Utility Center, Inc. v. City of Fort Wayne

ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Paul Helmke Karl L. Mulvaney
Fort Wayne, Indiana Randolph L. Seger
Brian W. Welch
Joe Conner Christopher M. York
Misty Smith Kelley Indianapolis, Indiana
Chattanooga, Tennessee
ATTORNEYS FOR AMICI CURIAE
ATTORNEYS FOR AMICI CURIAE INDIANA ASSOCIATION OF CITIES AND
INDIANA-AMERICAN WATER TOWNS AND INDIANA MUNICIPAL LAWYERS
COMPANY, INC., AMERICAN SUBURBAN ASSOCIATION
UTILITIES, INC., SANI TECH, INC., EASTERN Adam Arceneaux
HENDRICKS COUNTY UTILITY, INC., AND Brian E. Bailey
SOUTHEASTERN UTILITIES, INC. Indianapolis, Indiana
Daniel W. McGill
Nicholas K. Kile
Indianapolis, Indiana

ATTORNEYS FOR AMICI CURIAE
INDIANA ASSOCIATION OF SEWER COMPANIES,
HAMILTON SOUTHEASTERN UTILITIES, INC.,
RIVERSIDE WATER COMPANY, INC., EASTERN
BARTHOLOMEW WATER CORPORATION, AND
EDWARDSVILLE WATER CORPORATION
J. Christopher Janak
Ty H. Conner
Indianapolis, Indiana
______________________________________________________________________________

In the
Indiana Supreme Court
_________________________________

No. 02S04-0706-CV-248

UTILITY CENTER, INC., D/B/A AQUASOURCE,

Appellant (Plaintiff below),

v.

CITY OF FORT WAYNE, INDIANA,

Appellee (Defendant below).
_________________________________

Appeal from the Allen Circuit Court, No. 02C01-0207-PL-92
The Honorable Thomas J. Felts, Judge
_________________________________
 On Petition to Transfer from the Indiana Court of Appeals, No. 02A04-0410-CV-576
_________________________________

June 22, 2007

Sullivan, Justice.

Water and sewer service is provided in Indiana cities by the municipalities themselves or
by private, investor-owned utilities. In this case, a municipality seeks to acquire a portion of the
operations of a privately-owned utility that serves a portion of the City recently annexed. We
hold that it may do so pursuant to the requirements of Indiana’s general eminent domain statute.

Background

The City of Fort Wayne owns and operates a sewer and water utility. Utility Center, Inc.,
d/b/a Aquasource, is a for-profit corporation that operates a public utility that provides sewer and
water service in and around Fort Wayne.

Pursuant to Indiana’s general eminent domain statute, Ind. Code §§ 32-11-1.5 et seq.
(now I.C. §§ 32-24-2 et seq. 1 ), the City initiated condemnation proceedings against Utility Cen-
ter’s North System, 2 which serves a portion of the City recently annexed. Utility Center filed a
complaint against the City seeking declaratory and injunctive relief from the condemnation, on
grounds that the City was not following proper condemnation procedure. The City filed a coun-
terclaim seeking declaratory relief of its own, contending that Utility Center was required by law
to consent to municipal purchase of its facility. The parties filed cross motions for summary
judgment.

1
As noted infra, from time to time the Code is recodified; the change to the instant citation is the result of
the Recodification Act of 2002. See I.C. § 32-16-1.
2
Utility Center’s water and sewer facilities are divided into two geographic units, the North System and
the larger Aboite System; the Aboite System is not at issue in this matter.

2
 The trial court granted the City’s motion and denied Utility Center’s. The Court of Ap-
peals reversed and remanded. Utility Center, Inc. v. City of Fort Wayne, 834 N.E.2d 686 (Ind.
Ct. App. 2005). We grant the City’s petition for transfer.

