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Stillwater of Crown Point Homeowner's Ass'n, Inc. v. Stiglich

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

February 26, 2014

STILLWATER OF CROWN POINT HOMEOWNER'S ASSOCIATION, INC., individually and on behalf of its members; ROGER P. MAHONEY; KENT KOLODZIEJ; and KEVIN J. and MARGARET MCKENNA, Plaintiffs,
v.
ROBERT STIGLICH, Defendant

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[Copyrighted Material Omitted]

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For Stillwater of Crown Point Homeowner's Association Inc, Individually and behalf of its members, Roger P Mahoney, Kevin J McKenna, Margaret McKenna, Plaintiffs: Donna C Marron, LEAD ATTORNEY, Plews Shadley Racher & Braun - Ind/IN, Indianapolis, IN; Jeffrey D Claflin, LEAD ATTORNEY, Plews Shadley Racher & Braun - SB/IN, South Bend, IN; Daniel Philip Cory, Plews Shadley Racher & Braun - SB/IN, South Bend, IN.

For Kent Kolodziej, Plaintiff: Jeffrey D Claflin, LEAD ATTORNEY, Plews Shadley Racher & Braun - SB/IN, South Bend, IN; Daniel Philip Cory, Plews Shadley Racher & Braun - SB/IN, South Bend, IN; Donna C Marron, Plews Shadley Racher & Braun - Ind/IN, Indianapolis, IN.

Robert Stiglich, Defendant, Pro se, Crown Point, IN.

OPINION

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OPINION AND ORDER

PAUL R. CHERRY MAGISTRATE JUDGE.

This matter is before the Court on Plaintiffs' Motion for Partial Summary Judgment Against Defendant Robert Stiglich [DE 196], filed by Plaintiffs Stillwater of Crown Point Homeowner's Association, Inc., individually and on behalf of its members; Roger P. Mahoney; Kent Kolodziej; Kevin J. McKenna; and Margaret McKenna on April 2, 2013.

This is part two of the story of two subdivisions and three road crossings in Crown Point, Indiana. The Stillwater of Crown Point Subdivision (" Stillwater Subdivision" ) was developed by Defendants Stillwater Properties, LLC, Innovative Enterprises, Ltd., Robert Stiglich, and Jack Kovich. The Pine Hill Subdivision (" Pine Hill" ) was developed by Hawk Development Corp. Smith Ditch is located near the border of Stillwater Subdivision and Pine Hill. Three road crossings--Greenview Place, Stillwater Parkway, and Crooked Creek Trail--span Smith Ditch. The crossings at Greenview Place and Stillwater Parkway are within Stillwater Subdivision. The crossing at Crooked Creek Trail, the upstream-most crossing, connects Stillwater Subdivision and Pine Hill; Hawk Development Corp. constructed a " stub section" of the crossing up to the property line within Pine Hill, and Stillwater Properties, LLC constructed the remainder of the crossing, including the portion that spans the channel of Smith Ditch. Each crossing was constructed by placing fill material in Smith Ditch and the adjacent wetlands along with two thirty-six inch culverts to convey the flow of water in Smith Ditch under the crossings. In September 2008, flooding occurred in the subdivisions as water backed up behind the crossings, adversely affecting homes in the subdivisions, including those of Kent Kolodziej in Pine Hill and Roger P. Mahoney and Kevin J. and Margaret McKenna in Stillwater Subdivision.

In October 2011, this Court ruled on cross-motions for summary judgment. Following the rulings and subsequent settlement negotiations, this case was dismissed against Defendants City of Crown Point, Jack Kovich, Innovative Enterprises, Ltd., and Hawk Development Corp. The only defendant remaining in the case pending before the undersigned Magistrate Judge is Robert Stiglich. This case also remains pending before Chief Judge Philip Simon as to defaulted Defendant Stillwater Properties, LLC.

