CRONE, Judge.
Carmel residents Albert D. Bowen and Julie A. Bowen hired U.S. Architects to design what the Carmel Zoning Ordinance ("the Ordinance") categorizes as an accessory building. The Bowens submitted the design plans to the Carmel Department of Community Services ("the DCS"), which issued a building permit and a certificate of occupancy. The Bowens' neighbors, Joseph D. Barnette, Jr., and Charlene Barnette, complained to the DCS about the height of the Bowens' building. The DCS notified the Bowens that their building violated the height limits of the Ordinance and advised them to apply for a variance with the Carmel/Clay Board of Zoning Appeals ("the BZA"), which they did. The BZA denied the variance. The Bowens did not appeal the DCS's determination that their building is too tall, nor did they appeal the BZA's denial of a variance. The DCS again notified the Bowens that their building violated the Ordinance, that they had to bring it into compliance, and that the DCS would be withdrawing the certificate of occupancy. The Bowens did not appeal that determination.
Instead, the Bowens and U.S. Architects (collectively "the Plaintiffs") filed a complaint for declaratory relief against the DCS and the BZA (collectively "the City"), seeking an interpretation of the Ordinance and a determination that their building complied with it. The City filed a motion for judgment on the pleadings based on the Bowens' failure to exhaust their administrative remedies and counterclaimed for both an injunction ordering the Bowens to bring their building into compliance with the Ordinance and a civil penalty for a zoning violation. The Barnettes filed a motion to intervene, which the trial court granted, and joined the City's motion for judgment on the pleadings. The Plaintiffs filed a motion for summary judgment.
After a hearing, the trial court issued an order stating that the Bowens' failure to exhaust their administrative remedies would have been fatal to their claims but for the fact that the DCS had violated their due process rights and that DCS should be estopped from revoking the certificate of occupancy. The trial court also ruled that U.S. Architects did not have standing to bring a declaratory judgment action because it had not suffered an actual injury and could not request guidance for designing future buildings in Carmel. The trial court denied the City's motion for judgment on the pleadings; granted the
On appeal, the Plaintiffs contend that the appeal is moot because the Barnettes cannot enforce the Ordinance on the City's behalf. We conclude that the appeal is not moot because a party of record in the trial court is a party on appeal, and we may grant appropriate relief to any party. Also, as intervenors and parties to the judgment, the Barnettes may appeal the trial court's judgment to the extent that it is adverse to the interests that made intervention possible in the first place.
The Barnettes contend that the declaratory judgment action should be dismissed for lack of subject matter jurisdiction because the Bowens failed to exhaust their administrative remedies. We agree. The DCS is not estopped from enforcing the Ordinance because the relevant facts were equally known by or accessible to the Bowens and the City. And because the Bowens failed to exhaust their administrative remedies, which would have afforded them due process, they cannot complain about a due process violation. Therefore, we reverse and remand with instructions to dismiss the Plaintiffs' declaratory judgment complaint as to the Bowens and for further proceedings consistent with this opinion, such as reconsideration of the City's counterclaims.
Finally, U.S. Architects contends that the trial court erred in determining that it lacks standing to bring a declaratory judgment action. Because any injury suffered by U.S. Architects would be derivative of that suffered by the Bowens, and because it may not seek an advisory opinion for guidance in designing future buildings, we affirm the trial court on this issue and remand with instructions to dismiss the Plaintiffs' declaratory judgment complaint as to U.S. Architects.
In sum, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.
The relevant facts are undisputed. In 2010, the Bowens, who live next door to the Barnettes in Carmel, hired U.S. Architects to design what the Ordinance categorizes as an accessory building.
The Barnettes complained to the DCS about the height of the Bowens' building, which has a gable roof and no walls adjoining the street. Section 3.07 of the Ordinance defines "building height" in pertinent
In March 2011, the DCS sent a letter to the Bowens that reads in pertinent part as follows:
Id. at 99.
Indiana Code Section 36-7-4-918.1 provides that appeals from "any order, requirement, decision or determination made by an administrative official, hearing officer, or staff member under the zoning ordinance" shall be heard and determined by a board of zoning appeals. An appeal "must be filed within such time and in such form as may be prescribed by the board of zoning appeals by rule." Ind.Code § 36-7-4-919(a). Section 30.01 of the Ordinance provides that appeals shall be filed within thirty days of the action being appealed. The Bowens did not appeal the DCS's determination that their building was too tall.
Instead, on the advice of and with the assistance of the DCS, the Bowens applied for a variance with the BZA. On the Bowens' behalf, the DCS submitted proposed findings recommending approval of the variance. But after a hearing in April 2011, the BZA denied the variance, finding that the building "is approximately 36.5 feet in height";
On June 3, 2011, the DCS sent a letter to the Bowens that reads in pertinent part as follows:
Appellants' App. at 144. The Bowens did not appeal this determination.
