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LBLHA, LLC v. Town of Long Beach

Court of Appeals of Indiana

March 26, 2015

LBLHA, LLC, Margaret L. West, and Don H. Gunderson, Appellants-Plaintiffs,
v.
Town of Long Beach, Indiana, Alliance for the Great Lakes and Save the Dunes, Long Beach Community Alliance, Patrick Cannon, Roger Gansauer, David Oei, Bernard Rabinowitz, and Joan Smith, Appellees-Defendant and Intervenor Defendants

Appeal from the LaPorte Circuit Court. The Honorable Thomas J. Alevizos, Judge. Cause No. 46C01-1212-PL-1941.

ATTORNEY FOR APPELLANTS: Michael V. Knight, Barnes & Thornburg LLP, South Bend, Indiana.

ATTORNEY FOR AMICUS CURIAE: SAVE OUR SHORELINE: Keith A. Schofner, Lambert Leser, Bay City, Michigan.

ATTORNEYS FOR AMICUS CURIAE: PACIFIC LEGAL FOUNDATION: Paul Edgar Harold, LaDue Curran & Kuehn LLC, South Bend, Indiana; Mark Miller, Pacific Legal Foundation, Palm Beach Gardens, Florida.

ATTORNEYS FOR APPELLEE: TOWN OF LONG BEACH: L. Charles Lukmann, III, Charles F.G. Parkinson, Harris Welsh & Lukmann, Chesterton, Indiana.

ATTORNEY FOR APPELLEES: ALLIANCE FOR THE GREAT LAKES AND SAVE THE DUNES: Jeffrey B. Hyman, Conservation Law Center, Bloomington, Indiana.

ATTORNEY FOR APPELLEE: LONG BEACH COMMUNITY ALLIANCE: Kurt R. Earnst, Braje, Nelson & Janes, LLP, Michigan City, Indiana.

Brown, Judge. Bailey, J., and Robb, J., concur.

OPINION

Page 1078

Brown, Judge.

[¶ 1] LBLHA, LLC, Margaret L. West, and Don H. Gunderson (collectively, the " Lakefront Owners" ) appeal orders of the trial court dismissing all counts of their complaint against the Town of Long Beach, Indiana (the " Town" ) and other intervenor defendants, raising several issues. We find dispositive at this stage in the proceedings whether the State of Indiana or appropriate State officials as individuals in their official capacity should have been added or joined as a party or parties to the proceedings prior to the rulings on the Lakefront Owners' claims. We reverse and remand.

Facts and Procedural History

[¶ 2] As of April 27, 2011, a webpage of the Indiana Department of Natural Resources (the " IDNR" ) stated that " [t]he dividing line on Lake Michigan and other navigable waterways between public and

Page 1079

private ownership is the ordinary high watermark [" OHW" )]." Appellants' Appendix at 45. The webpage included two case examples, the first of which stated that " [w]hen Lake Michigan's water level is 'above' the [OHW] the State 'does not' own part of the dry beach," and the second of which stated that, " [w]hen Lake Michigan's water level is 'below' the [OHW] the State 'does' own part of the dry beach." Id. at 46. The second case example showed a diagram specifying the location of the OHW and the actual lake level and indicating " Private" for the area above the OHW and " State Ownership" for the area from the OHW to the actual lake level. Id.

[¶ 3] The National Resources Commission (" NRC" ) conducted a meeting on November 15, 2011. According to the meeting minutes, IDNR's chief legal counsel presented information with respect to the shoreline along Lake Michigan. The meeting minutes state:

[Counsel for IDNR] said there has not been a legal determination of what is the upper limit of the bed of Lake Michigan. In 1995, the Lakes Preservation Act established an elevation of 581.5 feet as the ordinary high water mark for Lake Michigan. " Where that falls on the beaches up there changes from season to season as the sand erodes and is put back." The State of Indiana has historically claimed ownership of what is below the ordinary high water mark; however, research has not produced evidence to support that claim. " All that is out there states that the beds of the navigable waters belong to the states, so what is the bed? Is it just what's under water or is it a distance beyond the water's edge? There is no legal guidance with regard to what we would actually own or hold in trust for the public, which is sort of issue number two here, is what are we, the State, holding in trust for the public use?"

