Duke Energy Indiana v. J. & J Development Company

On February 5, 2020, the Indiana Court of Appeals handed down a decision on Duke Energy Indiana v. J & J Development Company regarding the rights of easement owners.

J & J purchased land with the intent of developing a residential subdivision and began by constructing improvements within an electric-transmission line easement, which was owned by Duke Energy. J & J did not contact Duke, but instead began constructing improvements in and through the easement, which included an entrance, a road, detention basins, a fire hydrant, and buried utility lines.

Eventually, Duke was contacted by J & J when J & J needed sewer work done. When Duke came out to inspect, they saw all of the “improvements” and concluded that J & J had impermissibly encroached upon their easement. J & J then filed suit against Duke, seeking a declaration that the improvements did not interfere with Duke’s use of the easement. Duke then counterclaimed and requested a declaration that J & J’s improvements were impermissible and asked to have J & J remove the improvements.  The trial court ruled the improvements as permissible, so Duke appealed.

Both parties agreed that J & J was entitled to use the land within the easement, but the main issue was to what extent. It is well understood in Indiana the owner of the land can use land within an easement, as long as it does not unreasonably interfere with the easement owners’ rights. Thus, it was the court’s task to determine what it truly means for a landowner to unreasonably interfere with an easement owner’s rights.

The Court of Appeals ultimately sided with Duke. They concluded that just because J & J’s improvements have not yet hindered any of Duke’s work, does not establish they will not do so in the future. Ultimately, the Court of Appeals has just made the unreasonable interference standard much harder to rebut.

Read the full article by Jeremy Fetty, Parr Richey Patterson Frandsen and Kruse.