                                                                             FILED
                                                                        Feb 28 2019, 11:18 am

                                                                             CLERK
                                                                         Indiana Supreme Court
                                                                            Court of Appeals
                                                                              and Tax Court




ATTORNEYS FOR APPELLANTS                                   ATTORNEY FOR APPELLEES
William W. Gooden                                          Sheri Bradtke McNeil
Michael P. Maxwell, Jr.                                    Kopka Pinkus Dolin PC
Kristin A. McIlwain                                        Crown Point, Indiana
Clark Quinn Moses Scott & Grahn LLP
Indianapolis, Indiana


                                             IN THE
    COURT OF APPEALS OF INDIANA

Jon R. Grdinich and JRG, LLC,                              February 28, 2019
an Indiana Limited Liability                               Court of Appeals Case No.
Corporation,                                               18A-PL-1050
Appellants-Defendants-                                     Appeal from the Porter Superior
Counterplaintiffs-Third-Party Plaintiffs,                  Court
                                                           The Honorable Roger V. Bradford,
        v.                                                 Judge
                                                           Trial Court Cause No.
Plan Commission for the Town                               64D01-1611-PL-10626
of Hebron, Indiana,
Appellee-Plaintiff-Counterdefendant,

and

Town of Hebron, Indiana, and
Town Council for the Town of
Hebron, Indiana,

Appellees-Third-Party Defendants



Crone, Judge.

Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019                            Page 1 of 18
                                                   Case Summary
[1]   The Plan Commission for the Town of Hebron, Indiana (“the Plan

      Commission”), initiated the underlying action by filing a complaint for a

      mandatory injunction against Jon R. Grdinich and JRG, LLC, an Indiana

      Limited Liability Corporation (collectively “Grdinich”), asking the trial court to

      order Grdinich to remove a pond from his property. The proceedings

      ultimately led to Grdinich’s filing of a second amended counterclaim against

      the Plan Commission and a third-party complaint against the Town of Hebron,

      Indiana, and the Town Council for the Town of Hebron, Indiana (collectively

      “the Town”), which contained six counts relevant to the pond and one count of

      inverse condemnation based on the existence of an underground drainage

      pipeline on Grdinich’s property. The Plan Commission and the Town

      (collectively “Appellees”) moved to dismiss Grdinich’s second amended

      counterclaim and third-party complaint for failure to exhaust administrative

      remedies and state claims upon which relief can be granted. The trial court

      issued an order granting their motion to dismiss.


[2]   Grdinich now appeals the order dismissing his second amended counterclaim

      and third-party complaint, arguing that Counts 1-5 and 7 do not require

      exhaustion of administrative remedies and that they state claims for which relief

      can be granted.1 We conclude that the trial court improperly dismissed

      Grdinich’s claims based on the pond, but that the inverse condemnation claim



      1
          Grdinich does not challenge the trial court’s dismissal of Count 6.

      Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019     Page 2 of 18
      was properly dismissed. Accordingly, we affirm in part, reverse in part, and

      remand.


                                  Facts and Procedural History
[3]   In November 2016, the Plan Commission filed a complaint for mandatory

      injunction against Grdinich with the following allegations: Grdinich requested

      and received a building permit from the Town to build a house on property in

      Hebron; the property is located in an “R1” residential district; Grdinich built a

      house and a pond on the property; the Hebron Municipal Code of Ordinances

      (“the Ordinance”) does not permit a pond in an R1-zoned district unless the

      pond meets certain requirements; and Grdinich’s pond does not meet those

      requirements. Appellants’ App. Vol. 2 at 15-16. The Plan Commission

      requested an order requiring Grdinich to immediately remove the pond in its

      entirety.


[4]   In January 2017, Grdinich filed an answer, a counterclaim against the Plan

      Commission, and a third-party complaint against the Town. Appellees’ App.

