Hawkeye Land Co. v. Grand River Mutual Telephone Corporation ( 2014 )

IN THE COURT OF APPEALS OF IOWA
No. 4-044 / 13-0539
Filed March 26, 2014
HAWKEYE LAND CO.,
Plaintiff-Appellant,
vs.
GRAND RIVER MUTUAL TELEPHONE
CORPORATION,
Defendant-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Wayne County, David L.
Christensen, Judge.
Hawkeye Land Company appeals from the district court order dismissing
its action against Grand River Mutual Telephone Company. AFFIRMED.
Jon Michael McCright of Lynch Dallas, P.C., and Andrew Chase Potter,
Cedar Rapids, for appellant.
Steven Lowell Nelson of Davis, Brown, Koehn, Shors & Roberts, P.C.,
Des Moines, for appellee.
Mark R. Schuling, Consumer Advocate (Utilities), and John Stewart Long
of Office of Consumer Advocate, for intervenor Office of Consumer Advocate.
David Lynch and Cecil I. Wright II of Iowa Utilities Board, for amicus curiae
Iowa Utilities Board.
Considered by Danilson, C.J., Mullins, J., and Miller, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2013).
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MILLER, S.J.
Hawkeye Land Company (Hawkeye) appeals from the district court order
dismissing its action against Grand River Mutual Telephone Company (Grand
River) because Hawkeye failed to exhaust its administrative remedies. Because
Iowa Code section 476.27 (2011) provides an adequate administrative remedy
for the claimed wrong and requires that remedy be exhausted before allowing
judicial review, and Hawkeye failed to seek administrative redress before filing
this action, we affirm.
I. Background Facts and Proceedings.
Grand River provides communication services to customers in Wayne
County, where Hawkeye owns property. In September 2012, Grand River
notified Hawkeye that it was invoking Iowa Code section 476.27 to install
conduits in eight locations within railroad right-of-ways on Hawkeye’s property.
In return, Grand River provided Hawkeye with crossing fees in the amount of
$750 per crossing, as required by section 476.27(2)(b).
On November 15, 2012, Hawkeye filed a petition in equity seeking to
permanently enjoin Grand River from installing the conduits. On December 5,
2012, Grand River filed a motion to dismiss, supported by affidavits, arguing in
part that Hawkeye failed to exhaust its administrative remedies. Hawkeye’s
resistance to the motion was also supported by affidavits. The motion and
resistance were submitted on this record and the oral arguments of counsel on
January 29, 2013.
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The district court entered its order dismissing the action on March 6, 2013.
The court determined that section 476.27 provided an adequate administrative
remedy for the alleged wrong and that the statute requires the administrative
remedy be exhausted before an appeal may be made to the district court.
Because Hawkeye failed to avail itself to the administrative remedy, the court
granted Grand River’s motion to dismiss.
II. Scope of Review.
We review the district court’s grant of a motion to dismiss for failure to
exhaust administrative remedies for correction of errors at law. See Riley v.
Boxa, 542 N.W.2d 519, 521 (Iowa 1996) (citing what is now Iowa Rule of
Appellate Procedure 6.907).
III. Analysis.
It is undisputed that Hawkeye did not petition the Iowa Utilities Board for
relief under section 476.27 before filing this action. Does this failure prevent
Hawkeye from initially seeking relief from the court? The district court answered
affirmatively and dismissed Hawkeye’s action. The question we must answer on
appeal is whether the district court correctly found section 476.27 required
Hawkeye to exhaust administrative remedies before seeking redress through the
courts.
Where the legislature gives an administrative agency jurisdiction to
entertain a particular controversy, the jurisdiction is exclusive and must be
exhausted before an aggrieved party may seek redress through the courts.
Rowen v. LeMars Mut. Ins. Co., 230 N.W.2d 905, 909 (Iowa 1975). An action
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commenced without exhausting administrative remedies is subject to dismissal.