Discussion

I

Resolving the dispute in this case requires us to analyze not just the language that the
Legislature has used in statutes affecting the ability of municipalities to purchase privately-
owned water and sewer utility property but also the location of that language in the Indiana
Code. For this reason, we believe a brief introduction to the way in which the Legislature organ-
izes the laws it enacts would be helpful.

For many years, a private concern collected and arranged systematically the statutes en-
acted by the Legislature and published them as “Burns Annotated Statutes.” Some of the legisla-
tive enactments at issue in this case date to this period of time. In 1971, the Legislature itself
codified its enactments into an official “Indiana Code.” Since that time, new statutes and
changes to old ones have, for the most part, been adopted as amendments to the Indiana Code.
These amendments effect substantive change in Indiana law.

In addition, from time to time, the Legislature, under the auspices of an Indiana Code Re-
vision Commission, consolidates and updates the provisions in the Indiana Code to make it
clearer, more concise, and easier to interpret and apply. These “re-codification” projects are ex-
pressly designed not to change existing law; language is included in re-codification bills saying
precisely that. Occasionally there is a slip between the cup and the lip but when that occurs, the
courts have been firm in holding that no change in substantive or procedural law is effected by a
re-codification. See, e.g., State v. Wilson, 836 N.E.2d 407, 413-14 (Ind. 2005); Burd Mgmt.,
LLC v. State, 831 N.E.2d 104, 107-08 (Ind. 2005).

3
 The Indiana Code itself is now divided by subjects into 36 “titles.” (Title 8 contains the
laws dealing with utilities; title 32 the laws dealing with the acquisition of property by eminent
domain.) Each title is further divided, first into “articles,” then into “chapters,” and then into
“sections.” This organization is easily understood, thanks to a citation scheme that separates
each of these divisions by hyphens. For example, Ind. Code § 1-2-3-4 stands for section 4 of
chapter 3 of article 2 of title 1 of the Indiana Code.

II

In 1913, the Legislature enacted a comprehensive statute governing utilities often referred
to as the Shively-Spencer Utility Commission Act (the “Shively-Spencer Act”). Acts 1913, ch.
76 at 167. As part of the 1971 codification, the Shively-Spencer Act, as it had been amended
over time, became chapter 2 of article 1 of title 8 (I.C. § 8-1-2).

The Shively-Spencer Act conditioned investor-owned utility licenses, permits, and fran-
chises on the ability of municipalities to purchase utility property. These provisions are now
codified in sections 92 and 93 of chapter 2 of article 1 of title 8 of the Indiana Code (I.C. §§ 8-1-
2-92 & 93), as follows:

Every license, permit, or franchise granted after April 30, 1913, to any public util-
ity shall have the effect of an indeterminate permit subject to the provisions of this
chapter, and subject to the provisions that the license, franchise, or permit may be
revoked by the commission for cause or that the municipality may purchase the
property of such public utility, as provided in this section. Any such municipality
is authorized to purchase such property and every such public utility is required to
sell such property at the value and according to the terms and conditions as pro-
vided in this chapter.

I.C. § 8-1-2-92.

Any public utility accepting or operating under any indeterminate license, permit,
or franchise granted after April 30, 1913, shall by acceptance of any such inde-
terminate license, permit, or franchise be deemed to have consented to a future
purchase of its property including property located in contiguous territory within
six (6) miles of the corporate limits of such municipality by the municipality in

4
 which such utility is located, at the value and under the terms and conditions as
provided in this chapter, and shall thereby be deemed to have waived the right of
requiring the necessity of such taking to be established by the judgment of a court,
and to have waived all other remedies and rights relative to condemnation, except
such rights and remedies as are provided in this chapter and shall have been
deemed to have consented to the revocation of its license, permit, or franchise by
the commission for cause.

I.C. § 8-1-2-93.

In 1999, the Legislature enacted a new statute concerning utilities. This law, among
other things, added a new chapter 30 to article 1 of title 8 (I.C. § 8-1-30). This new chapter 30
has six sections, as follows:

• The first section provides that the definitions contained in Ind. Code § 8-1-2-1 ap-
ply to chapter 30.

