Elpers Bros. Construction & Supply, Inc. and Elpers Development, Inc. v. Deane L. Smith, II, MD and Lori A. Smith (mem. dec.)

CourtIndiana Court of Appeals
DecidedApril 27, 2020
Docket19A-PL-1327
StatusPublished

This text of Elpers Bros. Construction & Supply, Inc. and Elpers Development, Inc. v. Deane L. Smith, II, MD and Lori A. Smith (mem. dec.) (Elpers Bros. Construction & Supply, Inc. and Elpers Development, Inc. v. Deane L. Smith, II, MD and Lori A. Smith (mem. dec.)) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Elpers Bros. Construction & Supply, Inc. and Elpers Development, Inc. v. Deane L. Smith, II, MD and Lori A. Smith (mem. dec.), (Ind. Ct. App. 2020).

Opinion

MEMORANDUM DECISION Pursuant to Ind. Appellate Rule 65(D), FILED this Memorandum Decision shall not be Apr 27 2020, 6:01 am regarded as precedent or cited before any CLERK court except for the purpose of establishing Indiana Supreme Court Court of Appeals the defense of res judicata, collateral and Tax Court

estoppel, or the law of the case.

ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEES Crystal G. Rowe David E. Gray New Albany, Indiana David L. Jones Craig R. Emig Brent R. Weil Evansville, Indiana William G. Hussmann, Jr. Evansville, Indiana

IN THE COURT OF APPEALS OF INDIANA

Elpers Bros. Construction & April 27, 2020 Supply, Inc. and Elpers Court of Appeals Case No. Development, Inc., 19A-PL-1327 Appellants-Defendants, Appeal from the Vanderburgh Circuit Court v. The Honorable David D. Kiely, Judge Deane L. Smith, II, MD and Trial Court Cause No. Lori A. Smith, 82C01-1712-PL-6198 Appellees-Plaintiffs.

Altice, Judge.

Court of Appeals of Indiana | Memorandum Decision 19A-PL-1327 | April 27, 2020 Page 1 of 19 Case Summary [1] In 2007, Deane L. Smith II, MD and Lori Smith (Homeowners) purchased a

residential lot from Elpers Bros. Construction & Supply, Inc. and Elpers

Development, Inc. (Builders) and built their home on it. In 2017, Homeowners

filed suit in the Vanderburgh Circuit Court against Builders alleging that the

geothermal system used to heat and cool their home was damaged due to

problems with drainage in the subdivision and the retention pond on their

property. Homeowners asserted negligence claims as well as a request for a

declaratory judgment that Builders failed to comply with the subdivision plat

and ordinances. After Vanderburgh County was added as a third-party

defendant, Builders filed a motion for change of venue from the county.

Builders also filed a motion to disqualify Homeowners’ counsel, who during the

course of the litigation had been appointed the Vanderburgh County Attorney.

The trial court denied both motions, and Builders filed this interlocutory appeal

asserting that the denials were an abuse of discretion and/or an erroneous

interpretation of the law.

[2] We affirm.

Facts & Procedural History 1 [3] Around 2006, Builders purchased property in Vanderburgh County that they

developed into a residential subdivision known as Stonegate Estates (the

1 We deny Builders’ request for oral argument by separate order.

Court of Appeals of Indiana | Memorandum Decision 19A-PL-1327 | April 27, 2020 Page 2 of 19 Subdivision). In June 2007, Homeowners purchased Lot 1 in the Subdivision

from Builders and hired Builders to construct their home on the lot. Lot 1,

located on Skipping Stone Drive, includes a private lake for Homeowners’

exclusive use and enjoyment. The lake also serves as the retention pond for the

Subdivision and is subject to an easement for drainage of surface and storm

water from other lots. Homeowners installed the coils and component parts for

their geothermal heating and cooling system in the lake.