PROCEDURAL BACKGROUND

On June 4, 2009, Plaintiffs filed a Complaint against Jack Kovich, Innovative Enterprises, Ltd. (" Innovative Enterprises" ), Robert Stiglich, Stillwater Properties, LLC (" Stillwater Properties" ), Hawk Development Corp. (" Hawk" ), and the City of Crown Point, Indiana (" City" ), seeking injunctive relief and damages. Plaintiffs allege that, in 2008, Stillwater Subdivision and at least one home in Pine Hill were

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affected by flooding and allege that the construction of the three crossings of Smith Ditch created the flooding condition that caused the damage.

In Count I, Plaintiffs bring a Clean Water Act (" CWA" ) citizen suit pursuant to 33 U.S.C. § 1365(a), alleging that Stiglich, Stillwater Properties, Kovich, Innovative Enterprises, and Hawk's discharge of fill material to construct the crossings of Smith Ditch at Greenview Place and Stillwater Parkway violates the general and specific conditions set forth in the CWA § 401 water quality certification issued by the Indiana Department of Environmental Management (" IDEM" ) and the CWA § 404 permit issued by the U.S. Army Corps of Engineers and, therefore, violate an effluent standard or limitation under the CWA. Count I further alleges that Stiglich, Stillwater Properties, Kovich, and Innovative Enterprises' discharge of fill material to construct the crossing of Smith Ditch at Crooked Creek Trail without a CWA § 401 water quality certification and CWA § 404 permit violates an effluent standard or limitation under the CWA. Finally, Count I alleges that Hawk's discharge of fill material within Pine Hill to construct the stub portion of the crossing of Smith Ditch at Crooked Creek Trail violates the conditions set forth in the CWA § 404 permit issued by the Corps and, therefore, violates an effluent standard or limitation under the CWA.

In Count II, Plaintiffs allege a breach of the Wetlands Restriction and Covenants by Stiglich, Stillwater Properties, Kovich, and Innovative Enterprises by their development of undersized culverts at the three crossings.

In Count III, Plaintiffs allege a breach of the implied warranty of habitability by Stiglich, Stillwater Properties, Kovich, Innovative Enterprises, and Hawk because these Defendants knew or should have known that there were latent defects in Stillwater Subdivision and Pine Hill, including but not limited to, the inability of the culverts placed in the three crossings to prevent Smith Ditch, a natural watercourse, from flooding homes and common areas in Stillwater Subdivision and Pine Hill during or following a heavy rain.

Count IV alleges negligence per se against Stiglich, Stillwater Properties, Kovich, Innovative Enterprises, and Hawk for violating their duties under the Indiana Flood Control Act and the City of Crown Point Flood Control Ordinance to obtain a floodway construction permit pursuant to Indiana Code § 14-28-1-22(c) before developing the three crossings.

In Count V, Plaintiffs' negligence claim alleges that Stiglich, Stillwater Properties, Kovich, Innovative Enterprises, and Hawk breached the duty owed to Plaintiffs to exercise reasonable care in undertaking, approving, and upgrading the development of streets and drainage infrastructure in Stillwater Subdivision and Pine Hill.

Finally, in Count VI, Plaintiffs allege that the three crossings constitute public and private nuisances and that Stiglich, Stillwater Properties, Kovich, Innovative Enterprises, and Hawk's development and authorization of the three crossings are unlawful pursuant to the City of Crown Point Flood Control Ordinance and are an unreasonable use of the land.

Robert Stiglich filed an Answer on November 30, 2009. An Answer was filed by each of the other defendants with the exception of Stillwater Properties. On October 9, 2009, a Clerk's Entry of Default was entered against Stillwater Properties. On November 16, 2009, Defendant Stillwater Properties was severed as a party defendant for purposes of 28 U.S.C. § 636(c), and the case against Stillwater Properties only remains pending before Chief Judge Philip P. Simon.