• The second section provides a special definition for the term “utility company” as
either (1) a public utility that provides water or sewer service or (2) a regional sewer and water
district; but not a municipally-owned utility.

• The third section provides the Indiana Utility Regulatory Commission (IURC) au-
thority to review a utility company’s (1) technical, financial, and managerial capacity; (2) physi-
cal condition and capacity of the utility company’s plant; (3) compliance with Indiana or federal
law or the commission’s orders; and (4) provision of service to customers. The IURC is author-
ized to conduct such a review on the basis of its own motion, a request of the Office of the Util-
ity Consumer Counselor, or the filing of a complaint by a customer of the utility company, so
long as the commission’s order for review states facts to justify the review.

• The fourth section provides that the IURC may order certain remedial action
(specified in the fifth section) if the IURC concludes that the utility company has (1) continued
violations of (a) law regulating the utility company after the commission has ordered compliance

5
or (b) commission orders; or (2) severe deficiencies that the utility company has failed to rem-
edy.

• The fifth section sets forth the remedial measures that the IURC may take if it
finds either continuing violations or severe deficiencies on the part of a utility company of the
sort specified in the fourth section. These consist of (1) providing for the acquisition of the sub-
ject utility company or (2) providing for the appointment of a receiver to operate the subject pub-
lic utility. The fifth section goes on to specify procedural and substantive requirements with re-
spect to these remedies. 3

• The sixth section provides as follows:

A municipality or other governmental unit may not require a utility com-
pany that provides water or sewer service to sell property used in the provision of
such service to the municipality or governmental unit under IC 8-1-2-92, IC 8-1-
2-93, or otherwise, unless the procedures and requirements of this chapter have
been complied with and satisfied.

Stated simply, the question before the Court is whether this sixth section of chapter 30
(I.C. § 8-1-30-6) abrogates or restricts the City’s authority to condemn Utility Center’s property
pursuant to sections 92 and 93 of chapter 2 (I.C. §§ 8-1-2-92 & 93). We hold that it does not.

3
The substantive requirements with respect to the acquisition remedy are “(1) that the person acquiring
the subject utility company must pay the fair market value of the subject utility company at the time of
acquisition; and (2) the specific accounting methods and appraisal procedures and terms by which the fair
market value of the subject utility company is to be determined.” In addition, when the IURC orders an
acquisition under chapter 30, it “may provide cost recovery mechanisms for costs associated with im-
provements to the acquired system that are immediate and necessary to remedy deficiencies, including
any of the following:
(1) A mechanism for expediting any adjustments to the rate base and rates of the person acquir-
ing the subject utility company.
(2) Surcharges on customers of the acquired utility company system to pay for extraordinary
costs.
(3) A plan for deferring certain improvement costs and recovering costs in phases.
(4) A plan for equalizing rates of the subject utility company with the rates of the person acquir-
ing the subject utility company, if necessary.
(5) Other incentives to the person acquiring the subject utility company, including adjustments
to the allowed rate of return.”

I.C. § 8-1-30-5(d) & (e).

6
 The Court of Appeals held that Ind. Code § 8-1-30-6 applied to the City’s efforts to ac-
quire Utility Center’s property because the language of section 6 applies to any attempt by a mu-
nicipality to acquire property from a private water or sewer utility. The Legislature could have
limited the circumstances to which section 6 applies, the Court of Appeals said, but it did not.
Utility Center, 834 N.E.2d at 698. We, however, believe the language in section 6 must be read
in the context of the rest of chapter 30. See Robinson v. Wroblewski, 704 N.E.2d 467, 474 (Ind.
1998) (“In construing a statutory provision, we must consider the statute as an entirety, with each
part being viewed not as an isolated fragment but with reference to all the other companion pro-
visions.” (quoting Hinshaw v. Bd. of Comm’rs of Jay County, 611 N.E.2d 637, 639 (Ind.
1993))). We hold that section 6 applies only to a utility company that has been the subject of the
remedial measures identified in the preceding sections of chapter 30.