Instead, in September 2011, the Plaintiffs filed a complaint for declaratory relief against the City, seeking an interpretation of Section 25.01.01B of the Ordinance and a determination that the Bowens' building complied with it, as well as a stay of any zoning enforcement proceedings pending the resolution of the declaratory judgment action.
Thereafter, the City filed a motion for judgment on the pleadings based on the Bowens' failure to exhaust their administrative remedies. The Barnettes filed a motion to intervene as of right pursuant to Indiana Trial Rule 24, alleging that the Bowens' building "has severely compromised [their] view and has diminished the value of [their property]." Id. at 49-50.
The Plaintiffs filed a response to the motion for judgment on the pleadings and a memorandum in support of a motion for summary judgment, which stated,
Id. at 61. The Plaintiffs asserted that for purposes of calculating the height of an accessory building, the lot ground level should be "the average of the elevation of the land surrounding the primary residence." Id. at 65.
The Barnettes filed a response to the Plaintiffs' summary judgment motion, which the City joined, and also joined the City's motion for judgment on the pleadings. In their summary judgment reply brief, the Plaintiffs asserted for the first time that the DCS "effectively revoked" the Bowens' certificate of occupancy "without notice or opportunity to be heard" and thereby violated their due process rights. Id. at 164. The Plaintiffs also asserted for the first time that the Ordinance is "unconstitutionally vague and did not provide fair warning to either U.S. Architects or the Bowens of its requirement that the lot ground level is an average of the elevation of an imaginary line six feet from the adjacent wall of an accessory structure." Id. at 159-60. They further asserted that U.S. Architects has standing to bring a declaratory judgment action "because the Bowens have made a claim against U.S. Architects for remodeling costs to comply with [the] DCS's interpretation of the ordinance"
After a hearing, the trial court issued an order in which it concluded that the Bowens' failure to exhaust their administrative remedies would have been fatal to their claims but for the following considerations: (1) the DCS's revocation of their certificate of occupancy "without notice, hearing or just compensation" violated their due process rights; and (2) the DCS should be estopped from revoking the certificate because the Bowens "did in fact reasonably rely upon the issuance of [the building permit and certificate of occupancy] to their detriment by commencing and completing construction and by occupying the structure, only to be told nearly six months later that the accessory structure violated the applicable ordinance." Id. at 12, 14. The court further concluded that U.S. Architects lacked standing to bring the declaratory judgment action because it had not suffered the denial of a property interest or an actual injury; the court deemed the Bowens' claim against U.S. Architects as too speculative and stated that "[a] request for future guidance is not an actual, present, justiciable controversy." Id. at 17. Consequently, the court granted the Plaintiffs' summary judgment motion as to the Bowens and denied it as to U.S. Architects. The court also denied the City and the Barnettes' motion for judgment on the pleadings. Based on its finding of a due process violation, the court ordered the DCS to "immediately reissue the Certificate of Occupancy and/or provide just compensation as required by law." Id. at
The Barnettes now appeal, but the City does not. US Architects cross-appeals the trial court's determination regarding its lack of standing.
As a threshold matter, we first address the Plaintiffs' contention that this appeal is moot because the City did not file a notice of appeal and the Barnettes, as private citizens, cannot enforce the Ordinance on its behalf. Pursuant to Indiana Appellate Rule 17(A), a party of record in the trial court shall be a party on appeal. "`The rule operates of its own force to make all parties in the trial court parties on appeal, whether such parties participate actively or not.'" Hoosier Outdoor Adver. Corp. v. RBL Mgmt., Inc., 844 N.E.2d 157, 162 (Ind.Ct.App.2006) (quoting State v. Nixon, 270 Ind. 192, 194, 384 N.E.2d 152, 153 (1979)), trans. denied. Pursuant to Indiana Appellate Rule 66(C), "with respect to some or all of the parties or issues, in whole or in part[,]" we may affirm or reverse the trial court's decision or "grant any other appropriate relief." And we have "held that where a party is permitted to intervene in a lawsuit under Indiana Trial Rule 24, that party may appeal a decision adverse to its interests even if the original party or parties decide to forego the pursuit of an appeal; the case is not moot." Hoosier Outdoor, 844 N.E.2d at 161 (citing City of New Haven v. Chem. Waste Mgmt. of Ind., LLC, 685 N.E.2d 97, 102 (Ind.Ct.App. 1997), trans. dismissed (1998)).
Based on the foregoing, we agree with the Barnettes that "[t]he fact that the City is the party that brought the enforcement action, and not the Barnettes, is irrelevant[,]" and that, as parties to the trial court's judgment and this appeal, they "are entitled to pursue and receive an effective appellate remedy, independent of the City's ability to do so." Appellants' Reply Br. at 7, 6; see City of New Haven, 685 N.E.2d at 102 (denying landfill operator's motion to dismiss intervenor city's appeal from partial judgment in favor of landfill operator in county's zoning enforcement action, where county settled with landfill operator after filing appeal: "The City's status as a party to the lawsuit and the judgment rendered therein does not end merely because the original parties decided to settle their claims and to forego the pursuit of an appeal. Dismissal of the suit as between the original parties does not render moot the City's claims. There is no indication that the City has failed to meet the procedural requirements to bring an appeal to this court. As a party to the judgment ..., the City has the right to appeal that judgment to the extent that it is adverse to those interests which made intervention possible in the first place. This court has subject-matter jurisdiction over the City's appeal....").
