Warrick County, Indiana, A Political Subdivision, by and through its County Commissioners, Nova Conner, Don Williams, and Phillip Baxter, and Cincinnati Insurance Co. v. William Hill and Stacy Hill

• Court: Indiana Court of Appeals
• Decided: August 7, 2012
• Docket: 87A01-1201-PL-8
• Status: Published

Opinion

FILED Aug 07 2012, 8:54 am

FOR PUBLICATION CLERK of the supreme court, court of appeals and tax court

ATTORNEYS FOR APPELLANTS: ATTORNEYS FOR APPELLEE:

BRIAN L. ENGLAND MARK K. PHILLIPS RYAN J. GUILLORY Law Offices of Mark K. Phillips Hunt Suedhoff Kalamaros LLP Boonville, Indiana Indianapolis, Indiana

IN THE COURT OF APPEALS OF INDIANA

WARRICK COUNTY, INDIANA, A Political ) Subdivision, by and through its County ) Commissioners, Nova Conner, Don Williams, ) And Phillip Baxter, and CINCINNATI ) INSURANCE CO., ) ) Appellants-Defendants,1 ) ) vs. ) No. 87A01-1201-PL-8 ) WILLIAM HILL and STACY HILL, ) ) Appellees-Plaintiffs. )

APPEAL FROM THE WARRICK SUPERIOR COURT The Honorable Keith A. Meier, Judge Cause No. 87D01-0811-PL-563

August 7, 2012

1 Warrick County has filed the instant appeal and is not joined by Cincinnati Insurance Company. Nevertheless, a party of record in the trial court shall be a party on appeal. See Ind. App. R. 17(A). OPINION—FOR PUBLICATION

BRADFORD, Judge.

In this interlocutory appeal, Appellant-Defendant Warrick County, Indiana, challenges

the trial court’s denial of its motion for summary judgment in an action brought against it and

Cincinnati Insurance Company by Appellees-Plaintiffs William Hill and Stacy Hill. Upon

appeal, Warrick County claims that the trial court erred in denying summary judgment on

multiple grounds. We affirm.

FACTS AND PROCEDURAL HISTORY

The Hills are residents of Warrick County, Indiana, and have a house on Framewood

Drive in Newburgh. In 2001 and 2002, Warrick County performed drainage work in a ditch

adjacent to the Hills’ home. The work involved installing a polyethylene pipe into the ditch

and subsequently filling the ditch with backfill, thereby eliminating the ditch. Thereafter, the

Hills discovered that the crawl space under their home had significant standing water. The

Hills contacted Warrick County. In September of 2002, Warrick County sent contractor

MCF to the Hills’ residence to install underground downspout lines and direct them into an

open ditch in back of the Hills’ property, as a remedy. Apparently, downspout lines which

had previously drained the Hills’ home’s roof gutters into the now-filled ditch adjacent to

their property had been disconnected during the drainage project. MCF additionally installed

a sump pump.

On November 20, 2002, the Hills signed an Agreement and Release in which Warrick

County agreed to pay MCF’s $2714 bill and the Hills $500 in additional damages. In

2 exchange, the Hills agreed to “release[] and forever discharge[]” Warrick County from

certain claims or liability. App. p. 63. The Release Agreement identified the Hills’ water

problem and the scope of the release as follows:

[T]he [Hills] have contended that they have suffered certain damages to their home caused by interference with a certain drain which drains down spouts from the roof gutters on this home into an open ditch which had been running along the side of the real estate owned by the [Hills] which caused water to fill the crawlspace underneath said home and which the [Hills] contend has caused mold to accumulate within the home and has caused the [Hills] to incur certain expense in order to correct said drainage problem[.] *** [T]he [Hills] further have contended that the above damage to their home along with the accumulation of water under the crawlspace has been caused by blockage of the drains caused by the County in installing a drain pipe into that open ditch; *** [The Hills] now expressly agree that the County is released and forever discharged from any claims or liability for any damages that may now or may hereafter be discovered as a result of the aforementioned blockage or interference with the drainage from the home of the [Hills] as hereinabove referred to[.]

