ROBB, Chief Judge.
Utility Center, Inc. (the "Company") operates a public utility in Northeast
The Company operates a public water and sewer utility in and around Fort Wayne under the assumed name of Aqua Indiana, Inc. At some point, the City perceived operational problems with the Company's service and decided to condemn the Company's North System.
Following a delay due to parallel judicial proceedings, the Board resolved in September 2004 to update the December 2003 appraisals. In December 2004, based upon updated appraisals, the Board resolved to compensate the Company for the North System in the revised amount of $14,759,500. In December 2005, this Court issued a stay on the Board's condemnation proceedings pending resolution of the Company's related judicial challenge.
Specifically, in July 2002, the Company filed a complaint for declaratory judgment against the City, alleging that the City failed to follow the proper eminent domain or condemnation statute. In 2004 the trial court granted summary judgment in favor of the City. This Court issued an opinion in 2005, and the supreme court granted transfer and issued an opinion in June 2007. Util. Ctr., Inc. v. City of Fort Wayne, 834 N.E.2d 686 (Ind.Ct.App.2005), vacated and trans. granted by 868 N.E.2d 453 (Ind.2007). A majority of the supreme
Following the supreme court decision in June 2007, the Board received another updated appraisal and, in October 2007, resolved to compensate the Company in the amount of $16,910,500. The Company submitted remonstrances but did not present its own valuation of the property. At the oral argument before this Court, the Company explained that it did not present its own valuation to the Board for a combination of reasons, including: 1) litigation strategy; 2) the high cost of valuing its own property; 3) the "complexity" of valuing its own property because it is underground; and 4) presenting the value to the Board would be futile because the Board served as "both prosecutor and judge," and was part of the body which would "write the check." The Board confirmed its October 2007 resolution.
The Company appealed the Board's determined amount to the trial court and requested a jury trial. The City moved to strike the Company's request for a jury trial and for partial judgment on the pleadings and sought to limit the trial court's review of the Board's determined amount to the abuse of discretion standard. Following a hearing, the trial court granted these motions. The Company now brings this interlocutory appeal. Additional facts will be supplied as appropriate.
We apply a de novo standard of review to a trial court's decision on a motion for judgment on the pleadings. We will affirm the trial court's grant of a T.R. 12(C) motion for judgment when it is clear from the face of the pleadings that one of the parties cannot in any way succeed under the operative facts and allegations made therein. In making this determination we will accept as true the well-pleaded material facts alleged, and we will not affirm if there are any genuine issues of material fact. The moving party is deemed to have admitted well-pleaded facts in favor of the nonmovant, and this court will draw all reasonable inferences in favor of the nonmovant.
Burkett v. Am. Family Ins. Group, 737 N.E.2d 447, 456 (Ind.Ct.App.2000) (internal quotations and citations omitted). Similarly, we review de novo a trial court's determination of whether certain claims are entitled to a trial by jury. Lucas v. U.S. Bank, N.A., 953 N.E.2d 457, 460 (Ind. 2011).
Indiana Code chapter 32-24-1 concerns general procedures for eminent domain, and Indiana Code chapter 32-24-2 concerns procedures for cities' and towns' exercise of eminent domain powers. At the outset, we must determine which chapter applies. Section 32-24-2-6(a) states "this chapter does not apply if a municipality wants to acquire the property of a public utility (as defined in IC 8-1-2-1)," the section which defines "public utility" in the context of utility regulation. But chapter 32-24-1 describes public utilities' exercise of the power itself, which is irrelevant here. In addition, both the Company and the City agree on appeal that chapter 2 applies and chapter 1 does not, because condemnation proceedings here began with the Board and not at the circuit court. Indeed, because the City conducted condemnation
Under chapter 1, the trial court makes the initial determination as to the value of the property and just compensation owed. If an aggrieved property owner files written exceptions to the assessment, the case proceeds to trial and judgment as in civil actions. Ind.Code § 32-24-1-11. Under chapter 2, the trial court's role is that of an appellate court, providing the constitutionally required function of judicial review of an administrative decision by the Board. Because we decide this case under chapter 2, we expand upon this statement throughout this opinion.