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As the remainder of the parties filed forms of consent to have this case assigned to a United States Magistrate Judge to conduct all further proceedings and to order the entry of a final judgment in this case, this case was reassigned to the undersigned Magistrate Judge. Therefore, this Court has jurisdiction to decide this case pursuant to 28 U.S.C. § 636(c).

On October 11, 2011, the Court issued two Opinions with the following rulings: (1) granting Plaintiffs' Motion for Partial Summary Judgment Against Defendant City of Crown Point, Indiana and ordering the City of Crown Point to timely repair or replace the crossings at Greenview Place, Stillwater Parkway, and Crooked Creek Trail, but leaving the remainder of Plaintiffs' claims against the City pending; (2) denying Defendant Hawk Development Corporation's Motion for Summary Judgment; (3) granting in part and denying in part Plaintiffs' Motion for Partial Summary Judgment Against Defendants Jack Kovich, Innovative Enterprises, Robert Stiglich, Stillwater Properties, and Hawk; and (4) granting in part and denying in part the Motion of Defendants Jack Kovich and Innovative Enterprises for Summary Judgment on Plaintiffs' Complaint. The Court denied Plaintiffs' Motion for Partial Summary Judgment as brought against Defendant Robert Stiglich, finding that Plaintiffs did not establish facts and law or make any argument in that motion sufficient to hold Stiglich liable on summary judgment.

On November 3, 2011, Defendants Innovative Enterprises and Jack Kovich were dismissed with prejudice on a joint motion to dismiss. On August 3, 2012, Defendants Hawk and the City of Crown Point, Indiana were dismissed with prejudice on Plaintiffs' motion.

On August 21, 2012, a Notice of Filing Bankruptcy was filed as to Stiglich, and the Court issued an order on September 13, 2012, finding that this matter was stayed as to Stiglich. On March 18, 2013, the Court granted Plaintiffs' Motion to Lift Stay and this matter was restored to the docket.

On April 2, 2013, Plaintiffs filed the instant Motion for Summary Judgment and served on Defendant Stiglich a Notice of Summary Judgment Motion to Pro Se Litigant, setting forth the rules governing Stiglich's response to the summary judgment motion. Defendant Stiglich, pro se, filed a response brief on April 30, 2013, and Plaintiffs filed a reply brief on May 17, 2013.

SUMMARY JUDGMENT STANDARD

The Federal Rules of Civil Procedure mandate that motions for summary judgment be granted " if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Rule 56(c) further requires the entry of summary judgment, after adequate time for discovery, against a party " who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). " [S]ummary judgment is appropriate--in fact, is mandated--where there are no disputed issues of material fact and the movant must prevail as a matter of law. In other words, the record must reveal that no reasonable jury could find for the non-moving party." Dempsey v. Atchison, Topeka, & Santa Fe Ry. Co., 16 F.3d 832, 836 (7th Cir. 1994) (citations omitted).

A party seeking summary judgment bears the initial responsibility of informing

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the court of the basis for its motion and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, that it believes demonstrate the absence of a genuine issue of material fact. See Celotex, 477 U.S. at 323; Fed.R.Civ.P. 56(c). When, as with Plaintiffs' motion, the movant bears the burden of persuasion at trial, it must establish all the essential elements of its claim to prevail on summary judgment. Celotex, 477 U.S. at 322; accord Surles v. Andison, 678 F.3d 452, 455-56 (6th Cir. 2012) (recognizing that when the movant bears the burden of persuasion at trial, it " must show that the record contains evidence satisfying the burden of persuasion and that the evidence is so powerful that no reasonable jury would be free to disbelieve it" ) (internal citation and quotation marks omitted).

