayne, IN, Randolph L. Seger, Brian W. Welch, Karl L. Mulvaney, Bingham Greenebaum Doll LLP, Indianapolis, IN, Attorneys for Appellee.

On Petition To Transfer from the Indiana Court of Appeals, No. 90A04–1101–PL–15

RUCKER, Justice.

At issue in this case is the scope of judicial review where a property owner challenges the compensation awarded for condemnation of its property by a city's board of public works under an eminent domain statute applicable to cities and towns.

Background and Procedural History

Doing business as Aqua Indiana, Utility Center, Inc. owned and operated certain water and sewer facilities in the City of Fort Wayne. The facilities were divided into two separate geographic areas, the North System and the Aboite System, both of which provided services to customers within and outside the city limits. In 2002 the City—through its Board of Public Works—passed a resolution appropriating and condemning Utility Center's North System which served approximately 12,000 customers. And in 2003, based on the average of two appraisals, the Board assessed damages in the amount of $17,202,499.50. Then in 2004 based on updated appraisals, the Board assessed damages in the amount of $14,759,500.00. Utility Center challenged the condemnation proceedings alleging that the City failed to follow the proper eminent domain or condemnation statutes. The trial court granted summary judgment in the City's favor which the Court of Appeals reversed on review. See Util. Ctr., Inc. v. City of Fort Wayne, 834 N.E.2d 686 (Ind.Ct.App.2005). On transfer a majority of this Court affirmed the trial court's grant of summary judgment, essentially holding that the City was authorized to acquire the North System and did so in accordance with the applicable statute. See Util. Ctr., Inc. v. City of Fort Wayne, 868 N.E.2d 453 (Ind.2007).

After this Court's June 2007 opinion the Board, in October 2007, reaffirmed its initial resolution appropriating and condemning Utility Center's North System; and based on another updated appraisal adopted a resolution assessing damages in the amount of $16,910,500.00. Utility Center filed a written remonstrance with the Board challenging the assessment, after which the Board confirmed the resolution.

Utility Center appealed the Board's decision to the trial court and requested a trial by jury. The City moved to strike this request and also moved for partial judgment on the pleadings on grounds that the trial court was “limited to a review of the record before the City of Fort Wayne Board of Public Works.” Appellant's App. at 32. The trial court granted the City's motion to strike the jury trial request as well as the City's motion for partial judgment on the pleadings. Utility Center sought interlocutory review and the Court of Appeals affirmed the trial court's judgment. See Util. Ctr., Inc. v. City of Fort Wayne, 960 N.E.2d 824 (Ind.Ct.App.2012). Having previously granted transfer thereby vacating the opinion of the Court of Appeals, seeInd. Appellate Rule 58(A), we now reverse the judgment of the trial court.

Discussion

“[T]he power of eminent domain is inherently vested in the State but can be delegated to other entities by the legislature.” Vickery v. City of Carmel, 424 N.E.2d 147, 148 (Ind.Ct.App.1981) (citing Bd. of Comm'rs v. Blue Ribbon Ice Cream & Milk Corp. 231 Ind. 436, 109 N.E.2d 88, 89–90 (1952)). “Exercise of the delegated power consists of two aspects: 1) a specific legislative grant of authority; and 2) a method of procedure, prescribed by the legislature, whereby the authority must be exercised so as to protect the rights of property owners.” Id. (citing Highland Realty. Inc. v. Indianapolis Airport Auth., 182 Ind.App. 439, 395 N.E.2d 1259, 1266 (1979); Blue Ribbon Ice Cream, 109 N.E.2d at 89–90). Further, condemnation proceedings consist of two phases: the legislative determination of the necessity of the taking, and the judicial determination of just compensation for the taking. See Bragg v. Weaver, 251 U.S. 57, 58–59, 40 S.Ct. 62, 64 L.Ed. 135 (1919); Monongahela Navigation Co. v. United States, 148 U.S. 312, 327, 13 S.Ct. 622, 37 L.Ed. 463 (1893); Bd. of Aviation Comm'rs of the City of Warsaw v. Kosciusko Cnty. Super. Ct., 430 N.E.2d 754, 755 (Ind.1982).

