Jon R. Grdinich and JRG, LLC, an Indiana Limited Liability Corporation v. Plan Commission for the Town of Hebron, Indiana, and Town of Hebron, Indiana, and Town Council for the Town of Hebron, Indiana ( 2019 )


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  •                                                                              FILED
    Feb 28 2019, 11:18 am
    CLERK
    Indiana Supreme Court
    Court of Appeals
    and Tax Court
    ATTORNEYS FOR APPELLANTS                                   ATTORNEY FOR APPELLEES
    William W. Gooden                                          Sheri Bradtke McNeil
    Michael P. Maxwell, Jr.                                    Kopka Pinkus Dolin PC
    Kristin A. McIlwain                                        Crown Point, Indiana
    Clark Quinn Moses Scott & Grahn LLP
    Indianapolis, Indiana
    IN THE
    COURT OF APPEALS OF INDIANA
    Jon R. Grdinich and JRG, LLC,                              February 28, 2019
    an Indiana Limited Liability                               Court of Appeals Case No.
    Corporation,                                               18A-PL-1050
    Appellants-Defendants-                                     Appeal from the Porter Superior
    Counterplaintiffs-Third-Party Plaintiffs,                  Court
    The Honorable Roger V. Bradford,
    v.                                                 Judge
    Trial Court Cause No.
    Plan Commission for the Town                               64D01-1611-PL-10626
    of Hebron, Indiana,
    Appellee-Plaintiff-Counterdefendant,
    and
    Town of Hebron, Indiana, and
    Town Council for the Town of
    Hebron, Indiana,
    Appellees-Third-Party Defendants
    Crone, Judge.
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019                            Page 1 of 18
    Case Summary
    [1]   The Plan Commission for the Town of Hebron, Indiana (“the Plan
    Commission”), initiated the underlying action by filing a complaint for a
    mandatory injunction against Jon R. Grdinich and JRG, LLC, an Indiana
    Limited Liability Corporation (collectively “Grdinich”), asking the trial court to
    order Grdinich to remove a pond from his property. The proceedings
    ultimately led to Grdinich’s filing of a second amended counterclaim against
    the Plan Commission and a third-party complaint against the Town of Hebron,
    Indiana, and the Town Council for the Town of Hebron, Indiana (collectively
    “the Town”), which contained six counts relevant to the pond and one count of
    inverse condemnation based on the existence of an underground drainage
    pipeline on Grdinich’s property. The Plan Commission and the Town
    (collectively “Appellees”) moved to dismiss Grdinich’s second amended
    counterclaim and third-party complaint for failure to exhaust administrative
    remedies and state claims upon which relief can be granted. The trial court
    issued an order granting their motion to dismiss.
    [2]   Grdinich now appeals the order dismissing his second amended counterclaim
    and third-party complaint, arguing that Counts 1-5 and 7 do not require
    exhaustion of administrative remedies and that they state claims for which relief
    can be granted.1 We conclude that the trial court improperly dismissed
    Grdinich’s claims based on the pond, but that the inverse condemnation claim
    1
    Grdinich does not challenge the trial court’s dismissal of Count 6.
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019     Page 2 of 18
    was properly dismissed. Accordingly, we affirm in part, reverse in part, and
    remand.
    Facts and Procedural History
    [3]   In November 2016, the Plan Commission filed a complaint for mandatory
    injunction against Grdinich with the following allegations: Grdinich requested
    and received a building permit from the Town to build a house on property in
    Hebron; the property is located in an “R1” residential district; Grdinich built a
    house and a pond on the property; the Hebron Municipal Code of Ordinances
    (“the Ordinance”) does not permit a pond in an R1-zoned district unless the
    pond meets certain requirements; and Grdinich’s pond does not meet those
    requirements. Appellants’ App. Vol. 2 at 15-16. The Plan Commission
    requested an order requiring Grdinich to immediately remove the pond in its
    entirety.
    [4]   In January 2017, Grdinich filed an answer, a counterclaim against the Plan
    Commission, and a third-party complaint against the Town. Appellees’ App.
