Najam, Judge.
Statement of the Case
[1] The Commissioner of the Indiana Department of Environmental Management (IDEM) appeals the trials court denial of its Indiana Trial Rule 12(B)(6) motion to dismiss counterclaims filed by Eagle Enclave Development (Eagle). IDEM presents a single issue for our review, namely, whether the trial court erred when it denied IDEMs motion to dismiss.
[2] We reverse and remand with instructions.
Facts and Procedural History
[3] Eagle owns and operates a development in Evansville. Eagle obtained a permit in order to remove vegetation and soil and to discharge storm water associated with the construction of its development. Between September 30, 2013, and June 17, 2014, IDEM conducted four inspections of Eagles development site. During those inspections, IDEM observed that Eagle had violated Indiana law when it failed to minimize sedimentation to off-site areas. Specifically, IDEM observed thick sediment deposits in an off-site pond owned by an individual named Barbara Bolin. As a result of the violations, IDEM issued a Notice of Violation to Eagle on July 30, 2014.
[4] In order to resolve the violations, Eagle and IDEM entered into an Agreed Order on January 23, 2015. Pursuant to the terms of the Agreed Order, Eagle agreed to submit a plan including the specific actions [Eagle] will take to remove any sediment attributable to the activities at the Site from the off-site pond owned by Barbara Bolin. Appellants App. Vol. II at 28. Eagle also agreed to include in the plan a schedule for implementation and completion of all required actions. The Agreed Order further provided:
In the event IDEM determines that any plan submitted by [Eagle] is deficient or otherwise unacceptable, [Eagle] shall revise and resubmit the plan to IDEM in accordance with IDEMs notice. After three (3) submissions of any plan by [Eagle], IDEM may modify and approve any plan and [Eagle] must implement the plan, as modified by IDEM.
Id. at 29. And, [i]n recognition of the settlement reached, Eagle agreed to waive[ ] any right to administrative or judicial review of this Agreed Order. Id. at 27.
[5] Eagle then had two studies conducted in order to determine the amount of sediment in the Bolin pond that was attributable to Eagles actions. Based on those studies, Eagle concluded that only an inconsequential amount of sediment in the Bolin pond had come from Eagles development. Id. at 36. Accordingly, on June 1, 2016, Eagle wrote a letter to IDEM in which Eagle asked IDEM to modify the Agreed Order. Specifically, Eagle requested that IDEM remove the requirement for Eagle to dredge the pond. In exchange, Eagle offered to donate property to IDEM in order to act as a buffer to control runoff from Eagles development. IDEM responded that Indiana law does not establish a threshold amount of sediment runoff that constitutes a violation but, rather, the mere fact that sediment was discharged from the site was sufficient to be a violation. Because sediment had left Eagles property and entered the Bolin pond, and because [t]he requirement to remove the sediment from the off-site pond is necessary to remediate ... the violations, IDEM denied Eagles request to modify the Agreed Order. Id. at 39.
[6] Thereafter, Eagle filed a petition for review with the Office of Environmental Adjudication (OEA) in which Eagle requested the OEA to declare the waiver provision of the Agreed Order void for lack of notice and to find that IDEMs denial of Eagles modification request was an abuse of agency discretion. Eagle then filed a motion for partial summary judgment. In response, IDEM filed a motion to dismiss Eagles petition or, in the alternative, enter summary judgment for IDEM. The OEA granted IDEMs motion to dismiss and cross-motion for summary judgment. As to Eagles first claim, the OEA concluded that Eagles appeal of the waiver provision of the Agreed Order was not timely. As to Eagles second claim, the OEA concluded that IDEMs letter denying Eagles request to modify the Agreed Order was not a reviewable order under the Indiana Administrative Order and Procedures Act (AOPA). And the OEA determined that Eagles June 1, 2016, request to modify the Agreed Order should be considered [Eagles] first proposal required by the Agreed Order. Id. at 47.
[7] In light of the OEAs findings and conclusions, IDEM considered Eagles request for modification as its first proposed plan. IDEM then informed Eagle that its plan was deficient because the proposal did not describe the actions Eagle would take to remove sediment from the Bolin pond. In response, Eagle proposed a second plan to IDEM. In the second plan, Eagle again stated that any sediment discharge from its development site to the Bolin pond was insignificant and requested that IDEM remove the requirement that Eagle dredge the pond. Id. at 53. Eagle again proposed donating a portion of its property to serve as a buffer to control runoff.
