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Retired Munster administrators asked to repay $850,000

William Pfister, left, and Richard Sopko.

MUNSTER — Two former Munster school superintendents can't be made to return hundreds of thousands of dollars in extra retirement pay that Attorney General Curtis Hill Jr. claims they weren't entitled to receive.

The Indiana Court of Appeals ruled Monday the state waited too long to pursue William Pfister and Richard Sopko for their alleged misuse of public funds, and the five-year statute of limitations for reclaiming the money has expired.

Specifically, the court rejected Hill's argument the time period for seeking repayment only began on June 8, 2016, after the State Board of Accounts issued a special audit of Munster schools for the July 1, 1999, to June 30, 2014, period, following a suspected malfeasance report submitted by school district attorney Kathleen Maicher.

The appeals court instead agreed with Lake Circuit Judge Marissa McDermott in finding that the district's payments to Pfister and Sopko were approved by 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.

"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.

According to court records, Pfister received $359,728.94 in alleged overpayments, and Sopko $311,198.75, due to contract provisions allowing for annually compounding extra retirement annuity contributions that eventually equaled 42% of Pfister's salary and 36% of Sopko's.

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The state claimed such high payments on behalf of the superintendents were illegal, and sought to require Pfister and Sopko repay the district three times the amounts they each received in accordance with an Indiana law aimed at deterring public corruption.

However, the superintendents argued that the payments clearly were spelled out in their contracts that routinely were approved by the Munster school board, as well as on the payment vouchers, also approved by the school board, required to distribute the funds.

Pfister and Sopko said permitting the State Board of Accounts 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 state still can request the Indiana Supreme Court review the appellate ruling.

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