    Vol. 2 at 15. In May 2017, Grdinich filed an amended counterclaim and third-
    party complaint, which contained five counts: Count 1, a claim for declaratory
    judgment that the pond is in compliance with and does not violate the
    Ordinance; Count 2, a preliminary and permanent injunction restraining
    Appellees from removing the pond; Count 3, a claim of equitable estoppel
    seeking a judgment estopping Appellees from taking any action to restore the
    pond to its prior condition or otherwise modify the pond; Count 4, a 42 U.S.C.
    § 1983 claim alleging that the Plan Commission’s action regarding the pond
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019    Page 3 of 18
    was done without proper and fair notice to Grdinich, thereby depriving him of
    due process; and Count 5, an inverse condemnation claim alleging that
    Appellees own an underground storm drainage pipeline on his property for
    which they have no easement and for which he has not received just
    compensation. Appellants’ App. Vol. 2 at 30, 32, 34, 36, 37.
    [5]   In June 2017, Appellees filed a motion to dismiss Grdinich’s amended
    counterclaim and third-party complaint, arguing that he failed to exhaust
    administrative remedies with the Hebron Board of Zoning Appeals (“BZA”)
    and that the amended counterclaim and third-party complaint were
    unsupported by sufficient operative facts to state claims upon which relief can
    be granted. 
    Id. at 55-58.
    Following a hearing,2 in September 2017, the trial
    court issued an order granting Appellees’ motion to dismiss.
    [6]   In October 2017, Grdinich filed a second amended counterclaim and third-
    party complaint, in which he again alleged Counts 1 through 5 and added two
    new counts related to the pond: Count 6, a claim for declaratory judgment that
    he exhausted his administrative remedies; and Count 7, a promissory estoppel
    claim seeking a judgment estopping Appellees from taking any action to restore
    the pond to its prior condition or otherwise modify the pond. 
    Id. at 113,
    115.
    In the second amended counterclaim and third-party complaint, Grdinich
    alleged the following facts. When he bought the property in February 2015,
    2
    Grdinich reproduced the transcript of this and the subsequent hearing in his appendix in contravention of
    Indiana Appellate Rule 50(F).
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019                            Page 4 of 18
    there was a preexisting unimproved half-acre pond. 
    Id. at 88.
    He applied for
    and received a building permit from the Town to construct his residence and
    improve the pond. 
    Id. at 88.
    He completed the residence and improvement to
    the pond and was issued a certificate of occupancy from the Town in September
    2015. 
    Id. at 90.
    In April 2016, the Town issued a notice of building violation to
    Grdinich ordering him to return his property to its original grade. 
    Id. at 92-93.
    That same month, Grdinich also received a letter from the Plan Commission
    informing him that the pond was a non-permitted use and instructing him to
    restore his property to its condition prior to the construction of the pond. 
    Id. at 93.
    [7]   In November 2017, Appellees filed a motion to dismiss the second amended
    counterclaim and third-party complaint. 
    Id. at 132;
    Appellees’ App. Vol. 2 at
    64 (memorandum in support of motion). Grdinich filed a response.
    Appellants’ Supp. App. Vol. 2 at 3. In April 2018, following a hearing, the trial
    court issued an order granting Appellees’ motion to dismiss as to all counts.
    This appeal ensued.
    Discussion and Decision
    [8]   Grdinich contends that the trial court erred in granting Appellees’ motion to
    dismiss as to Counts 1-5 and 7. As a preliminary matter, we note that
    Appellees asserted in their motion to dismiss that Grdinich’s claims required
    dismissal for failure to exhaust administrative remedies pursuant to Indiana
    Trial Rule 12(B)(1) and for failure to state claims upon which relief can be
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019     Page 5 of 18
    granted pursuant to Trial Rule 12(B)(6). In the past, Indiana courts treated the
    failure to exhaust administrative remedies as a question of subject matter
    jurisdiction, and motions to dismiss on this basis were brought under Trial Rule
    12(B)(1). Appellees took this route in their motion to dismiss. However, our
    supreme court has indicated that failure to exhaust administrative remedies
    constitutes procedural error that does not implicate the trial court’s subject
    matter jurisdiction. First Am. Title Ins. Co. v. Robertson, 
    19 N.E.3d 757
    , 760 (Ind.
