The Clear Creek Conservancy District v. Kirkbride , 743 N.E.2d 1116 ( 2001 )

Attorneys for Appellant
Michael A. Wukmer
Ice Miller
Indianapolis, IN
James M. Houck
Greencastle, IN
Attorneys for Appellees
Robert C. Perry
Greencastle, IN
IN THE
INDIANA SUPREME COURT
THE CLEAR CREEK CONSERVANCY DISTRICT,
Appellant (Defendant below),
v.
ROBERT E. KIRKBRIDE and
BONNIE K. KIRKBRIDE,
Appellees (Plaintiffs below).
)
) Supreme Court No.
) 67S05-0004-CV-00269
)
)
)
) Court of Appeals No.
) 67A05-9904-CV-152
)
APPEAL FROM THE PUTNAM CIRCUIT COURT
The Honorable Diana LaViolette, Judge
Cause No. 67CO1-7107-MI-4
ON PETITION TO TRANSFER
March 6, 2001
SULLIVAN, Justice.
The Clear Creek Conservancy District assessed the Kirkbrides sewer
construction costs of $3,800 for each of two lots. Thinking their total
liability was $3,800 (rather than $7,600), the Kirkbrides did not object
within the time period specified by law. They later asked a court for
relief because of their “mistake or excusable neglect.” We hold that once
the statutory deadline passed, the assessment became final and the court
had no authority to grant relief on grounds of mistake or excusable
neglect.
Background
The Indiana Conservancy Act allows for “the creation of conservancy
districts for the purpose of controlling stream pollution, drainage,
irrigation, water supply and other natural resources. It creates a board
of directors and permits the levying of a tax and assessment for the
benefits and improvements to the real estate within the district.”[1]
Martin v. Ben Davis Conservancy Dist., 238 Ind. 502, 507, 153 N.E.2d 125,
128 (1958). Pursuant to the Conservancy Act, the Clear Creek Conservancy
District (“District”) was created to provide sewer service to the residents
of certain subdivisions located in Putnam County. The Conservancy Act
authorizes a district to pay for the construction of sewer works by
collecting “assessments from land that receives exceptional benefits from
the operation of the” sewers. Ind. Code § 14-33-7-5(4) (1998). The
District elected to use this technique to fund the construction of its
sewers. Following statutory procedures to be discussed at greater length
infra, court-appointed appraisers prepared a report which called for the
imposition of an “exceptional benefits assessment” of $3,800 per lot. The
appraisers filed its report with the trial court on August 5, 1998.
Ronald and Bonnie Kirkbride were owners of two subdivision lots, Lots
51 and 52, which were situated within the boundaries of the District. The
two lots had been deeded together in a single warranty deed which was duly
recorded in the office of the recorder. The Kirkbrides’ single family home
was constructed on the property line between the two lots. The Kirkbrides,
along with other benefited landowners, received a notice, dated August 6,
1998, informing them that each lot had been assessed $3,800 which would be
imposed unless they filed an exception to the report before September 29,
1998, the time set for court hearing on whether to accept the appraisers’
report. The Kirkbrides neither filed an exception to the appraisers’
report nor attended the hearing. Having raised no objection to the report,
the Kirkbrides were assessed a total of $7,600 for the two lots. On
October 29, 1998, the trial court approved the appraisers’ report.
On January 14, 1999, the Kirkbrides sought relief under Indiana Trial
Rule 60(b)(1), alleging mistake, surprise, or excusable neglect for failure
to file an exception to the appraisers’ report.[2] Their motion requested
that the trial court amend its order and reduce the assessment from $7,600
to $3,800, the amount of a single lot. On March 22, 1999, the trial court
granted the Kirkbrides’ motion and modified its order accordingly. The
District appealed. The Court of Appeals affirmed, finding that because the
Kirkbrides’ failure to file exceptions constituted the equivalent of a
default judgment, Trial Rule 60 was available for the trial court to reduce
the assessment. See Clear Creek Conservancy Dist. v. Kirkbride, 719 N.E.2d
852 (Ind. Ct. App. 1999).
The only issue presented in this appeal is whether benefited
landowners in conservancy districts are allowed to file untimely exceptions
to appraisers’ report by seeking judicial relief under Indiana Trial Rule
60(B)(1).
Discussion
The District contends that the Kirkbrides’ failure to file exceptions
to the appraisers’ report deprived the trial court of jurisdiction to
reduce their exceptional benefits assessment under Indiana Trial Rule
60(B)(1). The Kirkbrides respond, arguing that (1) the trial court had
proper jurisdiction to rule on the motion; and (2) the court’s order
granting them relief was proper because the billing for the two lots,
$7,600, was a surprise to them. (The Kirkbrides say that they believed
that because “their two lots had been deeded together and a single house
[was] constructed across the property line of both lots that they would
only be assessed for a single lot.” Appellee’s Br. at 6.)
