Background
Lou Ann Pierce owned property in Elwood containing an abandoned structure with no floors, bathrooms, plumbing, or sewer connection. Years before she acquired it, the Indiana Department of Environmental Management had directed the City to extend sanitary-sewer service to two unsewered residential areas to address pollution violations. The City told the former owners that properties within 300 feet of the new sewer had to connect. The property never did.
Beginning in 2008, Elwood billed the property for sewer service even though the structure could not produce sewage. Pierce and her partner disputed the charges in 2014 and again in 2020. They then sued for unjust enrichment and conversion. The City argued that Indiana Tort Claims Act notice requirements barred the suit, while Pierce eventually amended her complaint to seek a declaration that the City lacked authority to bill the property and an injunction against future charges.
The parties filed cross-motions for summary judgment. Pierce maintained that the Municipal Sewage Works Act authorized neither a mandatory connection nor charges for services the property did not receive. Elwood responded that the extension complied with IDEM’s order and that its ordinances required nearby users to pay a debt-service surcharge whether or not they used the system. The trial court sided with the City. Pierce appealed, and the City cross-appealed on its Tort Claims Act defense.
The Court’s Holding
The Indiana Court of Appeals reversed and ordered summary judgment for Pierce. Judge Bailey first applied the text of Indiana Code section 36-9-23-30, which allows a municipality to require a sewer connection for property “producing sewage or similar waste.” The undisputed evidence established that Pierce’s property had no working plumbing and could not produce waste. The City therefore lacked statutory authority to compel a connection.
The fee provisions led to the same result. Indiana Code section 36-9-23-25 makes sewage fees payable by property connected to, using, or served by the works. Pierce’s property fell into none of those categories, and she had no intent to connect. The sewer’s presence and possible neighborhood-wide sanitation benefit did not mean the system served her property. A provision allowing municipalities to consider whether vacant or unimproved property benefits from an available sewer when setting rates did not independently authorize billing an unconnected and unserved parcel. Elwood’s own ordinances also described charges for use or services and a surcharge paid by ratepayers served by the sewer.
The Indiana Tort Claims Act did not bar Pierce’s challenge. That statute applies to claims or suits in tort, generally involving personal injury, death, or property damage. Pierce sought a declaration that the City collected money without statutory authority. The panel characterized that conduct as ultra vires—beyond the City’s legal powers—rather than merely an erroneous exercise of an authorized power. Because the assessment was void and had no legal effect, Pierce could collaterally attack it at any time. Her request for declaratory relief was not converted into a tort claim merely because she also sought recovery of improperly collected fees.
Key Takeaways
- A municipality may compel a sewer connection under the cited statute only for property that produces sewage or similar waste.
- Property is not “served by” a sewer merely because the line is nearby or the broader area receives a public-health benefit.
- A rate-setting factor concerning vacant or unimproved property does not itself authorize fees against property that is neither connected to nor served by the system.
- A declaratory challenge to a municipality’s statutory authority may fall outside the Indiana Tort Claims Act and may attack a void ultra vires assessment despite the passage of time.
Why It Matters
Pierce gives Indiana property owners and municipal lawyers a close textual analysis of the Municipal Sewage Works Act. Local governments financing sewer expansions should distinguish the power to account for system-wide benefits when setting rates from the separate power to impose a charge on a particular parcel. Ordinances and billing practices cannot extend beyond the General Assembly’s grant of authority.
The opinion also matters beyond sewer disputes. Indiana practitioners should separate claims alleging negligent or wrongful governmental conduct from claims alleging that government lacked power to act at all. The first may trigger Tort Claims Act notice; the second may support declaratory or injunctive relief against a void action. Pleadings should identify the enabling statute, the precise limit allegedly exceeded, and the non-tort relief sought.