Alan Mizen v. State of Indiana ex rel. Gregory F. Zoeller, Attorney General of Indiana
2017 Ind. App. LEXIS 92
Ind. Ct. App.2017Background
- Alan Mizen was Center Township’s CFO and in June 2010 diverted $343,541.08 by creating a false invoice and depositing a Township check into his own account; he used the funds for personal expenses.
- The State Board of Accounts (SBOA) began a routine audit on January 22, 2014, discovered the theft, and opened a special investigation that resulted in additional audit work costing $54,978.41 and Special Investigation Report B44484.
- Mizen pled guilty in federal court in October 2014 and was ordered to pay $343,541.08 restitution; he paid that restitution before the State filed its civil suit.
- On June 17, 2015 the Attorney General filed suit: Count I sought reimbursement of the SBOA’s special-audit costs ($54,978.41); Count II sought relief under the Crime Victims Relief Act (CVRA) — treble damages, fees and costs — based on the misappropriation.
- The trial court denied Mizen’s summary-judgment motion, granted the State’s cross-motion, awarded the $54,978.41 audit costs and treble damages; on appeal the court affirmed in part, reversed in part, and remanded to reduce the treble award by the restitution paid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CVRA claim is time-barred (statute of limitations) | State: discovery rule — SBOA did not, and could not in exercise of ordinary diligence, discover theft until the SBOA audit began Jan. 22, 2014; complaint filed June 17, 2015 is timely | Mizen: prior SBOA audit reports (2012) disclosed irregularities and should have put the State on notice by mid-2012, making 2015 filing untimely | Held: No bar. Court applied discovery rule; designated evidence shows earliest discovery was Jan. 22, 2014; the CVRA claim is within two years. Mizen’s failure to plead SOL as affirmative defense did not preclude consideration on summary judgment. |
| Whether Attorney General may recover SBOA special-audit costs | State: I.C. §5-11-5-1 authorizes AG to recover public funds diverted by malfeasance, which includes audit costs the SBOA incurred investigating the diversion | Mizen: SBOA cost statutes allocate audit expenses to the municipality (I.C. §5-11-4-3) and AG lacks authority to seek audit costs from the individual once misappropriated funds are repaid | Held: AG may recover the additional, unbudgeted special-audit costs because they were a direct diversion caused by Mizen’s malfeasance; judgment for $54,978.41 affirmed. |
| Whether the State may recover treble damages under the CVRA after restitution | State: CVRA permits treble damages; restitution paid reduces but does not bar treble recovery; AG can seek penalties and other remedies in addition to recovery of funds | Mizen: restitution made criminally eliminates any pecuniary loss and treble damages would punish him twice (double jeopardy/due process) | Held: Treble damages are permissible; restitution does not bar a CVRA claim but must be credited against any civil treble award. Court remanded to reduce treble award by the $343,541.08 restitution, leaving $687,082.16 plus attorney fees and costs. |
| Double jeopardy / due process challenge to civil treble damages | State: civil remedy is distinct and allowable; treble damages serve deterrent and compensatory functions | Mizen: civil treble is additional punishment following criminal imposition of restitution | Held: Double jeopardy objection fails — civil treble damages are not barred by prior criminal prosecution; due process claim waived by failure to raise below. |
Key Cases Cited
- Martin v. Brown, 716 N.E.2d 1030 (Ind. Ct. App. 1999) (summary judgment standard and statute-of-limitations accrual principle)
- Kesling v. Hubler Nissan, Inc., 997 N.E.2d 327 (Ind. 2013) (de novo review of summary judgment; consideration of designated materials)
- Prime Mortgage USA, Inc. v. Nichols, 885 N.E.2d 628 (Ind. Ct. App. 2008) (CVRA accrues under discovery rule; two-year statute applies)
- Honeywell, Inc. v. Wilson, 500 N.E.2d 1251 (Ind. Ct. App. 1986) (statute-of-limitations may be raised via summary-judgment motion despite omission from pleadings)
- Wysocki v. Johnson, 18 N.E.3d 600 (Ind. 2014) (CVRA is quasi-criminal and relies on predicate criminal conduct)
- Blankenship v. McKay, 534 N.E.2d 243 (Ind. Ct. App. 1989) (restitution from criminal prosecution does not bar subsequent CVRA treble-damages claim; restitution credited against civil recovery)
- JPMCC 2006-CIBC14 Eads Parkway, LLC v. DBL Axel, LLC, 977 N.E.2d 354 (Ind. Ct. App. 2012) (CVRA characterized as punitive and deterrent)