Clay County Must Cover Jail Contracts, Attorney Fees

The Court of Appeals Western District agreed on Dec. 5 that the Clay County Commission must restore nearly $1 million in funding it had removed from the county sheriff’s budget.

The appeals court said the cuts, which left Sheriff Paul Vescovo’s department without enough money to cover the costs of the county detention center, were as “disturbing as they are indefensible.” And in a rare move, the court also said the county could be on the hook for some of the sheriff’s attorneys’ fees.

Judge Anthony Rex Gabbert — who was a Clay County circuit judge until his appointment to the Western District in 2013 — said the county commission’s actions “left the Sheriff with no option but to litigate.” Judges Alok Ahuja and Gary D. Witt concurred.

Fritz Riesmeyer and Chris Tillery of Seigfreid Bingham, who represented the sheriff, said the ruling sets parameters on the discretion that county officials have in making spending decisions, at least when it comes to funding that is necessary for county departments to carry out their required duties.

“You have to make a good-faith effort to fund a complete financial plan for the upcoming year,” Riesmeyer said. “I think that’s where this decision is huge and will be cited here on out in these battles.”

The case also hinged on the unusual facts proven at trial.

“It’s not usually going to be the case where they don’t budget to pay their own contracts, but here they did,” Tillery said.

Lowell Pearson, a partner with Husch Blackwell’s Jefferson City office who represented the county, declined to comment.

On a 2-1 vote, the Clay County Commission had approved a 2019 budget of about $1.79 million for the sheriff’s office — less than its prior year’s budget and lacking sufficient funds to pay contracts with vendors for the jail, which houses about 300 detainees. The budget also stripped Vescovo of authority to move money around within his budget to pay those previously approved contracts.

The sheriff alleged the cuts were in retaliation for his investigation of allegations that the county budget officer, Laurene Portwood, had tampered with public records. Portwood was indicted on state charges and later entered into a deferred-prosecution agreement.

In August, Daviess County Associate Circuit Judge Daren Adkins, who was specially appointed to the case, ordered the county to allocate about $755,000 to cover existing contracts for detainees’ food and health care and an additional $230,000 for the detention center’s administrative costs. He didn’t disturb any budget decisions that weren’t covered by contract.

The Western District’s ruling also noted that it was stepping into a legislative body’s appropriations process. Under a set of state statutes known as the County Budget Laws, Missouri’s counties are required to meet certain financial standards — including that budgets “shall contain adequate provisions for the expenditures necessary” for county offices and that department heads must be consulted about cuts.

Gabbert was careful to note that counties aren’t required to simply accept whatever budget a department head proposes and that counties can trim budgets to address revenue shortfalls, so in many cases court action would be inappropriate. However, Gabbert wrote, Clay County’s case had “unique facts,” including that the county had continued to enter into contracts even while it cut the money to pay for them.

“Once the County was bound by the vendor contracts, the amount due on those contracts became the minimum sum necessary to adequately fund those lines within the Sheriff’s department’s budget,” Gabbert said.

In addition, the judge wrote, the county provided “no justification whatsoever” for its decision and had “knowingly underfunded the Sheriff in a manner calculated to make it impossible for the Sheriff to carry out his lawful duties for reasons that are as disturbing as they are indefensible.” Gabbert added that the county “has made no attempt to rebut the alarming assertions” that the cuts were connected to the sheriff’s investigation of the county budget officer.

“Despite the County’s impassioned argument that these facts are irrelevant and that the law does not allow a writ to issue here, we cannot overlook facts as egregious as these,” Gabbert wrote.

Adkins’ earlier ruling had denied Vescovo’s request for attorneys’ fees. The Western District agreed there was no statutory authority for the sheriff to recover those fees, but it added that this was one of the unusual cases where “special circumstances” allowed the court to award them.

“If [Vescovo] is now forced to pay his attorney’s fees from his existing budget appropriations, the County would be gifted yet another opportunity to punish the Sheriff by refusing additional appropriations to offset his legal fees in this case, and we are under no illusions as to how the County would likely respond to a request for additional appropriations,” Gabbert wrote.

Once again, Gabbert noted the rarity of a court forcing one government entity to pay another department’s legal bills.

“Though one could characterize this case — where funds would be transferred between county coffers — as robbing Peter to pay Paul, here we are considering if Peter should pay Paul’s lawyer,” Gabbert wrote.

The Western District remanded the case to Adkins to determine the amount, though it declined to award fees for the appeal.

“Our criticisms of the County’s conduct stopped when they appeared before this body, and we found their appeal, though unsuccessful, to be an illuminating and well-argued treatment of a novel and challenging legal problem,” Gabbert wrote.

The case is State ex rel. Vescovo v. Clay County, WD83130.

 By Scott Lauck | Missouri Lawyers Weekly

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