We say this because it is clear that the substantive purpose of chapter 30 is to grant au-
thority to the IURC to deal with public water and sewer utilities that have encountered legal or
financial difficulties. See I.C. § 8-1-30-4. As described in greater detail above, section 3 of
chapter 30 sets forth the authority of the IURC to investigate a private water or sewer utility’s
legal and financial affairs on the basis of its own motion, a request of the Office of the Utility
Consumer Counselor, or the filing of a complaint by a customer of the utility company. Then
section 4 of chapter 30 authorizes the IURC to take remedial action with respect to those (but
only those) private water and sewer utilities with respect to which the commission finds “con-
tinuing violations” or “severe deficiencies.” Next, chapter 5 of chapter 30 sets forth the remedial
authority the IURC enjoys to direct the acquisition of the subject utility company or provide for
the appointment of a receiver. We think that it would be totally inconsistent with the purpose
and structure of chapter 30 taken as a whole to say that section 6 of chapter 30 applies to all pri-
vate sewer and water utilities, rather than only to those subject to investigation under section 3,
findings of “continuing violations” or “severe deficiencies” under section 4, and a remedial order
under section 5.

Said differently, we hold that the single sentence that is section 6 limits only a municipal-
ity’s ability to disrupt an order of the IURC issued under section 5. That is, the limitation per-
mits the procedures articulated in section 5 to operate without “municipality or other governmen-

7
tal” interruption. Absent the language in section 6, a conflict might develop as to which gov-
ernment entity has priority with respect to the rehabilitation of a “troubled utility,” the
municipality or the IURC. See Cemetery Co. v. Warren Sch. Tp. of Marion Co., 236 Ind. 171,
139 N.E.2d 538, 544 (1957) (noting it is within the Legislature’s power to grant one gov-
ernmental entity a superior or overriding power over another to exercise eminent domain). But,
outside the context of “troubled utilities,” section 6 has no application.

Although we think this result is dictated by the language of chapter 30 itself, we find sup-
port for our conclusion in two other places.

First, we note that when the Legislature prohibited condemnation of electric utilities by
municipalities (and other entities), the limiting provision used “clear and unambiguous language”
to that effect. That Indiana Code section reads:

Notwithstanding any other provision of this chapter, after February 29, 1980, a
municipality, public utility, or corporation organized under IC 8-1-13 may not
bring any action in the circuit or superior court of any county against any corpora-
tion organized under IC 8-1-13 or any public utility as defendant for the condem-
nation of its electric utility property for the use of the property in providing elec-
tric utility service.

I.C. § 8-1-2-95.1. There is no comparable prohibition in Ind. Code § 8-1-30-6.

Second, the IURC, in 2001, itself was presented with a question similar to the one pre-
sented in this case. The IURC was asked whether section 6 would apply if the City of Indian-
apolis were to acquire the property of a private water utility. The commission held that section 6
limits only a municipality’s eminent domain authority where the utility is the subject of an inves-
tigation initiated under section 3 of chapter 30. In re Petition of the City of Indianapolis, No.
41821, 2001 Ind. PUC LEXIS 109 (Feb. 9, 2001). The “interpretation of a statute by an adminis-
trative agency charged with the duty of enforcing the statute is entitled to great weight, unless
[the] interpretation would be inconsistent with the statute itself.” LTV Steel Co. v. Griffin, 730
N.E.2d 1251, 1257 (Ind. 2000).

