Damage of personal property not unconstitutional taking

The Indiana Court of Appeals has ruled in favor of a sanitary district in a suit against it alleging an unconstitutional taking of homeowners’ personal property after sewage backed up into their homes. The judges relied on a case from Nevada to support their decision.

Homeowners Katherine Farley and James Paul, along with other property owners, sued the Hammond Sanitary District after heavy rains caused sewage to back up in their basements. Summary judgment was granted in favor of the sanitary district on the homeowners’ tort claims. At issue in the appeal are only Farley and Paul’s tort claims and their claims for unconstitutional taking of personal property.

The two alleged in Katherine Farley and James Paul v. Hammond Sanitary District, No. 45A05-1008-CT-481, that the intrusion of the sewage into their homes interfered with their personal property without just compensation, violating Article 1, Section 21 of the Indiana Constitution – the Takings Clause. No Indiana court has addressed this issue on point because previous caselaw only dealt with real property, not personal property. The appellate judges relied on ASAP Storage Inc. v. City of Sparks, 123 Nev. 639, 173 P.3d 734 (2007), to affirm summary judgment for the Hammond Sanitary District on this claim.

In Sparks, property owners were barred from their homes for 48 hours by city officials due to a flood. Their personal property was damaged, and they sued under a similar clause under the Nevada Constitution. Ultimately, the Supreme Court of Nevada concluded that a brief interference with property rights didn’t rise to the level of compensable taking. The Indiana judges found in the instant case that the sewage backup only lasted for a short period of time – six to 12 hours in Paul’s case, and four days in Farley’s case, as she was out of town when it occurred but she cleaned up the basement as soon as she returned. Since it was brief in nature, it didn’t rise to the level of a compensable taking under the Takings Clause despite the harm to the personal property.

The COA split over the striking in part of Farley and Paul’s expert witness’ affidavit. The trial court struck two portions of engineer Michael Williams’ affidavit – that the sanitary district failed to properly clean its sewers, which led to accumulated obstructions that reduced carrying capacity and caused the backups; and that the district didn’t properly clean its sewers and keep them free of debris, which reduced capacity and caused the backups.

The judges all agreed that the trial court didn’t abuse its discretion in striking the first statement because Williams’ legal conclusion was not evidence. But the majority reversed striking the second disputed portion, finding that statement was based on his experience, education and review of evidence. Judge Nancy Vaidik dissented, believing the trial court properly struck this portion. She would affirm summary judgment for the district on this point.

The judges also found there to be a dispute of fact as to whether inadequate maintenance played a part in the sewer backups, and the sanitary district failed to establish its immunity. They reversed summary judgment on the issue of governmental immunity and negligence, and remanded for further proceedings.