      Vol. 2 at 15. In May 2017, Grdinich filed an amended counterclaim and third-

      party complaint, which contained five counts: Count 1, a claim for declaratory

      judgment that the pond is in compliance with and does not violate the

      Ordinance; Count 2, a preliminary and permanent injunction restraining

      Appellees from removing the pond; Count 3, a claim of equitable estoppel

      seeking a judgment estopping Appellees from taking any action to restore the

      pond to its prior condition or otherwise modify the pond; Count 4, a 42 U.S.C.

      § 1983 claim alleging that the Plan Commission’s action regarding the pond
      Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019    Page 3 of 18
      was done without proper and fair notice to Grdinich, thereby depriving him of

      due process; and Count 5, an inverse condemnation claim alleging that

      Appellees own an underground storm drainage pipeline on his property for

      which they have no easement and for which he has not received just

      compensation. Appellants’ App. Vol. 2 at 30, 32, 34, 36, 37.


[5]   In June 2017, Appellees filed a motion to dismiss Grdinich’s amended

      counterclaim and third-party complaint, arguing that he failed to exhaust

      administrative remedies with the Hebron Board of Zoning Appeals (“BZA”)

      and that the amended counterclaim and third-party complaint were

      unsupported by sufficient operative facts to state claims upon which relief can

      be granted. Id. at 55-58. Following a hearing,2 in September 2017, the trial

      court issued an order granting Appellees’ motion to dismiss.


[6]   In October 2017, Grdinich filed a second amended counterclaim and third-

      party complaint, in which he again alleged Counts 1 through 5 and added two

      new counts related to the pond: Count 6, a claim for declaratory judgment that

      he exhausted his administrative remedies; and Count 7, a promissory estoppel

      claim seeking a judgment estopping Appellees from taking any action to restore

      the pond to its prior condition or otherwise modify the pond. Id. at 113, 115.

      In the second amended counterclaim and third-party complaint, Grdinich

      alleged the following facts. When he bought the property in February 2015,



      2
        Grdinich reproduced the transcript of this and the subsequent hearing in his appendix in contravention of
      Indiana Appellate Rule 50(F).

      Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019                            Page 4 of 18
      there was a preexisting unimproved half-acre pond. Id. at 88. He applied for

      and received a building permit from the Town to construct his residence and

      improve the pond. Id. at 88. He completed the residence and improvement to

      the pond and was issued a certificate of occupancy from the Town in September

      2015. Id. at 90. In April 2016, the Town issued a notice of building violation to

      Grdinich ordering him to return his property to its original grade. Id. at 92-93.

      That same month, Grdinich also received a letter from the Plan Commission

      informing him that the pond was a non-permitted use and instructing him to

      restore his property to its condition prior to the construction of the pond. Id. at

      93.


[7]   In November 2017, Appellees filed a motion to dismiss the second amended

      counterclaim and third-party complaint. Id. at 132; Appellees’ App. Vol. 2 at

      64 (memorandum in support of motion). Grdinich filed a response.

      Appellants’ Supp. App. Vol. 2 at 3. In April 2018, following a hearing, the trial

      court issued an order granting Appellees’ motion to dismiss as to all counts.

      This appeal ensued.


                                      Discussion and Decision
[8]   Grdinich contends that the trial court erred in granting Appellees’ motion to

      dismiss as to Counts 1-5 and 7. As a preliminary matter, we note that

      Appellees asserted in their motion to dismiss that Grdinich’s claims required

      dismissal for failure to exhaust administrative remedies pursuant to Indiana

      Trial Rule 12(B)(1) and for failure to state claims upon which relief can be


      Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019     Page 5 of 18
granted pursuant to Trial Rule 12(B)(6). In the past, Indiana courts treated the

failure to exhaust administrative remedies as a question of subject matter

jurisdiction, and motions to dismiss on this basis were brought under Trial Rule

12(B)(1). Appellees took this route in their motion to dismiss. However, our

supreme court has indicated that failure to exhaust administrative remedies

constitutes procedural error that does not implicate the trial court’s subject

matter jurisdiction. First Am. Title Ins. Co. v. Robertson, 19 N.E.3d 757, 760 (Ind.