At issue is whether the principles articulated in Lehnen v. State, 693
N.E.2d 580 (Ind. Ct. App. 1998), transfer denied, 706 N.E.2d 169, a case
involving a dispute arising out of an eminent domain action, are applicable
to conservancy district assessments. In Lehnen, the landowners failed to
file exceptions to an appraisers’ report that established the payments to
which they were entitled for appropriation of part of their land. Id. at
581. The landowners contended that the appraisers’ report was tantamount
to a complaint and so the failure to file exceptions was the equivalent of
a default judgment. Thus, the landowners argued, the trial court had
proper jurisdiction to modify the assessment of damages by way of Trial
Rule 60(B)(1) on the basis of their attorney’s excusable neglect. Id. The
Court of Appeals rejected the landowner’s argument, reasoning:
Eminent domain proceedings are statutory, and where the statute
fixes a definite procedure, it must be followed. Compliance with all
the provisions relating to the assessment of damages and their
recovery is essential also on the part of the landowner. Failure to
file exceptions within the requisite time has been held to deprive the
court of jurisdiction to try the issue of damages. If neither party
files exceptions, the appraisers’ award is conclusive.
Id. at 582 (internal citations omitted) (emphasis added). The Lehnen court
held that because the landowners failed to file timely their exceptions,
the trial court did not have jurisdiction to step in and consider the issue
of modifying the damage assessment. Id.
The Court of Appeals in this case declined to follow Lehnen, finding
that, unlike the eminent domain statute, “the legislature [did] not
provide[] a similar comprehensive statutory scheme for filing exceptions to
appraisers’ reports in exceptional benefits assessment actions.”
Kirkbride, 719 N.E.2d at 855. Based on this distinction, the court
concluded that the trial court’s order approving the appraisers’ report
constituted a default judgment and affirmed the trial court’s use of Trial
Rule 60 in granting relief. Id. We disagree.
Judge Friedlander’s dissent in this case was correct when he stated,
“[T]he principle to be distilled from Lehnen, i.e., ‘when a statute fixes a
definite procedure, it must be followed,’ applies without regard to the
volume or size of the statutes.” Kirkbride, 719 N.E.2d at 857
(Friedlander, J., dissenting) (quoting Lehnen, 693 N.E.2d at 582). This
Court has held repeatedly that a party’s failure to file exceptions within
the statutory time limit in eminent domain actions deprives the trial court
of jurisdiction to consider the issue of damages. See Southern Indiana Gas
& Elec. Co. v. Decker, 261 Ind. 527, 524, 307 N.E.2d 51, 53 (1974) (citing
Agan v. Hendricks Super. Ct., 250 Ind. 675, 235 N.E.2d 458 (1968); Denny v.
State, 244 Ind. 5, 189 N.E.2d 820 (1963); State v. Redmon, 205 Ind. 335,
186 N.E. 328 (1933)); see also Best Realty Corp. v. State, 400 N.E.2d 1204,
1205 (Ind. Ct. App. 1980).
Indeed, this principle has been applied in at least one case
involving a conservancy district. See In re The Big Raccoon Conservancy
Dist., 173 Ind. App. 218, 222, 363 N.E.2d 1004, 1007-08 (1977) (holding
that because the conservancy district act is a creature of the legislature,
freeholders were required to follow statutory procedures for dissolving the
district).
Similar to the eminent domain procedures,[3] the Conservancy Act fixes
a definite procedure for the imposition of exceptional benefits
assessments. After court approval of the conservancy district’s
comprehensive plan for the accomplishment of the purpose for which the
district was established, see Ind. Code § 14-33-6-6(c)(1998), and a
decision by the district’s board to meet its expenses and obligations from
the collection of assessments from land that receives exceptional benefits
from the operation of the district plan, see id. § 14-33-7-7(a)(3), the
court appoints a board of three competent, disinterested persons to serve
as appraisers, see id. § 14-33-8-1(2).
In the case of sewer projects, the board of appraisers, following the
requirements of see id. §§ 14-33-8-6 and 14-33-8-8, appraises the amount of
exceptional benefits received by each record owner of real property and
files a report of its findings with the court, see id. §§ 14-33-8-9 and 14-
33-8-10. The report must contain the name of each record owner of real
property appraised and the amount of exceptional benefits. See id. The
court then sets a date for a hearing on the report. See id. § 14-33-8-
12(a).
The court gives notice of the hearing by publication, by mail to each
owner named in the report, and by mail to the district. See id. § 14-33-8-
12(b). Publication of the notice must occur at least 30 days and the mail
notice must occur at least 20 days before the date of the hearing. See id.
The owner “is considered to have acquiesced” in the appraisal “unless,
within the time limit prescribed by the notice of hearing on the report of
the board of appraisers, the interested person files an exception to the
appraisers’ report specifying in the exceptions ... the appraisal of
exceptional benefits.” Id. § 14-33-8-13(b). While the determinations of
the board of appraisers are considered prima facie correct, a person filing
exceptions is entitled to be heard and present evidence at the hearing.
See id. § 14-33-8-15. At the conclusion of the hearing, the trial court
either dismisses or approves the report; its order is subject to appellate
review. See id. § 14-33-8-16.[4]
In short, the Conservancy Act provides a definite procedure for
interested landowners to follow when contesting an appraisers’ report, and
“where the statute fixes a definite procedure, it must be followed.”
