Indiana Utility LawAdjudicatory Proceedings Will Not Always Be a Second-Chance for Utilities in Condemnation Valuation ProceedingsBy: Jeremy L. Fetty

In a recent case, the Indiana Court of Appeals held that a utility will not be granted a full de novo review when the utility fails to actively participate in the administrative proceeding. In Utility Center, Inc. v. City of Fort Wayne, 960 N.E.2d 824, 827 (Ind. Ct. App. 2012), a utility company challenged the city’s board of public works’ (“Board”) compensation award and asserted it should be accorded the right to a jury trial for compensation determination. Both the trial court and Indiana Court of Appeals disagreed, affirming the compensation award and denying the request for jury trial. Specifically, in a condemnation proceeding, where the Board was determining the compensation owed to a property owner, the property owner had great incentive to actively participate in the Board’s determination, as a trial court’s “de novo” review of an administrative decision, as provided for under Ind. Code § 32-24-2-11(a) did not always mean a complete retrial of the issues involved. In that case, the utility failed to present any compensation value of its own, claiming “trial strategy.”

The Indiana Court of appeals found that the trial court was correct in affirming the Board’s compensation award, as the utility could not seek a do-over in the trial court after silently boycotting the Board proceedings by failing to put forth its own proposed valuation or building a record of its specific exceptions to the assessment by submitting thorough remonstrances. Also, the court stated that without specific valuation put forth by the utility or detailed criticism of the appraisal, the Board had almost no choice but to confirm its resolution to pay the company in accordance with the assessment by the Board. Further, in responding to the utility’s challenge that the Board was not an impartial tribunal, the court stated that where a municipality actively seeks to avoid the appearance of impropriety and there is no evidence of actual impropriety, due process rights are not violated when a municipality’s employees serve as advocates and different employees of the same municipality serve as decision-makers in administrative proceedings.

Therefore, the utility was denied a chance to adjudicate its condemnation compensation award when the utility failed to submit its own proposed valuation during the administrative proceeding.

Jeremy Fetty is a partner in the law firm of Parr Richey Obremskey Frandsen & Patterson with offices in Lebanon and Indianapolis. He often advises businesses and utilities (for profit, non-profit and cooperative) on organizational, human resources, and transactional matters and drafts and reviews commercial contracts.

The statements contained herein are matters of opinion and general information only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have any questions regarding this article, please contact an attorney.