Darrell Birge and Sandra Birge v. Town of Linden, Indiana , 57 N.E.3d 839 ( 2016 )

FILED
Jul 25 2016, 8:37 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANTS ATTORNEY FOR APPELLEE
James E. Ayers Sheri Bradtke McNeil
Wernle, Ristine & Ayers Kopka Pinkus Dolin PC
Crawfordsville, Indiana Crown Point, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Darrell Birge and Sandra Birge, July 25, 2016
Appellants-Plaintiffs, Court of Appeals Case No.
54A01-1509-PL-1495
v. Appeal from the Montgomery
Circuit Court
Town of Linden, Indiana, The Honorable Peggy Lohorn,
Appellee-Defendant. Special Judge
Trial Court Cause No.
54C01-1409-PL-774
Robb, Judge.
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Case Summary and Issue
[1] Darrell and Sandra Birge own farmland in Montgomery County, Indiana. In
2014, the Birges filed a complaint against various governmental entities and
independent contractors after modifications to an existing drainage system
caused flooding on their property. The complaint named the Town of Linden
(“Town”) as a defendant. The Town filed a motion to dismiss for failure to
state a claim, which the trial court granted. The Birges now appeal the
dismissal of their claims against the Town. Concluding the trial court erred in
dismissing the Birges’ complaint for failure to state a claim, we reverse and
remand.
Facts and Procedural History
[2] On September 22, 2014, the Birges filed a Verified Complaint for Nuisance and
Damages against (1) the Town; (2) Montgomery County; (3) Montgomery
County Drainage Board (“Drainage Board”); (4) Montgomery County Board of
Commissioners (“Board of Commissioners”); (5) Montgomery County
Surveyor (“County Surveyor”); (6) Banning Engineering, P.C.; and (7) Harvey
Construction Company, Inc. On November 13, 2014, the Town filed an
answer, which raised as an affirmative defense governmental immunity under
the Indiana Tort Claims Act (“ITCA”). With leave of the trial court, the Birges
filed an amended complaint on February 10, 2015, alleging in relevant part:
4. That . . . Montgomery County by the [Drainage Board], prior
to 2012, and in accordance with I.C. 36-9-27-34, had established
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and maintained a farm drainage system designated Montgomery
County Hose Drain, to collect and remove underground water
from agricultural land to the south of [the Birges’] property, a
portion of which drain was located within a right-of-way across
[the Birges’] property dedicated for use as an agricultural farm
drainage ditch.
5. That said Hose Drain was a regulated farm drain, repairs and
maintenance of which were to be supervised by the County
Surveyor and funded by benefit assessments and maintained by
the [Drainage Board] in accordance with I.C. 36-9-27-34(a), to
collect and carry away underground water from the agricultural
fields of the farmers of Montgomery County, flowing south to
north through the [Town], and to thus drain the farm lands of
[the Birges] and others.
6. That the [Town] in an effort to reduce flooding from storm water,
applied for funds to improve its storm drainage system, and the
[Drainage Board] did consort and conspire with the [Town] to
improperly utilize the Hose Drain right-of-way and the statutory powers
of the Drainage Board to assist the Town to build new components of a
municipal storm water drainage system under the pretense that such was
an agricultural drain and in the course of such conspiracy abused
its statutory power as set out in I.C. 36-9-27-34(a) to wrongfully
assess payment for such Town storm drain from the owners of
agricultural land in the water shed, including the land owned by
[the Birges], who were assessed in the sum of $9,000 for
construction of the Linden Town Storm Drain, which was of no
benefit to [the Birges] or to other agricultural landowners. The
[Drainage Board] agreed to and did authorize the construction of
the Linden Storm Sewer to follow the course of the original
agricultural Hose Drain and to disrupt and block the operation of
the Hose Drain.
7. That by reason of such conduct [Montgomery] County by the
intentional act of its Surveyor and Drainage Board did, in 2012,
abandon and destroy said agricultural drain by cutting it, and by
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constructing a new closed storm water drain which does not
drain the subsurface water from [the Birges’] land, but instead
carries only part of the surface water from the [Town] through
such land, and by reason of defective design and construction
collects and deposits large portions of storm water from the
Town into the subsurface of the property of [the Birges] . . . .