Once a properly supported motion for summary judgment is made, the non-moving party cannot resist the motion and withstand summary judgment by merely resting on its pleadings. See Fed.R.Civ.P. 56(e)(2); Donovan v. City of Milwaukee, 17 F.3d 944, 947 (7th Cir. 1994). Rule 56(e) provides that " [i]f a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact as required by Rule 56(c), the court may . . . consider the fact undisputed for purposes of the motion [or] grant summary judgment if the motion and supporting materials--including the facts considered undisputed--show that the movant is entitled to it . . . ." Fed.R.Civ.P. 56(e)(2), (3); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Thus, to demonstrate a genuine issue of fact, the nonmoving party must " do more than simply show that there is some metaphysical doubt as to the material facts," but must " come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56(e)).

In this case, Defendant Stiglich is proceeding pro se. In his response brief, Stiglich fails to comply with Northern District of Indiana Local Rule 56-1(b)(2), which requires the party opposing summary judgment to include in its brief or appendix " a section labeled 'Statement of Genuine Disputes' that identifies the material facts that the party contends are genuinely disputed so as to make a trial necessary." N.D. Ind. L.R. 56-1(b)(2). Although Stiglich includes a section titled " Statement of Genuine Disputes," it fails to identify any disputed material facts, as it provides in its entirety: " As I so stated above, I am not an attorney and am Pro Se, therefore I will simply say that I do dispute many of the alleged 'undisputed facts' found in section II [Plaintiffs' Statement of Material Facts]; specifically, B., C., D., E., and F. Given the opportunity to present the supporting evidence that will clearly illustrate my position." (Def. Resp., p. 2). Misapprehending the purpose of a motion for summary judgment, Stiglich also requests that the Court deny the motion and allow a jury to hear the facts. The only evidence Stiglich submits in support of his response brief is a copy of Plaintiffs' exhibits with his handwritten notations in the margins. The Court has reviewed his notations; none of the evidence that he references raises a genuine issue of material fact as to the issues before the Court. To the extent that his notations could be construed as argument, the Court considers those arguments in its analysis.

Nevertheless, in viewing the facts presented on a motion for summary judgment, a court must construe all facts in a light most favorable to the non-moving party

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and draw all legitimate inferences in favor of that party. See Anderson, 477 U.S. at 255; Srail v. Vill. of Lisle, 588 F.3d 940, 948 (7th Cir. 2009); NLFC, Inc. v. Devcom Mid-Am., Inc., 45 F.3d 231, 234 (7th Cir. 1995). A court's role is not to evaluate the weight of the evidence, to judge the credibility of witnesses, or to determine the truth of the matter, but instead to determine whether there is a genuine issue of triable fact. See Anderson, 477 U.S. at 249-50. Although Stiglich has not raised any genuine issues of material fact, the burden rests on Plaintiffs to establish all essential elements of their claims.

MATERIAL FACTS

A. The Subdivisions and the Crossings

Stillwater Subdivision is a residential subdivision in Crown Point, Indiana. Smith Ditch is a tributary of Beaver Creek, the drainage basin for which includes Stillwater Subdivision and Pine Hill, as well as areas upstream. Three crossings within Stillwater Subdivision--Greenview Place, Stillwater Parkway, and Crooked Creek Trail (" the Crossings" ) (listed in order from downstream to upstream)--were constructed by placing dirt and other fill material on the banks and in the channel of Smith Ditch, and by placing two 36-inch culverts to convey the flow in Smith Ditch under each road crossing. Jonathan E. Jones, Plaintiffs' expert, concluded that the three Crossings are located in the floodway of Smith Ditch and are subject to Indiana Department of Natural Resources (" IDNR" ) jurisdiction. In its August 9, 2006 letter to Stiglich, the U.S. Army Corps of Engineers recognized Smith Ditch as part of the navigable waters of the United States.

B. The Stillwater Developers

Stillwater Properties, LLC (" Stillwater Properties" ), an Indiana limited liability company, was formed on July 1, 1996, with Defendant Robert Stiglich and Defendant Jack Kovich each a 50% member. Stillwater Development, Inc. (" Stillwater Development" ) was formed on May 6, 1998, with Stiglich and Kovich each owning 50% of its shares. Kovich controlled the day-to-day operations and management of Stillwater Properties and Stillwater Development.