[8] IDEM then filed a petition for civil enforcement of the Agreed Order. In that petition, IDEM asserted that Eagle had failed to comply with all of the terms and conditions of the Agreed Order. Specifically, IDEM asserted that Eagle had failed to comply with paragraph 6 of the Order Section of the Agreed Order by submitting a plan that includes actions to be taken to remove any sediment attributable to the activities at the Site from the off-site pond owned by Barbara Bolin. Id. at 19. IDEM asked the court to order Eagle to comply with the Agreed Order.
[9] Eagle filed its response and affirmative defenses. In addition, Eagle asserted three counterclaims against IDEM. First, Eagle claimed that IDEM had failed to provide adequate notice to Eagle that it had agreed to waive its right to seek judicial or administrative review of the Agreed Order, which notice was required by AOPA. Eagle asserted that IDEMs failure to provide adequate notice of the waiver provision rendered that provision void. Second, Eagle claimed that IDEMs denial of Eagles June 1, 2016, request to modify the Agreed Order was an appealable order under AOPA and that it was an abuse of agency discretion for IDEM to deny Eagles request. And, third, Eagle contended that IDEM does not have jurisdiction over the pond because it is privately owned.
[10] IDEM filed a motion to dismiss Eagles counterclaims under Indiana Trial Rule 12(B)(6). In its motion to dismiss, IDEM contended that the trial court should dismiss Eagles first counterclaim because Eagle had waived its right to seek administrative and judicial review of the Agreed Order and that Eagles first counterclaim was simply an attempt to renegotiate the terms of the Agreed Order. IDEM contended that Eagles second counterclaim must fail because IDEMs letter rejecting Eagles proposed modification was not an appealable order as it did not alter the effectiveness of the Agreed Order or otherwise determine a legal right, duty, privilege, immunity, or other legal interest. Id. at 80. Rather, IDEM asserted that all of Eagles duties were established in the Agreed Order and that the letter was merely a statement or clarification by IDEM regarding what was already determined and agreed to in the Agreed Order[.] Id. Finally, IDEM asserted that the trial court must dismiss Eagles third counterclaim because Eagle had waived any right to administrative or judicial review of the Agreed Order, because Eagle is far past the thirty-day deadline to seek judicial review of the order, and because Eagle had waived the question of IDEMs jurisdiction by failing to raise it before the OEA. Id. at 82. Following a telephonic hearing, the trial court denied IDEMs motion to dismiss. The trial court certified its order for interlocutory appeal, which we accepted.
Discussion and Decision
[11] IDEM contends that the trial court erred when it denied IDEMs Indiana Trial Rule 12(B)(6) motion to dismiss Eagles counterclaims. As the Indiana Supreme Court has stated:
We review de novo the trial courts grant or denial of a motion based on Indiana Trial Rule 12(B)(6). Babes Showclub v. Lair , 918 N.E.2d 308, 310 (Ind. 2009). Such a motion tests the legal sufficiency of a claim, not the facts supporting it. Charter One Mortgage Corp. v. Condra , 865 N.E.2d 602, 604 (Ind. 2007). Viewing the complaint in the light most favorable to the non-moving party, we must determine whether the complaint states any facts on which the trial court could have granted relief. Id. at 604-05.
Caesars Riverboat Casino, LLC v. Kephart , 934 N.E.2d 1120, 1122 (Ind. 2010).
Counterclaim One
[12] IDEM first contends that the trial court erred when it denied IDEMs motion to dismiss Eagles first counterclaim, which claimed that the waiver provision of the Agreed Order was void for lack of notice. Specifically, IDEM asserts that the trial court should have dismissed Eagles first counterclaim because Eagle had raised the same issue before the OEA and received an adverse judgment but did not seek judicial review of that judgment. Eagle agrees and acknowledges that its first counterclaim is improper because the OEAs judgment became final when Eagle did not seek review of that judgment. Appellees Br. at 12. Accordingly, Eagle now abandons this claim and agrees that it should be dismissed. Id. We therefore need not address IDEMs contention that the trial court erred when it denied IDEMs motion to dismiss Eagle first counterclaim for lack of notice.