2014), amended on reh’g on other grounds, 27 N.E.3d 768 (Ind. 2015); see also Ellis

v. State, 58 N.E.3d 938, 940-41 (Ind. Ct. App. 2016), trans. denied; Alkhalidi v.

Ind. Dep’t of Corr., 42 N.E.3d 562, 565 (Ind. Ct. App. 2015); Rudisel v. State, 31

N.E.3d 984, 988 (Ind. Ct. App. 2015); but see D.A.Y. Inv. LLC v. Lake Cty., 106

N.E.3d 500, 506 (Ind. Ct. App. 2018) (“Failure to exhaust administrative

remedies is therefore a defect in subject matter jurisdiction.”), trans. denied; John

C. & Maureen G. Osborne Revocable Family Tr. v. Town of Long Beach, 78 N.E.3d

680, 695-96 (Ind. Ct. App. 2017) (“[F]ailure to exhaust administrative remedies

deprives the trial court of subject matter jurisdiction.”), trans. denied.

Appropriately, on appeal neither party approaches the failure to exhaust

administrative remedies as a question of subject matter jurisdiction. However,

neither party makes any attempt to suggest which Trial Rule 12(B) subsection,

if any, applies to a motion to dismiss for failure to exhaust administrative

remedies, and neither party provides a standard for appellate review of a trial

court’s grant of a motion to dismiss for failure to exhaust administrative

remedies.


Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019        Page 6 of 18
[9]    We observe that Trial Rule 12(B)(1) and 12(B)(6) motions to dismiss are treated

       differently at both the trial level and the appellate level. For instance, in ruling

       on a motion to dismiss for lack of subject matter jurisdiction under Trial Rule

       12(B)(1), “the trial court may consider not only the complaint and motion but

       also any affidavits or evidence submitted in support.” City of Fort Wayne v. Sw.

       Allen Cty. Fire Prot. Dist., 82 N.E.3d 299, 303 (Ind. Ct. App. 2017), trans. denied

       (2018). The appellate standard of review is dependent on what happened in the

       trial court. Id. Thus, when exhaustion of administrative remedies was treated

       as a question of subject matter jurisdiction under Rule 12(B)(1), the trial court

       could consider affidavits or evidence submitted in support.


[10]   In contrast, in ruling on a motion to dismiss for failure to state a claim pursuant

       to Trial Rule 12(B)(6), the trial court must accept as true the facts alleged in the

       complaint, and if matters outside the pleading are considered, the motion must

       be properly converted into one for summary judgment. Kapoor v. Dybwad, 49

       N.E.3d 108, 120 (Ind. Ct. App. 2015), trans. denied (2016). Such motions test

       the legal sufficiency of the claim, not the facts supporting it. Kitchell v. Franklin,

       997 N.E.2d 1020, 1025 (Ind. 2013). Dismissals under Trial Rule 12(B)(6) are

       “rarely appropriate.” State v. Am. Family Voices, Inc., 898 N.E.2d 293, 296 (Ind.

       2008) (quoting King v. S.B., 837 N.E.2d 965, 966 (Ind. 2005)). Appellate review

       of the trial court’s ruling on a Trial Rule 12(B)(6) motion is de novo. Kitchell,

       997 N.E.2d at 1025. On appeal, we view the pleadings in the light most

       favorable to the nonmoving party, with every reasonable inference construed in

       that party’s favor to determine if there is any set of allegations under which the

       Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019        Page 7 of 18
       plaintiff could be granted relief. Am. Family Voices, 898 N.E.2d at 296.

       However, the plaintiff must still plead the operative facts necessary to set forth

       an actionable claim. Id. “If a complaint states a set of facts that, even if true,

       would not support the relief requested, we will affirm the dismissal.” McPeek v.

