Court: Indiana Court of Appeals; March 26, 2015; Indiana; State Appellate Court
The Lakefront Owners—LBLHA, LLC, Margaret L. West, and Don H. Gunderson—appeal the trial court's dismissal of their complaint against the Town of Long Beach and other defendants. A central issue in the appeal is whether Indiana state officials should have been included as parties before the trial court's rulings. The court reverses and remands the case for further proceedings.
Key factual background includes a statement from the Indiana Department of Natural Resources (IDNR) webpage, indicating that the ordinary high watermark (OHW) defines the boundary between public and private ownership along Lake Michigan. Two case examples illustrate the implications of lake levels relative to the OHW, with ownership claims differing based on whether the water level is above or below this mark.
During a National Resources Commission (NRC) meeting in November 2011, IDNR's chief legal counsel noted the absence of a legal determination regarding the upper limit of Lake Michigan's bed, despite historical claims of state ownership below the OHW. The meeting highlighted ongoing legal uncertainties and ownership disputes, particularly as they pertain to public use and access to beaches.
Counsel for Long Beach property owners expressed concerns about the IDNR's claim of ownership below the OHW and sought its removal from public documentation. The property owners argued that their deeds extend to the low water mark and referenced legal precedents from surrounding states that favor private property rights over public access rights.
Counsel asserted that neighboring State Supreme Courts have not ruled that the public rights doctrine supersedes private deeds. A resolution from the Town indicated it would no longer defend private property rights below the ordinary high water mark (OHW) based on information from the Indiana Department of Natural Resources (IDNR) website. Most lakefront property owners in Long Beach, Indiana, signed a petition regarding this issue. The IDNR website clarified that the OHW delineates regulatory jurisdiction and public use boundaries on Lake Michigan. Two case examples were cited, indicating that when Lake Michigan's water level is above the OHW, the State does not regulate the dry beach, but when below, it does. The Town Council enacted Resolution 12-008 on November 12, 2012, acknowledging that the bed of Lake Michigan near Long Beach is state-owned and establishing a policy for enforcing public property ordinances due to boundary disputes. This resolution recognized IDNR's position on the OHW as the line for state regulatory jurisdiction, set at an elevation of 581.5 feet. Subsequently, on December 10, 2012, the Lakefront Owners filed a complaint against the Town, claiming that the Town's resolution undermined their private property rights and sought declaratory relief to affirm that no public rights burden the lakefront and challenge the Town's claims.
Lakefront Owners claim the Town acted under state law to unlawfully deprive them of property, alleging an unconstitutional temporary taking and violation of the Home Rule Act. The Town's defense includes a failure to join necessary parties, specifically the State of Indiana and its Department of Natural Resources. The court permitted intervention from Alliance for the Great Lakes and Long Beach Community Alliance, which argued that the State holds title to Lake Michigan's bed up to the Ordinary High Water Mark and cannot convey this land without legislative authority. The Lakefront Owners sought a declaratory summary judgment asserting their property boundary extends to the water's edge and that the Town's 2012 Resolution is unconstitutional. Supporting their motion, they presented a July 2013 Report by land surveyor Gary Kent, who reviewed relevant legal documents and concluded that no statutes define the boundary between Lake Michigan and upland properties. Kent's professional opinion indicates that the boundary extends to the water's edge when undisturbed, based on principles of boundary law.
On August 26, 2013, the Town filed a cross-motion for summary judgment concerning Counts II, III, and IV of the Lakefront Owners’ complaint, arguing that their motion for declaratory summary judgment should be denied. The Town asserted it had not claimed ownership of the Lakefront Owners’ property and stated that the 2012 Resolution simply recognized the Indiana Department of Natural Resources (IDNR)'s regulatory authority. The Town contended that the Lakefront Owners' attempt to quiet title failed to include indispensable parties, specifically the State of Indiana, and clarified that the dispute referenced in the Resolution was between private owners and the State, not the Town.