    2014), amended on reh’g on other grounds, 
    27 N.E.3d 768
    (Ind. 2015); see also Ellis
    v. State, 
    58 N.E.3d 938
    , 940-41 (Ind. Ct. App. 2016), trans. denied; Alkhalidi v.
    Ind. Dep’t of Corr., 
    42 N.E.3d 562
    , 565 (Ind. Ct. App. 2015); Rudisel v. State, 
    31 N.E.3d 984
    , 988 (Ind. Ct. App. 2015); but see D.A.Y. Inv. LLC v. Lake Cty., 
    106 N.E.3d 500
    , 506 (Ind. Ct. App. 2018) (“Failure to exhaust administrative
    remedies is therefore a defect in subject matter jurisdiction.”), trans. denied; John
    C. & Maureen G. Osborne Revocable Family Tr. v. Town of Long Beach, 
    78 N.E.3d 680
    , 695-96 (Ind. Ct. App. 2017) (“[F]ailure to exhaust administrative remedies
    deprives the trial court of subject matter jurisdiction.”), trans. denied.
    Appropriately, on appeal neither party approaches the failure to exhaust
    administrative remedies as a question of subject matter jurisdiction. However,
    neither party makes any attempt to suggest which Trial Rule 12(B) subsection,
    if any, applies to a motion to dismiss for failure to exhaust administrative
    remedies, and neither party provides a standard for appellate review of a trial
    court’s grant of a motion to dismiss for failure to exhaust administrative
    remedies.
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019        Page 6 of 18
    [9]    We observe that Trial Rule 12(B)(1) and 12(B)(6) motions to dismiss are treated
    differently at both the trial level and the appellate level. For instance, in ruling
    on a motion to dismiss for lack of subject matter jurisdiction under Trial Rule
    12(B)(1), “the trial court may consider not only the complaint and motion but
    also any affidavits or evidence submitted in support.” City of Fort Wayne v. Sw.
    Allen Cty. Fire Prot. Dist., 
    82 N.E.3d 299
    , 303 (Ind. Ct. App. 2017), trans. denied
    (2018). The appellate standard of review is dependent on what happened in the
    trial court. 
    Id. Thus, when
    exhaustion of administrative remedies was treated
    as a question of subject matter jurisdiction under Rule 12(B)(1), the trial court
    could consider affidavits or evidence submitted in support.
    [10]   In contrast, in ruling on a motion to dismiss for failure to state a claim pursuant
    to Trial Rule 12(B)(6), the trial court must accept as true the facts alleged in the
    complaint, and if matters outside the pleading are considered, the motion must
    be properly converted into one for summary judgment. Kapoor v. Dybwad, 
    49 N.E.3d 108
    , 120 (Ind. Ct. App. 2015), trans. denied (2016). Such motions test
    the legal sufficiency of the claim, not the facts supporting it. Kitchell v. Franklin,
    
    997 N.E.2d 1020
    , 1025 (Ind. 2013). Dismissals under Trial Rule 12(B)(6) are
    “rarely appropriate.” State v. Am. Family Voices, Inc., 
    898 N.E.2d 293
    , 296 (Ind.
    2008) (quoting King v. S.B., 
    837 N.E.2d 965
    , 966 (Ind. 2005)). Appellate review
    of the trial court’s ruling on a Trial Rule 12(B)(6) motion is de novo. 
    Kitchell, 997 N.E.2d at 1025
    . On appeal, we view the pleadings in the light most
    favorable to the nonmoving party, with every reasonable inference construed in
    that party’s favor to determine if there is any set of allegations under which the
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019        Page 7 of 18
    plaintiff could be granted relief. Am. Family 
    Voices, 898 N.E.2d at 296
    .