[4] During development of the Subdivision, Builders hired engineer Keith Poff and

Sitecon, Inc. (collectively, the Engineers) to design the Subdivision’s drainage

system and to install the lake on Lot 1. The drainage and erosion control plans

were submitted to Vanderburgh County, and the county’s Drainage Board

approved them on December 5, 2006. Pursuant to county ordinance,

Vanderburgh County may dedicate roads for public use and, thus, assume

responsibility for the maintenance of those roads and drainage structures. In

this case, Vanderburgh County identified two streets in the Subdivision,

including Skipping Stone Drive, as public roadways. On May 13, 2008,

Vanderburgh County “Accepted for Maintenance” Skipping Stone Drive and

the associated drainage structures within the Subdivision. Appellants’ Appendix

Vol. 2 at 110, 126. Later, in May 2011, the county’s Area Plan Commission

released Builders’ letter of credit (or performance bond) after having found “the

satisfactory completion of the remaining work on the drainage facilities and

other public improvements in the [Subdivision].” Id. at 111, 128-29.

Court of Appeals of Indiana | Memorandum Decision 19A-PL-1327 | April 27, 2020 Page 3 of 19 [5] From 2009 to 2015, Homeowners used the geothermal system to heat and cool

their home. In mid-2015, they noticed excessive silt in the lake, and in

December 2015 they determined that their geothermal system was not working

properly, believing this was due to drainage issues in the Subdivision and

deteriorating lake conditions. Homeowners hired attorneys David L. Jones and

Craig R. Emig of the law firm Jones Wallace, LLC to investigate and pursue

any claims associated with the geothermal system’s failure. In December 2017,

Homeowners filed a lawsuit in the Vanderburgh Circuit Court against Builders

and the Subdivision’s HOA.

[6] The complaint alleged that the lake/retention pond was no longer usable due to

sediment from upstream runoff, that Homeowners’ geothermal system was

damaged “and will have to be reconstructed with dredging of the lake in

association with remedial measures to prevent the lake from then refilling with

dirt and silt and/or relocation of the coils followed by dredging of the lake,”

and that “all Defendants have failed to act as required under the various

agreements or to remediate the continuing damage to Plaintiffs’ property, or

undertake proper reconstruction and maintenance of the drainage facilities.”

Id. at 29-30. Homeowners asserted two claims: (1) a request for a declaratory

judgment declaring Builders and the HOA in breach and violation of the

requirements of the subdivision plat, and all applicable local and ordinances,

regulations, and statutes and ordering them to immediately comply with the

provisions of the subdivision plat and its conditions and to perform such

corrective and remedial work as necessary to be in full compliance; and (2) a

Court of Appeals of Indiana | Memorandum Decision 19A-PL-1327 | April 27, 2020 Page 4 of 19 claim that Builders negligently designed, constructed, and maintained the

drainage and erosion control facilities of the Subdivision.

[7] Builders filed their answer on February 22, 2018, raising affirmative defenses,

including that “the amount to be awarded, if any, should be diminished in

proportion to the amount of contributory fault of the Plaintiffs and/or the

contributory fault of other non-parties or Defendants whose conduct

proximately contributed to the incident complained of in Plaintiffs’

Complaint.” Id. at 73. In July 2018, Homeowners replaced their geothermal

system at a cost of approximately $26,000, and buried the new system’s pipes in

the ground, not the lake.

[8] In January or February 2019, the Vanderburgh County Commissioners

appointed Jones as the Vanderburgh County Attorney, and Emig became

Assistant County Attorney. On March 22, 2019, the parties participated in a

mediation, which was not successful. On March 25, Builders filed a motion for

leave to amend the pleadings to file a third-party complaint against

Vanderburgh County and the Engineers. The same day, Builders also filed a

motion to disqualify Homeowners’ counsel, Jones and Emig and their law firm,

under the Ind. Rules of Professional Conduct, asserting that they, as the

Vanderburgh County Attorney and Assistant County Attorney, had an

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