COA: Statute of limitations for AG to act on SBOA report begins when verified report is filed

Claims made by the Indiana Attorney General’s Office against a former Jennings County bookkeeper accrued upon the office’s receipt of a final investigation report, not a preliminary report, the Indiana Court of Appeals affirmed Friday in a case of first impression.

In May 2017, Indiana Attorney General Curtis Hill filed a complaint pursuant to Indiana Code Section 5-11-5-1 to recover public funds from Cathy Jo Robertson, a former bookkeeper for the Jennings County Clerk’s Office. Results from a special investigation conducted by the Indiana State Board of Accounts in 2014 found that during her tenure, Robertson diverted more than $61,300 in public funds for her personal gain using a “checks substituted for cash” scheme. The OAG also sought more than $184,000 in treble damages pursuant to the Crime Victim Relief Act.

Robertson filed a motion to dismiss the complaint pursuant to Indiana Trial Rule 12(B)(6), asserting the complaint had not been filed within the two-year statute of limitations because it had accrued between her time of employment from January 2009 to April 2011. Even if the statute of limitations did not begin to run until the OAG had discovered the alleged loss of funds, Robertson contended, the complaint was still time-barred because the OAG had actual notice of her alleged offenses when the SBOA had placed its unverified report with the OAG in December 2014.

But the Jennings Superior Court determined the plain language of section 5-11-5-1 provided that the statute of limitations commenced in January 2016, when the SBOA gave the verified report to the OAG. Robertson’s motion to dismiss was ultimately denied, and the Indiana Court of Appeals affirmed on interlocutory appeal despite Robertson’s contentions of error.

In a case of first impression, the appellate court held that the OAG’s claims under the statute did not accrue until it received the SBOA’s signed and verified final report. Finding the statute’s language to be clear, the appellate panel said the Indiana General Assembly has required the OAG to act only when the it receives the final report, not when it receives a preliminary report.

“Thus, we decline to hold that the statute of limitations begins to run prior to the time the OAG is required to act,” Judge Edward Najam wrote for the unanimous panel.

The panel further disagreed with contentions raised by Robertson and Liberty Mutual Insurance as amicus curiae that the SBOA would be able to “indefinitely toll the statute of limitations by delaying publication of the report” if time did not begin to run until the final report was received. The court also denied the assertion that the SBOA could toll the statute of limitations indefinitely by withholding placement of the final report.

The appellate panel therefore determined the two-year statute of limitations period did not begin to run until after the OAG received the final report and that the complaint was filed within that timeframe. Thus, the claim was timely filed, and the trial court did not err in its denial of Robertson’s motion to dismiss in Cathy Jo Robertson v. State of Indiana ex rel. Curtis T. Hill, Jr., Attorney General of Indiana; Ronald Bloemer, Auto-Owners Insurance Company, and OneBeacon Insurance Company, 18A-PL-1002.