COA affirms judgment against Hammond in towns’ sewer suit

Hammond’s sanitary district had no statutory authority to cancel wastewater treatment contracts with the neighboring Lake County towns of Griffith, Highland and Whiting, the Indiana Court of Appeals ruled Monday, affirming the trial court in a split opinion.

Hammond’s sanitary district for more than 20 years has had agreements to accept and treat wastewater from the towns, but those agreements are to expire in 2018. The district in 2013 informed the towns it planned to cancel the contracts because it could no longer afford to serve the communities based on terms of the contract.

The towns sued, and Lake Superior Judge John Sedia ruled in their favor. He also ordered the parties into binding arbitration to resolve issues raised during the dispute.

The Court of Appeals panel affirmed in Sanitary District of the City of Hammond, Indiana and the City of Hammond, Indiana v. Town of Griffith, Indiana; Town of Highland, Indiana, et al. 45A03-1404-PL-125.

"We conclude that the trial court did not err in finding that the District lacked statutory authority to cancel the Treatment Agreements because the Public Purchasing Statute did not apply to the Treatment Agreements,” Judge James Kirsch wrote for the majority joined by Judge Terry Crone. “The trial court also did not err in ordering the parties to arbitration for all disputes concerning the Treatment Agreements, as arbitration was mandated by the Treatment Agreements for all such disputes.”

Dissenting Judge Margret Robb would reverse, holding Hammond was authorized under I.C. 5-22-6-1 to cancel the contracts. She would remand to the trial court to review the sanitary district’s determination.