8
 Finally, we make note of the fact that Senator David C. Long, the author of chapter 30
when it was enacted by the Legislature in 1999, filed an affidavit and supporting exhibits with
the trial court in this matter, explaining his “intent as the author” of the statute. The trial court
declined to consider the affidavit and the Court of Appeals affirmed, reflecting this Court’s pol-
icy that “[i]n interpreting statutes, we do not impute the opinions of one legislator, even a bill’s
sponsor, to the entire legislature unless those views find statutory expression.” A Woman’s
Choice-East Side Women’s Clinic v. Newman, 671 N.E.2d 104, 110 (Ind. 1996) (citing
O’Laughlin v. Barton, 582 N.E.2d 817, 821 (Ind. 1991)).

Senator Long’s affidavit has also been presented to us as an addendum to an amicus brief.
In it, Senator Long noted:

[Chapter 30] sought to create an incentive for a private or municipal utility to take
over a troubled utility and make the necessary investment to bring that troubled
utility back to health. Prior to the enactment of [chapter 30], the IURC really had
no way to take away the operation of a troubled utility from its owner, place that
utility in receivership, and then provide an opportunity and incentive to an inves-
tor to purchase that utility and make the necessary investments in the utility to re-
store adequate service to the customers.

(Long Aff. ¶ 8, Addend. to Br. of Amici Curiae Ind. Ass’n of Sewer Companies et al. at 2). As
should be apparent, this description comports with our reading of what the language of the bill
enacted by the Legislature as chapter 30 actually did.

Senator Long’s affidavit also said that his intent, as the author, was to prevent “a munici-
pal utility from using its powers of eminent domain to take over the ownership of a healthy pri-
vate utility.” (Long Aff. ¶ 9, Addend. to Br. of Amici Curiae Ind. Ass’n of Sewer Companies et
al. at 3). We respect Senator Long’s work in this field but, for the reasons set forth above, are
unable to conclude that his intent in this regard was enacted into law.

We hold that Ind. Code § 8-1-30-6 does not abrogate or restrict a municipality’s existing
authority to condemn utility property pursuant to Ind. Code §§ 8-1-2-92 & 93 except with respect
to utilities subject to orders under Ind. Code § 8-1-30-5.

9
 III

As an alternative to the argument discussed in part II supra, Utility Center argues that if
the City is authorized to acquire its property, the City must follow procedures set forth in Ind.
Code § 8-1.5-2, including conducting a public referendum. The City counters that it is entitled to
follow the procedures for eminent domain generally applicable to municipalities that are set forth
in Ind. Code §§ 32-24-1 & 2. Because of the way in which it resolved this case, the Court of
Appeals did not address this contention.

We return to the 1913 Shively-Spencer Act and its provisions, now codified at Ind. Code
§§ 8-1-2-92 & 93. As noted supra, these sections condition investor-owned utility licenses, per-
mits, and franchises on the authority of municipalities to purchase utility property. The prede-
cessor to § 92 first established municipal condemnation power in this regard: “Any municipality
shall have the power, subject to the provisions of this act to acquire by condemnation the prop-
erty of any public utility . . . .” Acts 1913, ch. 76, § 103 at 202.

In addition to granting a municipality the authority to condemn, the Shively-Spencer Act
also provided condemnation procedures. In 1933, the Shively-Spencer Act was amended and a
referendum requirement was added: “No municipal council or municipality shall have the
authority or power to condemn . . . a public utility property unless the said condemna-
tion . . . shall have been submitted to and approved by the voters of said municipality.” Acts
1933, ch. 190, § 18(a) at 953. In the 1971 codification, the referendum requirement was
included in Ind. Code § 8-1-2-99.

The parties’ disagreement is over the impact of the Legislature’s enactment in 1982 of a
new article 1.5 in title 8. P.L. 74-1982. Article 1.5, which now contains six chapters, sets forth
provisions governing municipal utilities. Its enactment in 1982 was accompanied by the repeal
of ten sections of Ind. Code § 8-1-2. Hearkening back to part I of this opinion, our reading of
these 1982 changes is that these were substantive changes rather than a re-codification; there is
no language in P.L. 74-1982 suggesting that it was not intended to change prior law.

10
 The sections of article 1.5 that generate the debate here are found in chapter 2. They read
in relevant part:

§ 15. Condemnation and eminent domain.

