COA finds statute grants DNR immunity from claims over flooded fields

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A family of farmers in Marshall County who claimed their fields flooded because of the Indiana Department of Natural Resources’ negligent operation of a nearby dam had their trial court victory washed away when the Court of Appeals of Indiana ruled that a state statute grants the agency immunity from negligence claims.

Marvin and Diane Houin along with their son Charlie own and operate Houin Grain Farms. The family grows corn and soybeans on a portion of the 4,890 acres that is located in the Lake of the Woods watershed.

The Lake of the Woods is a public freshwater lake in Marshall County. In 1957, a dam was constructed, and to settle the continuing conflict between the residential property owners near the lake and the agricultural property owners, the Marshall Circuit Court issued a lake level order in 1986.

Under that order, the legal average lake level was set at 803.85 feet from May 15 to Sept. 15. That allowed neighboring fields to drain so the crops could be planted and harvested. From Sept. 15 to May 15, the level was lowered to 802.85 feet.

The residential lake property owners had operated the dam for years, but after they decided they no longer wanted the responsibility of opening and closing the dam, DNR took over the operation in 2009. However, the agency did not keep the lake at the summer level and, instead, mandated the gate would be kept closed until Sept. 15 unless lake level elevation exceeded 804.35 feet.

The Houins claimed DNR’s noncompliant operation of the dam caused their fields to flood in multiple years.

Thus, in 2016, the Houins filed a tort claim notice with the state, claiming damages because DNR did not operate the dam under the terms set by the Marshall Circuit Court’s 1986 lake level order. The following year, the Houins filed a complaint arguing DNR’s operation of the dam was negligent, constituted a nuisance and a trespass, and constituted inverse condemnation.

DNR asserted it was immune from liability under Indiana Code §§ 34-13-3-3 and 14-27-7.5-15. However, the Marshall Circuit Court concluded DNR was not entitled to immunity for how it operated the dam and ultimately award the Houins a judgment in the aggregate amount of $485,644.

On appeal, DNR argued the trial court’s ruling was contrary to law. Specifically, it claimed immunity under the Dam Safety Act, Indiana Code Chapter 14-27-7.5.

The Dam Safety Act gives DNR jurisdiction over the maintenance and operations of dams in Indiana. But while the act requires the agency to exercise care and maintain the dam, I.C. 14-27-7.5-15 provides DNR immunity.

The Houins countered the act only grants DNR immunity from its statutory duty to “operate” a dam. It does not grant immunity for the Houins’ common law negligence and nuisance claims, they argued.

In Indiana Department of Natural Resources v. Marvin Houin, Diane Houin, Charles Houin, Houin Grain Farms, LLC, and Marvin Houin as power of attorney for Marilyn J. Ralston, 21A-CC-1178, the Court of Appeals found for the agency.

“The Houins cannot avoid the General Assembly’s decision to grant immunity to the DNR for its operation of a dam by claiming that they have presented a claim for common law negligence,” Judge Paul Mathias wrote for the court, citing Sprunger v. Egli, 44 N.E.3d 690, 694 (Ind. Ct. App. 2015) (quoting F.D. v. Ind. Dep’t of Child Servs., 1 N.E.3d 131, 143 (Ind. 2013)).

“We agree with the Houins and the trial court that the DNR assumed a duty to operate the dam from 2009 to 2015,” Mathias continued. “But chapter 14-27-7.5-8 unequivocally provides that the DNR will not be held liable for its operation of a dam. And the General Assembly enacted the Dam Safety Act to give the DNR jurisdiction over dams on Indiana’s rivers, streams, and lakes.

“When the residential lake owners refused to operate the dam, the DNR had to step in to operate the dam,” the judge concluded. “Because DNR is immune to suit, it is irrelevant that the DNR assumed the lake property owners’ duty to operate the dam.”

However, the COA did uphold the judgment in favor of the Houins on their inverse condemnation claim, finding “the DNR’s failure to operate the dam as required by the 1986 Lake Level Order constituted a taking.”

The case was remanded for further proceedings.

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