See Schneider v. State, 789 N.W.2d 138, 145 (Iowa 2010) (specifically
addressing the exhaustion requirement of the Iowa Tort Claims Act). Two
conditions must be met before the exhaustion doctrine can be applied: (1) an
adequate remedy must exist for the claimed wrong, and (2) the governing
statutes must expressly or impliedly require the remedy to be exhausted before
allowing judicial review. Riley, 542 N.W.2d at 521.
We agree with the district court that an adequate remedy exists for the
claimed wrong. Iowa Code section 476.27(2) sets forth the terms and conditions
applicable to railroad right-of-way crossings. The legislature directed the Iowa
Utilities Board to adopt rules prescribing the terms and conditions for a crossing.
Iowa Code § 476.27(2). It also provided a means for parties to petition the board
for relief. Id. § 476.27(4)(a). The board adopted Iowa Administrative Code rule
199-42.18(2), which sets forth the procedure for petitioning for relief when special
circumstances exist for a particular intended crossing. If Hawkeye felt entitled to
block the installation of the conduits on its property, it could have petitioned the
board for additional relief pursuant to rule 199-42.18(2).
We then consider whether the statute requires exhaustion of the
administrative remedy before allowing judicial review. In making this
determination, we look to the legislature’s intent, consider the objectives the
legislature sought to accomplish, and construe the statute to best effect
legislative intent. Keokuk Cty. v. H.B., 593 N.W.2d 118, 125 (Iowa 1999). If
there is no explicit statutory direction, we consider whether the exhaustion
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requirement would be consistent with the statutory scheme so that any implied
exhaustion requirement is tailored to fit the role the legislature assigned to the
agency. Id.We conclude the district court correctly interpreted the statute to require
exhaustion of administrative remedies. Although no direct language in the
statute requires exhaustion, section 476.27(4) provides a mechanism for a party
to seek redress through the board.1 Section 476.27(5) further provides that a
party may appeal the board’s determination of damages to the district court as
set forth in chapter 6B and may appeal the board’s determination of issues other
than damages pursuant to chapter 17A. The clear implication of the statutory
scheme requires a party to exhaust administrative remedies before seeking
review by the courts. This interpretation is consistent with the underlying
rationale of the exhaustion doctrine, which “is designed to promote orderly
procedures within the judicial system by requiring a preliminary administrative
sifting process.” Schneider, 789 N.W.2d at 145.
Following the district court’s dismissal of its petition, Hawkeye did file a
timely motion asking the court to address certain issues, including constitutional
issues, that the district court’s ruling did not address. However, before the court
ruled on its motion Hawkeye appealed, thus waiving the motion and divesting the
court of jurisdiction. See, e.g., IBP, Inc. v. Al-Gharib, 604 N.W.2d 621, 628 (Iowa
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Although Hawkeye argues the use of the word “may” in the statute shows the
administrative remedy is permissive and not mandatory, our supreme court has stated
the use of the term “may” does not warrant the conclusion that the legislature intended to
allow judicial relief before the exhaustion of the administrative remedy. See Riley, 542
N.W.2d at 522.
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2000) (“When the party who has filed a posttrial motion appeals, no jurisdictional
problem arises. Rather, we consider the movant-appellant’s appeal as having
been taken as a matter of right. However, in these circumstances, the appellant
is deemed to have waived and abandoned the posttrial motion. Additionally,
once the appeal is perfected, the district court loses jurisdiction to rule on the
motion, and any such ruling has no legal effect.”). Hawkeye has thus not
preserved error on issues, if any, that had been presented to the district court but
had not been addressed by its decision, and we will not address them.
Having found Hawkeye was required to exhaust its administrative
remedies before seeking redress through the courts, we need not consider the
other issues and arguments Hawkeye raises on appeal. They should have been
raised before the board in an administrative proceeding.
“The failure to exhaust all required administrative remedies deprives the
court of its authority and requires dismissal when properly raised.” H.B., 593
N.W.2d at 123. Because Hawkeye failed to exhaust its administrative remedies,
we affirm the district court order dismissing its petition for permanent injunctive
relief.
AFFIRMED.