(a) If the municipality and the owners of a public utility are unable to
agree upon a price to be paid for the property of the public utility, the municipal-
ity may:
(1) by ordinance declare that a public necessity exists for
the condemnation of the utility property; and
(2) bring an action in the circuit or superior court of the
county where the municipality is located against the utility for the
condemnation of the property.
(b) An ordinance adopted under subsection (a) is final.
(c) For the purpose of acquiring the property of a public utility, the mu-
nicipality:
(1) may exercise the power of eminent domain in accor-
dance with IC 32-24[ 4 ]; and
(2) is required only to establish the necessity of taking as
this chapter requires.
...

§ 16. Ordinances requiring voter approval.

(a) A municipal legislative body may not adopt an ordinance . . . under
section 15 [IC 8-1.5-2-15] of this chapter for the purpose of condemning the
property of a public utility; without first submitting the question of the construc-
tion, acquisition, or condemnation to the voters of the municipality at a special or
general election.
...

I.C. §§ 8-1.5-2-15 & 16.

Utility Center contends that if the City is to acquire its property, it must proceed accord-
ing to the requirements of section 15, one of which is the referendum requirement of section 16.
The City argues that even if section 15 is applicable in this situation, it has the option of proceed-
ing either under mutually exclusive subsections 15(a) or 15(c). And while it acknowledges that
the referendum requirement of section 16 is applicable if it chooses to proceed under subsection

4
Indiana Code § 32-24 sets forth the general procedures that municipalities must follow in acquiring
property by eminent domain, as discussed infra.

11
15(a), the City contends section 16 is not applicable if it chooses to proceed under subsection
15(c).

We agree with the City’s reading. We believe Ind. Code § 8-1.5-2-15 details two alterna-
tive methods for condemning a utility outright or acquiring utility property. Method one pro-
vides that the municipal legislative body may, after it passes an ordinance declaring the existence
of a public necessity, petition the circuit or superior court to condemn the property. I.C. § 8-1.5-
2-15(a). By its terms, section 16 requires a referendum prior to the adoption of such an ordi-
nance. I.C. § 8-1.5-2-16.

Method two provides that the municipal legislative body, to determine compensation,
may proceed under Ind. Code § 32-24, the general eminent domain statute. I.C. § 8-1.5-2-15(c).
Because section 15 does not require the adoption of an ordinance for a municipality to proceed in
this way, section 16’s referendum requirement is not applicable.

We make several concluding observations is support of this result.

First, it is clear to us that the 1982 changes that established article 1.5 – the municipal
utilities article – in title 8 effected a substantive change in the referendum requirement. Prior law
(I.C. § 8-1-2-99(a)), providing that “[n]o municipal council or municipality shall have the author-
ity or power to condemn, lease, erect, establish, construct, purchase or acquire a public utility
property unless said condemnation, leasing, erecting, construction, purchase, or acquisition shall
have been submitted to and approved by the voters of said municipality,” was repealed. The
only comparable language enacted in the new article 1.5 was that of section 16 set forth above.
And its predicate in section 15(a) is permissive, not mandatory: a “municipality may . . . by ordi-
nance declare . . . .”

Second, reading the Legislature as subjecting utilities to the general eminent domain stat-
ute seems to us entirely consistent with the dictates of Ind. Code §§ 8-1-2-92 & 93 set out early
on in this opinion. A utility like Utility Center holds an indeterminate permit subject to the au-

12
thority of a municipality like the City to purchase its property. Such a utility does not have the
authority to designate a particular condemnation procedure.

Third, and perhaps most important, both the utilities title and the eminent domain article
mandate that Utility Center be paid the fair market value of its property that the City seeks to ac-
quire as well as the damages, if any, to the residue of its property caused by taking out the part
the City seeks to acquire. I.C. §§ 8-1-2-92 & 93; I.C. § 32-24-1-9.