    However, the plaintiff must still plead the operative facts necessary to set forth
    an actionable claim. 
    Id. “If a
    complaint states a set of facts that, even if true,
    would not support the relief requested, we will affirm the dismissal.” McPeek v.
    McCardle, 
    888 N.E.2d 171
    , 174 (Ind. 2008) (citation omitted).
    [11]   Here, the trial court declined to view matters outside the pleadings, and
    therefore we will review the issue of exhaustion of remedies de novo as we
    would if it had been decided under Trial Rule 12(B)(6).
    Section 1 – Dismissal of Grdinich’s claims based on failure to
    exhaust administrative remedies was improper.
    [12]   We first consider Count 1 since it goes to the heart of the matter. In Count 1,
    Grdinich requested a declaratory judgment that the pond is in compliance with
    and does not violate the Ordinance. Grdinich contends that the trial court erred
    in granting Appellees’ motion to dismiss Count 1 based on failure to exhaust
    administrative remedies.
    [13]   “It is well-established that, if an administrative remedy is available, it must be
    pursued before a claimant is allowed access to the courts.” Town Council of New
    Harmony v. Parker, 
    726 N.E.2d 1217
    , 1224 (Ind. 2000). “The reasons for this
    requirement are well established: (1) premature litigation may be avoided; (2)
    an adequate record for judicial review may be compiled; and (3) agencies retain
    the opportunity and autonomy to correct their own errors.” Ind. Dep’t of Envtl.
    Mgmt. v. Twin Eagle LLC, 
    798 N.E.2d 839
    , 844 (Ind. 2003). “Where … an
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019      Page 8 of 18
    administrative remedy is readily available, filing a declaratory judgment action
    is not a suitable alternative.” Carter v. Nugent Sand Co., 
    925 N.E.2d 356
    , 360
    (Ind. 2010).
    [14]   Grdinich contends that the pond is not subject to regulation by the Ordinance,
    and therefore he is not required to exhaust administrative remedies.3
    Specifically, he asserts that his pond is less than three acres in size; the
    Ordinance only regulates ponds or lakes that are three acres or more in size,
    requiring a special exception by the BZA pursuant to Sections 2-2-8-1 and 2-2-
    13-9 of the Ordinance; and the Ordinance is completely silent with respect to
    ponds or lakes less than three acres in size. Appellants’ Br. at 9-10. To support
    his argument that this claim does not require the exhaustion of remedies,
    Grdinich relies on Boone County Area Plan Commission v. Kennedy, 
    560 N.E.2d 692
    (Ind. Ct. App. 1990).
    [15]   In that case, the Kennedys owned “forty acres contiguous to one of Zionsville’s
    borders upon which is located a four bedroom dwelling house and outbuildings
    which they will use for recreational purposes on weekends.” 
    Id. at 696.
    The
    Kennedys wanted to build a private recreational skeet and shooting range on
    fifteen acres. Whether they could build the skeet range without seeking formal
    application from the county depended on whether the proposed skeet range was
    a “primary” or “accessory” use under the Boone County zoning ordinance. If
    3
    Appellees assert that Grdinich waived this argument because he failed to raise it below. We disagree. Our
    review of the record shows that Grdinich presented a substantially similar argument to the trial court. Tr.
    Vol. 2 at 34-35; Appellants’ Supp. App. Vol. 2 at 17.
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019                           Page 9 of 18
    “primary,” the Kennedys would need permission from the county because the
    land was in an R-1 residential zone. If “accessory,” the zoning ordinance by its
    own terms would exclude the use from regulation, and the Kennedys would not
    need permission from the county to build the skeet range. After an informal
    exchange, the plan commission informed the Kennedys that under the zoning
    ordinance the proposed skeet range could not be built because it was a primary
    as opposed to an accessory use of the real estate. Without petitioning the plan
    commission for authority to construct the skeet range, the Kennedys filed suit
    for declaratory judgment seeking permission to build the skeet range on their
    real estate as an accessory use thereto. The trial court granted summary
    judgment in favor of the Kennedys.