On December 5, 2000, Kovich, as Seller, and Stiglich, as Buyer, executed the Stillwater Properties, LLC, Equity Purchase Agreement. Pursuant to the Agreement, Kovich agreed to sell and did sell to Stiglich all of Kovich's equity and interest in Stillwater Properties and Stillwater Development. Pursuant to the Agreement, Kovich acknowledged that, as of December 5, 2000, he was no longer a member or manager of Stillwater Properties.

Stiglich is and was the sole shareholder and officer of Diamond Veil Development, Inc. (" Diamond Veil Development" ), an Indiana corporation, since its formation on April 30, 1992.

From approximately 1996 to 2002, Stillwater Properties owned the real property that was developed into Stillwater Subdivision. At some point in calendar year 2002, that land was transferred to Land Trust no. 6687 u/t/a dated June 6, 2000, with Mercantile National Bank of Indiana as Trustee. The development of Stillwater Subdivision, including planning, zoning, platting, permitting, grading, developing, or constructing of any section, street or crossing, was generally undertaken by Stillwater Development and Diamond Veil Development.

Stillwater Development developed portions of Stillwater Subdivision at issue in this case between approximately 1998 and 2000. Diamond Veil Development developed portions of Stillwater Subdivision at issue in this case between approximately 2000 and 2007. Stillwater Properties, during the time it owned the land that was

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developed into Stillwater Subdivision (until sometime in 2002), executed and provided documents as the owner of the real property being developed into Stillwater Subdivision.

C. Permits

J.F. New & Associates, Inc. (" J.F. New" ) served as an environmental/wetlands consultant in connection with the development of Stillwater Subdivision through 2004. Jack Kovich is the sole owner of Innovative Enterprises, Ltd. (" Innovative Enterprises" ), which Kovich states was not involved in the development of Stillwater Subdivision.

On October 13, 1997, J.F. New, on behalf of Innovative Enterprises, submitted a request for a § 401 Water Quality Certification (under the federal Clean Water Act (" CWA" )) to the Indiana Department of Environmental Management (" IDEM" ). Revised plans were submitted on October 13, 1997, and December 11, 1997.

By correspondence from IDEM dated February 3, 1998, which referenced the applicant as Innovative Enterprises, the CWA § 401 Water Quality Certification was approved (No. 97-45-MTM-00002-A) with certain delineated conditions, requiring that the project be completed as described in the December 11, 1997 correspondence, that the wetland mitigation be completed within one year, and that a deed restriction be recorded that prohibits dredging, filling, flooding, or modification of wetland vegetation for all wetland areas in the subdivision.

On behalf of Kovich and Innovative Enterprises, J.F. New also submitted an application for a CWA § 404 wetlands permit to the U.S. Army Corps of Engineers. On March 3, 1998, the U.S. Army Corps of Engineers issued a CWA § 404 wetlands permit (File No. 97-145-042-OGC), including authorization under Nationwide Permit (" NWP" ) 26 to discharge 660 cubic yards of clean fill material into .69 acre of wetlands and other waters to facilitate the construction of Stillwater Subdivision. The permit allowed for the use of 225 cubic yards of fill for the construction of three road crossings, two of which were the crossings at Greenview Place and Stillwater Parkway (but not Crooked Creek Trail). The permit included a number of special conditions, including:

(1) The permittee shall adhere to the conditions specified by the Indiana Department of Environmental Management's Section 401 Water Quality Certification dated February 3, 1998 . . . .
(3) The permittee shall be responsible for the successful completion of compensatory mitigation in accordance with the wetland mitigation plan detailed in the document " Pre-Construction Notification and Wetland Delineation Report, Stillwater Subdivision, Crown Point, Indiana" prepared for Jack Kovich, Innovative Enterprises, Inc. . . . .
(4) Construction of the mitigation areas, including seeding and re-vegetation, shall be concurrent with construction ...

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