Counterclaim Two
[13] IDEM next contends that the trial court erred when it did not dismiss Eagles second counterclaim, which asserted that IDEMs August 12, 2016, letter denying Eagles request to modify the Agreed Order was a final order under AOPA and that it was an abuse of agency discretion for IDEM to deny Eagles request. IDEM specifically asserts that Eagle is precluded from asserting that counterclaim because Eagle had raised the same issue before the OEA and had received an adverse judgment but did not timely seek judicial review of that judgment. In essence, IDEM contends that Eagle is using the second counterclaim as an indirect and improper means to belatedly seek judicial review of an issue that had already been adjudicated by the OEA. We must agree.
[14] Here, Eagle voluntarily entered into the Agreed Order in which it agreed to submit a plan that included the specific actions Eagle would take to remove the sediment attributable to its actions from the pond. After Eagle had conducted tests and determined that only an inconsequential amount of sediment was attributable to its actions, Eagle requested that IDEM modify the Agreed Order. Appellants App. Vol. II at 36. When IDEM declined to modify the Agreed Order, Eagle filed a complaint with the OEA in which it alleged that IDEMs denial of the modification request was an abuse of agency discretion. But the OEA concluded that IDEMs letter denying Eagles request was not a reviewable order under AOPA as the letter did not order Eagle to take any action.
[15] On April 27, 2017, the OEA issued its order in which it concluded that IDEMs letter was not a reviewable order under AOPA. A final order of the OEAs environmental law judge is subject to judicial review under IC 4-21.5-5. Ind. Code § 13-30-3-7 (2018). And Indiana Code Section 4-21.5-5-4(b)(1) provides that a person who fails to ... timely petition for review of an order ... has waived the persons right to judicial review[.] Indeed, the OEAs order indicated that it is a Final Order subject to Judicial Review consistent with the applicable provisions of I.C. § 4-21.5. Pursuant to I.C. § 4-21.5-5-5, a Petition for Judicial Review of this Final Order is timely only if it is filed ... within thirty (30) days .... Appellants App. Vol. II at 47. There is no dispute that Eagle did not timely file a petition for judicial review of that order. Accordingly, Eagle waived its right to seek judicial review of the OEAs order.
[16] Still, Eagle asserts that it is not precluded from raising its second counterclaim because the OEAs decision was not final as to the ultimate question-whether IDEM arbitrarily denied its requested modification-that Eagle ... prematurely sought to answer. Appellees Br. at 14. Eagle is correct that the OEA did not reach the merits of its claim. But the OEA concluded that it was not able to reach the merits of Eagles claim because IDEMs letter was not a reviewable order under AOPA. As discussed above, the OEAs decision was a final order subject to judicial review. If Eagle believed that the OEA was incorrect and that IDEMs letter was a reviewable order, Eagle should have challenged the OEAs order by seeking judicial review. But Eagle did not, which rendered the OEAs conclusion that IDEMs letter was not a reviewable order under AOPA final. Because Eagle waived its right to seek judicial review of the OEAs order, Eagle cannot now raise that same issue in a counterclaim before the trial court. The trial court therefore erred when it denied IDEMs motion to dismiss Eagles second counterclaim.
Counterclaim Three
[17] Finally, IDEM contends that the trial court erred when it did not dismiss Eagles third counterclaim, which asserted that IDEM does not have jurisdiction over the pond. Specifically, IDEM contends that the trial court erred when it denied IDEMs motion to dismiss that counterclaim because Eagle had waived the issue of IDEMs jurisdiction when Eagle had failed to raise that issue before the OEA. In essence, IDEM asserts that the trial court should have dismissed Eagles third counterclaim because Eagle had failed to exhaust its administrative remedies.