    [16]   The plan commission appealed, arguing that the grant of summary judgment
    was improper for two reasons: (1) the Kennedys could not directly seek a
    judicial determination without first exhausting administrative remedies; and (2)
    even if the matter was properly in court, there was a genuine issue of material
    fact as to whether the Kennedys’ proposed skeet range was a permitted
    accessory use under the ordinance. In addressing whether the Kennedys had to
    avail themselves of administrative remedies before resorting to the courts for
    relief, the Kennedy court observed,
    The test to determine the propriety of declaratory relief is whether the
    issuance of a declaratory judgment will effectively solve the problem
    involved, whether it will serve a useful purpose, and whether or not
    another remedy is more effective or efficient. Applying that test here it
    is readily apparent the lower court’s determination the skeet
    range was an accessory use unregulated by the [o]rdinance
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019           Page 10 of 18
    effectively solved the problem, served a useful purpose, and no
    other remedy was available to the Kennedys absent their
    involuntary submission to the [o]rdinance’s administrative
    processes.
    
    Id. at 696
    (emphasis added). The Kennedy court concluded that “direct resort
    to the trial court was appropriate.” 
    Id. [17] The
    Kennedy court then considered whether there was a genuine issue of
    material fact as to whether the Kennedys’ proposed skeet range was a permitted
    accessory use under the ordinance. 
    Id. The Kennedy
    court construed the
    ordinance and concluded that the proposed skeet range was an accessory use
    and exempt from the ordinance’s provisions, and therefore the trial court did
    not err by so finding. 
    Id. at 696
    -97.
    [18]   Grdinich asserts that, like in Kennedy, the use at issue here is not subject to
    regulation by the Ordinance, and therefore he is not required to exhaust
    administrative remedies. Appellees counter that the pond is regulated by the
    Ordinance, and therefore he is required to exhaust administrative remedies.
    We observe that both parties’ arguments appear to conflate the two different
    questions that were before the Kennedy court. The Kennedy court had to decide
    both whether exhaustion of administrative remedies was required and, because
    summary judgment had been granted to the Kennedys on their declaratory
    judgment action, whether the trial court had properly found that the skeet range
    was an accessory use that was exempt from the ordinance’s provisions. Here,
    Grdinich’s declaratory judgment claim has not been determined on the merits.
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019     Page 11 of 18
    Accordingly, we need decide only whether Grdinich is required to exhaust
    administrative remedies.
    [19]   Like in Kennedy, interpretation of the Ordinance may show that its regulations
    do not apply to the pond. If Grdinich’s pond is not regulated by the Ordinance,
    Grdinich, like the Kennedys, has no administrative procedures to exhaust.4
    The appeal in Kennedy was from a summary judgment proceeding, whereas
    here the appeal is from the grant of a Trial Rule 12(B)(6) motion. Our decision
    must be based on the allegations in Grdinich’s counterclaim and third-party
    complaint. Based on the few provisions of the Ordinance that are before us, it
    is not obvious as a matter of law that Grdinich’s pond falls within the
    Ordinance’s purview.
    [20]   In addition, Grdinich contends, and Appellees concede, that Count 1 is an
    affirmative defense to Appellees’ claim against him, and therefore the resolution
    of Count 1 potentially determines the outcome of Appellees’ claim. Based on
    the scant record before us, it appears that the issuance of a declaratory judgment
    will effectively solve the problem involved and serve a useful purpose, and there
    is not another remedy that is more effective or efficient. Accordingly, we
    conclude that Count 1 was improperly dismissed.
    [21]   Because the resolution of Count 1 potentially impacts all the counts related to
    the pond, i.e., Counts 2-4 and 7, we conclude that the failure to exhaust
    4
    Unlike in Kennedy, we do not have the benefit of the entire zoning ordinances and its definitions.
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019                               Page 12 of 18
    administrative remedies is an improper basis on which to dismiss those counts.
    As to Count 5, the inverse condemnation claim, there is nothing in the record
    to suggest that administrative remedies are available, and Appellees make no
    argument that there are.