       McCardle, 888 N.E.2d 171, 174 (Ind. 2008) (citation omitted).


[11]   Here, the trial court declined to view matters outside the pleadings, and

       therefore we will review the issue of exhaustion of remedies de novo as we

       would if it had been decided under Trial Rule 12(B)(6).


        Section 1 – Dismissal of Grdinich’s claims based on failure to
               exhaust administrative remedies was improper.
[12]   We first consider Count 1 since it goes to the heart of the matter. In Count 1,

       Grdinich requested a declaratory judgment that the pond is in compliance with

       and does not violate the Ordinance. Grdinich contends that the trial court erred

       in granting Appellees’ motion to dismiss Count 1 based on failure to exhaust

       administrative remedies.


[13]   “It is well-established that, if an administrative remedy is available, it must be

       pursued before a claimant is allowed access to the courts.” Town Council of New

       Harmony v. Parker, 726 N.E.2d 1217, 1224 (Ind. 2000). “The reasons for this

       requirement are well established: (1) premature litigation may be avoided; (2)

       an adequate record for judicial review may be compiled; and (3) agencies retain

       the opportunity and autonomy to correct their own errors.” Ind. Dep’t of Envtl.

       Mgmt. v. Twin Eagle LLC, 798 N.E.2d 839, 844 (Ind. 2003). “Where … an


       Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019      Page 8 of 18
       administrative remedy is readily available, filing a declaratory judgment action

       is not a suitable alternative.” Carter v. Nugent Sand Co., 925 N.E.2d 356, 360

       (Ind. 2010).


[14]   Grdinich contends that the pond is not subject to regulation by the Ordinance,

       and therefore he is not required to exhaust administrative remedies.3

       Specifically, he asserts that his pond is less than three acres in size; the

       Ordinance only regulates ponds or lakes that are three acres or more in size,

       requiring a special exception by the BZA pursuant to Sections 2-2-8-1 and 2-2-

       13-9 of the Ordinance; and the Ordinance is completely silent with respect to

       ponds or lakes less than three acres in size. Appellants’ Br. at 9-10. To support

       his argument that this claim does not require the exhaustion of remedies,

       Grdinich relies on Boone County Area Plan Commission v. Kennedy, 560 N.E.2d

       692 (Ind. Ct. App. 1990).


[15]   In that case, the Kennedys owned “forty acres contiguous to one of Zionsville’s

       borders upon which is located a four bedroom dwelling house and outbuildings

       which they will use for recreational purposes on weekends.” Id. at 696. The

       Kennedys wanted to build a private recreational skeet and shooting range on

       fifteen acres. Whether they could build the skeet range without seeking formal

       application from the county depended on whether the proposed skeet range was

       a “primary” or “accessory” use under the Boone County zoning ordinance. If



       3
         Appellees assert that Grdinich waived this argument because he failed to raise it below. We disagree. Our
       review of the record shows that Grdinich presented a substantially similar argument to the trial court. Tr.
       Vol. 2 at 34-35; Appellants’ Supp. App. Vol. 2 at 17.

       Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019                           Page 9 of 18
       “primary,” the Kennedys would need permission from the county because the

       land was in an R-1 residential zone. If “accessory,” the zoning ordinance by its

       own terms would exclude the use from regulation, and the Kennedys would not

       need permission from the county to build the skeet range. After an informal

       exchange, the plan commission informed the Kennedys that under the zoning

       ordinance the proposed skeet range could not be built because it was a primary

       as opposed to an accessory use of the real estate. Without petitioning the plan

       commission for authority to construct the skeet range, the Kennedys filed suit

       for declaratory judgment seeking permission to build the skeet range on their

       real estate as an accessory use thereto. The trial court granted summary

       judgment in favor of the Kennedys.


