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Bellwether Properties, LLC v. Duke Energy Indiana, LLC

Court of Appeals of Indiana

September 13, 2016

Bellwether Properties, LLC, Appellant-Plaintiff,
Duke Energy Indiana, LLC, Appellee-Defendant.

         Appeal from the Monroe Circuit Court The Honorable E. Michael Hoff, Judge Trial Court Cause No. 53C01-1506-CT-1172

          ATTORNEYS FOR APPELLANT William N. Riley Joseph N. Williams James A. Piatt Anne Medlin Lowe Riley Williams & Piatt, LLC Indianapolis, Indiana Lonnie D. Johnson Pamela J. Hensler Michael J. Potraffke Clendening Johnson & Bohrer, P.C. Bloomington, Indiana

          ATTORNEYS FOR APPELLEE Thomas L. Davis Darren A. Craig Maggie L. Smith Frost Brown Todd LLC Indianapolis, Indiana Steven J. Moss Duke Energy Business Services, LLC Plainfield, Indiana

          Brown, Judge.

         [¶1] Bellwether Properties, LLC ("Bellwether") appeals the trial court's order granting a motion to dismiss in favor of Duke Energy Indiana, Inc. ("Duke"). Bellwether raises one issue, which we revise and restate as whether the trial court erred in dismissing Bellwether's complaint for inverse condemnation as time-barred. We reverse and remand.[1]

         Facts and Procedural History

         [¶2] The facts as alleged in the complaint follow. On July 19, 1957, Duke's predecessor in interest, Public Services Company of Indiana, obtained a perpetual Electric Pole Line Easement (the "Easement") on land now owned by Bellwether for the installation of overhead electric lines. The Easement, memorialized in an Electric Pole Line Easement which was attached to Bellwether's complaint, states that the Easement is ten feet wide, including five feet on either side of the utility lines, and it provided the owner, currently Duke, with the

right to construct, operate, patrol, maintain, reconstruct and remove electrical line, including necessary poles, wires, anchors, guys and fixtures attached thereto, for the transmission of electrical energy over, along, or across the following described real estate situated in the County of Monroe, and State of Indiana, to wit: . . . .

Appellant's Appendix at 14.

         [¶3] In 1976, the Indiana Utility Regulatory Commission (the "IURC") promulgated 170 I.A.C. 4-1-26, adopting standards contained in the 1967 edition of the National Electrical Safety Code ("NESC") to govern the clearance needed around electrical lines. See Burns Indiana Administrative Rules and Regulations 8-1-2-4-A57 (1976). The IURC adopted newer editions of the NESC in 1986, 1987, 1990, 1993, and 1998.[2] On November 1, 2002, the IURC amended 170 I.A.C. 4-1-26 to provide that the 2002 edition of the NESC will govern practices involving electrical lines:

(a) In all cases not covered by specific statutes in effect, Part 2, "Safety Rules for the Installation and Maintenance of Overhead Electric Supply and Communication Lines", and Part 3, "Safety Rules for the Installation and Maintenance of Underground Electric Supply and Communication Lines", of the 2002 edition of the National Electrical Safety Code as approved by the American National Standards Institute June 14, 2001, as ANSI Standard C2, are prescribed for overhead and underground construction practice commenced after the date of promulgation of this section.
(b) The commission incorporates by reference the 2002 National Electrical Safety Code. Copies may be obtained from the Institute of Electrical and Electronics Engineers, Inc., 445 Hoes Lane, Piscataway, New Jersey 08855-1331 or are available for copying at the Indiana Utility Regulatory Commission, Indiana Government Center-South, 302 West Washington Street, Room E306, Indianapolis, Indiana 46204.

170 I.A.C. 4-1-26 (2002).

         [¶4] Following the IURC's incorporation of the 2002 NESC, Bellwether desired to expand a structure on its property and contacted Duke about its plans. Duke indicated that Bellwether could not expand according to the plan submitted because the plan would not provide the horizontal strike clearance[3] required by the 2002 NESC, explaining that, due to the type and voltage of the current lines within the Easement, a total horizontal strike clearance of approximately twenty-three feet is required and that 170 I.A.C. 4-1-26 and the 2002 NESC provided Duke with control over the entire twenty-three-feet-wide strip of land in and around the Easement.

