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Jeffersonville Prevails on Delinquent Sewer Fees at Supreme Court

In Pinnacle Prop. Dev. Group, LLC v. City of Jeffersonville, Pinnacle objected to the City’s procedure of transferring delinquent sewer service balances on rental properties to the owner of the rental properties. Pinnacle brought a declaratory judgment action against the City alleging that the City lacked legal authority to transfer the delinquent balances.

The trial court held that the City complied with all statutes and ordinances, and that Indiana Code § 36-9-23 authorized the City’s procedure. The Court of Appeals reversed the trial court, holding that the ordinances did not authorize the collection of delinquent balances from the owners of the rental property. See Pinnacle Prop. Dev. Group, LLC v. City of Jeffersonville, 875 N.E.2d 310, 303-04 (Ind. Ct. App. 2007). Click here.

The Supreme Court vacated the Court of Appeals’ opinion and reinstated the decision of the trial court. Pinnacle argued that Indiana Code § 36-9-23-32(c) disallowed the City from transferring the bills to the owners. The Court disagreed, and stated that Indiana Code § 36-9-23-32(c) did not affect the ultimate liability for the delinquent fees, which are payable by the owner, but only affected the procedure for creating a lien on the property. The Court further stated that the City bills tenants as a convenience to property owners.

Cities remain free to collect a deposit from tenants or bring a civil action against the tenant of the property, but the ultimate responsibility for payment of delinquent bills remains with the property owner.

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