[16]   The plan commission appealed, arguing that the grant of summary judgment

       was improper for two reasons: (1) the Kennedys could not directly seek a

       judicial determination without first exhausting administrative remedies; and (2)

       even if the matter was properly in court, there was a genuine issue of material

       fact as to whether the Kennedys’ proposed skeet range was a permitted

       accessory use under the ordinance. In addressing whether the Kennedys had to

       avail themselves of administrative remedies before resorting to the courts for

       relief, the Kennedy court observed,


               The test to determine the propriety of declaratory relief is whether the
               issuance of a declaratory judgment will effectively solve the problem
               involved, whether it will serve a useful purpose, and whether or not
               another remedy is more effective or efficient. Applying that test here it
               is readily apparent the lower court’s determination the skeet
               range was an accessory use unregulated by the [o]rdinance
       Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019           Page 10 of 18
               effectively solved the problem, served a useful purpose, and no
               other remedy was available to the Kennedys absent their
               involuntary submission to the [o]rdinance’s administrative
               processes.


       Id. at 696 (emphasis added). The Kennedy court concluded that “direct resort

       to the trial court was appropriate.” Id.


[17]   The Kennedy court then considered whether there was a genuine issue of

       material fact as to whether the Kennedys’ proposed skeet range was a permitted

       accessory use under the ordinance. Id. The Kennedy court construed the

       ordinance and concluded that the proposed skeet range was an accessory use

       and exempt from the ordinance’s provisions, and therefore the trial court did

       not err by so finding. Id. at 696-97.


[18]   Grdinich asserts that, like in Kennedy, the use at issue here is not subject to

       regulation by the Ordinance, and therefore he is not required to exhaust

       administrative remedies. Appellees counter that the pond is regulated by the

       Ordinance, and therefore he is required to exhaust administrative remedies.

       We observe that both parties’ arguments appear to conflate the two different

       questions that were before the Kennedy court. The Kennedy court had to decide

       both whether exhaustion of administrative remedies was required and, because

       summary judgment had been granted to the Kennedys on their declaratory

       judgment action, whether the trial court had properly found that the skeet range

       was an accessory use that was exempt from the ordinance’s provisions. Here,

       Grdinich’s declaratory judgment claim has not been determined on the merits.


       Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019     Page 11 of 18
       Accordingly, we need decide only whether Grdinich is required to exhaust

       administrative remedies.


[19]   Like in Kennedy, interpretation of the Ordinance may show that its regulations

       do not apply to the pond. If Grdinich’s pond is not regulated by the Ordinance,

       Grdinich, like the Kennedys, has no administrative procedures to exhaust.4

       The appeal in Kennedy was from a summary judgment proceeding, whereas

       here the appeal is from the grant of a Trial Rule 12(B)(6) motion. Our decision

       must be based on the allegations in Grdinich’s counterclaim and third-party

       complaint. Based on the few provisions of the Ordinance that are before us, it

       is not obvious as a matter of law that Grdinich’s pond falls within the

       Ordinance’s purview.


[20]   In addition, Grdinich contends, and Appellees concede, that Count 1 is an

       affirmative defense to Appellees’ claim against him, and therefore the resolution

       of Count 1 potentially determines the outcome of Appellees’ claim. Based on

       the scant record before us, it appears that the issuance of a declaratory judgment

       will effectively solve the problem involved and serve a useful purpose, and there

       is not another remedy that is more effective or efficient. Accordingly, we

       conclude that Count 1 was improperly dismissed.


[21]   Because the resolution of Count 1 potentially impacts all the counts related to

       the pond, i.e., Counts 2-4 and 7, we conclude that the failure to exhaust



       4
           Unlike in Kennedy, we do not have the benefit of the entire zoning ordinances and its definitions.

       Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019                               Page 12 of 18
       administrative remedies is an improper basis on which to dismiss those counts.

       As to Count 5, the inverse condemnation claim, there is nothing in the record

       to suggest that administrative remedies are available, and Appellees make no

       argument that there are.


