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Hoagland Family Limited Partnership v. Town of Clear Lake

Court of Appeals of Indiana

August 28, 2019

Hoagland Family Limited Partnership, Appellant-Defendant,
v.
Town of Clear Lake, Appellee-Plaintiff

          Appeal from the Steuben Circuit Court The Honorable Allen N. Wheat, Judge Trial Court Cause No. 76C01-1006-PL-425.

          Attorneys for Appellant Leanna Weissmann Lawrenceburg, Indiana Jonathan O. Cress Cress Law Group PC Angola, Indiana

          Attorneys for Appellee Jeffrey P. Smith David K. Hawk Hawk, Haynie, Kammeyer & Smith, LLP Fort Wayne, Indiana

          Baker, Judge.

         [¶1] This long-running litigation has clogged the court system for nearly a decade. It has been a conduit for a buildup of bile between the parties and has amassed a commodious volume of attorney fees. It is long since time to plunge this dispute from the judicial pipeline, and in resolving this appeal, we order both parties to move on in good faith as they finally eliminate this waste of everyone's resources.

         [¶2] Hoagland Family Limited Partnership (Hoagland) appeals from several of the trial court's orders entered in favor of the Town of Clear Lake (the Town). First, Hoagland argues that the trial court erred by ordering it to pay penalties for Hoagland's failure to connect its properties to the Town's sewer lines. Second, Hoagland argues that the trial court applied the wrong ordinance to the sewer connection process. Third, Hoagland argues that the trial court erred by ordering it to pay the Town's attorney fees. Finally, Hoagland argues that the trial court erred by denying its request for a discovery sanction against the Town.

         [¶3] We agree with Hoagland on its first three arguments and disagree on its fourth. Therefore, we affirm in part, reverse in part, and remand with instructions to vacate the erroneous orders and for further proceedings.

         Facts

         The First Appeal

         [¶4] This litigation has been here before, when this Court described the underlying facts as follows:

Hoagland owns three parcels of real estate ("the properties") located in the Town. Although the Town operates a sanitary sewer system, Hoagland's properties are not connected to it and contain their own septic systems. Each of the properties are within 300 feet of the Town's sewers. In May 2001, as the Town prepared to install its sewer system, it requested an easement for each of the properties so that it could connect them to the sewer system, but Hoagland declined the request.

         In 2003, the Town passed the following ordinance:

The owners of all houses, buildings or properties used for human occupancy, employment, recreation or other purposes situated within the town and which [sic] the property line is within 300 feet of the sanitary sewer is [sic] required at his or her expense to install suitable toilet facilities therein and to connect such facilities directly with the proper sewer in accordance with the provisions of this chapter.
Clear Lake, Ind., Code of Ordinances § 51.51(A). The Town also adopted an ordinance mandating that "[n]o authorized person shall uncover, make any connections with or opening into, use, alter, or disturb any public sewer or appurtenance thereto without first obtaining a written permit from the Town Council." Id. at § 51.52(A)(1). "[T]he owner or his or her agent shall make application on a special form furnished by the town. The permit applications shall be supplemented by any plans, specifications, or other information considered pertinent in the judgment of the Inspector." Id. at § 51.52(A)(2).

In April 2005, after the Town had installed its system, Hoagland filed an action alleging that the Town had inversely condemned its land by running a sewer main under Hoagland's property.

This suit ended in October 2010 with a settlement between the parties.
Eight months after Hoagland filed the complaint against the Town, the Town passed a Resolution directing the Town's attorney to take legal action against several residents who had not connected to the sewer system; Hoagland's three properties were on the list.
In May 2009, the Town amended its penalty ordinance. Whereas the penalty for violation of a Town ordinance had been set at a minimum of $100 and a maximum of $1000, the new penalty for failure to connect to the sewer system was $500, per day, per property, with no express limit. CLC § 51.99(B).

         On January 12, 2010, the Town gave Hoagland notice that Hoagland must connect the properties to the Town's sewer system within ninety days:

you are hereby given notice that the Town of Clear Lake will proceed to compel connection of the above described properties to the Town of Clear Lake sewer system unless all of said properties are connected to the sewer system within ninety (90) days. You are further given notice that any use of privies, cesspools, septic tanks, or similar structures must be discontinued within ninety days (90) from today. Failure to connect to the Clear Lake sewer system within ninety (90) days may subject the Hoagland Family Limited Partnership to fines, court costs and attorney fees as allowed by Indiana Code and the Town of Clear Lake Ordinances.
Appellant's Supp. App. p. 68. This letter also informed Hoagland that since it had been "benefit[ting]" from the sewer system to which its properties were not yet connected, the Town was also demanding immediate payment of $4, 537.38 in back charges for each property, or a total of $13, 612.14.
After Hoagland did not take any action, the Town filed a complaint in which it asked for an order requiring connection, sewer charges that Hoagland allegedly should have been paying plus a further ten percent penalty pursuant to local ordinance, $500 per property per day for each day Hoagland remained unconnected, an order requiring the discontinuance of any private septic systems, and attorney fees and costs. In its answer, Hoagland argued that the Town's claims were barred because they were compulsory counterclaims that should have been asserted during the previous litigation involving inverse condemnation, that the Town's notice to connect was defective, and that the sewer system was generally illegal.
After competing motions for summary judgment and hearings on those motions, on May 4, 2016, the trial court granted summary judgment to Hoagland and denied it to the Town. The Town stipulated that Hoagland cannot complete a connection to the sewer system without the presence of grinder pumps, that the Town has not installed any grinder pumps through which Hoagland could connect to the sewers, and that the Town had not commenced any eminent domain proceedings to put grinder pumps on Hoagland's property. The trial court noted that the Town's claimed penalties had exceeded $2.9 million by the time of the last hearing. It ruled that Hoagland's compelled connection with the Town's sewer system would involve ...

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