The Construction did also block and prevent the prior subsurface
drainage from the property of [the Birges] along the right-of-way
of said former Hose Drain, such that underground water pools
and is not carried away, and surface water pools and is not
carried away, causing water to accumulate and the water table to
rise creating a nuisance to [the Birges] by reason of flooding and
bog-like conditions, ruination of farmland, failure of [the Birges’]
residential septic system, and [destruction of] the right of [the
Birges] to peaceful possession and use of their premises . . . . The
result of said acts by the County has been the inability to farm
approximately 13 acres of prime farmland because of the chronic
wet and bog-like condition thereof.
8. That [the Birges] did, prior to such placement, specifically
warn the County Surveyor and the Drainage Board of the
defective design, and probable consequences of the planned
construction of the Linden Storm Sewer line on and across [the
Birges’] property, and requested reconsideration and competent
engineering review. The County officials, namely the County
Surveyor and the [Drainage Board,] proceeded despite such
requests and warnings and without referral for a competent
engineering evaluation. Following construction, when the
predicted flooding occurred and its effects were discovered on
October 12, 2012, when harvest of some areas proved impossible,
[the Birges] sought relief from the [Board of Commissioners],
which has failed to undertake any corrective action. . . . No
significant action has been taken by any Defendant to correct
such conditions.
9. That [the Birges] are not able by any means to prevent such
discharge, flooding, and accumulation of storm water or to
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accomplish the removal of the excess water, and each of those
conditions constitutes a nuisance preventing the reasonable use
of the farm property of [the Birges], and interfering with the use,
value and habitability of [the Birges’] home, and reducing the
agricultural value of [the Birges’] land and also [the value of] that
portion of [the Birges’] land which is a platted subdivision . . . .
Appendix of the Appellant at 27-29 (emphasis added).
[3] Based on the foregoing, the amended complaint sought an injunction ordering
the abatement of the nuisance, but “[i]n the event the Court does not grant a
mandatory injunction,” the complaint further asserted a claim for inverse
condemnation. Id. at 32-33. Specifically, the complaint alleged that,
by reason of the acts of Montgomery County and [the Town] the
property of [the Birges] has been rendered of substantially
reduced value in that (1) [the] water table has been elevated such
that access across the area is impeded or prevented, (2)
cultivation of many acres is prevented, (3) the home of [the
Birges] is rendered unsalable and its habitability is in question
and its value reduced, and (4) areas of platted subdivision have
been rendered unbuildable and therefore of no value for
development on account of the artificially high water table . . . .
Id. at 33.
[4] On March 2, 2015, the Town filed a motion to dismiss for failure to state a
claim, which the trial court granted. This appeal followed.
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Discussion and Decision
I. Standard of Review
[5] We review de novo the trial court’s grant or denial of a motion to dismiss based
on Trial Rule 12(B)(6). Kitchell v. Franklin, 997 N.E.2d 1020, 1025 (Ind. 2013).
“A motion to dismiss for failure to state a claim tests the legal sufficiency of the
claim, not the facts supporting it.” Id. In conducting our review, we accept as
true the facts alleged in the complaint. Trail v. Boys & Girls Clubs of Nw. Ind., 845
N.E.2d 130, 134 (Ind. 2006). “[W]e view the pleadings in the light most
favorable to the nonmoving party, with every reasonable inference construed in
the nonmovant’s favor.” Babes Showclub, Jaba, Inc. v. Lair, 918 N.E.2d 308, 310
(Ind. 2009). A complaint may not be dismissed for failure to state a claim
“unless it is clear on the face of the complaint that the complaining party is not
entitled to relief.” Charter One Mortg. Corp. v. Condra, 865 N.E.2d 602, 605 (Ind.
2007).
II. Failure to State a Claim
[6] The complaint asserts claims for nuisance, civil conspiracy, and inverse
condemnation. In granting the Town’s motion to dismiss for failure to state a
claim, the trial court concluded it was clear on the face of the complaint that
discretionary function immunity applies in this case and the Birges failed to
allege facts supporting a claim for civil conspiracy. We conclude otherwise.
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A. Discretionary Function Immunity
[7] The ITCA governs tort claims against governmental entities and public
employees. Veolia Water Indianapolis, LLC v. Nat’l Trust Ins. Co., 3 N.E.3d 1, 5
(Ind. 2014). Governmental entities may be subject to liability for tortious
conduct unless the conduct falls within an immunity granted by the ITCA. Id.