           Section 2 – Dismissal of Counts 2 and 7 based on failure to
           plead sufficient operative facts to state a claim upon which
                       relief can be granted was improper.
[22]   Next, the parties dispute whether Counts 2 and 7 contain sufficient operative

       facts to state claims upon which relief may be granted.5 We reiterate that in

       examining whether these counts state claims upon which relief may be granted,

       we must accept as true the facts alleged in Grdinich’s second amended

       counterclaim and third-party complaint. Kapoor, 49 N.E.3d at 120.


[23]   In Count 2, Grdinich sought a preliminary injunction to enjoin Appellees from

       removing the pond. To obtain a preliminary injunction, the moving party must

       ultimately show that


               (1) the movant’s remedies at law are inadequate, thus causing
               irreparable harm pending resolution of the substantive action; (2)
               the movant has at least a reasonable likelihood of success at trial
               by establishing a prima facie case; (3) threatened injury to the
               movant outweighs the potential harm to the nonmoving party
               resulting from the granting of an injunction; and (4) the public
               interest would not be disserved.



       5
         Appellees challenge Count 4 only on the basis of failure to exhaust administrative remedies and do not
       contend that Count 4 lacks sufficient operative facts to state a claim upon which relief can be granted.

       Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019                          Page 13 of 18
       Sperro LLC v. Ford Motor Credit Co., 64 N.E.3d 235, 249 (Ind. Ct. App. 2016)

       (quoting Apple Glen Crossing, LLC v. Trademark Retail, Inc., 784 N.E.2d 484, 487

       (Ind. 2003)).


[24]   Grdinich contends that he properly pled the operative facts that, if taken as true,

       show that he will suffer irreparable harm pending resolution of the action; he

       has at least a reasonable likelihood of success at trial; the Town will not suffer

       any harm and an injunction will not harm the public interest because his pond

       remediates the neighborhood drainage and mosquito problems and his

       neighbors support the improvements to the pond. Appellees challenge only his

       assertions regarding irreparable harm and likelihood of success at trial. First,

       they argue that Grdinich’s second amended counterclaim and third-party

       complaint sets forth no injury other than an economic one, and therefore his

       remedies at law are adequate. In his reply brief, Grdinich responds that he

       alleges that “his irreparable damages follow from the fact that he would never

       have constructed his home on the property and moved his family into it if he

       had known the pond improvements would not be permitted.” Appellants’

       Reply Br. at 18. Given that we must accept his allegation as true, we find that it

       is sufficient to allege that Grdinich’s remedies at law are inadequate.


[25]   Appellees next contend that Grdinich fails to allege operative facts showing that

       he has a reasonable likelihood of success on the merits. We disagree. We

       must accept as true that Grdinich’s pond is less than three acres. His argument

       that his pond is lawful without any approval because a pond less than three

       acres is not regulated by the Ordinance is a legal argument. As such, he has

       Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019     Page 14 of 18
       alleged sufficient operative facts showing a reasonable likelihood of success on

       the merits, and therefore his claim for a preliminary injunction survives

       dismissal under Trial Rule 12(B)(6).6


[26]   We next address Count 7 because it is based on the pond. In Count 7, Grdinich

       alleged a claim of promissory estoppel. “Estoppel is not generally applicable

       against government entities for the actions of public officials.” Biddle v. BAA

       Indianapolis, LLC, 860 N.E.2d 570, 581 (Ind. 2007). The reason for the rule is

       twofold. “If the government could be estopped, then dishonest, incompetent or

       negligent public officials could damage the interests of the public. At the same

       time, if the government were bound by its employees’ unauthorized

       representations, then government, itself, could be precluded from functioning.”

       Samplawski v. City of Portage, 512 N.E.2d 456, 459 (Ind. Ct. App. 1987).

