Montalvo v. State ex rel. Zoeller

27 N.E.3d 795

Manuel MONTALVO, et. al., Appellants–Defendants

v.STATE of Indiana, ex rel. Gregory F. ZOELLER, Attorney General of Indiana, Appellee–Plaintiff.

No. 45A03–1312–PL–495.

Court of Appeals of Indiana.

March 9, 2015.

Elizabeth M. Bartolucci, Heather Keil, O'Hagan LLC, Chicago, IL, Attorneys for Appellants.

Heather M. Crockett, Kurt D. Hammel, John Edward Frank, Office of the Indiana

Attorney General, Indianapolis, IN, Attorneys for Appellee.

CRONE, Judge.

Case Summary

[1] Hector Cavazos, Clifton Johnson, Gary McCracken, and Aldolfo Velez (“the Appellants”) appeal the trial court's entry of partial summary judgment in favor of the State of Indiana on the State's claim to recover public funds. At all relevant times, the Appellants were members of the East Chicago Public Library Board (“the Library Board”).¹ The State filed a complaint to recover funds alleging that, in exchange for their service on the Library Board, the Appellants received the payment of health, dental, vision, and life insurance premiums on their behalf, in violation of Indiana Code Section 36–12–2–21, which states that “[a] member of a library board shall serve without compensation.” After the State filed a motion for partial summary judgment and the Appellants filed a cross-motion for summary judgment, the trial court granted the State's motion. In entering partial summary judgment in the State's favor, the trial court concluded as a matter of law that the term “compensation” includes the payment of insurance premiums, and therefore the Appellants' receipt of such compensation in exchange for their service was in violation of statutory law and constituted the misappropriation of public funds. Accordingly, the trial court entered money judgments against each of the Appellants for the reimbursement of those funds. The sole issue presented for our review is whether the trial court erred in granting the State's motion for partial summary judgment. Concluding that the State is entitled to judgment as a matter of law, we affirm the trial court's entry of partial summary judgment in favor of the State.

Facts and Procedural History

[2] The relevant material facts are undisputed. The State Board of Accounts (“the SBOA”) conducted an audit and supplemental audit of the East Chicago Public Library for the period of January 1, 2008 to December 31, 2010.² During the audit period, the Appellants were members of the Library Board and each received the payment of insurance premiums for health, dental, vision, and life insurance in exchange for their service on the Library Board. The SBOA referred the audit reports to the Office of the Attorney General of Indiana. On April 18, 2011, the State filed a “Complaint to Recover Public Funds” alleging that the Appellants had misappropriated public funds. Specifically, the State asserted that the Appellants received the payment of health, dental, vision, and life insurance premiums in exchange for their service on the Library Board in violation of Indiana Code Section 36–12–2–21, which states in pertinent part that “[a] member of a library board shall serve without compensation.” The Appellants filed a motion to dismiss, which was denied by the trial court.

[3] Thereafter, the State filed its motion for partial summary judgment asserting, as a matter of law, that insurance premiums are compensation, and therefore the Appellants misappropriated public funds in receiving such compensation in exchange for their service on the Library Board in violation of Indiana Code Section 36–12–2–21. The Appellants filed a cross- motion for summary judgment arguing, as a matter of law, that insurance premiums are not compensation and that the Appellants were not prohibited from having their insurance premiums paid in exchange for their service on the Library Board.

[4] Following a hearing on both motions, the trial court granted the State's motion for partial summary judgment. In its order, the trial court found and concluded,

1. Indiana Code § 36–12–2–21 states that “[a] member of a library board shall serve without compensation.”

2. Compensation, in its plain and ordinary usage, includes premiums for health, dental, vision, and life insurance.

3. The [Library Board] approved the payment of health, dental, vision, and life insurance premiums for its members in exchange for their service on the [Library Board]. The following board members received premiums (or premiums were paid on their behalf) in the amounts listed below from January 1, 2008 to December 31, 2010:

Board Member	Total Insurance Premiums
	Clifton Johnson	$52,636.26
	Gary McCracken	$24,604.76
	Hector Cavazos	$27,965.53
	Aldolfo Velez	$31,673.49

4. The payment and/or receipt of premiums for health, dental, vision, and life insurance constitutes compensation to the members of the [Library Board]. The receipt of compensation in exchange for service on the [Library Board] violates Ind.Code § 36–12–2–21.