         [¶5] On June 30, 2015, Bellwether filed a Class Action Complaint and Jury Trial Demand (the "Complaint") noting that it was bringing its claim pursuant to Ind. Trial Rule 23 individually and on behalf of a class, which it defined, and alleging one count of inverse condemnation. Bellwether specifically alleged that Duke took property for a public purpose without proceeding with a condemnation action under Ind. Code §§ 32-24-1 et seq. and without providing just compensation, noting that, "[t]hroughout the State of Indiana, Duke has continued to maintain electrical transmission lines that-when considering the required horizontal strike clearance-violate the express limitations of the easements in place." Appellant's Appendix at 8. On August 21, 2015, Duke filed a motion to dismiss, arguing that Bellwether's complaint fell outside the six-year statute of limitations for inverse condemnation actions. On September 14, 2015, Bellwether filed its opposition to the motion to dismiss, and on October 5, 2015, Duke filed its reply brief in support of its motion to dismiss.

         [¶6] On October 15, 2015, the trial court held a hearing on Duke's motion, and on October 29, 2015, it issued an order granting Duke's motion to dismiss (the "Order") which stated in part:

[Duke] alleges in defense that [Bellwether's] inverse condemnation action is barred by the six (6) year statute of limitation contained in IC 34-11-2-7(3). The Indiana Supreme Court has decided that the six year limitation for trespass applies to inverse condemnation actions. Murray v. City of Lawrenceburg, 925 N.E.2d 728, 733 (Ind. 2010)[.]
[Duke] maintains that [Bellwether's] inverse condemnation claim action accrued when it could have brought a claim for inverse condemnation, again citing Murray v. City of Lawrenceburg. [Duke] maintains that since the [IURC] adopted the revised 2002 version of the National Electric Safety Code in 2002, [Bellwether's] inverse condemnation claim action accrued in 2002, and its filing in 2015 was too late.
[Bellwether] seeks to apply a discovery rule to the limitation of inverse condemnation actions. [Bellwether] argues that, while citizens are ordinarily charged with knowledge of the law, an exception should exist when the subject of the law is arcane or limited in application to specialized entities or circumstances (such as utility companies), and therefore outside the notice of ordinary land owners in the conduct of their affairs. [Bellwether] claims it is particularly inequitable to expect and require Indiana landowners to have knowledge of the rules governing the National Electric Safety Code requirements for utility electrical line strike clearances.
However, it is not necessary to prove that a citizen has actual notice of a law. The general rule that ignorance of the law is not an excuse charges citizens with knowledge of the law.
The first question raised is simply how a legislature must go about advising its citizens of actions that must be taken to avoid a valid rule of law that a mineral interest that has not been used for 20 years will be deemed to be abandoned. The answer to this question is no different from that posed for any legislative enactment affecting substantial rights. Generally, a legislature need do nothing more than enact and publish the law, and afford the citizenry a reasonable opportunity to familiarize itself with its terms and to comply. In this case, the 2-year grace period included in the Indiana statute forecloses any argument that the statute is invalid because mineral owners may not have had an opportunity to become familiar with its terms. It is well established that persons owning property within a State are charged with knowledge of relevant statutory provisions affecting the control or disposition of such property.
Texaco, Inc. v. Short, 454 US. 516, 531-532 (U.S. 1982)
Given the Supreme Court's approval of the two (2) year grace period in the Texaco, Inc. v. Short case, the six (6) year limitation period in this case appears to be more than adequate to allow property owners to learn of the utility regulation. [Bellwether] has not offered any authority to the contrary, or any authority that regulations should be treated differently than statutes.
[Bellwether's] complaint was not filed within six (6) years of the enactment of the regulation that [Bellwether] claims expanded [Duke's] easement. Since the statute of limitations provides a complete defense to [Bellwether's] complaint, [Bellwether's] complaint should be dismissed with prejudice, as any amendment of ...

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