App. pp. 62-63.

Thereafter, the Hills continued to have problems with accumulating water, including

water in the crawlspace and sink holes in their yard. The Hills contacted Warrick County

many times after MCF completed its work. According to Ms. Hill, Warrick County indicated

that the sink holes were unrelated to drainage and probably due to heavy rain.

In approximately May 2007, Ms. Hill noticed that brick had begun to pull away from

the side of her house. She also noticed cracks in the brick wall on her home’s west side. Ms.

Hill contacted her insurance carrier, who sent an adjuster to the house, and ultimately hired

an engineering firm. In August of 2007, Donan Engineering issued a report indicating that

3 the Hills’ home’s structural problems were attributable to the high moisture condition in the

foundation soil. On December 5, 2007, Andy Easley Engineering submitted a report

indicating that the moisture and foundational problems were due to the County’s eliminating

the open ditch adjacent to the Hills’ home, leading to a higher water table. Easley

recommended the construction of a groundwater interception drain to lower the ground water

level on the Hills’ property.

On December 14, 2007, the Hills submitted a notice of tort claim, and on November

25, 2008, filed a complaint against Warrick County and Cincinnati Insurance Company

seeking damages caused by Warrick County’s filling of the drainage ditch. In their

complaint, the Hills alleged that Warrick County’s elimination of the ditch was not

contemplated by their Release Agreement. In its answer, Warrick County asserted that the

Hills’ claims were barred on several grounds, including (1) failure to provide timely Notice

of Tort Claim under the Indiana Tort Claims Act; (2) the six-year statute of limitations; and

(3) operation of the Release Agreement.

On July 9, 2011, Warrick County moved for summary judgment on the above three

grounds. On August 12, 2011, the Hills filed a response disputing Warrick County’s claims

for summary judgment and requesting trial. Following Warrick County’s September 19,

2011 reply, the trial court held a hearing on October 11, 2011, after which it denied Warrick

County’s motion on October 18, 2011.2 Warrick County petitioned the trial court to certify

2 At the same time, the court granted Defendant Cincinnati Insurance Company’s motion for summary judgment.

4 the matter for interlocutory appeal, which it did. This court accepted the appeal on February

20, 2012.

DISCUSSION AND DECISION

Upon appeal, Warrick County challenges the trial court’s grant of summary judgment.

On appeal, the standard of review for a summary judgment motion is the same as that used

in the trial court: summary judgment is appropriate only where the evidence shows that there

is no genuine issue of material fact and the moving party is entitled to judgment as a matter

of law. Reeder v. Harper, 788 N.E.2d 1236, 1240 (Ind. 2003) (citing Ind. Trial R. 56(C)).

All facts and reasonable inferences drawn from those facts are construed in favor of the non-

moving party. Id. Review of a summary judgment motion is limited to those materials

designated to the trial court. Id. We must carefully review a decision on a summary

judgment motion to ensure that a party was not improperly denied its day in court. Id.

I. Indiana Tort Claims Act

The parties do not dispute the applicability of the Indiana Tort Claims Act (“ITCA”).

Under section 34-13-3-8 (2007) of the ITCA, a tort claim against a political subdivision is

barred unless notice is filed with the political subdivision within one hundred eighty (180)

days after the loss occurs.

On appeal, we are generally bound by the same standard as the trial court, specifically,

that we must consider all designated material in the light most favorable to the nonmoving

party. Huntington v. Riggs, 862 N.E.2d 1263, 1266 (Ind. Ct. App. 2007), trans. denied.

However, compliance with the notice provisions of the ITCA “‘is a procedural precedent

5 which the plaintiff must prove and which the trial court must determine prior to trial.’” Hupp

v. Hill, 576 N.E.2d 1320, 1323 (Ind. Ct. App. 1991) (quoting Ind. Dep’t of Highways v.

