John E. Moriarity and Mae E. Moriarity v. Indiana Department of Natural Resources

FILED
Feb 13 2018, 7:45 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEY FOR APPELLANTS ATTORNEYS FOR APPELLEE
William M. Horne Curtis T. Hill, Jr.
Horne Law LLC Attorney General of Indiana
Indianapolis, Indiana
Kyle Hunter
Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
John E. Moriarity and Mae E. February 13, 2018
Moriarity, Court of Appeals Case No.
Appellants-Petitioners, 27A04-1612-PL-2731
Appeal from the Grant Circuit
v. Court
The Honorable Mark E. Spitzer,
Indiana Department of Natural Judge
Resources, Trial Court Cause No.
Appellee-Respondent. 27C01-1511-PL-73
Najam, Judge.
Statement of the Case
[1] John and Mae Moriarity (collectively “the Moriaritys”) appeal the trial court’s
order in which the court affirmed the decision of the Natural Resources
Commission (“the Commission”) in favor of the Indiana Department of
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Natural Resources (“DNR”) following the DNR’s notice of violation issued to
the Moriaritys and final order thereon. The Moriaritys present three issues for
our review, which we restate as follows:
1. Whether the DNR erred when it exercised jurisdiction
over the Moriaritys’ dam.
2. Whether the DNR’s determination that the Moriaritys’
dam is a “high hazard” dam is supported by substantial
evidence.
3. Whether the Moriaritys preserved for appellate review
their claim that the DNR exceeded its statutory authority
when it entered an order that did not expressly allow for
the possibility that the Moriaritys could make
modifications to their dam and lake to remove them from
the DNR’s jurisdiction.
[2] We affirm.
Facts and Procedural History1
[3] The Moriaritys own farm land in Grant County. Between 1997 and 2000, John
constructed a dam and a lake on the farm, and he stocked that lake with fish.
The dam is more than twenty feet high at some points, the lake has a surface
1
We held oral argument in this case on October 30, 2017. On October 31, we ordered the parties to
participate in mediation pursuant to Appellate Rule 20. The parties participated in mediation but were
unable to reach a mediated resolution of the case.
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area of approximately forty acres, and the lake contains more than 100 acre-feet
of water.2
[4] During the course of the construction, the Moriaritys were in contact with the
DNR about any relevant permits the Moriaritys might need, but the DNR did
not instruct them to obtain any specific permits from the DNR. Nonetheless,
between 2002 and 2008, the DNR issued to the Moriaritys a notice of violation
(“NOV”) with respect to the dam on at least three separate occasions. The
Moriaritys either did not comply with those NOVs or had them subsequently
dismissed by a trial court. On May 14, 2012, the DNR issued another NOV to
the Moriaritys. The 2012 NOV alleged, in relevant part, that the Moriaritys’
dam was in violation of Indiana’s Dam Safety Act, Ind. Code Ann. §§ 14-27-
7.5-1 to -16 (West 2011).
[5] The Moriaritys sought administrative review of the 2012 NOV. At an ensuing
fact-finding hearing, the DNR presented expert testimony that streams existed
on the Moriaritys’ property. The DNR’s experts further testified that the
Moriaritys’ lake was created by the damming of those streams.
[6] The DNR also presented the testimony of Kenneth Smith, the DNR’s assistant
director of the water division, who testified that the Moriaritys’ dam was a
2
The Dam Safety Act does not apply to a structure that meets all of the following conditions: is built for the
sole purpose of erosion control, watering livestock, recreation, or providing a haven or refuge for fish or
wildlife; has a drainage area above the dam of not more than one square mile; does not exceed twenty feet in
height; and does not impound a volume of more than one hundred acre-feet of water. Ind. Code § 14-27-7.5-
1(1) (2017). The Moriaritys have stipulated that their structure impounds more than one hundred acre-feet of
water and, as such, does not meet all of the conditions of Section 14-27-7.5-1(1).
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“high hazard” dam. In particular, Smith testified that it is “not that hard to tell
a High-Hazard Dam. You can stand on the dam, literally can look downstream
of it and see things that are in harm’s way.” Appellants’ App. Vol. II at 106.
Smith further testified that, looking out from the Moriaritys’ dam, it was
“visually obvious” that that dam “was a High-Hazard Dam” due to the
presence of several structures that, if a breach occurred, would be inundated
“with great velocity and depth.” Id. at 129. Similarly, George Crosby, a DNR
geologist, testified that, if the dam “breaks above the house [of the Moriaritys’
son, who lived nearby], it’s likely that there could be some serious damage to
that house and . . . to other homes, too.” Appellants’ App. Vol. III at 45.
