Court: DNR case can proceed despite 11-year delay

The Indiana Court of Appeals has looked past a trial rule calling for diligent prosecution of claims, finding that a state Department of Natural Resources land ownership dispute can proceed despite an 11-year delay in prosecuting because it’s of great public importance and should be decided on the merits.

A 20-page decision comes Thursday in the case of Indiana DNR v. Ronald W. and Sandra J. Ritz, No. 24A01-1009-PL-442, a Franklin Circuit case involving a tract of land along the former Whitewater Canal that the state sought to use for a hiking and biking trail.

Both sides claimed ownership, with the DNR citing a title through a quit claim deed in 1946 from the Whitewater Canal Association of Indiana while the husband and wife had a title from 1971 that they’d obtained from previous property owner deeds. When the DNR put markers on the property in 1991 for the proposed development, Ronald and Sandra Ritz, who operated a canoe business on adjacent land, removed them and blocked the state employees from accessing the property. That led to a court complaint in 1991 by the DNR.

But the case docket doesn’t clearly show what happened with that case, except for entries that it was dismissed more than once according to Indiana Trial Rule 41(E) requiring diligent prosecution. But the court didn’t dismiss it and instead kept it alive. Records aren’t completely clear on whether the court held hearings on dismissal, as required by the trial rule, but the claim was ultimately dismissed in 1999 because of Rule 41(E).

In the background of all that happening, the state agency had abandoned the original plans to develop the Whitewater Canal Trail in 1996, but asked the Indiana Attorney General’s Office to continue pursuing that original action against the Ritzes. The state resurrected the Whitewater Canal Project in 2004, but the state agency wasn’t aware of the initial action against the Ritzes. It wasn’t until 2009 that the state began pursuing it again with a second action – after the 10-year statutory period when the AG’s office destroys records.

The Ritzes challenged the second action on the grounds that the 1991 complaint had been dismissed with prejudice and that the statute of limitations had since expired regarding the second action. The DNR filed a motion to reinstate the original action, contending that a hearing wasn't held and so dismissal was improper. The trial court reinstated the orignal action.

Now, both parties are arguing over whether the case should be decided on the merits or whether the DNR lost the right to prosecute the case because of its inaction according to Rule 41(E). The trial court dismissed both actions against the Ritzes, but the Court of Appeals – combining both actions on appeal -  has reversed that ruling and ordered it be kept alive.

The appellate panel opted to consider the merits of the case, finding that Ritzes suffered minimal prejudice because of the delay and that the significant impact of the land ownership question warranted review. The appellate court found no evidence that the DNR is “manipulating the judicial system” as the Ritzes allege, and the appellate judges pointed out that many trial courts routinely issue show cause orders simply when the docket shows no activity.

“Although it is unclear from the record what caused the Attorney General’s Office to fail to pursue the action in the 1990s, there is no evidence that the State was purposely and deliberately dilatory or unwilling to resolve the dispute,” the appellate panel wrote.

Judge Cale Bradford wrote a separate concurring opinion that emphasized this decision is not to be seen as providing the state immunity in following Trial Rule 41(E). Rather, the type of “unusual circumstances” in this case dictate that the state be allowed to neglect a case for as long as it did here without dismissal. The state is still required in other contexts, such as eminent domain, to avoid unnecessary delays and expedite matters.

“Nobody has greater respect for property rights than I do, and I believe that questions involving those rights should be fully litigated before they are granted or taken away,” he wrote. “Although I express no opinion on the strength of either side’s claim to the land at issue, I much prefer that questions affecting the interests of all Hoosiers be decided on the merits.”