Hughes, 575 N.E.2d 676, 678 (Ind. Ct. App. 1991)). Accordingly, judgments based upon

compliance with ITCA are subject to review as negative judgments, which we will reverse

only if contrary to law. Id. at 1324. Otherwise stated, a negative judgment may only be

reversed if the evidence is without conflict and all reasonable inferences to be drawn from

the evidence lead to a conclusion other than that reached by the trial court. Capital Drywall

Supply, Inc. v. Jai Jagdish, Inc., 934 N.E.2d 1193, 1199 (Ind. Ct. App. 2010).

Warrick County points to designated evidence indicating that the Hills’s observation

of water problems occurred on a continuing basis since 2002. According to Warrick County,

the continuing nature of the water problems links them to the original problems observed and

addressed in 2002. Given this alleged 2002 origin of the problems, the Hills’ December 2002

Notice of Tort Claim, in Warrick County’s view, fell well outside the statutory 180-day time

frame.

The Hills respond by arguing that the issue of structural damage to their home was not

discovered until May 2007, that they did not know its cause until December 2007, and that

they filed their notice of tort claim regarding this structural damage on December 14, 2007,

which was within the 180 days.

6 In denying Warrick County’s motion for summary judgment, the trial court observed3

from the designated evidence that the 2002 water problems were attributed to unconnected

downspouts. The court also observed that the structural damage discovered in 2007 was

attributed to excessive soil moisture content resulting from the elimination of a ditch adjacent

to the Hills’ home. Distinguishing the downspout problem from the excessive moisture

content problem, the court observed that the structural damage and its cause were not

discovered until as late as December 2007, and concluded that the Hills were within the

ITCA’s 180-day time frame when they filed their notice.

We find no error in the trial court’s decision. The undisputed evidence demonstrates

that Warrick County’s drainage project involved more than one component, including

disconnecting existing downspouts and filling in an existing ditch. The 2002 problems were

attributed, by an expert contractor, to the disconnected downspouts. The 2007 problems, in

contrast, were attributed by an expert to the removal of a ditch and the resulting excessive

soil moisture content. These problems are easily distinguished: one involves the inadequate

means by which excessive water is removed; the other, the factors forcing an excessive

amount of water into the soil. The presence in 2002 of downspout problems could not be

said to indicate the existence of other problems. To the contrary, the fact of their diagnosis

likely eliminated speculation about other causes. Given the multi-part nature of Warrick

County’s drainage redirection project, we reject its contention that the presence of some

3 The judgment contains a footnote indicating that any statements listed in the judgment do not constitute findings and conclusions, and that any information listed in the order is simply included for purposes of providing “some guidance to the thoughts of the court.”

7 water problems necessarily placed the Hills on notice of the origin of all problems. We find

no error in the trial court’s refusing to grant summary judgment on ITCA timing grounds.

II. Statute of Limitations

Warrick County additionally claims that the Hills’ claims are barred by Indiana Code

section 34-11-2-7 (2007), which enforces a six-year statute of limitations on actions for

injury to property other than personal property. Warrick County’s argument is premised

upon its contention that injury to the Hills’ property occurred in 2002 or earlier. The Hills do

not dispute the applicability of section 34-11-2-7 but claim that their injury occurred in 2007,

when they discovered the structural damage to their home.

Under Indiana’s discovery rule, a cause of action accrues, and the limitation period

begins to run, when a claimant knows or in the exercise of ordinary diligence should have

known of the injury. Cooper Indus., LLC v. City of South Bend, 899 N.E.2d 1274, 1280 (Ind.

2009). The determination of when a cause of action accrues is generally a question of law.

Id. For an action to accrue, it is not necessary that the full extent of the damage be known or

even ascertainable, but only that some ascertainable damage has occurred. Id.

In denying Warrick County’s motion for summary judgment on statute of limitations

grounds, the trial court relied upon the same reasoning it used in denying summary judgment

on ITCA grounds. The court specifically observed that the Hills did not discover the

structural damage to their home until May 2007, and they did not know it was attributable to

the filling of the drainage ditch until December 2007. The filing of their complaint in

November 2008, it concluded, was therefore well within the six-year statute of limitations.

