MUNSTER — Attorney General Curtis Hill Jr. is asking the Indiana Supreme Court to allow him to seek the return of hundreds of thousands of dollars in extra retirement pay from two former School Town of Munster superintendents.
In a 20-page petition for transfer, Hill argues that the Indiana Court of Appeals got it wrong when it unanimously ruled in June that the state waited too long to pursue its civil lawsuit against William Pfister and Richard Sopko for their alleged misuse of public funds.
Hill claims in his filing that the five-year statute of limitations only began running on June 8, 2016, when the attorney general's office received a special audit from the State Board of Accounts alleging malfeasance, misfeasance and nonfeasance by Pfister and Sopko.
He said the fact that six prior biennial state audits failed to identify any misdeeds was irrelevant because Indiana law permits the SBOA to conduct special audits when public corruption is alleged, as it was in this case by the school district's lawyer, Kathleen Maicher.
The special audit, covering the July 1, 1999 through June 30, 2014 period, claims Pfister and Sopko crafted contracts awarding them annually compounding retirement annuity contributions that resulted in massive overpayments to both former school chiefs.
Hill said it's unlikely the extra retirement payments — which eventually equaled 42% of Pfister's salary and 36% of Sopko's — could have been caught earlier as the standard state audit does not usually include review of individual annuity payments.
As a result, Hill said he should be allowed to pursue repayment of the funds, since he filed suit seeking $473,976.06 from Pfister and $387,528.60 from Sopko, along with triple damages, within one year of receiving the special audit report.
"Because (the attorney general's office) cannot bring a claim before it receives the final report, the limitations period does not begin running until it receives the final report," Hill said.
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That argument previously was rejected by the Court of Appeals and Lake Circuit Judge Marissa McDermott.
They found the district's contracts with and payments to Pfister and Sopko each were approved by the Munster school board, and the state had plenty of opportunities to identify and rectify any errors through its six audits of the school district during the period covered by the special audit.
"We conclude under these circumstances that the causes of action brought against Pfister and Sopko for amounts paid before May 23, 2012, five years prior to the May 23, 2017, complaint filed by the state, are barred by the statute of limitations," the appeals court said.
Pfister and Sopko, through their attorneys, now have until the final week of August to file a response to the attorney general's request for Supreme Court review.
They've previously said that permitting SBOA to delve decades into the past, when its prior audits of Munster schools during the period found no malfeasance, would produce "an absurd result" where the statute of limitations essentially is meaningless.
"Whatever roles the attorney general occupies, it certainly does not exist to re-characterize above-board payments as public corruption, many years after the fact, nor as a safety net when a local governmental entity suffers buyer's remorse for how it interpreted a contract provision," they said.
The Indiana Supreme Court typically agrees to hear about 8% of the cases appealed to it each year.
Three of the five justices must vote to grant transfer to vacate the Court of Appeals ruling and set a case for decision by the state's highest court.