[18] Our Supreme Court has addressed whether the issue of jurisdiction can be raised without having completed the administrative process. In Indiana Department of Environmental Management v. Twin Eagle LLC , a developer filed a declaratory judgment action in which it sought to prevent IDEM from enforcing state laws against its project. 798 N.E.2d 839, 842 (Ind. 2003). IDEM responded and filed a motion to dismiss the developers action due to the developers failure to exhaust its administrative remedies, and both parties filed motions for summary judgment. Id. The trial court concluded that Indianas environmental laws did not give IDEM regulatory authority over private ponds or isolated wetlands and granted the developers motion for summary judgment. Id. at 843.
[19] IDEM appealed to the Indiana Supreme Court and asserted that the trial court lacked subject matter jurisdiction over the developers claim because the developer had failed to exhaust its administrative remedies. Id. The Indiana Supreme Court reiterated the value of completing administrative proceedings before resorting to judicial review. Id. at 844. But the Court went on to state that, generally, if an action is brought upon the theory that the agency lacks the jurisdiction to act in a particular area, exhaustion of remedies is not required. Id.
[20] Nonetheless, the Court also stated that, in order for IDEM to have the authority to regulate specific waters, the body of water at issue must fall under the statutory definition of waters. Id. at 846. The Court further noted that the statutory term waters does not include a private pond, which is a body of water wholly upon the land of a single owner or group of owners and not connected with any public waters of the state. Id. (citing Trowbridge v. Torabi , 693 N.E.2d 622, 627 (Ind. Ct. App. 1998) ). And the Court held that whether the developers project involves ponds within this definition was a fact issue for administrative determination in the first instance. Id. at 846-47. The Court further stated that, even if the developer were correct and the particular waters at issue were not subject to regulation, the proper forum to address this fact sensitive issue is through the administrative process. Id. at 845.
[21] Accordingly, while the Twin Eagle Court stated that the exhaustion of administrative remedies is generally not required if the action is brought under the theory that an agency lacks jurisdiction, it is clear that that exception only applies where the question of the agencys jurisdiction presents a pure question of law. Thus, where the question of an agencys jurisdiction turns on a question of fact, resort to the administrative process is still a condition precedent to judicial review.
[22] Our Court addressed a similar issue in Outboard Boating Club of Evansville, Inc., v. Indiana State Department of Health , 952 N.E.2d 340 (Ind. Ct. App. 2011). In Outboard Boating Club , the owners of two private boat club facilities received notices from the Indiana State Department of Health (ISDH) that the clubs were in violation of a provision of Indiana law applicable to campgrounds. Id. at 342. The clubs filed a declaratory judgment action asserting that ISDH lacked jurisdiction to regulate their facilities because the facilities were not campgrounds within the statutory definition. Id. ISDH filed a motion to dismiss in which it alleged that the trial court lacked subject matter jurisdiction to hear the case because the clubs had failed to exhaust their administrative remedies. Id. The trial court granted ISDHs motion to dismiss. Id.
[23] On appeal, the clubs asserted that the trial court erred when it concluded that it lacked subject matter jurisdiction because the clubs were not required to exhaust their administrative remedies since their action challenged ISDHs jurisdiction to regulate their facilities. Id. at 344. This Court stated that the clubs d[id] not argue that the ISDH lack[ed] general authority to regulate campgrounds. Rather, they argue[d] that their facilities [were] outside the ISDHs regulatory jurisdiction because they d[id] not fall within the regulatory definition of campgrounds. Id. at 346. Because the clubs did not question ISDHs general authority over campgrounds but, instead, challenged ISDHs authority over a particular campground, this Court held that the clubs question of ISDHs jurisdiction over a particular site is precisely the type of fact sensitive issue the Twin Eagle court concluded should be resolved in the first instance by the administrative agency. Id. at 345. Accordingly, this Court concluded that the clubs were required to exhaust their administrative remedies before the trial court could hear the action. Id. at 347.
[24] Here, Eagle asserts that it did not need to exhaust its administrative remedies before raising counterclaim three to the trial court because that counterclaim raised the question of IDEMs jurisdiction. But Eagle does not challenge IDEMs general authority to regulate waters. Rather, Eagle contends that the particular water at issue is not subject to IDEMs jurisdiction. To support its assertion that IDEM does not have jurisdiction over the pond, Eagle cites Indiana Code Section 13-11-2-265(a), which defines waters as (1) the accumulation of water, surface or underground, natural and artificial, public and private; or (2) a part of the accumulations of water. Eagle also cites to Indiana Code Section 13-11-2-265(b)(2), which specifically excludes a private pond from the definition of waters. Eagle then contends that, because the Bolin pond is privately owned, it is not a water subject IDEMs jurisdiction. IDEM responds that the Bolin pond is not a private pond because it is connected with public waters of the state. Reply Br. at 9.