Indiana Code section 32–24–1 et seq. (“Chapter 1”) sets forth Indiana's general eminent domain procedure. In short, Chapter 1 proceedings are initiated by a would-be condemnor filing a complaint in the trial court. Ind.Code § 32–24–1–4(a). If the property owner objects to the condemnation and the objection is overruled, then the trial court appoints appraisers to assess the damages or benefits the owner may sustain by reason of the acquisition. I.C. §§ 32–24–1–7(c); 32–24–1–8(e). Either party may file exceptions to the appraiser's report after which the case proceeds to trial and judgment as in civil actions. I.C. § 32–24–1–11.

In this case, the Board exercised its power of eminent domain pursuant to Indiana Code section 32–24–2 et seq.¹ (“Chapter 2”), which sets forth eminent domain procedures for cities and towns. Unlike Chapter 1, under Chapter 2 the proceedings are initiated by a municipal works board which adopts a resolution declaring that the municipality wants to acquire the property, I.C. § 32–24–2–6, and the board assesses the amount of damages due the affected property owners, I.C. § 32–24–2–8. An aggrieved party may remonstrate in writing. I.C. § 32–24–2–10. And once the board makes a final determination, the aggrieved party may “take an appeal” of the assessment by filing “an original complaint” in the trial court. I.C. §§ 32–24–2–10(c), –11(a). In such an appeal, “[t]he court shall rehear the matter of the assessment de novo and confirm, reduce, or increase the assessment.” I.C. § 32–24–2–11(a).

At stake in this case is what does it mean to say, in the context of a Chapter 2 eminent domain proceeding, that “[t]he court shall rehear the matter of the assessment de novo.” More precisely: What did the Legislature intend in this context? The City argues the trial court is limited to a review of the record before the Board. Utility Center counters the trial court's review includes a full evidentiary hearing before a jury.

When presented with a question of statutory construction, we first determine “whether the legislature has spoken clearly and unambiguously on the point in question.” Ind. Dept. of Revenue v. Miller Brewing Co., 975 N.E.2d 800, 803 (Ind.2012) (quoting Sloan v. State, 947 N.E.2d 917, 922 (Ind.2011)). “If so, our task is relatively simple: we need not ‘delve into legislative intent’ but must give effect to ‘the plain and ordinary meaning of the language.’ ” Id.

At first blush it would appear that this case is a “no brainer.” In its plain and ordinary sense the meaning of a hearing “de novo” is rather straightforward: “[a] new hearing of a matter, conducted as if the original hearing had not taken place.” Black's Law Dictionary 789 (9th ed.); see also Uhlir v. Ritz, 255 Ind. 342, 264 N.E.2d 312, 314 (1970) (“[I]n the usual sense of that phrase [de novo] one might envisage a complete retrial of the issues involved.”); Stiller v. LaPorte Hosp., Inc., 570 N.E.2d 99, 108 (Ind.Ct.App.1991) (noting that a “trial de novo” is commonly understood to mean “a proceeding where a reviewing court decides facts anew, reweighs evidence, or substitutes its judgment for that of the fact-finder in the administrative proceeding.”). However, things are not so simple in this case.

In a variety of contexts concerning judicial review of a decision by an administrative body our courts have essentially determined that de novo review does not mean “a new hearing ... as if the original hearing had not taken place.” Black's Law Dictionary 789 (9th ed.) As the Court of Appeals correctly observed, Indiana appellate courts have repeatedly confirmed the propriety of limited review of administrative decisions. See Util. Ctr., Inc., 960 N.E.2d at 829–30 (citing cases). This Court's opinion in City of Mishawaka v. Stewart, 261 Ind. 670, 310 N.E.2d 65 (1974), is also instructive. Stewart involved the termination of a firefighter from a city fire department—a decision made by the City's Board of Public Works and Safety. Pursuant to a statute calling for “de novo review” the firefighter appealed and after an evidentiary hearing the trial court reversed the Board's decision. The Court of Appeals reversed the trial court's judgment. On transfer this Court affirmed the trial court's judgment. Important to our discussion the Court had this to say:

Although the statute recites that the appeal shall be heard by the court de novo, this is not literally true. This has been held to mean, not that the issues at the hearing before the board are heard and determined anew, but rather that new issues are formed and determined.²

“[A] review or appeal to the courts from an administrative order or decision is limited to a consideration of whether or not the order was made in conformity with proper legal procedure, is based upon substantial evidence, and does not violate any constitutional, statutory, or legal principle.”

Id. at 68–69 (quoting State ex rel. Pub. Serv. Comm'n v. Boone Cir. Ct., 236 Ind. 202, 138 N.E.2d 4, 8 (1956)). In short our courts have long held that judicial review...