Conclusion

We grant transfer and affirm the judgment of the trial court with respect to its decision to
grant summary judgment in favor of the City.

Rucker, J., concurs. Shepard, C.J., concurs with separate opinion. Boehm, J., dissents with
separate opinion in which Dickson, J., concurs.

13
SHEPARD, Chief Justice, concurring.

The complicated order of events in this case and the way in which the litigants have posi-
tioned themselves makes the task of statutory interpretation more difficult than usual. There are
grounds on which I anticipated that Utility Center might prevail, but those grounds turn out not
to have been part of how the situation or the litigation evolved.

I see the events that unfolded during the spring of 1999 as having been both favorable to
the desires of the present owners and unfavorable to them.

The Utilities Regulatory Commission had received complaints about inadequate service
provided by Utility Center, Inc., since at least 1988. The tools the Commission possessed for
dealing with such situations were at that time limited and somewhat traditional: a series of orders
that could in theory lead to a revocation of the license. Still, the Commission was certainly en-
gaged in deploying those tools in an effort to produce better water for consumers in Allen
County. The Commission had issued multiple findings about the adequacy of service and multi-
ple orders directed at dealing with the failures that were apparent. Utility Center, Inc., Causes
No. 38686 and 38846, 1991 Ind. PUC Lexis 127, 11 (IURC 4/17/91) (“As a practical matter,
then, Petitioner’s treatment plant is therefore nonfunctional, as is a significant portion of its col-
lection system.”); Utility Center, Inc., Cause No. 41187, 1999 PUC LEXIS 12 (IURC 2/25/99).
The owners of Utility Center had sometimes resisted these efforts. Id. At 2 n. 1.

The Commission’s latest orders were in place as the General Assembly considered the
amendments that became I.C. 8-1-30, or “Chapter 30.” Against the backdrop of the derelictions
at Utility Center, Inc., Senator Long’s description of the object of Chapter 30 seems to me to
complement both the statutory language itself and the situation. The Chapter 30 amendments,
most particularly the authority for a Commission-directed sales or receiverships, did indeed sup-
ply the Commission with a much more useful toolbox than existed before,. This new toolbox
was well suited to the chronic problems at Utility Center and doubtless useful for solving future
problems in a variety of other locations. I think the Court’s opinion is correct to say that no-
condemnation rule for utilities subject to Chapter 30 investigations is likewise complementary.
When the Commission is engaged in redirecting a troubled utility, it should be able to deploy its

14
various remedial powers without the intervention of an adjoining municipality, except by the
Commission’s permission, and it should be able to make these decisions without worrying that
any subsequent condemnation might upset investment-backed expectations. I think the Court’s
opinion uses rather ordinary rules of statutory construction when it concludes that Chapter 30 did
not effect a repeal of the general statutory authority for municipal condemnation that has been in
place since the beginning of the last century (a fair contrast to the language used when the legis-
lature changed existing law as to electric utilities).

Looking at this intertwining of regulatory and legislative activity, I would have thought
that Utility Center was a utility that was the subject of the sort of processes described in Chapter
30 at the time Chapter 30 was considered and adopted by the General Assembly. Accordingly, I
would also have thought that Chapter 30 constituted a barrier to the condemnation of such a util-
ity during the course of the Commission’s investigation, “unless the procedures and requirements
of this chapter have been complied with and satisfied,” as the sixth section of Chapter 30 pro-
vides.

The present owners of Utility Center, however, have maintained before Judge Felts, and
before the courts on appeal, that Utility Center was not a utility subject to Chapter 30 procedures
and requirements.

