Lattner v. Emerson, No. 21A-PL-822 (Ind. Ct. App. Feb. 24, 2022)

Use Restrictions: The Court of Appeals of Indiana held that a retaining wall was not a structure subject to the building setback requirements.

Lake Talahi Club (association) governed the Lake Talahi Subdivision in Evansville, Ind. Daniel and Carrie Emerson (the Emersons) owned a home in the subdivision. Their neighbors next door were Patrick and Susan Lattner (the Lattners).

In 2019, the Emersons informed the Lattners that they were going to install a pool. Their architect drew up plans for the project, including a pool house containing storage space, a restroom, and a lounge area. Options for locating the pool on the lot were limited due to the uneven terrain, the location of a septic tank, and the subdivision plat restrictions.

The plat included restrictions barring any building or structure from being located nearer than 20 feet to the side lot line. Also, no building or structure of any nature, other than ovens and summer houses, could be located on any lot nearer than 50 feet to the water’s edge at the high-water level.

The first set of plans situated the pool house about 10 feet from the Lattners’ property line. Even though this location violated the 20-foot setback, the Emersons believed this was the best location to be out of view from both homes because it would be next to an exterior wall of the Lattners’ garage, which had no doors or windows. The Lattners believed this was too close to their property line and asked the Emersons to move the pool house outside the 20-foot setback.

The architect drew up new plans so that no building crossed the 20-foot setback and conspicuously marked the setback requirement on the plans. The Emersons submitted the plans to the association’s building committee, which approved the plans without comment. A surveyor staked the precise lot boundary line.

Due to the topography, the pool project required lots of regrading and leveling of the Emersons’ yard. These elevation changes necessitated the installation of non-structural retaining walls to retain dirt and prevent soil erosion. The Emersons’ lot originally contained decorative, white brick retaining walls in many locations, including within the 20-foot setback. The new retaining walls were designed to match the existing retaining walls. The plans called for a new retaining wall to be installed about 11 feet from the Lattners’ boundary line. Installation of the retaining wall did not require any building permit.

When footers for the retaining wall were installed, the Lattners objected to the proximity to their home and sent the Emersons a cease-and-desist letter. The Lattners also expressed concern that the pool project would cause drainage issues on their lot because it was situated downhill from the Emersons’ lot. To address the drainage concerns, the Emersons’ contractor added a 12-inch underground pipe and drainage system to divert water from the retaining wall area to the lake.

The Lattners sued the Emersons, requesting a temporary restraining order and permanent injunction (order prohibiting or mandating certain action) barring any improvements within the 20-foot setback. The trial court found that the retaining wall was not a “structure,” so it did not violate the plat restrictions. The Lattners appealed.

The word “structure” was not defined in the restrictions, and the appeals court found it ambiguous as to whether it encompassed something like a retaining wall. A review of dictionaries and contextual clues throughout the restrictions did not yield a clear answer. The Lattners argued that a common sense reading would render a “structure” to be anything permanently mounted into the ground, but that definition would include things such as driveways and walkways that even the Lattners agreed should not be covered by the setback requirement.

Due to the ambiguity, the trial court was correct to consider evidence outside of the plat as to the term’s meaning. The Emersons’ contractor testified that retaining walls were generally not considered structures within the building trade and were not treated as such for purposes of needing a building permit.

The appeals court further noted that the survey identified several improvements on the Lattners’ property that violated the 20-foot and 50-foot setbacks, including the Lattners’ house, which encroached on the setback by several feet. Other items on the Lattners’ lot that violated the setback included the driveway, two fences, a firepit, a concrete pad for the HVAC equipment, a deck, and retaining walls. In fact, most of the subdivision lots had retaining walls that violated the shoreline setback, and many had a variety of improvements within the side yard setbacks, including fences, retaining walls, masonry improvements, walkways, and driveways. The appeals court found the fact that such improvements were routinely located within the setback as suggesting the setback requirement was not intended to apply to retaining walls.

In any event, where the restriction is ambiguous, all doubts must be resolved in favor of the free use of the property. Accordingly, the trial court’s judgment was affirmed.

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