       However, “estoppel may be appropriate where the party asserting estoppel has

       detrimentally relied on [a] governmental entity’s affirmative assertion or on its

       silence where there was a duty to speak.” Equicor Dev., Inc. v. Westfield-

       Washington Twp. Plan Comm’n, 758 N.E.2d 34, 39 (Ind. 2001). “[A] party

       asserting promissory estoppel must establish five elements: ‘(1) a promise by the

       promissor (2) made with the expectation that the promisee will rely thereon (3)

       which induces reasonable reliance by the promisee (4) of a definite and

       substantial nature and (5) injustice can be avoided only by enforcement of the




       6
         We express no opinion on whether Grdinich can ultimately carry his burden to show by a preponderance
       of the evidence that he is entitled to a preliminary injunction.

       Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019                      Page 15 of 18
       promise.” Biddle, 860 N.E.2d at 581 (quoting First Nat’l Bank of Logansport v.

       Logan Mfg. Co., 577 N.E.2d 949, 954 (Ind. 1991)). Also, with respect to a

       government entity, the party asserting promissory estoppel must show “that

       estoppel is not inconsistent with the public interest.” Muncie Indus. Revolving

       Loan Fund Bd. v. Ind. Constr. Corp., 583 N.E.2d 769, 771 (Ind. Ct. App. 1991).


[27]   Grdinich argues that Count 7 states a claim upon which relief may be granted

       because he made the following allegations in support thereof: the plans he

       submitted to the Town were approved and the requisite permits issued; he

       initiated and completed construction at significant time and expense in

       reasonable reliance on the Town’s approval; he relied on the Town’s approval

       to his detriment because he expended significant resources to bring his home

       into conformity with the zoning ordinance; injustice can be avoided only by

       enforcement of the approved permits; and restoring the pond to its prior

       condition would cause drainage problems to the surrounding neighborhood as

       well as potential public health problems due to increased risk of mosquito

       infestation. Accepting these facts as true, as we must, we conclude that

       Grdinich has alleged sufficient operative facts to support a claim for promissory

       estoppel. Therefore, dismissal of Count 7 was improper.


                       Section 3 – Count 5 was properly dismissed.
[28]   Last, we consider Count 5, a claim for inverse condemnation based on the

       existence of an underground drainage pipeline. Pursuant to Indiana Code

       Section 32-24-1-16, an owner of property acquired for public use may bring a


       Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019   Page 16 of 18
       suit for inverse condemnation to recover money damages, if the government

       takes property but fails to initiate eminent domain proceedings. Murray v. City

       of Lawrenceburg, 925 N.E.2d 728, 731 (Ind. 2010). “An action for inverse

       condemnation requires: ‘(1) a taking or damaging; (2) of private property; (3)

       for public use; (4) without just compensation being paid; and (5) by a

       governmental entity that has not instituted formal proceedings.’” Id. (quoting

       29A C.J.S. Eminent Domain § 560 (2007)).


[29]   Grdinich argues that he pled all the operative facts to establish a claim for

       inverse condemnation: “that real estate owned by him is encumbered by a 150-

       foot underground storm water drainage pipeline that is owned and controlled

       by Hebron for public use without payment for just compensation.” Appellants’

       Br. at 13. Grdinich also alleged that the pipeline causes damages to him,

       including the diminution in value and the deprivation of beneficial use of a

       substantial portion of his property. We observe that the pipeline was present

       when Grdinich purchased the property. Whatever diminution in value, if any,

       or deprivation of beneficial use, if any, to the property resulting from the

       pipeline occurred prior to his purchase of the property. Nothing changed after

       he purchased the property, and thus he has not suffered any damages.

       Accordingly, we conclude Count 5 fails to state a claim upon which relief can

       be granted, and therefore the claim was properly dismissed.


[30]   Based on the foregoing, we affirm the trial court’s dismissal of Count 5, reverse

       the dismissal of Counts 1-4 and 7, and remand for further proceedings.



       Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019    Page 17 of 18
[31]   Affirmed in part, reversed in part, and remanded.


       Vaidik, C.J., and Mathias, J., concur.




       Court of Appeals of Indiana | Opinion 18A-PL-1050 | February 28, 2019   Page 18 of 18
