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Editor’s note: This article has been updated.
In a dispute between Lake County’s sheriff and the local county commissioners, the Court of Appeals of Indiana has ruled for the sheriff after finding he acted within his authority when signing a contract to provide health services at the jail without first getting permission.
Oscar Martinez Jr. has served as elected sheriff in Lake County since 2017, and his duties include operating the local jail and taking care of the inmates housed there.
Since 2012, Martinez and his predecessors have engaged the services of Correctional Health Indiana Inc. to provide medical services to the inmates. Those contracts for the services have ranged from annual to multiyear.
The earlier contracts were entered into between CHI and the Lake County Board of Commissioners “on behalf of” the sheriff. Later contracts, including the three-year contract for 2017 through 2019, were expressly “approved by” the board “on behalf of” the sheriff.
In the summer of 2021, Martinez negotiated an agreement with CHI for services in 2022 totaling $6.1 million, payable over two years. The negotiated amount for CHI’s services was included as a line item in the sheriff’s proposed departmental budget for 2022, which was submitted to the Lake County Council for review and approval.
The council approved the sheriff’s 2022 budget in October 2021, so the sheriff and CHI executed a contract for medical services at the jail. At its November 2021 meeting, the commissioners ratified the council’s countywide budget for 2022.
With approval of his 2022 budget, the sheriff had available funds to cover the full amount of the 2022 CHI contract. Still, because the board had historically requested that it review and approve such contracts, the sheriff placed the contract on the agenda for the board’s November meeting.
At the meeting, individual commissioners expressed displeasure that the sheriff had not allowed an independent quality insurance consultant, hired by the board in 2020, to have access to the jail. The commissioners also noted the contract would be the third extension of the arrangement with CHI, with a significant price increase, and the services had not been put out for bid since 2016.
The board voted to defer action on the contract, ostensibly to give the sheriff 30 days to grant the consultant access to the jail.
Given the impending expiration of the current contract with CHI, Martinez requested that the board schedule a special meeting before Jan. 1 to approve the 2022 contract. The board refused the sheriff’s request.
Subsequently, on or about Dec. 22, 2021, Martinez executed a new contract with CHI for medical services at the jail for 2022 that was identical to the first contract, except that the signature block for board approval was omitted.
On Jan. 18, the sheriff submitted a purchase order to the board and/or the auditor for the full amount of the second contract along with CHI’s first invoice for $253,952. The auditor certified that there were appropriated funds available to pay for the purchase order.
The next day, at its regular meeting, the board voted to continue contracting with CHI for medical services at the jail, but only at the rate that CHI had been paid in 2021 and only on a month-to-month basis. The board’s decision to approve payments at the prior 2021 rate resulted in a monthly shortfall to CHI of $24,186.
Accordingly, the sheriff submitted a purchase order change request form changing the amount from $6.1 million to $5.8 million. In the remarks section of the form, the sheriff indicated that the amendment of the purchase order amount was “not intended as any compromise or waiver of the Sheriff’s claims” in the instant lawsuit, which he filed Jan. 21.
The sheriff filed a complaint for declaratory and injunctive relief seeking declarations that he, not the board, had the authority to enter contracts relating to the operation of the jail and/or the care of its inmates, and that he alone had the authority to determine how to spend the funds in his annual approved budget.
The sheriff also asked the trial court to direct the board and the auditor to approve the original purchase order for the second contract “and any future purchase orders and/or invoices submitted by the Sheriff in connection with the Second CHI 2022 Contract.”
Finally, Martinez asked for a declaration that he didn’t need to submit future contracts to the board for approval that relate to the operation of the jail and/or the care of its inmates.
The Lake Superior Court granted partial summary judgment in favor of the sheriff and denied the board’s cross-motion for summary judgment.
Specifically, the trial court found the sheriff had the authority to enter into contracts to take care of the jail and the inmates there and to determine how to spend funds within the 2022 sheriff’s budget that were allocated to take care of the jail and its inmates. It also directed the board and auditor to process/approve/pay/satisfy purchase orders and/or invoices submitted by the sheriff attendant to the second contract with CHI.
Before the COA, judges affirmed for the sheriff.
“We agree with the Sheriff that his express duty to take care of the Jail and its prisoners includes the authority to enter into contracts for this purpose,” Judge Robert Altice wrote. “… Indeed, if the Board had the exclusive right to enter into such contracts, as it claims, the Sheriff would be transformed into a passive manager, a mere department head, notwithstanding his constitutional office, and would have limited ability to take care of the Jail and its prisoners.
“As the trial court observed, statutory assignment of the Sheriff’s take-care duty ‘could not be more expressed,’’’ Altice continued. “The General Assembly’s grant of power and authority to the Sheriff must allow for him to fulfill this statutory duty. In other words, by assigning the Sheriff the take-care duty, the General Assembly granted him the authority to enter into jail-related contracts. This interpretation harmonizes and gives effect to both I.C. § 36-2-3.5-4 and I.C. § 36-2-13-5(a)(7).”
Further, the COA found there was no dispute over the 2022 approved budget and rejected the board’s reliance on I.C. 36-2-6-2.
“While this statute provides the Board with discretion to consider the validity of invoices filed with the Auditor, it does not allow the Board to abuse that discretion by refusing to pay valid invoices submitted by officials for budgeted items that have been fully appropriated and for which the funds remained unencumbered,” Alitce wrote. “The trial court did not exceed its authority by ordering the Board and the Auditor to process, approve, and pay invoices submitted by the Sheriff related to the Second 2022 CHI Contract.”
The case is Lake County Board of Commissioners, et al. v. Lake County Sheriff Oscar Martinez, Jr., in his official capacity, 22A-PL-1559.
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