Crosby further testified that, “even without the homes, . . . this thing would still
be considered High-Hazard . . . due to [a downstream] road because of the
traffic; that’s a very high-traffic road.” Appellee’s App. Vol. III at 188.
[7] Following the fact-finding hearing and oral argument, the Commission entered
its order for the DNR and against the Moriaritys, which the Commission
supported with findings of fact and conclusions of law. The Commission’s
“Final Order” stated as follows:
1. [The Moriaritys] . . . are hereby ordered to draw down the
water level in the Moriarity impounded lake to an elevation of
between 840 and 845 feet NAVD. They shall . . . consult with a
professional engineer duly licensed in Indiana . . . to develop a
safe and appropriate dewatering plan for accomplishing the draw
down as herein ordered.
2. The water level of the impounded lake shall be maintained at
between 840 and 845 feet NAVD until the Moriaritys . . . have
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complied with the remainder of this Order as set forth below in
Paragraphs 3 and 5.
3. [The Moriaritys] . . . are hereby ordered to comply with I.C.
[§] 14-27-7.5-9(a) by having their dam inspected by a professional
engineer . . . and submitting a report of that inspection to the
DNR’s Division of Water within ninety (90) days of the issuance
of a final order in this proceeding. . . .
4. [The Moriaritys] . . . are hereby ordered to comply with I.C.
[§] 14-27-7.5-9(b) by completing any maintenance, repair, or
alteration as required to fulfill the usual and customary
requirements of the DNR.
5. In lieu of compliance with Paragraphs 1 through 4 above, [the
Moriaritys], . . . under the direction of a professional engineer . . .
[may ] dewater, breach, and permanently decommission the
dam.
6. [The Moriaritys] . . . are hereby ordered to pay [a total of
$10,000 in] civil penalties for their violations of the Dam[] Safety
Act. . . .
Appellant’s App. Vol. II at 56-57. The Moriaritys filed a petition for judicial
review thereafter, and the trial court affirmed the Commission’s decision. The
Moriaritys filed a motion to correct error with the trial court, which was
subsequently deemed denied. This appeal ensued.
Discussion and Decision
Standard of Review
[8] Our standard of review is well settled:
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Pursuant to Indiana’s Administrative Order[s] and Procedures
Act (“AOPA”), we may set aside an agency action only if it is
(1) arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law; (2) contrary to
constitutional right, power, privilege, or immunity;
(3) in excess of statutory jurisdiction, authority, or
limitations, or short of statutory right; (4) without
observance of procedure required by law; or (5)
unsupported by substantial evidence.
Ind. Code § 4-21.5-5-14(d) (Supp. 2012). The party seeking
judicial review bears the burden of proving the agency action is
invalid for one of the above five reasons. Id. § 4-21.5-5-14(a).
Further, when reviewing a challenge to an administrative
agency’s decision, “this Court will not try the facts de novo nor
substitute its own judgment for that of the agency.” State Bd. of
Registration for Prof’l Eng’rs v. Eberenz, 723 N.E.2d 422, 430 (Ind.
2000) (citing Ind. Dep’t of Envtl. Mgmt. v. Conard, 614 N.E.2d 916,
919 (Ind. 1993)). Rather, we defer to the agency’s findings if they
are supported by substantial evidence. Ind. Dep’t of Envtl. Mgmt.
v. West, 838 N.E.2d 408, 415 (Ind. 2005).
On the other hand, we review an agency’s conclusions of law de
novo. Nat. Res. Def. Council v. Poet Biorefining-N. Manchester, LLC,
15 N.E.3d 555, 561 (Ind. 2014).
Jay Classroom Teachers Ass’n v. Jay Sch. Corp., 55 N.E.3d 813, 816 (Ind. 2016).
Issue One: DNR’s Jurisdiction
[9] The Moriaritys first contend that the DNR erred when it exercised jurisdiction
over their dam. In particular, the Moriaritys assert that the DNR
misinterpreted the Indiana Code; that the DNR’s assertion of jurisdiction under
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the Dam Safety Act here is not supported by substantial evidence; and that the
DNR’s erroneous exercise of jurisdiction denied the Moriaritys due process and
resulted in an arbitrary and capricious decision. We address each of the
Moriaritys’ arguments in turn.
Statutory Construction
[10] We first turn to the Moriaritys’ claim that the DNR misinterpreted its
jurisdiction under the Indiana Code. In particular, the Moriaritys allege that
the “DNR’s jurisdiction hinged on whether the fish pond—or, more
technically, its ‘structure’—was built ‘in, on, or along’ a stream.” Appellants’
Br. at 21. “‘To the extent the issue turns on statutory construction, whether an
agency possesses jurisdiction over a matter is a question of law for the courts.’”