On September 25, 2013, Alliance responded to the Lakefront Owners' motion, requesting the court grant summary judgment in favor of the Town and Alliance. Alliance criticized the July 2013 Report, arguing it contained significant flaws and did not establish a prima facie claim of ownership. It maintained that the federal survey notes from 1829 defined the shoreline and that the land below Lake Michigan's high water mark belonged to the State of Indiana under the equal footing doctrine, thus subject to public trust. Alliance emphasized that the public retains a perpetual right of access to the beach at the ordinary high water (OHW) mark.
During the October 17, 2013 hearing, the Town’s counsel stated he represented only the Town, not the public or the State, noting that the State could potentially own the disputed land. The court questioned why the State was not present, to which the Town’s counsel acknowledged the necessity of the State's involvement. Counsel for the Lakefront Owners claimed the State was absent because it disclaimed any ownership in Long Beach. Toward the end of the hearing, the Town’s counsel suggested that the Lakefront Owners should pursue legal action against the State and any alleged trespassers, distancing the Town from liability. Counsel for the Lakefront Owners argued that the Town's implied consent allowed occupiers on the beach, asserting that the Town had established the OHW as the boundary between public and private property in Long Beach.
On December 26, 2013, the trial court granted summary judgment in favor of the Town regarding Counts I through IV of the Lakefront Owners' complaint. The court determined that the Town's 2012 Resolution did not adversely affect the Lakefront Owners' property rights or constitute a taking, describing it as a policy statement that did not assert ownership over the land in question. The court emphasized that the Resolution merely acknowledged the Indiana Department of Natural Resources (IDNR) regulatory authority concerning adjacent property and did not resolve ownership issues, which it deemed a legal question better suited for the Indiana Legislature or an appellate court. Consequently, the court concluded there was no taking by the Town of Long Beach.
Following this ruling, on January 23, 2014, the Lakefront Owners sought permission to amend their complaint to include the State of Indiana as a party, aiming to address the ownership question. They argued that this addition would not prejudice any party and noted that the State, through the Attorney General’s Office, had no objection to being included. The Lakefront Owners also highlighted that both the Town and Alliance supported adding the State as a party to facilitate a resolution of the ownership matter.
On January 23, 2014, the Lakefront Owners filed a motion to correct error, asserting a genuine material fact issue regarding the 2012 Resolution and its potential unconstitutional taking of their properties. They requested the court to reverse the summary judgment favoring the Town on Counts II through IV. Additionally, they contended the court erred in granting summary judgment on Count I for declaratory judgment, claiming the ownership issue is a legal question requiring a declaration to determine property boundaries and public rights, which is crucial to assessing the taking claim.
In response, Alliance filed on February 7, 2014, opposing the Lakefront Owners' motion and seeking partial summary judgment on Count V, as well as final judgment on Counts I through V. Alliance indicated conditional support for adding the State of Indiana as a defendant, provided a relevant controversy was identified. They argued that the previous summary judgment on Counts I through IV should not be revisited, as adding the State would delay proceedings and prejudice their position.
On February 10, 2014, the Town opposed the Lakefront Owners' motion to amend the complaint, arguing the proposed changes were futile since they reiterated already dismissed claims. The Lakefront Owners replied on February 19, maintaining that adding the State would not cause delay or prejudice, as all parties acknowledged the State’s necessity in the litigation. They emphasized that the previous court ruling did not address public trust rights, which are essential for resolving the case. The Lakefront Owners also criticized Alliance for changing its position on the State's involvement, arguing for judicial estoppel based on this inconsistency.
On March 6, 2014, the Lakefront Owners opposed the Town's motion for summary judgment on Count V. The chronological case summary does not indicate a trial court ruling on the Lakefront Owners’ January 23, 2014 motions for leave to amend their complaint and to correct an error. On April 1, 2014, they filed a notice of appeal regarding a December 26, 2013 order. The court acknowledged the completion of the clerk’s record on April 16, 2014, and on April 24, 2014, granted the Town's motion for summary judgment on Count V, prompting the Lakefront Owners to appeal this order as well. The appeals were subsequently consolidated.
