120 N.E.3d 269
Ind. Ct. App.2019Background
- The Hebron Plan Commission sued Jon Grdinich and JRG, LLC seeking a mandatory injunction ordering removal of a pond on Grdinich’s R1‑zoned property as nonconforming under the Hebron zoning ordinance.
- Grdinich counterclaimed and filed third‑party claims against the Town and Town Council asserting: declaratory judgment that the pond complies with the ordinance (Count 1); preliminary and permanent injunctions preventing removal (Count 2); equitable estoppel (Count 3); 42 U.S.C. § 1983 due process claim (Count 4); inverse condemnation for an underground storm pipeline (Count 5); and later promissory estoppel (Count 7). He also pleaded exhaustion of administrative remedies (Count 6) but did not appeal its dismissal.
- Appellees moved to dismiss for failure to exhaust administrative remedies and for failure to state claims under Trial Rules 12(B)(1) and 12(B)(6). The trial court granted dismissal of all counts; Grdinich appealed.
- The Court of Appeals reviewed dismissal de novo under a 12(B)(6) standard because the trial court did not consider matters outside the pleadings; thus factual allegations must be accepted as true for sufficiency review.
- The panel held dismissal was improper as to Counts 1–4 and 7 because (a) it was not clear as a matter of law that the ordinance regulated Grdinich’s sub‑3‑acre pond (so administrative remedies might not be available) and (b) Counts 2 and 7 alleged sufficient operative facts for injunctive and promissory‑estoppel relief. Count 5 (inverse condemnation) was properly dismissed because any alleged taking/damage from the pipeline predated Grdinich’s purchase, so he alleged no compensable injury.
Issues
| Issue | Plaintiff's Argument (Grdinich) | Defendant's Argument (Plan Commission/Town) | Held |
|---|---|---|---|
| Whether declaratory relief (Count 1) requires exhaustion of administrative remedies | Pond is <3 acres and ordinance regulates only ponds ≥3 acres, so ordinance does not apply and no administrative remedy exists | Ordinance regulates the pond; administrative remedies (BZA) must be exhausted before court | Dismissal improper — not obvious ordinance applies; declaratory relief may be appropriate without exhaustion |
| Whether claims related to pond (Counts 2–4,7) must be dismissed for failure to exhaust administrative remedies | Same nonapplication/exception argument; exhaustion not required if ordinance does not reach pond | Exhaustion required because ordinance governs ponds | Dismissal improper — Counts 2–4 and 7 depend on Count 1; exhaustion was improper ground for dismissal |
| Whether Count 2 (preliminary injunction) pleaded sufficient operative facts | Alleged irreparable harm, reliance, and likelihood of success because pond is <3 acres and thus lawful | Relief at law is adequate; no non‑economic irreparable harm; insufficient likelihood of success | Dismissal improper — allegations accepted as true support irreparable harm and likelihood of success at pleading stage |
| Whether Count 5 (inverse condemnation) states a claim | Town’s underground drainage pipeline encumbers property and constitutes a taking without compensation | Pipeline existed before purchase; no post‑purchase taking or damages alleged | Dismissal proper — plaintiff alleged no compensable taking/damage after purchase, so claim fails |
Key Cases Cited
- First Am. Title Ins. Co. v. Robertson, 19 N.E.3d 757 (Ind. 2014) (failure to exhaust administrative remedies is procedural error, not necessarily jurisdictional)
- Town Council of New Harmony v. Parker, 726 N.E.2d 1217 (Ind. 2000) (administrative remedies must be pursued when available; reasons for exhaustion explained)
- Ind. Dep’t of Envtl. Mgmt. v. Twin Eagle LLC, 798 N.E.2d 839 (Ind. 2003) (purpose of exhaustion requirement: avoid premature litigation and allow agency correction)
- Carter v. Nugent Sand Co., 925 N.E.2d 356 (Ind. 2010) (declaratory judgment is not a suitable alternative when administrative remedies are available)
- Boone Cty. Area Plan Comm’n v. Kennedy, 560 N.E.2d 692 (Ind. Ct. App. 1990) (declaratory relief appropriate where ordinance does not cover the use and no administrative process is available)
- Murray v. City of Lawrenceburg, 925 N.E.2d 728 (Ind. 2010) (elements required for inverse condemnation claim)
- Biddle v. BAA Indianapolis, LLC, 860 N.E.2d 570 (Ind. 2007) (limitations on estoppel against government; elements for promissory estoppel)
- Sperro LLC v. Ford Motor Credit Co., 64 N.E.3d 235 (Ind. Ct. App. 2016) (factors required for preliminary injunction)