Under Indiana Code chapter 32-24-2, once the board of public works and safety of a city or legislative body of a town resolves to acquire certain property, Indiana Code sections 32-24-2-8 and -10 require the same body to assess the amount of compensation due to the owner of the condemned property. The property owner may submit written remonstrances to the Board, and the Board may sustain or modify the amount due in light of the remonstrances. The property owner may appeal to the trial court.
Section 11 provides that "[t]he [trial] court shall rehear the matter of the assessment de novo and confirm, reduce, or increase the assessment." Ind.Code § 32-24-2-11(a). But to interpret this simply as authority or instruction for the trial court to consider and decide the matter anew would belie the complexity of this statute. Our supreme court has explained that a statute providing for de novo review of an administrative decision does not always mean "a complete retrial of the issues involved." Uhlir v. Ritz, 255 Ind. 342, 345, 264 N.E.2d 312, 314 (1970). At least sometimes, the judiciary's "constitutional relationship with the other branches of government precludes such a review." Id.
Similarly, Indiana Code chapter 4-21.5-5 provides the exclusive means of judicial review of an agency action, except for two exceptions irrelevant here. Ind.Code § 4-21.5-5-1. Section 11 of that chapter states: "Judicial review of disputed issues of fact must be confined to the agency record for the agency action supplemented by additional evidence taken under section 12 of this chapter.[
Our supreme court has explained that the apparent paradox as to the scope of a trial court's de novo review of an agency decision is due to the separation of powers doctrine:
Uhlir, 255 Ind. at 344-45, 264 N.E.2d at 313-14 (citations omitted, emphasis added).
Indiana appellate courts have repeatedly confirmed the propriety of limited review of administrative decisions in a variety of situations.
The Company argues that the scope of trial courts' appellate review of administrative decisions depends largely upon whether the administrative decision at issue is judicial or legislative in nature. Recognizing the above-quoted reasoning of Uhlir, the Company argues that a trial court's authority to review an agency's determination of just compensation for condemned property is unlimited because such determination is judicial in nature. This is in contrast with, the Company contends, a trial court's authority to review an agency's determination to condemn property because such determination is legislative in nature.
This distinction is supported by the Seventh Circuit Court of Appeals: "final determination of just compensation is a judicial function[;] ... the denial of judicial review would pose constitutional difficulties." Wisconsin Cent. Ltd. v. Pub. Serv. Comm'n of Wisconsin, 95 F.3d 1359, 1370 (7th Cir.1996). The Company's distinction
Monongahela Navig. Co. v. U.S., 148 U.S. 312, 327, 13 S.Ct. 622, 37 L.Ed. 463 (1893).
The Company refers us to Gulf Power Co. v. U.S., 187 F.3d 1324 (11th Cir.1999), in which the Eleventh Circuit Court of Appeals held that an administrative body may determine just compensation in the first instance, so long as the agency decision is subject to judicial review "to ensure that a court makes the ultimate determination of just compensation."
Monongahela, Gulf Power, and Long Island Water-Supply make clear that determination of just compensation following condemnation of property is to some extent a judicial question. However, none clearly indicate whether the limited judicial review described by Indiana statutes and case law satisfy the requirement for the judiciary's "ultimate" determination.
