We all know that in straight condemnation actions, the condemnor must usually name all parties with an interest in the land as defendants. Indiana law is no different, although the Indiana Supreme Court has ruled that nonjoinder is not a jurisdictional defect. In Snyder v. Town of Yorktown, No. 18A02-1405-CT-332 (Oct. 10, 2014), the Indiana Court of Appeals considered an argument that the same holds true in inverse cases.
While upgrading its sewer system, the town needed access to Snyder's property. She said no to an easement. The town's contractors entered anyway, excavated a trench, and installed a storm pipe. This resulted in her filing an inverse condemnation action.
The town asserted that her claim was missing a needed party, a mortgagee. It argued that in an eminent domain action, all those with an interest in the property would need to have been named, and the same holds true for an inverse condemnation, right?
The Defendants asserted, and the trial court agreed, that a landowner who files an inverse condemnation claim pursuant to Chapter 1 of the eminent domain statute is required to follow the same filing procedure as would the government because the legislature has provided that an inverse condemnation claim shall be determined “substantially in the manner provided in the article.” Ind. Code § 32-24-1-16. The trial court reasoned that, regardless of whether the plaintiff is the government or a property owner, “lienholders have the right to know that property in which they have an interest is the subject of a condemnation action.” Appellant’s App. at 266. Determining that it could not “adjudicate the rights to a piece of real estate without joining all interested parties,” the court concluded that dismissal of Snyder’s inverse condemnation claim was appropriate. Id.
Slip op. at 14.
The Court of Appeals concluded that while inverse condemnation is a procedure by which an owner whose land has been taken may seek compensation which meant that there was some logic in the town's argument, it was not a jurisdictional defect for the property owner to have not named the lienholder. If nonjoinder is not a jurisdictional defect in a straight condemnation under Indiana law, then it is not a jurisdictional defect in an inverse condemnation action. This was a joinder issue, and not one that should have resulted in the trial court dismissing for failure to state a claim:
Snyder’s procedural failure to name her mortgagee as a defendant in her complaint is not proper grounds for dismissal of her inverse condemnation claim, and the trial court erred in granting the Defendants’ motion to dismiss on that basis.
Slip op. at 15.
The court remanded the case "for futher proceedings consistent with this opinion." Which to us means that on remand the plaintiff will either join the mortgagee, or, if the plaintiff cannot or will not and the court determines that the action cannot go forward without the absent party the court will order the mortgagee joined. (The court also affirmed dismissal of Snyder's tort claim because she had waited too long to file it.)
Sidebar: how's this for a touch of municipal chutzpah? The town needed an easement for its project and when the property owner said no, the town didn't commence an eminent domain action, but apparently just went ahead and did the needed work. Then, when the property owner finally sues for inverse condemnation -- a claim that the town should have instituted an eminent domain action, but didn't -- the town asserts the process should be the same as it would have been had the town instituted an eminent domain action.
Snyder v. Town of Yorktown, No. 18A02-1405-CT-332 (Ind. App. Oct. 10, 2014)