8 The reasoning we used to affirm the trial court’s ITCA ruling is similarly applicable

here. While the Hills may have experienced ongoing water problems, the downspout

problems discovered and addressed in 2002 do not demonstrably encompass the structural

damage/excessive soil moisture content discovered in 2007. Accordingly, we find no error in

the trial court’s denial of summary judgment on section 34-11-2-7 grounds.

III. Discovery Rule

Warrick County further argues that the discovery rule should not apply to toll the

ITCA and statute of limitations deadlines because, in its view, the Hills were aware of some

damage in 2002, even if they were not aware of the full extent of this damage. Warrick

County cites to multiple cases from other jurisdictions in support of this point.

There can be no question that a cause of action may accrue before the full extent of

damage is known or ascertainable, so long as some damage is ascertainable. See Cooper

Indus., 899 N.E.2d at 1280. But here, as the trial court concluded, the evidence demonstrates

no ascertainable damage to the structure of the Hills’ home until 2007. The evidence

indicating that there were water problems on the Hills’ property prior to that time does not

demonstrate that these problems had caused structural damage to their home or that they were

attributable to Warrick County’s actions. Warrick County does not dispute that a cause of

action accrues when a plaintiff has notice of his injury and its cause. See Farmers Elevator

Co. of Oakville, Inc. v. Hamilton, 926 N.E.2d 68, 77 (Ind. Ct. App. 2010) (observing that

cause of action accrues when plaintiff knows or should have discovered that he has sustained

9 an injury due to the act of another), trans. denied. Warrick County’s argument on this point

warrants no relief.

IV. Release Agreement

Finally, Warrick County points to the Release Agreement the Hills signed in 2002 and

claims that its terms preclude their current action. Generally, the construction of a written

contract is a question of law for the trial court for which summary judgment is particularly

appropriate. Perryman v. Motorist Mut. Ins. Co., 846 N.E.2d 683, 687 (Ind. Ct. App. 2006).

If the terms of a written contract are ambiguous, however, it is the responsibility of the trier-

of-fact to ascertain the facts necessary to construe the contract. Id. Consequently, when

summary judgment is granted based upon the construction of a written contract, the trial

court has either determined as a matter of law that the contract is not ambiguous or uncertain,

or that the contract ambiguity, if one exists, can be resolved without the aid of a factual

determination. Id.

In denying Warrick County’s motion for summary judgment, the trial court referenced

the language in the Release Agreement identifying as problematic the “interference with a

certain drain which drains down spouts from the roof gutters on this home into an open

ditch” and the “blockage of the drains by the County in installing a drain pipe into [an] open

ditch.” As the trial court observed, nothing in the Release Agreement mentioned an elevated

water table, nor did any language connect the known blockage problems with structural

damage to the home.

10 It appears that the trial court concluded the language of the Release Agreement was

unambiguous and clearly did not cover structural damage caused by the heightened water

table brought about by the County’s filling of the ditch. To the extent the trial court may

have found an ambiguity, the denial of summary judgment demonstrates that the ambiguity

could not be resolved without the aid of a factual determination.

We find no error in the trial court’s decision. The Release Agreement, which

specifically referenced the problematic downspouts, did not mention the complete

elimination of the drainage ditch or structural damage to the home, suggesting that these

problems were not a contemplated term of the release. Warrick County suggests that certain

language referencing “other damages” and “interference with drainage from the home”

demonstrates that the structural problems now at issue were an understood term in the

Release Agreement. Given the multiple sources of water problems and their varying effects,

we are unpersuaded that certain identified problems in the Release Agreement also

implicated unidentified problems. At most, the language creates an ambiguity, construed

against the drafter, for a fact-finder to resolve. See MPACT Const. Group, LLC v. Superior

Concrete Constructors, Inc., 802 N.E.2d 901, 910 (Ind. 2004) (“When there is ambiguity in a

contract, it is construed against its drafter.”). We find no abuse of discretion in the trial

court’s denial of summary judgment on this ground.

The judgment of the trial court is affirmed.

ROBB, C.J., and BAKER, J., concur.