Id. at 295. Counsel for IDNR explained that the Town has an extensive beach area that did not exist twenty years ago and asked " [d]o we focus on ownership or do we focus on what the State holds in trust for the public use." Id. at 296. Counsel for IDNR stated " this is an important issue that has yet to be settled," that " [t]he ownership issue has been litigated extensively in the surrounding states," that " [t]he Ohio Supreme Court issued an opinion favoring the private property owners, as did the States of Michigan, Illinois, and Wisconsin," and that " [a]s you can imagine there are a lot of people used to using those beaches that don't live there. It will impact their use of the beach." Id. Counsel for Long Beach property owners provided an information binder to members of the NRC which he indicated consisted of plat information and copies of source documents, and noted that the language on the IDNR's website contained the claim of ownership by the State of Indiana below the OHW, that the property owners desired for that language to be removed, and that the deeds for his clients " go down to the low water mark." Id. at 297. Counsel for Long Beach property owners also stated that " Michigan's public right says for its citizens that its citizens may traverse its lake shore beneath the ordinary high water mark," that " Michigan limited its public rights to just traversing only, and stopping on the beach to fish, sunbathe, or for any other activity was not allowed," and that " Ohio found that private property rights run down to the water's edge." Id. Counsel further said that " the cases that have been decided by neighboring State Supreme Courts have not held that the public rights doctrine has trumped anybody's private deed," that a resolution passed by the Town " states that it is no longer defending someone's private property

Page 1080

right below the ordinary high water mark based on the website publication," and that all of the Long Beach lakefront property owners except one signed a petition. Id. The matter of the information posted on IDNR's website was taken under consideration.

[¶ 4] As of October 10, 2012, the IDNR webpage provided that the OHW " is the line on Lake Michigan and other navigable waterways used to designate where regulatory jurisdiction lies and in certain instances to determine where public use and ownership begins and/or ends." Id. at 48. The webpage again included two case examples, the first of which stated that " [w]hen Lake Michigan's water level is 'above' the [OHW], the State does not regulate any of the dry beach," and the second of which stated that, " [w]hen Lake Michigan's water level is 'below' the [OHW], the State does regulate part of the dry beach." Id. at 49. The second case example showed a diagram specifying the location of the OHW and the actual lake level and indicating " Private" for the area above the OHW and " State Regulatory Jurisdiction" for the area from the OHW to the actual lake level. Id.

[¶ 5] The Town enacted, by vote of the Town Council on November 12, 2012, Resolution 12-003 (the " 2012 Resolution" )[1] which provided in part:

[Indents throughout original omitted] WHEREAS, the bed of Lake Michigan adjacent to Long Beach, Indiana, is owned by the State of Indiana; and,
WHEREAS, disputes have arisen relative to the location of boundary lines between private owners and the state of Indiana along the shores of Lake Michigan in Long Beach, Indiana; and,
WHEREAS, these disputes can create issues regarding the enforcement by the Long Beach Police Department of PUBLIC PROPERTY ORDINANCES; and,
WHEREAS, it is desirable that a clear policy be established relative to the enforcement of PUBLIC PROPERTY ORDINANCES on properties adjacent to Lake Michigan in the Town of Long Beach, Indiana, both for the benefit of private property owners, the general public and law enforcement officials; and,
NOW THEREFORE BE IT RESOLVED, by the TOWN COUNCIL of the Town of Long Beach, Indiana, that the following policy be and is hereby adopted:
1. The [Town] recognizes and accepts [IDNR's] position as reflected in its publications including, but not limited to, its website, the ordinary high watermark is the line on Lake Michigan used to designate where the state's regulatory jurisdiction lies and, in certain instances, to determine where public ownership or use begins and/or ends.
2. That the ordinary high watermark is an elevation of 581.5 feet, as adopted by the U.S. Army Corps of Engineers, and the Indiana Natural Resources Commission found at 312 IAC 1-1-26.[2]

Page 1081

3. The Long Beach Police Department shall only enforce PRIVATE PROPERTY ORDINANCES between Lake Shore Drive and Lake Michigan in the following locations:
A. The entire lengthy [sic] and width of all publicly owned beach accesses above the elevation of 581.5 feet.
B. The entire length and width of all lots owned by the [Town] above the elevation of 581.5 feet.

Id. at 69-70.

[¶ 6] On December 10, 2012, the Lakefront Owners filed a complaint against the Town. The Lakefront Owners alleged that LBLHA, LLC, is an association of private property owners of real property abutting Lake Michigan, that West and Gunderson are individual property owners owning property in lots on Lake Shore Drive, Long Beach, Indiana, and that the Town adopted a resolution which has resulted in its failure to enforce private property rights on the lakefront. The Lakefront Owners, under Count I, sought declaratory relief and alleged that there is no public right burdening the lakefront, that the Town is unlawfully claiming rights on the lakefront, and that determination of the Town's lakefront claims are particularly well suited for declaratory relief. The Lakefront Owners alleged that the Town acted under color of state law and deprived the Owners of their real property under Count II, that the Town's assertion of ownership and public trust rights is an unconstitutional temporary taking of the Lakefront Owners' property rights for which just compensation is due under Counts III and IV, and that the Town has violated the Home Rule Act found at Ind. Code § 36-1-3-8 under Count V. The Town ...


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