Our discussion regarding the dual meaning of a trial court's "de novo" review leads us to the following conclusion. In an appeal of an administrative determination of just compensation, due process requires only that a party be permitted judicial review "limited to the consideration of whether there is substantial evidence to support the agency's finding and order and whether the action constitutes an abuse of discretion, is arbitrary, capricious, or in excess of statutory authority as revealed by the uncontradicted facts." DenniStarr Envtl., 741 N.E.2d at 1287-88. Neither Indiana Code chapter 32-24-2, nor the due process clauses under the United States Constitution or the Indiana Constitution, require a trial court reviewing an administrative determination of just compensation to conduct an evidentiary hearing or jury trial. Cf. Slentz, 233 Ind. at 231, 118 N.E.2d at 487 ("[I]t is essential to due process that the mode of determining the compensation be such as to afford the owner an opportunity to be heard. Among several admissible modes is that of causing the amount to be assessed by viewers, subject to an appeal to a court carrying with it a right to have the matter determined upon a full trial.") (quoting Bragg, 251 U.S. at 59, 40 S.Ct. 62) (emphasis added); Wisconsin Cent. Ltd., 95 F.3d at 1370 (acknowledging that an argument that due process is lacking where judicial review of an administrative decision entails deference to findings of fact regarding just
This conclusion makes sense because, as noted above, under Indiana Code chapter 32-24-1, the trial court makes the initial determination as to the value of the property and just compensation owed. And under chapter 32-24-2, the chapter relevant here, the trial court's role is that of a reviewing court, providing the constitutionally required function of judicial review to an administrative decision. Accordingly, the de novo review described in Indiana Code section 32-24-2-11(a) and accompanying case law describes the trial court's standard of review regarding legal issues with the Board's decision. However, consistent with Indiana Code sections 4-21.5-5-11 and -14 and the host of case law that discusses limited review of administrative decisions, the trial court's review regarding factual issues decided by the Board is limited to determining whether "substantial evidence ... support[s] the finding and order of the administrative body." Uhlir, 255 Ind. at 345, 264 N.E.2d at 314 (quotation omitted). Judicial review regarding factual issues is limited to the agency record except for additional evidence related to the validity of the agency's action that meets the requirements of Indiana Code section 4-21.5-5-12. Ind.Code § 4-21.5-5-1.
This conclusion also finds strong support in a 1975 decision by our court in City of Indianapolis v. Nickel, 165 Ind.App. 250, 331 N.E.2d 760 (1975). In Nickel the Board of Sanitary Commissioners of the City of Indianapolis constructed a sewer system in a residential area, and by statute was tasked with assessing the cost to each property owner for use of the new system. Following an assessment, some property owners filed with the Board written remonstrances, upon which the Board held a hearing and eventually approved the assessment. Property owners appealed to the trial court, and following a bench trial in which property owners presented an appraiser who opined that the Board's method of assessing was improper and suggested an alternate way, the trial court modified the Board's assessment to conform to a reduced assessment found appropriate by the trial court. Each part of this procedure—the Board's assessment, written remonstrances, and trial—were clearly provided for by statutes. The City appealed the trial court's decision, in part challenging the trial court's authority to substitute its judgment for that of the Board; in essence, the question before our court was the scope of the trial court's authority to review the Board's decision. See id. at 260, 331 N.E.2d at 765-66. Our court reviewed a host of prior Indiana cases which discuss trial court appellate review of an administrative decision, and concluded that the due process right of property owners for just compensation is a "right ... to judicial review, not an appeal, especially not an appeal by trial de novo." Id. at 261, 331 N.E.2d at 766. Consistent with the limited review summarily described in parentheses of cases cited above, the Nickel opinion holds that trial courts are authorized to review administrative decisions regarding public improvement benefit assessments only to determine whether the agency had jurisdiction, the agency proceedings met the requirements of due process, the agency acted within the scope of its powers, substantial evidence supports the factual conclusions, and its determination comports with the law applicable to the facts found. Id. at 262, 331 N.E.2d at 767.
Our conclusion that limited judicial review of an administrative determination of just compensation comports with due process is also consistent with federal case law. Although the Company argues to the contrary and refers us to Monongahela,
Gulf Power, 187 F.3d at 1333 (citations omitted).
Having drawn and articulated our conclusion regarding the proper scope of a trial court's review, we explain how this conclusion applies to this case regarding the Company's appeal to the trial court.
