Appeals panel affirms East Chicago library board must repay insurance premiums

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A trial court properly ruled for the state when it ordered East Chicago Library Board members to repay more than $136,000 in health, dental, vision and life insurance premiums since state law says those members serve without compensation, the Indiana Court of Appeals ruled Monday.

The panel rejected the argument on appeal that the board members were unaware of I.C. 36-12-2-21, which states library board members serve without compensation. The members also claimed summary judgment in favor of the state was improper because a genuine issue of fact existed over the members’ knowledge as to the wrongfulness of their conduct.

“(T)he Appellants’ knowledge as to the wrongfulness of their conduct is irrelevant for purposes of this appeal,” Judge Terry Crone wrote for the panel in Manuel Montalvo, et. al. v. State of Indiana, ex rel. Gregory F. Zoeller, Attorney General of Indiana, 45A03-1312-PL-495.

“Indiana Code Section 5-11-6-3 gives the attorney general authority to institute and prosecute civil proceedings if an examination or investigation reveals ‘that any public money’ has been ‘unlawfully expended, either by having been expended for a purpose not authorized by law in an amount exceeding that authorized by law, or by having been paid to a person not lawfully entitled to receive it,’” Crone wrote.

Manuel Montalvo, Hector Cavazos, Clifton Johnson, Gary McCracken and Aldolfo Velez each were ordered to repay between $24,604 and $52,636 in insurance premiums when the trial court granted summary judgment in favor of the state. The panel found the meaning of “compensation” unambiguous in affirming the trial court, and the office of attorney general was authorized by statute to seek and secure recovery of the funds.

“We recognize that such unfettered discretion by our attorney general in prosecuting civil proceedings to recover funds may lead to seemingly harsh results, as it did here. However, it is not within the province of the trial court or this Court to second-guess such decisions. Because the undisputed material facts establish that public money was unlawfully expended for the insurance premiums of the Appellants, the trial court properly entered partial summary judgment in favor of the State and money judgments against each of the Appellants for the recovery of those funds,” the panel concluded.


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