Walczak v. Labor Works-Ft. Wayne LLC, 983 N.E.2d 1146, 1152 (Ind. 2013)
(quoting Ind. Dep’t of Envtl. Mgmt. v. Twin Eagle LLC, 798 N.E.3d 839, 844 (Ind.
2003)).
[11] As the Indiana Supreme Court has explained:
When construing a statute our primary goal is to ascertain the
legislature’s intent. Adams v. State, 960 N.E.2d 793, 798 (Ind.
2012). To discern that intent, we look first to the statutory
language itself and give effect to the plain and ordinary meaning
of statutory terms. Pierce v. State, 29 N.E.3d 1258, 1265 (Ind.
2015). “If a statute is unambiguous, that is, susceptible to but
one meaning, we must give the statute its clear and plain
meaning.” State v. Evans, 810 N.E.2d 335, 337 (Ind. 2004)
(quotation omitted).
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Suggs v. State, 51 N.E.3d 1190, 1193-94 (Ind. 2016).
[12] Indiana Code Section 14-27-7.5-8(a)(1) (2017) provides in relevant part that the
DNR has “jurisdiction . . . over the maintenance and repair of structures in, on,
or along . . . streams.” The statute does not define “streams.” But that term
has a plain and ordinary meaning, namely, “a body of running water flowing in
a channel on the surface of the ground[.]” Webster’s 3d New Int’l Dictionary
2258 (2002). And the Commission used that plain and ordinary meaning here:
[t]he DNR’s witnesses all provided definitions of “stream” as
flowing water through a defined channel. The DNR’s definition
is consistent with the definitions provided by the parties as
Exhibit 3, which includes definitions from both standard English
dictionaries and technical dictionaries. The Moriaritys argue that
[the definition proffered by their expert witness, Heather Bobich,]
should be used. She relies upon the Army Corps of Engineers’
definition. However, it is not necessary to use a technical
definition of “stream.” The legislature chose to use the word
“stream” and chose not to define it. As “stream” has a common
meaning, the failure to define it supports the conclusion that the
legislative intent must have been to use the plain and ordinary
meaning. . . . Applying the rules of statutory construction,
“stream” is clear and unambiguous and requires no further
interpretation.
Appellants’ App. Vol. II at 51. We agree with the Commission and hold that
the term “stream” is unambiguous and means a body of running water flowing
in a channel on the surface of the ground.
[13] Still, the parties dispute whether, to constitute a stream under the statute, a
body of running water must flow continuously in a channel or may flow
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intermittently. Here, while the DNR presented evidence of flowing water in
streams on the property, Bobich testified that she observed no flowing streams
in 2012, which, she conceded, was “a hot and very dry year.” Id. at 46. After
concluding that there were streams on the Moriaritys’ property, the
Commission also concluded that “[t]he fact that water does not flow constantly
is not determinative.” Id. at 52.
[14] We agree with the DNR. As the DNR points out, the Moriaritys’ suggestion
that only structures along continuously flowing streams fall under the DNR’s
jurisdiction
ignores the variableness of the weather and the seasons, and it
would exclude streams that might have a significant volume of
flowing water for the majority of the year and then dry up for a
couple weeks during the hottest part of the summer or during a
year of extreme dr[o]ught.
Appellee’s Br. at 26-27. We also agree that “[u]sing a broader meaning of the
word ‘stream’ is especially appropriate here[] because the purpose of the Dam
Safety Act is to protect the public and ensure that dams and other structures on
water are maintained in good repair.” Id. at 25-26. Absent a clear intent from
our legislature to the contrary, we hold that, as a matter of law, both
continuously flowing and intermittent streams constitute streams under the
statute.
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Sufficiency of the Evidence
[15] The Moriaritys next contend that the DNR presented insufficient evidence to
prove that it had jurisdiction over their dam and lake. However, that
contention amounts to a request that we reweigh the evidence, which we
cannot do. Again, Indiana Code Section 14-27-7.5-8 provides that the DNR
has jurisdiction over the maintenance and repair of structures in, on, or along
streams. And the DNR presented testimony from several experts who stated
unequivocally that streams existed on the Moriaritys’ property and that the lake
was created by damming those streams. We hold that the DNR presented
sufficient evidence to prove that it had jurisdiction over the Moriaritys’ dam
and lake pursuant to Indiana Code Section 14-27-7.5-8, and the Moriaritys have
not shown that the Commission’s decision is contrary to law.