We begin this section by restating the events leading up to the Board's determination, which the Company appealed to the trial court. Condemnation of the Company's property was upheld by our supreme court in an opinion that was handed down in June 2007. The Board then received an updated appraisal of the value of the Company's condemned property and, in October 2007, resolved to compensate the Company in that amount. The Company accepted its invitation to submit written remonstrances to the Board objecting to the value assessed. The City stated at oral argument before our Court, without dispute by the Company, that the appraisal constituted many hundreds of pages of detailed information explaining the appraiser's reasoning and valuation. Also at oral argument before our Court, the Company acknowledged that it was not prevented from submitting its own valuation to the Board, but explained that it did not do so for a combination of reasons, including: 1) litigation strategy; 2) the high cost of valuing its own property; 3) the "complexity" of valuing its own property because it is underground; and 4) presenting the value to the Board would be futile because the Board served as "both prosecutor and judge." The Board confirmed its October 2007 resolution, which the Company appealed to the trial court.
It strikes us as inequitable for the Company to have silently boycotted the Board's proceedings by not submitting its own valuation or providing a detailed criticism of the appraiser's assessment, and now argue that the Board's determination was inaccurate. To the extent it was part of the Company's litigation strategy to forego submitting its own valuation of the property or other critical information in written form attached to its remonstrances, this
Apparently the Company operated under the belief that it would appeal the Board's determination to the trial court, and at that point the Company could "do over" the assessment proceedings, this time before the trial court, by entering its own evidence, perhaps to include its own valuation, and cross-examining the appraisers who prepared the assessment it deems inaccurate.
We conclude that the Company cannot seek a do-over in the trial court after silently boycotting the Board proceedings by failing to put forth its own proposed valuation or building a record of its specific exceptions to the assessment by submitting thorough remonstrances. Without a specific valuation put forth by the Company or detailed criticism of the appraisal, the Board almost had no choice but to confirm its resolution to pay the Company in accordance with the assessment by the City. Regardless, for the reasons explained above, the trial court was correct to decline to hold a jury trial and limit its review to the abuse of discretion standard.
The Company contends due process requires property owners be afforded notice and an opportunity to be heard regarding just compensation for their condemned property, and further that trial "[c]ourt review of administrative just compensation decisions can be limited only where the administrative proceedings provide the owner with this full hearing before an impartial tribunal." Appellant's Brief at 18 (emphasis in original). In effect, this constitutes a concession that the trial court's full review of the Board's decision in this case is unnecessary if the proceedings before the Board constitute a "full hearing before an impartial tribunal."
The Company argues that the administrative proceeding did not constitute a full hearing before an impartial tribunal for two reasons: (1) the Board served as both the legislative body condemning the property and the body which decided the amount to pay the Company; and (2) Indiana Code chapter 32-24-2 does not provide for the Company, as a property owner, to conduct discovery, cross-examine witnesses, or present its own evidence to the Board, so precluding the Company from presenting such evidence before the trial court would entirely eliminate its ability to do so, in violation of due process.
Our opinion in Nickel stated that the judiciary's authority in reviewing administrative decisions is limited to jurisdictional and due process issues. 165 Ind.App. at 262, 331 N.E.2d at 767. "Among [the] elements [of due process] are reasonable notice, an opportunity for a fair hearing, and the right to have a court of competent jurisdiction determine if the finding is supported by evidence." Id. None of these elements suggest a need for discovery, cross-examination of witnesses, or presentation of evidence. We explained further:
Id. at 263, 331 N.E.2d at 767 (quoting Warren v. Indiana Tel. Co., 217 Ind. 93, 118-19, 26 N.E.2d 399, 409 (1940)).
In considering whether the elements of due process are satisfied by the circumstances here—the condemnation of the North System and provision of compensation to the Company—we may first note that neither reasonable notice nor the competency of the court's jurisdiction are at issue. The sole due process issue is whether the Company was afforded a "fair hearing" by the Board; because if so then due process has been satisfied. The Company completed a valuation and submitted it to the Indiana Utility Regulatory Commission in an unrelated proceeding. The Company was not prohibited from submitting this valuation to the Board by attaching it to its remonstrances.
The trial court found:
App. of Appellants at 15.