5. Because the payment of premiums for health, dental, vision, and life insurance was made with public funds, and because the payment and/or receipt of those premiums violated Indiana law, [the Appellants] misappropriated the public funds of the East Chicago Public Library.

6. Thus, summary judgment should be entered for the State of Indiana and against [the Appellants].

Appellants' App. at 24–26. Accordingly, the trial court entered partial summary judgment in favor of the State and awarded the State money judgments against each of the Appellants in the amount of the total insurance premiums received by each, plus costs and interest from the date of the judgment until paid in full. This appeal ensued.

Discussion and Decision

[5] The Appellants challenge the trial court's grant of the State's motion for partial summary judgment. Our supreme court recently reiterated,

The standard of review for a partial summary judgment is the same as that used in the trial court: summary judgment is appropriate only where the evidence shows that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Where the challenge to the trial court's ruling presents only legal issues, not factual ones, the issues are reviewed de novo.

Ballard v. Lewis, 8 N.E.3d 190, 193 (Ind.2014) (citations omitted). Where the trial court enters specific findings of fact and conclusions thereon in support of its decision, although they aid our review of the summary judgment ruling, they are not binding upon us. Evansville Courier & Press v. Vanderburgh Cnty. Health Dep't, 17 N.E.3d 922, 927 (Ind.2014). “Pure questions of law, like the issues of statutory construction we address here, are particularly appropriate for summary resolution, and we review them de novo.” Id. (citations omitted).

[6] The crux of the parties' dispute is the meaning of the term “compensation” as used in Indiana Code Section 36–12–2–21. That section, entitled “Compensation of library board members,” states, “A member of a library board shall serve without compensation. A board member may not serve as a paid employee of the public library, except the treasurer as provided in section 22 of this chapter.” Ind.Code § 36–12–2–21. The State asserts that insurance premiums are compensation, and therefore the Appellants' receipt of those premiums in exchange for their service was in violation of Indiana law and constituted the misappropriation of public funds. The Appellants assert that insurance premiums are not compensation, and therefore they were not statutorily prohibited from receiving them.

[7] When interpreting statutes, our primary purpose is to give effect to the intent of the legislature. F.D. v. Ind. Dep't of Child Servs., 1 N.E.3d 131, 136 (Ind.2013). “The first step in interpreting a statute is to determine whether the legislature has spoken clearly and unambiguously on the point in question.” Sees v. Bank One, Ind., N.A., 839 N.E.2d 154, 157 (Ind.2005). If the statute is clear and unambiguous, we need not apply any rules of statutory construction other than to require that words and phrases be taken in their plain, ordinary, and usual sense. Id. If the legislature has not defined a word, we may properly consult English dictionaries to determine the plain and ordinary meaning of words. Naugle v. Beech Grove City Schs., 864 N.E.2d 1058, 1068 (Ind.2007). We review the statute as a whole and will presume that the legislature intended for the statutory language used to be applied in a logical and not an absurd manner. In re Resnover, 979 N.E.2d 668, 674 (Ind.Ct.App.2012). Clear and unambiguous statutes leave no room for judicial construction. Terkosky v. Ind. Dep't of Educ., 996 N.E.2d 832, 842 (Ind.Ct.App.2013).

[8] We find the statutory language at issue here to be unambiguous. The legislature has proclaimed that a public library board member shall render his or her service “without compensation.” Ind.Code § 36–12–2–21. Because the legislature did not define the broad term “compensation” used in Article 12 regarding libraries, we look to its plain and ordinary meaning. “Compensation” is defined as “[r]emuneration and other benefits received in return for services rendered.” Black's Law Dictionary (10th ed. 2014) (emphasis added). Ordinarily, this includes “wages, stock option plans, profit-sharing, commissions, bonuses, golden parachutes, vacation, sick pay, medical benefits, disability, leaves of absence, and expense reimbursement.” Id. (citing Kurt H. Decker & H. Thomas Felix II, Drafting and Revising Employment Contracts, § 3.17 at 68 (1991)). Thus, pursuant to a plain reading of the statutory language, the payment of premiums for health, dental, vision, and life insurance constitutes compensation, and the Appellants' receipt of such compensation in exchange for their service on the Library Board violated Indiana Code Section 36–12–2–21.³

[9] We disagree with the Appellants' assertion that the requirement that public library board members serve “without compensation” means only that, with the...