Our rules of appellate procedure, purposefully favorable to the judgments rendered at
trial, provide that appellate courts can affirm a judgment even when the reasons given by the trial
court seem erroneous if it appears that the right party won on other grounds that are apparent.
Thornton v. Pender, 268 Ind. 540, 377 N.E.2d 613 (1978); Fort Wayne Patrolmen’s Benevolent
Ass’n, Inc. v. City of Fort Wayne, 408 N.E.2d 1295 (Ind. Ct. App. 1980). We do not do the op-
posite. That is, we do not set aside the results of a trial on the basis of an argument not made by
any of the litigants but rather occurring to some appellate judge after the case has been tried. See
Keller v. State, 549 N.E.2d 372 (Ind. 1990). Whether I am right that Utility Center was a “sub-
ject utility,” it is not an argument presented by either party. I find myself unable to vote to re-
verse on such a basis.

15
Boehm, J., dissenting

I accept the majority’s conclusion that the placement of Section 8-1-30-6 in the Indiana
Code as a part of a new Chapter 30 added in 1999 suggests that it may be limited to distressed
utilities. But the language of the section is quite unequivocal:

Sec. 6. A municipality or other governmental unit may not require a utility com-
pany that provides water or sewer service to sell property used in the provision of such
service to the municipality or governmental unit under IC 8-1-2-92, IC 8-1-2-93, or oth-
erwise, unless the procedures and requirements of this chapter have been complied with
and satisfied.

Section 2 of the new Chapter 30 defines “utility company” as a “public utility that provides water
or sewer service.” I.C. § 8-1-30-2. Section 5 of the new Chapter 30 defines “subject utility
company” as one subject to a finding of violations of law or IURC orders or unremedied “severe
deficiencies.” These definitions do not leave any room for interpretation. Section 6 uses one
defined term—“utility company”—and does not use the other. The majority concludes Section 6
applies only to utilities that are subject to an order under Section 5. But the statute has a defini-
tion—“subject utility company”—for such a company and does not use it in Section 6.

Apart from the literal language of Section 6, it seems to me that the majority reads that
section in a manner that strips it of any meaning whatever. Section 6 prohibits condemnation of
a utility without going through the “procedures and requirements” of Section 5. The majority
concludes that Section 6 applies only to utilities that are the subject of a Section 5 order. But
those are the very utilities that have gone through the only “procedures and requirements” of
Chapter 30. It therefore seems to me that the majority’s reading renders Section 6 wholly empty
of content.

Judicial surgery is sometimes required where preposterous results are dictated by the lit-
eral language of the statute. I do not believe Section 6 can be ignored or rewritten based on its
absurdity. If Section 6 as interpreted by the majority has any meaning at all, it must be because
there could be a utility that has not gone through the “procedures and requirements” of Chapter
30, but remains subject to Section 6 as limited by the majority’s reading. One amicus curiae
suggests that Section 6 applies to utilities that are under review contemplated by Section 3 but
not yet subject to findings and orders under Sections 4 and 5. There is no basis in the statute to

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support this reading. Section 6 refers to “satisfying” and “complying with” the procedures of
Chapter 30, not being “subject to review” or some similar description of a utility at an earlier
stage of investigation. In any event, if there is such a thing as a utility that is subject to Section 6
as the majority limits it, but is not subject to a Section 5 order, a legislative choice to immunize
all utilities from condemnation cannot be seen to be absurd. To the contrary, it seems to me that
whether healthy utilities should be subject to Section 6 is a policy choice the legislature could
readily make based on a desire to encourage investment in private sewer and water facilities.
Indeed, the majority’s reading seems less reasonable to me. Distressed utilities would seem to be
the best candidates to be acquired by a governmental entity to assure stable service. On its face
it is odd that the legislature would choose to prevent governmental acquisition of this perhaps
imaginary class of distressed utilities but permit it as to healthy ones.

Whatever the policy considerations may be, it seems to me that this section was carefully
crafted to apply to all utilities. If that is not a proper reading of Section 6, the General Assembly
could easily correct it, and the City could then initiate a new eminent domain proceeding. Be-
cause I believe the Court of Appeals correctly resolved this issue, I would deny transfer. Given
that transfer has been granted, I respectfully dissent.

Dickson, J., concurs.

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