    Section 2 – Dismissal of Counts 2 and 7 based on failure to
    plead sufficient operative facts to state a claim upon which
    relief can be granted was improper.
    [22]   Next, the parties dispute whether Counts 2 and 7 contain sufficient operative
    facts to state claims upon which relief may be granted.5 We reiterate that in
    examining whether these counts state claims upon which relief may be granted,
    we must accept as true the facts alleged in Grdinich’s second amended
    counterclaim and third-party complaint. 
    Kapoor, 49 N.E.3d at 120
    .
    [23]   In Count 2, Grdinich sought a preliminary injunction to enjoin Appellees from
    removing the pond. To obtain a preliminary injunction, the moving party must
    ultimately show that
    (1) the movant’s remedies at law are inadequate, thus causing
    irreparable harm pending resolution of the substantive action; (2)
    the movant has at least a reasonable likelihood of success at trial
    by establishing a prima facie case; (3) threatened injury to the
    movant outweighs the potential harm to the nonmoving party
    resulting from the granting of an injunction; and (4) the public
    interest would not be disserved.
    5
    Appellees challenge Count 4 only on the basis of failure to exhaust administrative remedies and do not
    contend that Count 4 lacks sufficient operative facts to state a claim upon which relief can be granted.
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019                          Page 13 of 18
    Sperro LLC v. Ford Motor Credit Co., 
    64 N.E.3d 235
    , 249 (Ind. Ct. App. 2016)
    (quoting Apple Glen Crossing, LLC v. Trademark Retail, Inc., 
    784 N.E.2d 484
    , 487
    (Ind. 2003)).
    [24]   Grdinich contends that he properly pled the operative facts that, if taken as true,
    show that he will suffer irreparable harm pending resolution of the action; he
    has at least a reasonable likelihood of success at trial; the Town will not suffer
    any harm and an injunction will not harm the public interest because his pond
    remediates the neighborhood drainage and mosquito problems and his
    neighbors support the improvements to the pond. Appellees challenge only his
    assertions regarding irreparable harm and likelihood of success at trial. First,
    they argue that Grdinich’s second amended counterclaim and third-party
    complaint sets forth no injury other than an economic one, and therefore his
    remedies at law are adequate. In his reply brief, Grdinich responds that he
    alleges that “his irreparable damages follow from the fact that he would never
    have constructed his home on the property and moved his family into it if he
    had known the pond improvements would not be permitted.” Appellants’
    Reply Br. at 18. Given that we must accept his allegation as true, we find that it
    is sufficient to allege that Grdinich’s remedies at law are inadequate.
    [25]   Appellees next contend that Grdinich fails to allege operative facts showing that
    he has a reasonable likelihood of success on the merits. We disagree. We
    must accept as true that Grdinich’s pond is less than three acres. His argument
    that his pond is lawful without any approval because a pond less than three
    acres is not regulated by the Ordinance is a legal argument. As such, he has
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019     Page 14 of 18
    alleged sufficient operative facts showing a reasonable likelihood of success on
    the merits, and therefore his claim for a preliminary injunction survives
    dismissal under Trial Rule 12(B)(6).6
    [26]   We next address Count 7 because it is based on the pond. In Count 7, Grdinich
    alleged a claim of promissory estoppel. “Estoppel is not generally applicable
    against government entities for the actions of public officials.” Biddle v. BAA
    Indianapolis, LLC, 
    860 N.E.2d 570
    , 581 (Ind. 2007). The reason for the rule is
    twofold. “If the government could be estopped, then dishonest, incompetent or
    negligent public officials could damage the interests of the public. At the same
    time, if the government were bound by its employees’ unauthorized
    representations, then government, itself, could be precluded from functioning.”
    Samplawski v. City of Portage, 
    512 N.E.2d 456
    , 459 (Ind. Ct. App. 1987).
