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Bergman v. Big Cicero Creek Joint Drainage Board

Court of Appeals of Indiana

November 22, 2019

Kip Bergman, Scot Gasho, Jane Harper, Philip Overdorf, Brent Snow, and George Tebbe, Appellants-Petitioners,
v.
Big Cicero Creek Joint Drainage Board, Appellee-Respondent.

          Appeal from the Tipton Circuit Court The Honorable Mark Dudley, Special Judge Trial Court Cause No. 80C01-1710-MI-340

          Attorney for Appellants Jeffrey O. Meunier Carmel, Indiana

          Attorney for Appellee Steven A. Holt Holt Legal Noblesville, Indiana

          NAJAM, JUDGE

         Statement of the Case

         [¶1] Kip Bergman, Scot Gasho, Jane Harper, Philip Overdorf, Brent Snow, and George Tebbe (collectively "Landowners") filed a petition for judicial review of a decision by the Big Cicero Creek Joint Drainage Board ("the Board") regarding a reconstruction project. The trial court affirmed the Board's decision. Landowners appeal and raise three issues for our review:

1. Whether the trial court erred when it found that the Board was not prohibited from funding a reconstruction project through a loan to be repaid with excess funds in a maintenance fund.
2. Whether the trial court erred when it found that the Board was not required to issue bonds to pay for the reconstruction project.
3. Whether the trial court erred when it found that Landowners' claim that the Board was improperly formed was barred under the doctrine of laches.

         [¶2] We affirm.

         Facts and Procedural History

         [¶3] Landowners own parcels of real property in Tipton and Atlanta, Indiana. Their parcels are located within the Big Cicero Creek watershed ("the watershed"). The Board, which was formed in 1991, is a "multi-county joint drainage board consisting of five members." Appellants' App. Vol. 2 at 41. On October 17, 2014, the Board mailed a notice to all landowners in the watershed, including Landowners, stating in relevant part that a maintenance report and schedule of assessments had been filed and were available for public inspection and that a public hearing was scheduled for November 19. Following the public hearing, the Board issued written findings and an order "adopting and approving the maintenance report and schedule of assessments as reported by the County surveyors in their report." Id. at 19.

         [¶4] In that 2014 report, surveyors from four counties in the watershed recommended a significant increase in annual maintenance fund assessments and an increase in the maintenance fund balance. In particular, the surveyors stated that, "[w]ith this increase in the available balance in the drain fund the Board would then be able to utilize maintenance funds to fully pay or partially pay for future reconstruction projects." Id. at 140. The surveyors concluded that the plan "would reduce or eliminate assessments for future reconstructions on Big Cicero Creek." Id. (emphasis added). Landowners did not seek judicial review of the Board's November 2014 order.

         [¶5] In 2017, the Board asked the Tipton County surveyor to prepare a report regarding a plan for "partial reconstruction" of the Big Cicero Creek Open Drain System ("the drain system"). Id. at 19. In that 2017 report, the Tipton County surveyor proposed a partial reconstruction of the drain system projected to cost $4.7 million. He recommended that "no additional assessments be sought, that the project should be funded by an outside source, with repayment occurring from a portion of the current revenue stream that is captured under the maintenance assessment for the drain[.]" Id. at 63.

         [¶6] Thereafter, on September 15, the Board mailed notices to affected landowners that a hearing would be held regarding the proposed partial reconstruction of the drain system. The Board also made available to the public the Tipton County surveyor's report and the schedule of assessments. Following the public hearing on the partial reconstruction plan on September 20, the Board, in a decision dated September 22, adopted and approved the surveyor's recommendations and found in relevant part as follows:

3. No additional assessments for Partial Reconstruction shall be levied against [the] public;
4. Funding for the project shall be obtained from either private or public sources for the partial reconstruction, with repayment coming from a portion of the yearly maintenance assessment until the debt is paid in full; not to exceed more than 75 percent of the annual assessment in any given year.

Id. at 167.

         [¶7] On October 10, Landowners timely filed their petition for judicial review of the Board's September 22 decision. In particular, Landowners asserted that

[t]he Big Cicero Creek Joint Drainage Board's decision was wholly arbitrary, capricious, unlawful, an abuse of discretion, not in accordance with the law and in excess of statuary [sic] jurisdiction, authority, limitations, or short of statuary [sic] right. In addition, the Big Cicero Creek Joint Drainage Board acted without observance of procedure required by law and its decision is unsupported by substantial evidence.

Id. at 43. Landowners also alleged that, because "the Board's first meeting [in 1991] took place 35 days after the meeting was required to take place" pursuant to statute, the Board was "improperly formed" and must be disbanded. Id. at 24-25.

         [¶8] Following a hearing on Landowners' petition for judicial review on February 5, 2019, the trial court denied the petition. In its findings and conclusions, the trial court stated in relevant part as follows:

INTRODUCTION
The court's presumption [sic] i[n] this case arose for two (2) primary reasons. The first is the [Landowners] disagree with the reconstruction plan adopted by [the Board] because they feel very strongly it will not address or alleviate the flooding on Big Cicero Creek and as a corollary to this feeling is that they should not be forced to pay for it. The second reason this case arose is that the [Landowners] feel that the Board was not fully transparent with its intentions. The Board's intention, in 2014, was to fund a future reconstruction of Big Cicero Creek via an increased maintenance assessment. The Board adopted a maintenance assessment in 2014 knowing that it was larger than what was needed for annual maintenance. The Board intended to create a surplus over a number of years and then transfer 75% of that surplus to use as a down payment on a partial reconstruction of Big Cicero Creek. [Landowners], among others, paid the maintenance assessment and the Board received those payments fully intending to use them for reconstruction purposes at a later date. No one asked for judicial review or otherwise appealed the Board's 2014 increased maintenance assessment and the issue of the propriety of that increase is not at issue today. The issue is whether the Board may transfer excess from the maintenance fund to its reconstruction fund. The established statutory scheme allows the collection of up to eight (8) times the estimated annual cost of periodic maintenance of a drain and then later transfer 75% of that excess to a reconstruction fund. . . .
* * *
FINDINGS OF FACT
* * *
3. On September 17, 2014, the surveyors of Tipton County, Hamilton County, Boone County and Clinton County submitted a report to the Board outlining their request that the Board increase the maintenance assessments as they had not been raised in twenty-one (21) years and that the solutions for solving issues have outstripped the current maintenance funds and were not adequate to keep up with the maintenance needs of the drain. The surveyors also requested the Board increase the limitation on the maintenance fund to up to 8 times the annual maintenance assessment as allowed in Section 43 of the Indiana Drainage Code as this would allow the Board to utilize maintenance funds to fully pay or partially pay for future reconstruction projects as Section 45.5 of the Drainage Code allowed a transfer of up to 75% of the maintenance fund to pay for reconstruction projects and eliminate assessments for future reconstruction projects on Big Cicero Creek.
4. On October 17, 2014, Notice was sent to landowners stating, in relevant part "You are hereby notified that the maintenance report of the Tipton, Hamilton, Boone & Clinton County Surveyors and the schedule of assessments made by the Big Cicero Creek Drainage Board have been filed and are available for public inspection in the offices of the Tipton, Hamilton, Boone & Clinton County Surveyors." The notice also provided a link to the Surveyors' Report to the Board. The Notice also stated that a ...

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