Indiana Code section 34-13-3-3(7) provides, “A governmental entity or an
employee acting within the scope of the employee’s employment is not liable if
a loss results from . . . [t]he performance of a discretionary function.” Whether
an act constitutes the performance of a discretionary function is a question of
law for the court’s determination. City of Beech Grove v. Beloat, 50 N.E.3d 135,
138 (Ind. 2016). As an exception to the general rule of liability, discretionary
function immunity is narrowly construed. Id. We apply the
“planning/operational test” our supreme court adopted in Peavler v. Bd. of
Comm’rs of Monroe Cnty., 528 N.E.2d 40 (Ind. 1988):
Under the planning/operational dichotomy, the type of
discretion which may be immunized from tort liability is
generally that attributable to the essence of governing. Planning
activities include acts or omissions in the exercise of a legislative,
judicial, executive or planning function which involves
formulation of basic policy decisions characterized by official
judgment or discretion in weighing alternatives and choosing
public policy. Government decisions about policy formation
which involve assessment of competing priorities and a weighing
of budgetary considerations or the allocation of scarce resources
are also planning activities.
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Id. at 45 (citations omitted). In applying this test, “we distinguish between
decisions involving the formulation of basic policy, entitled to immunity, and
decisions regarding only the execution or implementation of that policy, not
entitled to immunity.” Gary Cmty. Sch. Corp. v. Boyd, 890 N.E.2d 794, 800 (Ind.
Ct. App. 2008) (quotation omitted), trans. denied. “The critical inquiry is not
merely whether judgment was exercised but whether the nature of the judgment
called for policy considerations.” Peavler, 528 N.E.2d at 45 (quotation omitted).
“The question may require an extended factual development . . . .” Id. at 46.
[8] In City of Beech Grove, 50 N.E.3d 135, a woman fell and injured herself when she
stepped into a pothole on a city street. The woman sued the City for her
injuries, alleging the City negligently failed to maintain the street. The City
claimed discretionary function immunity under the ITCA and moved for
summary judgment. The trial court denied the City’s motion for summary
judgment and certified the order for interlocutory appeal. This court accepted
jurisdiction and reversed in a divided opinion. Our supreme court granted
transfer and affirmed the denial because the designated evidence failed to
demonstrate the City engaged in a policy decision. Id. at 136.
[9] In support of its motion for summary judgment, the City designated an affidavit
from the Mayor and minutes from City Council and Board of Works and Safety
meetings. The City argued the designated evidence showed the City executed a
complete road reconstruction project in lieu of piecemeal repairs due to a policy
determination. With respect to the Mayor’s affidavit, our supreme court
concluded the affidavit could not be relied upon because “[t]he actions of
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individual members of a board or commission outside a meeting cannot be
substituted for the actions at a duly constituted meeting or for the minutes
thereof.” Id. at 140 (alteration in original) (quoting Scott v. City of Seymour, 659
N.E.2d 585, 590 (Ind. Ct. App. 1995)). As for the minutes from City Council
and Board of Works and Safety meetings, the court noted the minutes reflected
“the steps taken to fund a project that had already been discussed, planned, and
approved.” Id. at 142. The minutes did not reveal “any discussion about how
the area encompassed within the Project was decided upon, why specific repairs
were selected over others, what would be done about road damage in the
meantime, why total reconstruction was necessary, or the costs of total
reconstruction compared to conducting other individual repairs.” Id.
Ultimately, although the ongoing discussions regarding the funding and
timeline for the project could support an inference that the City, at some point,
engaged in a policy discussion, the court affirmed the denial of summary
judgment because the minutes did not reveal an actual weighing of options or
cost-benefit analysis with respect to the decision to suspend routine
maintenance in favor of the project. Id. at 142-43; see also Gerbers, Ltd. v. Wells
Cnty. Drainage Bd., 608 N.E.2d 997, 999 (Ind. Ct. App. 1993) (“If . . . the trial
court assumed that by actually acting, the Board must have consciously
weighed the competing interests, the trial court’s assumption [was] erroneous
and contrary to Peavler.”), trans. denied.
[10] Given the standard enunciated in City of Beech Grove, we cannot say it is “clear
on the face of the complaint” that the Town is entitled to discretionary function
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immunity. Charter One Mortg. Corp., 865 N.E.2d at 605. The complaint alleges,
“the [Town] in an effort to reduce flooding from storm water, applied for funds
to improve its storm drainage system.” App. at 27. But the fact the Town
applied for the funds does not, in itself, demonstrate a conscious weighing of
options with respect to the Town’s decision to improve its storm drainage
system. As our supreme court observed in Peavler, the question of discretionary
function immunity “may require an extended factual development.” 528
N.E.2d at 46. Accepting as true the facts alleged in the complaint, we believe
the question of immunity in this case requires additional factual development.