    However, “estoppel may be appropriate where the party asserting estoppel has
    detrimentally relied on [a] governmental entity’s affirmative assertion or on its
    silence where there was a duty to speak.” Equicor Dev., Inc. v. Westfield-
    Washington Twp. Plan Comm’n, 
    758 N.E.2d 34
    , 39 (Ind. 2001). “[A] party
    asserting promissory estoppel must establish five elements: ‘(1) a promise by the
    promissor (2) made with the expectation that the promisee will rely thereon (3)
    which induces reasonable reliance by the promisee (4) of a definite and
    substantial nature and (5) injustice can be avoided only by enforcement of the
    6
    We express no opinion on whether Grdinich can ultimately carry his burden to show by a preponderance
    of the evidence that he is entitled to a preliminary injunction.
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019                      Page 15 of 18
    promise.” 
    Biddle, 860 N.E.2d at 581
    (quoting First Nat’l Bank of Logansport v.
    Logan Mfg. Co., 
    577 N.E.2d 949
    , 954 (Ind. 1991)). Also, with respect to a
    government entity, the party asserting promissory estoppel must show “that
    estoppel is not inconsistent with the public interest.” Muncie Indus. Revolving
    Loan Fund Bd. v. Ind. Constr. Corp., 
    583 N.E.2d 769
    , 771 (Ind. Ct. App. 1991).
    [27]   Grdinich argues that Count 7 states a claim upon which relief may be granted
    because he made the following allegations in support thereof: the plans he
    submitted to the Town were approved and the requisite permits issued; he
    initiated and completed construction at significant time and expense in
    reasonable reliance on the Town’s approval; he relied on the Town’s approval
    to his detriment because he expended significant resources to bring his home
    into conformity with the zoning ordinance; injustice can be avoided only by
    enforcement of the approved permits; and restoring the pond to its prior
    condition would cause drainage problems to the surrounding neighborhood as
    well as potential public health problems due to increased risk of mosquito
    infestation. Accepting these facts as true, as we must, we conclude that
    Grdinich has alleged sufficient operative facts to support a claim for promissory
    estoppel. Therefore, dismissal of Count 7 was improper.
    Section 3 – Count 5 was properly dismissed.
    [28]   Last, we consider Count 5, a claim for inverse condemnation based on the
    existence of an underground drainage pipeline. Pursuant to Indiana Code
    Section 32-24-1-16, an owner of property acquired for public use may bring a
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019   Page 16 of 18
    suit for inverse condemnation to recover money damages, if the government
    takes property but fails to initiate eminent domain proceedings. Murray v. City
    of Lawrenceburg, 
    925 N.E.2d 728
    , 731 (Ind. 2010). “An action for inverse
    condemnation requires: ‘(1) a taking or damaging; (2) of private property; (3)
    for public use; (4) without just compensation being paid; and (5) by a
    governmental entity that has not instituted formal proceedings.’” 
    Id. (quoting 29A
    C.J.S. Eminent Domain § 560 (2007)).
    [29]   Grdinich argues that he pled all the operative facts to establish a claim for
    inverse condemnation: “that real estate owned by him is encumbered by a 150-
    foot underground storm water drainage pipeline that is owned and controlled
    by Hebron for public use without payment for just compensation.” Appellants’
    Br. at 13. Grdinich also alleged that the pipeline causes damages to him,
    including the diminution in value and the deprivation of beneficial use of a
    substantial portion of his property. We observe that the pipeline was present
    when Grdinich purchased the property. Whatever diminution in value, if any,
    or deprivation of beneficial use, if any, to the property resulting from the
    pipeline occurred prior to his purchase of the property. Nothing changed after
    he purchased the property, and thus he has not suffered any damages.
    Accordingly, we conclude Count 5 fails to state a claim upon which relief can
    be granted, and therefore the claim was properly dismissed.
    [30]   Based on the foregoing, we affirm the trial court’s dismissal of Count 5, reverse
    the dismissal of Counts 1-4 and 7, and remand for further proceedings.
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019    Page 17 of 18
    [31]   Affirmed in part, reversed in part, and remanded.
    Vaidik, C.J., and Mathias, J., concur.
    Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019   Page 18 of 18