A key issue is whether the State of Indiana or State officials in their official capacities should have been added as parties under Indiana Trial Rule 19 prior to the rulings on the Lakefront Owners' claims. Ind. Trial Rule 19(A) mandates the joinder of parties if their absence prevents complete relief or if they have an interest that might be impaired by the case's disposition. The trial court has discretion regarding the necessity of a party's inclusion, and the absence of an indispensable party does not automatically lead to case dismissal. Instead, the court can either order the absent party to be joined or allow the case to proceed without them. The rule encourages a flexible, fact-sensitive approach to joinder decisions. The Lakefront Owners' December 10, 2012 complaint contended that the Town's resolutions failed to uphold private property rights on the lakefront, specifically seeking declaratory relief regarding property boundaries and public rights under Ind.Code. 34-14-1.
Indiana's Declaratory Relief Act, outlined in Ind.Code. 34-14-1, allows individuals affected by contracts, statutes, or ordinances to seek a judicial declaration regarding their rights or legal relations. Specifically, Ind.Code. 34-14-1-2 permits any interested party to resolve questions of construction or validity related to these instruments. Furthermore, Ind.Code. 34-14-1-11 mandates that all interested persons must be included in proceedings, ensuring that declarations do not affect non-parties' rights. It also stipulates that if a statute or ordinance is challenged as unconstitutional, the court must notify the attorney general, who may intervene to present evidence and arguments on the constitutionality. In a specific case involving Lakefront Owners, they claimed a controversy regarding the Town's assertion of public rights over the lakefront, arguing the lakefront is not subject to public claims. Their request for declaratory relief arose from Town Council resolutions acknowledging boundary disputes along Lake Michigan. One resolution recognized the Indiana Department of Natural Resources' designation of the Ordinary High Water Mark (OHW) for regulatory jurisdiction, while another outlined enforcement of private property ordinances. The Town's response included a defense that the Lakefront Owners did not include necessary parties, specifically the State of Indiana or its Department of Natural Resources. Subsequently, an intervenor, Alliance, asserted that the State holds absolute title to the lakebed up to the OHW and that only the Indiana Legislature can convey such lands.
On July 23, 2013, the Lakefront Owners filed a motion for declaratory summary judgment, asserting that their northern property boundary extends to the line where Lake Michigan's water stands under normal conditions. The Town countered with a cross-motion for summary judgment, arguing that the Lakefront Owners' complaint failed to include indispensable parties, particularly the State of Indiana, and emphasized that the dispute was between private owners and the State, not the Town. During a hearing on October 17, 2013, the Town's counsel noted that only the State could potentially own the disputed land and suggested that the Lakefront Owners should sue the State.
The trial court later issued a summary judgment on December 26, 2013, favoring the Town and Alliance on all counts of the Lakefront Owners' complaint, explicitly avoiding the question of ownership of the land between the ordinary high water mark (OHW) and the shore. The court stated that ownership is a legal question more appropriately addressed by the Indiana Legislature or an appellate court involving the State. Consequently, the court did not rule on the Lakefront Owners' request for declaratory relief.
On January 23, 2014, the Lakefront Owners filed a motion to amend their complaint to include the State, asserting that this addition would not prejudice any party and that the Attorney General's Office had no objection. They contended that their claim for declaratory relief was valid and that the court erred in granting summary judgment on Count I. However, the trial court did not respond to the motion to amend. The parties’ appellate briefs primarily focus on issues of ownership and public rights concerning the beach area below the OHW, referencing various legal documents and previous appellate decisions from Illinois, Michigan, and Ohio. The complexity of ownership rights and public access to the Lake Michigan beach area underlines the significance of this legal action.
