Divided COA flushes attorney fees, equipment costs in sewer judgment

Northern Indiana property owners were relieved of the bulk of a court order requiring them to pay more than $48,000 to connect to a sewer system, including a ruling on appeal voiding an award of more than $20,000 in attorney fees to the sewer district.

The Indiana Court of Appeals majority reversed a significant portion of the Steuben Superior Court’s order that Janice and Kenneth Steele pay $48,505 to connect to a sewer line extended by Steuben Lakes Regional Waste District. The largest itemized cost of that bill was attorney fees of $20,785, but the order also included, among other things, assessments of $7,445 for back user fees and penalties and a contractor reimbursement fee of $6,029 for each of the Steeles’ two properties.

The suit began after the Steeles declined to connect to the sewer after they were informed they would be required to do so. The district in 2016 sent the Steeles a letter requesting a permanent easement to run the sewer line in exchange for the cost of equipment — in this case, about $7,000 per property. The Steeles declined to provide an easement, the system was built and last year the court issued the order requiring the Steeles to connect and pay a nearly $50,000 tab.

While finding the trial court was within its rights to order the Steeles to connect their properties to the sewer, the COA majority of judges Nancy Vaidik and Leanna Weissmann took exception in this case to longstanding practices of incentivizing landowners to grant easements.

“Because the District has no enforceable legal right to go onto a property to install sewer equipment without an easement, the property owner can be required to arrange and pay for the necessary construction work. However, because the District can provide the necessary equipment without going onto the property, we hold it must provide that equipment even if the property owner refuses to voluntarily grant an easement,” the majority held. “We also reverse the award of attorney’s fees.”

Dissenting Judge L. Mark Bailey laid out century-old underpinnings of U.S. Supreme Court and Indiana Supreme Court caselaw compelling landowners to connect to sewers where they are available. He noted in particular City of Angola v. Croxton, 112 N.E. 385 (Ind. 1916), upholding the power of the state to require property owners to connect to sewer systems.

“Because the Steeles did not accept the terms of the incentive program, I cannot say that the Steeles are entitled to the sewer equipment without cost,” Bailey concluded. “Moreover, because the Connection Requirement is not conditioned on the District first purchasing an easement, I cannot say that the Steeles, by insisting on an easement, may avoid statutorily authorized penalties and other financial ramifications imposed for their ongoing failure to connect. I therefore cannot join the majority in reversing on this issue.”

Bailey also would affirm the award of attorney fees but would remand for proceedings to determine their reasonableness.

The case is Janice Steele and Kenneth Steele v. Steuben Lakes Regional Waste District, 20A-PL-1000.