At this stage in the proceedings, the trial court erred in determining the Town is
entitled to discretionary function immunity.
[11] We express no opinion as to the ultimate resolution of the immunity issue, but
to the extent the trial court concluded immunity under the ITCA would bar the
Birges’ claim for inverse condemnation, the trial court erred. If the government
takes property but fails to initiate eminent domain proceedings, Indiana Code
section 32-24-1-16 permits the owner of the property to recover money damages
in an action for inverse condemnation. Murray v. City of Lawrenceburg, 925
N.E.2d 728, 731 (Ind. 2010). The immunity provisions provided by the ITCA
do not apply to claims for inverse condemnation, see Ind. Code § 34-13-3-1
(stating Indiana Code chapter 34-13-3 “applies only to a claim or suit in tort”),
and could not apply in any event because just compensation is constitutionally
required, see Murray, 925 N.E.2d at 731 (stating the Indiana Constitution and
the Fifth Amendment of the United States Constitution require just
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compensation if the State exercises its inherent authority to take private
property for public use). If the Town is entitled to discretionary function
immunity in this case, immunity will extend only to tort claims brought under
the ITCA.
B. Civil Conspiracy
[12] “A civil conspiracy is a combination of two or more persons who engage in a
concerted action to accomplish an unlawful purpose or to accomplish some
lawful purpose by unlawful means.” Miller v. Cent. Ind. Cmty. Found., 11 N.E.3d
944, 962 (Ind. Ct. App. 2014), trans. denied. The complaint alleges the Town
conspired with the Drainage Board to “improperly utilize” the existing right-of-
way and construct new components for the municipal storm drainage system,
which “caus[ed] water to accumulate and the water table to rise creating a
nuisance to [the Birges] by reason of flooding and bog-like conditions . . . .”
App. at 27-28. The trial court concluded the Birges failed to plead facts
supporting a claim for civil conspiracy because they did not allege the Town
acted unlawfully or to accomplish an unlawful purpose. We disagree.
[13] Civil conspiracy is not an independent cause of action. Am. Heritage Banco, Inc.
v. McNaughton, 879 N.E.2d 1110, 1115 (Ind. Ct. App. 2008). It must be alleged
with an underlying tort. Crystal Valley Sales, Inc. v. Anderson, 22 N.E.3d 646, 653
(Ind. Ct. App. 2014), trans. denied. Unlike criminal conspiracy, the gist of a civil
conspiracy is not the unlawful agreement, but the damage caused by acts
committed in pursuance of the agreement. K.M.K. v. A.K., 908 N.E.2d 658,
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663-64 (Ind. Ct. App. 2009), trans. denied; 16 Am. Jur. 2d Conspiracy § 53 (2016).
Thus, an allegation of civil conspiracy is “just another way of asserting a
concerted action in the commission of a tort.” Boyle v. Anderson Fire Fighters
Assoc. Local 1262, 497 N.E.2d 1073, 1079 (Ind. Ct. App. 1986), trans. denied.
[14] In its order granting the Town’s motion to dismiss, the trial court recognized
the pleaded facts may support an underlying claim for nuisance1 but concluded
the tort of nuisance does not constitute an “unlawful” purpose or means. See
App. at 61 (noting the Birges “label the planning and construction [of the storm
drain] as ‘wrong’ because of the alleged result of nuisance, not because of an
unlawful purpose or means”). This conclusion was error. An allegation of civil
conspiracy is merely an assertion of concerted action in the commission of a
tort causing damage to the Birges. Accordingly, the trial court erred in
concluding the Birges failed to allege facts supporting a claim for civil
conspiracy.
Conclusion
[15] The trial court erred in dismissing the Birges’ complaint for failure to state a
claim. We therefore reverse and remand for further proceedings consistent with
this opinion.
1
Indiana Code section 32-30-6-6 defines a nuisance as: “Whatever is: (1) injurious to health; (2) indecent; (3)
offensive to the senses; or (4) an obstruction to the free use of property; so as essentially to interfere with the
comfortable enjoyment of life or property . . . .”
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[16] Reversed and remanded.
Najam, J., and Crone, J., concur.
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