Derivative Arguments
[16] The Moriaritys also assert that the DNR’s erroneous exercise of jurisdiction
deprived the Moriaritys of their right to due process 3 and, similarly, resulted in
an arbitrary and capricious decision by the Commission. 4 But these arguments
are derivative of the Moriaritys’ contention that the DNR unlawfully exercised
3
In particular, the Moriaritys maintain that, because there are multiple definitions of “stream” depending on
which dictionary is consulted, there were no ascertainable standards by which they had fair notice that the
DNR had jurisdiction over their streams.
4
In particular, the Moriaritys assert that, “[i]n the absence of a plain and ordinary meaning of
‘stream, . . . [the] DNR’s choice of a stream definition was arbitrary, and its determination [here] was
arbitrary and capricious.” Appellants’ Br. at 33.
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jurisdiction here. As explained above, the DNR did not unlawfully exercise its
jurisdiction. As such, the Moriaritys’ derivative arguments must fail.
Issue Two: High Hazard Dam
[17] The Moriaritys also contend that the Commission’s determination that their
dam is a “high hazard dam” under Indiana Code Section 14-27-7.5-8(b) is
erroneous. In particular, the Moriaritys claim that a computerized inundation
study conducted by one of the DNR’s experts, Suzanne Delay, was “fatally
flawed because it was based on a starting water elevation that undisputed
evidence showed to be 2.3 feet higher than the top of the dam at its starting
point or ‘breakout point,’ as measured and described by [the] DNR.”
Appellants’ Br. at 33. Thus, the Moriaritys maintain that the “high hazard
classification lacked substantial evidence.” Id. at 37.
[18] Indiana Code Section 14-27-7.5-8(b)(1) states that a “high hazard” dam
includes a “structure the failure of which may cause the loss of life and serious
damage to homes, industrial and commercial buildings, public utilities, major
highways, or railroads.” And 312 IAC 10.5-3-1 states in relevant part:
(a) the division shall assign whether a dam is classified as:
(1) high hazard;
(2) significant hazard; or
(3) low hazard;
based on best information available.
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(b) In making the determination of assignment under subsection
(a), the division shall apply existing U.S. Army Corps of
Engineers Phase 1 reports and other appropriate documentation.
(c) The division may also consider observations of the dam and the
vicinity of the dam, including the risk posed to human life and property if
the dam fails.
(1) If an uncontrolled release of the structure’s
contents due to a failure of the structure may result in
any of the following, the dam shall be considered
high hazard:
(A) The loss of human life.
(B) Serious damage to:
(i) homes;
(ii) industrial and
commercial buildings; or
(iii) public utilities. . . .
(Emphasis added.)5
[19] The Moriaritys’ emphasis on Delay’s allegedly flawed analysis misses the mark.
Other witnesses presented substantial evidence to support the Commission’s
5
The Moriaritys note that, while Indiana Code Section 14-27-7.5-8(b) classifies a dam as high hazard when
it may cause loss of human life and serious property damage, 312 IAC 10.5-3-1 is written in the disjunctive
and requires a showing that a dam breach may result in either loss of human life or serious property damage.
The Moriaritys do not ask us to resolve this apparent inconsistency between the statute and the
administrative code.
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conclusion that the Moriaritys’ dam was a high-hazard dam. In particular,
Smith testified that the hazard posed by the dam was obvious and included
potential damage to nearby residences. Crosby similarly testified that, if the
dam broke, it could cause serious damage to several homes. And Crosby
further stated that, “even without the homes,” the dam was “still . . . High-
Hazard” due to a downstream, “very high-traffic road.” Appellee’s App. Vol.
III at 188. Thus, as the Commission found, “even without Ms. Delay’s
testimony, there is sufficient evidence to support [the] DNR’s conclusion that
this is a high hazard dam.” Appellants’ App. Vol. II at 54. Accordingly, the
Moriaritys cannot show that the Commission’s decision on this question is
contrary to law.
Issue Three: Final Order
[20] Finally, the Moriaritys contend that the DNR’s final order “exceeded the
agency’s statutory authority because it would effectively require the Moriaritys
to dewater their fish pond completely, without the possibility of making
modifications that would remove the fish pond from [the] DNR’s jurisdiction.”
Appellants’ Br. at 37. However, the Moriaritys raised this issue for the first
time in their motion to correct error. As such, the issue is waived. See Troxel v.
Troxel, 737 N.E.2d 745, 752 (Ind. 2000).
Conclusion
[21] In sum, we affirm the trial court’s denial of the Moriaritys’ petition for judicial
review.
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[22] Affirmed.
Brown, J., and Pyle, J., concur.
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