Lehnen, 693 N.E.2d at 582. Landowners must comply with the special
statutory procedures laid out by the legislature before seeking judicial
review of either the damage assessment (under eminent domain actions), see
Decker, 261 Ind. at 524, 307 N.E.2d at 53, or exceptional benefits
assessments (under conservancy district statutes). Allowing landowners to
file untimely exceptions in the trial court is simply not authorized by the
conservancy district statutory scheme.
Here, the Kirkbrides were required to take action by filing timely
exceptions to the appraisers’ report pursuant to Indiana Code § 14-33-8-13
and as explained in the notification sent to them. That is, they were
required to file exceptions to the appraisers’ report before September 29,
1998, the date of the hearing, in order to contest the exceptional benefits
assessment of $7,600. The Kirkbrides do not dispute that they received
notification of the hearing detailing the implications of the appraisers’
report, but they neither attended the hearing nor filed exceptions.
Consequently, the Kirkbrides are deemed to have acquiesced in the
appraisers’ report, and it became conclusive as to them.
As noted supra, the Kirkbrides seek to invoke the provisions of Trial
Rule 60 (B)(1) which allow relief from a final order or judgment on grounds
of “mistake ... or excusable neglect.” They argue that their mistaken
impression that their exceptional benefit liability was $3,800 (rather than
$7,600) entitled them to invoke the rule. Given the legislature’s detailed
and clear specification of the way in which exceptional benefit assessments
are to be contested, we hold that the Kirkbrides’ misunderstanding here was
not a “mistake” within the meaning of the rule. To hold otherwise would
undermine the statutory scheme for fixing in place the financing
arrangements of conservancy districts and, by extension, of other
governmental units operating under similar statutory arrangements.[5]
Conclusion
Having previously granted transfer, we vacate the opinion of the Court
of Appeals pursuant to Indiana Appellate Rule 11(B)(3) and remand to the
trial court for proceedings consistent with this opinion.
SHEPARD, C.J., and DICKSON, BOEHM, and RUCKER, JJ., concur.
-----------------------
[1] The Conservancy Act was codified as Indiana Code § 13-3-3-2 et
seq., and then Indiana Code § 19-3-2-1 et seq.; now see Indiana Code § 14-
33-1-1 et. seq. (Supp. 1995).
[2] Indiana Trial Rule 60(B)(1) provides, “On motion and upon such
terms as are just the court may relieve a party or his legal representative
from an entry of default, final order, or final judgment, including
judgment by default, for ... mistake, surprise, or excusable neglect.”
[3] Under the eminent domain statutes, after a complaint is filed to
appropriate a landowner’s real estate, see Ind. Code § 32-11-1-2 (1998), a
notice of the complaint filing is sent to the affected landowner; see id. §
32-11-1-3; the notice tells the landowner to appear before a court within a
specified time to show cause why the land should not be appropriated, id.;
after approval of appropriation, the court appoints three appraisers to
assess the landowner’s damages resulting from the appropriation and the
appraisers prepare a report reflecting the assessment thereof; id. § 32-11-
1-4; another notice is sent to the landowner explaining that the
appraisers’ report was filed and that the landowner has 20 days from the
mailing of the notice to file written exceptions to the appraisers’ report,
id. § 32-11-1-8; if no exceptions are filed, the appraisers’ report is
conclusive as to the matter of damages, id.; see also Samplawski v. City of
Portage, 512 N.E.2d 456, 458 (Ind. Ct. App. 1987).
[4] It is worth noting one important difference between the exception
procedures in the Conservancy Act and the eminent domain statute. The
Conservancy Act provides that a landowner accepts the appraisers’ report
“unless, within the time limit prescribed by the notice of hearing on the
report of the board of appraisers, the interested person files an exception
to the appraisers’ report ... .” Ind. Code § 14-33-8-13(b) (1998)
(emphasis added). In contrast, the eminent domain statute expressly sets a
defined time limit — 20 days after filing the report — in which the
landowner must file exceptions to the appraisers’ report. See id. § 32-11-
1-8. Thus, for the landowner to file timely exceptions in a conservancy
district action, he or she must have received a notice of the hearing under
Ind. Code § 14-33-8-12, and that notice must have a definite time limit to
object. If no notice was sent to the affected landowners, then the
landowners would have a basis to seek judicial relief. However, that is
not the situation in this case. In compliance with the statute, the
Kirkbrides received a notice of the hearing on the report informing them
that (1) the amount assessed for each lot was $3,800; (2) their lots, Lot
51 and Lot 52, were listed separately in the report (R. at 7, 68); (3) the
hearing on the report was set for September 29, 1998; and (4) interested
parties will have accepted the appraisers’ report “unless such person
file[d] exceptions to said Appraiser’s [sic] Report before the time set for
the hearing. . . .” (R. at 4.)
[5] This case is distinct from Clear Creek Conservancy Dist. v.
Wooden, 712 N.E.2d 997 (Ind. Ct. App. 1999), in which relief from an
assessment was granted pursuant to statute and not pursuant to Trial Rule
60.