A complaint brought by Indiana residents seeking to build seawalls along their lakefront property will not proceed after the Indiana Court of Appeals decided Tuesday the residents must first exhaust their administrative remedies before litigating their complaint.
Several homeowners in the Lake Michigan shoreline town of Long Beach, including John and Maureen Osborne Revocable Family Trust, Timothy and Anna Voortman and Christopher Lyons, sought to build seawalls on each of their respective lakefront residential lots on the southern shore of Lake Michigan, claiming storms and waves damaged their properties and put their septic systems in “imminent peril” of being breached. Without the seawalls, the homeowners claim their homes could be damaged to the point of being uninhabitable.
The homeowners initially filed building permits with the Board of Zoning Appeals, requesting a variance from the town’s view protection ordinance. However, during public hearings, James Neulieb and Long Beach Community Alliance, Inc., posed oral and written objections to the seawalls, arguing they could cause or accelerate beach erosion.
The BZA granted the homeowners’ request for a variance, finding “construction of the proposed seawall(s) is an absolute necessity… .” The three homeowners then filed an application with the Building Commission for a building permit, which was approved by then-Building Commissioner Aaron Tomsheck.
The homeowners then began construction, but LBCA and Neulieb filed administrative appeals to the BZA, challenging the legality of the building permits. Tomsheck issued a stop work order, and in response the homeowners and their contractor, Duneland Development, LLC, filed a complaint against Neulieb, LBCA, the BZA, the Building Commission, the town, the town council, the Advisory Plan Commission and certain individuals in their official capacities as members of those groups.
The complaint included six counts for declaratory relief and six counts for injunctive relief against the defendant parties and further sought a temporary restraining order and preliminary injunction. LBCA moved to dismiss pursuant to Indiana’s Anti-SLAPP statutes and Trial Rule 12(b)(6) and for lack of jurisdiction. Neulieb filed a similar motion to dismiss, arguing the trial court lacked jurisdiction because the homeowners had not exhausted their administrative remedies.
Meanwhile, Tomsheck issued a second set of stop work orders, finding the plans for the seawalls did not comply with certain zoning requirements. But the LaPorte Superior Court denied LBCA and Neulieb’s motions to dismiss for lack of subject matter jurisdiction, and motions to dismiss as they related to the Indiana Anti-SLAAP statute.
The trial court then denied the homeowners’ and Duneland’s motions for injunctive relief and declaratory judgment, while also denying Neulieb and LCBA’s motions requesting certification for interlocutory appeal as they related to the denial of their motions to dismiss based on Anti-SLAAP statutes.
Meanwhile, the BZA rescinded the issuance of the three building permits, prompting the homeowners to file for judicial review. The homeowners and Duneland also appealed the order denying injunctive and declaratory relief, while LBCA and Neulieb appealed the denial of the Anti-SLAAP motions to dismiss, arguing that order was now final by virtue of the orders denying certification and denying injunctive and declaratory relief. The Indiana Association of Cities and Towns and Indiana Municipal Lawyers Association filed amicus curiae briefs on appeal in support of the town defendants.
In a 40-page opinion on Tuesday, Indiana Court of Appeals Judge James Kirsch first wrote the appellate court had jurisdiction to hear the town defendants’ arguments on appeal because the order denying injunctive and declaratory relief “‘disposes of all claims as to all parties’ and thus constitutes a final judgment as defined under Appellate Rule 2(H)(1).”
Then, drawing on precedent from the case of Barnett v. U.S. Architects, LLP, 15 N.E.3d (Ind. Ct. App. 2014), Kirsch wrote the trial court erred in its decision not to dismiss the homeowners’ case because they failed to exhaust their administrative remedies. Rather than seeking declaratory judgment, the homeowners should have first moved through the administrative appeal process with the BZA, the judge said.
Thus, the trial court’s order denying the motions to dismiss the case was reversed.The case is John C. & Maureen G. Osborne, et al v. Town of Long Beach, Indiana et al, 46A03-1607-PL-1698.