In support of its contention that the proceedings before the Board do not constitute a full hearing before an impartial tribunal, the Company relies on Stewart, 261 Ind. 670, 310 N.E.2d 65. In Stewart, our supreme court considered whether a firefighter was afforded due process in a termination hearing before the board of public works and safety. The court concluded that the legislature placed the city attorney in a position whereby it acted as both an advocate for the city seeking the employee's termination and as a member of the deciding tribunal. Id. at 678, 310 N.E.2d at 69. For this reason, the supreme court concluded that the employee's right to due process was violated.
In Stewart, the supreme court acknowledged but disregarded our court's opposite conclusion—that due process was not violated—in Guido v. City of Marion, 151 Ind.App. 435, 280 N.E.2d 81 (1972). Stewart, 261 Ind. at 681, 310 N.E.2d at 71. In Guido, the city attorney presided over the board of public works and safety in proceedings regarding termination of a police officer while an assistant city attorney advocated for the officer's dismissal.
Prohibiting a governmental agency from serving as both the decision-making body and an advocate for one side may be optimal, but a municipality's eminent domain and just compensation proceedings inherently involve the municipality's attorneys advocating for condemnation and putting forth evidence regarding the value of the property, and municipality employees
For these reasons, we conclude that the Company was afforded a full hearing before an impartial tribunal, and accordingly that trial court review of the Board's determination can and should be limited in scope, as discussed above.
We conclude that judicial review of an administrative determination of just compensation should be limited to the consideration of whether there is substantial evidence to support the agency's finding and order and whether the action constitutes an abuse of discretion, is arbitrary, capricious, or in excess of statutory authority as revealed by the uncontradicted facts. As such, judicial review is limited to the agency record and other evidence which suggests the agency lacked authority to render its decision. We further conclude that where a municipality actively seeks to avoid the appearance of impropriety and there is no evidence of actual impropriety, due process rights are not violated when a municipality's employees serve as advocates and different employees of the same municipality serve as decision-makers in administrative proceedings.
Accordingly, the factual circumstances of this case lead us to affirm the trial court's order declining to hold a jury trial and stating its intention to limit its review of the Board's determination for an abuse of discretion.
Affirmed.
BARNES, J., and BRADFORD, J., concur.
Util. Ctr., Inc. v. City of Fort Wayne, 834 N.E.2d 686, 689 (Ind.Ct.App.2005) (citation omitted) (restating the Board's reason for proceeding with condemnation proceedings), vacated and trans. granted by 868 N.E.2d 453 (Ind.2007).
Similarly, both the Company and the City contend that the following case supports their opposing positions: Bragg v. Weaver, 251 U.S. 57, 40 S.Ct. 62, 64 L.Ed. 135(1919). Bragg is also not quite on point. In Bragg, the issue was whether the state statute regarding compensation for condemned property satisfies due process regarding "the necessity or expediency of ... the compensation to be paid." Id. at 58, 40 S.Ct. 62. Here, there is no dispute about the Company's right to due process regarding when it will be paid, and the propriety of the taking was decided in its first pass through our appellate courts.
Both the Slentz and Bragg decisions include some dicta that may be stretched and analogized to the issues now on appeal, but they are not binding precedent and provide little direct guidance regarding the issues now before us.
Id. Of those five means listed, two stem from the federal statute at issue, two stem from general federal appellate procedure, and the fifth allows the trial court to "rely on the evidentiary submissions in the record ... when they are sufficient for the task." Id. Gulf Power does not hold that anything short of full judicial review, including an evidentiary hearing and jury trial, violates due process.
In addition, the Company's reliance upon Indiana Code section 32-24-6-1 is also misplaced, as that statute provides for trial and judgment regarding just compensation for condemned property similar to civil actions in accordance with the procedures of Indiana Code chapter 32-24-1. Cemetery Co. v. Warren Sch. Twp. of Marion Cnty., 236 Ind. 171, 181, 139 N.E.2d 538, 543 (1957), states that the predecessor to Indiana Code section 32-24-6-1 applies to eminent domain by cities and towns as well as corporate bodies, but that statement refers to the significantly different predecessor statute.