This mention of subject matter jurisdiction brings us to our next point. The Barnettes contend that the trial court should have dismissed the Plaintiffs' declaratory
We agree with the Barnettes that the trial court should have dismissed the Plaintiffs' declaratory judgment complaint as to the Bowens because they failed to exhaust their administrative remedies. According to our supreme court, "It is well-established that, if an administrative remedy is available, it must be pursued before a claimant is allowed access to the courts." Parker, 726 N.E.2d at 1224. Where "an 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).
The exhaustion doctrine is supported by "strong policy reasons and considerations of judicial economy[.]" Austin Lakes Joint Venture v. Avon Utils., Inc., 648 N.E.2d 641, 644 (Ind.1995).
Johnson v. Celebration Fireworks, Inc., 829 N.E.2d 979, 982 (Ind.2005) (quoting Austin Lakes, 648 N.E.2d at 644 (quoting Weinberger v. Salfi, 422 U.S. 749, 765, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975))).
Established administrative procedures may not be bypassed simply because a party raises a constitutional issue; otherwise they could be circumvented "by the mere allegation of a constitutional deprivation." Ind. State Dep't of Welfare v. Stagner, 410 N.E.2d 1348, 1353 (Ind.Ct. App.1980).
The exhaustion requirement is not without exceptions, however. Smith v. State Lottery Comm'n of Ind., 701 N.E.2d 926, 931 (Ind.Ct.App.1998), clarified on reh'g, trans. denied (1999). For example, a party is excepted from the requirement "when some equitable consideration precludes application of the rule." Id. Here, the trial court essentially determined that the exhaustion requirement was precluded by estoppel.
LaGrange Cnty. Reg'l Util. Dist. v. Bubb, 914 N.E.2d 807, 811 (Ind.Ct.App.2009).
"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 behind the rule is two-fold. 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).
The Barnettes point out that "[e]stoppel cannot be applied if the facts are equally known by or accessible to both parties," City of Crown Point v. Lake Cnty., 510 N.E.2d 684, 687 (Ind.1987), and that "[p]roperty owners are charged with knowledge of ordinances that affect their property." Story Bed & Breakfast, LLP v. Brown Cnty. Area Plan Comm'n, 819 N.E.2d 55, 64 (Ind.2004). We agree with the Barnettes that the Bowens thus were charged with knowing what the maximum height for accessory buildings is pursuant to the Ordinance and that height is "measured based on the average level of the ground adjacent to the exterior walls of the accessory building, not the primary residence." Appellants' Br. at 38. Plaintiffs' argument to the contrary is unsupported by the plain language of Section 3.07 of the Ordinance, which refers to the
And as for the Bowens' due process claim, we simply observe that exhausting their administrative remedies would have afforded them all the process that they were due. "At a minimum, due process requires notice and an opportunity to be heard, with the hearing held at a meaningful time and in a meaningful manner." Myers v. Coats, 966 N.E.2d 652, 658 (Ind.Ct.App.2012). Pursuant to statute, the Bowens had two opportunities to appeal from and be heard on the DCS's determination that their accessory building is too tall
Based on the foregoing, we conclude that the Plaintiffs' declaratory judgment complaint should be dismissed as to the Bowens for lack of subject matter jurisdiction due to their failure to exhaust their administrative remedies. Therefore, we reverse and remand with instructions to dismiss the Plaintiffs' declaratory judgment complaint as to the Bowens and for further proceedings consistent with this opinion, such as reconsideration of the City's counterclaims for an injunction and a civil penalty.
Simply put, no.
Affirmed in part, reversed in part, and remanded.
BAKER, J., and NAJAM, J., concur.
Id. at 540. There is no question that the trial court has the power to hear and determine declaratory judgment cases such as the one filed by the Bowens. In light of K.S., it seems to us that a party's failure to exhaust administrative remedies should be considered a type of legal error (i.e., procedural default) that has nothing to do with a court's subject matter jurisdiction. But a recent opinion from our supreme court suggests otherwise. See Walczak v. Labor Works-Ft. Wayne LLC, 983 N.E.2d 1146, 1154 (Ind.2013) (addressing argument that trial court lacked subject matter jurisdiction because plaintiff "failed to exhaust available administrative remedies before filing her claim" under Wage Payment Act without determining whether such failure implicates subject matter jurisdiction). Until our supreme court brings further clarity to this area, we will follow their most recent precedent on the subject.
Middleton Motors, Inc. v. Ind. Dep't of State Revenue, 269 Ind. 282, 285, 380 N.E.2d 79, 81 (1978).