[25] The parties arguments demonstrate that, as in Outboard Boating Club , here the question is not whether IDEM has the general authority to regulate waters but whether the Bolin pond is a private pond or whether the pond is connected to public waters of the State. Eagles question of IDEMs jurisdiction over a particular site is precisely the type of fact-sensitive issue the Twin Eagle court concluded should be resolved in the first instance by the administrative agency. Outboard Boating Club of Evansville, Inc. , 952 N.E.2d at 345. Because the question of whether the Bolin pond is subject to IDEMs jurisdiction is one of fact and not one of law, the proper forum to address this fact sensitive issue is through the administrative process. Twin Eagle , 798 N.E.2d at 845. Accordingly, Eagle was required to raise the question of IDEMs jurisdiction to the administrative agency before it could raise it to the trial court. See Outboard Boating Club of Evansville, Inc. , 952 N.E.2d at 347. Because Eagle did not raise the factual issue of IDEMs jurisdiction to the administrative agency first, Eagle has not preserved for the trial courts review Eagles claim that IDEM lacks jurisdiction over the Bolin pond. The trial court therefore erred when it denied IDEMs motion to dismiss Eagles third counterclaim.
Conclusion
[26] In sum, we need not address IDEMs contention that the trial court erred when it did not dismiss Eagles first counterclaim as Eagle has abandoned that counterclaim. We hold that the trial court erred when it denied IDEMs motion to dismiss Eagles second counterclaim because the OEA had already adjudicated that issue and because Eagle failed to timely seek judicial review of the OEAs order. We also hold that the trial court erred when it denied IDEMs motion to dismiss Eagles third counterclaim because Eagle has not preserved the question of IDEMs jurisdiction for the trial courts review as it is a fact-sensitive question that must be raised for the first time before the administrative agency. Accordingly, we reverse the trial courts order denying IDEMs motion to dismiss, and we remand with instructions for the trial court to dismiss Eagles three counterclaims.
[27] Reversed and remanded with instructions.
Pyle, J., and Altice, J., concur.
Indiana Code Section 4-21.5-6-1 provides that, in addition to any other remedy provided by law, the attorney general in the name of the state at the request of a state agency may apply for a court order in a circuit or superior court to enforce an order issued under this article by a verified petition for civil enforcement.
IDEM also filed a motion to stay discovery pending the outcome of its motion to dismiss, which motion the trial court denied at the same time it denied IDEMs motion to dismiss. However, IDEM makes no argument on appeal that the trial court erred when it denied IDEMs motion to stay discovery.
To the extent that Eagle asserts that IDEM opened the door to Eagles second counterclaim when IDEM filed the petition for civil enforcement after Eagle had only submitted two proposed plans, Eagle has not cited any authority to support its position that that counterclaim is properly before the trial court despite the fact that Eagle did not timely seek judicial review of the OEAs order. Appellants Br. at 17.
IDEM makes no argument in its brief on appeal that the waiver provision of the Agreed Order precludes Eagle from asserting its third counterclaim. Indeed, IDEM acknowledges that Eagle could have raised this issue in its OEA appeal. Appellants Br. at 16.
Throughout its brief, Eagle asserts that IDEM wrongly filed its petition for civil enforcement. Specifically, Eagle contends that IDEM was bound by the Agreed Order and the OEAs decision, which both precluded IDEM from filing its petition before Eagle submitted its third plan. Eagle also asserts that IDEM should have filed a declaratory judgment action instead of the petition for civil enforcement. However, Eagle did not raise either of those issues in the trial court. It is well settled that we generally will not address an argument that was not raised in the trial court and is raised for the first time on appeal. Leatherman v. State , 101 N.E.3d 879, 885 (Ind. Ct. App. 2018). Accordingly, we will not consider Eagles arguments that IDEM improperly filed its petition or that IDEM should have instead filed a declaratory judgment action.