Alliance argues that the absence of the State from the case renders any declaration regarding the boundary between State and private title or public trust inappropriate. The trial court did not assess the ownership rights of the Lakefront Owners or public rights concerning the disputed beach area, nor did it rule on the substantive allegations in Count I of the Lakefront Owners’ complaint, primarily because it found no taking had occurred. However, the Town failed to show that the Lakefront Owners cannot request a court determination of their property rights, irrespective of the evidence concerning a taking. The determination of any taking may depend on the extent of the Lakefront Owners' interest in the beachfront below the Ordinary High Water mark (OHW).
Claims from all parties, including the Lakefront Owners, the Town, and Alliance, indicate potential impairments to the State’s ability to protect its interest in the beachfront, necessitating the State's inclusion as a necessary party under Indiana Trial Rule 19(A). The Lakefront Owners assert ownership of the beach below the OHW, while the Town contends the dispute is between the Lakefront Owners and the State, and Alliance claims the beach belongs to the State or is subject to public trust rights. The Lakefront Owners argue that adding the State will not prejudice the Town or Alliance, and the Attorney General's Office has no objection to being included as a party.
The conclusion reached is that the trial court should have joined the State or relevant State officials as necessary parties before ruling on the Lakefront Owners’ claims. Although the trial court should have added the State, it is noted that the Lakefront Owners may still have separate claims against the Town. The 2012 Resolution by the Town, deemed a policy statement regarding the enforcement of public property ordinances, does not negate the Lakefront Owners’ objections to the Town's ordinances affecting their property rights, which also relate to the State’s interest in the lakefront land.
The State must be joined as a party in the case, as questions arise regarding potential conflicts between the Town's enforcement policy and the State's position, including who has the authority to determine these conflicts. The Town remains a necessary party because the Lakefront Owners may have separate claims against it. The trial court did not address the substantive allegations in Count I, rendering the summary judgment on that count improper. The court also declined to address arguments regarding Counts II through IV until the State presents its position on Count I and other claims. The determination of whether a taking occurred may depend on the Lakefront Owners' interests in the beachfront area, which could be revisited on remand. Regarding Count V, the trial court acted without authority when it issued an order after the Lakefront Owners filed their appeal, as jurisdiction had already transferred to the appellate court. Ultimately, the State of Indiana or relevant officials should have been included in the proceedings prior to the summary judgment rulings, leading to a reversal of the summary judgment for Counts I through IV and invalidation of the Count V order. The trial court can proceed with the parties' motions or trials after the State clarifies its ownership interests concerning the disputed beach area.
No opinion is expressed regarding the allegations in the Lakefront Owners’ complaint or the related summary judgment materials and appeals. The court's December 26, 2013 order granting summary judgment for Counts I through IV is reversed, as is the April 24, 2014 order regarding Count V. The case is remanded to permit the addition of the State of Indiana or relevant state officials as parties, and for further proceedings consistent with this decision.
Resolution 12-003 amends Resolution No. 10-002, defining "ordinary high watermark" per 312 IAC 1-1-26. This definition includes physical characteristics on the shore, such as clear lines on the bank and changes in soil, noting that the shore of Lake Michigan is established at 581.5 feet I.G.L.D. 1985. According to the 2009 BLM Manual, riparian owners' titles are governed by state law below the ordinary high water mark of inland navigable waters, and Indiana is classified as a "Low Water Mark" state, indicating that lot lines may extend to the low water mark.
The "Disputed Area" is defined as the land between the ordinary high water mark and the shore. The term "person" covers various legal entities as per Ind. Code 34-14-1-13. Additionally, while courts lack subject matter jurisdiction for declaratory judgments against the state, actions can be pursued against state officials in their official capacity. Considerations for such actions include economic impacts, interference with investment-backed expectations, and the nature of government actions, as noted in relevant case law.
