County sues state over unpaid fees for housing inmates at detention center

Cascade County has filed a lawsuit against the Montana Department of Corrections over unpaid fees for housing offenders at the Cascade County Detention Center.

The suit was filed last week in district court in Helena and alleges that the state owes Cascade County more than $766,599 for room and board of people serving a DOC sentence at the Cascade County facility. The state is also owes the county for unpaid medical services for DOC inmates, but an amount is not specified in the lawsuit.

The county is suing the state for breach of contract, unjust enrichment and breach of implied covenant of good faith and fair dealing.

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The county alleges that the state “has been enriched by refusing to reimburse plaintiff for costs of confinement for DOC offenders by fattening their coffers and gaining interest on the monetary amounts which do not belong to them,” according to the complaint. That state’s enrichment is “unjust because it deprives the plaintiff from allocating such funds to other county operations and ultimately deprives the tax payers from funds which would otherwise be used to benefit the county citizenry.”

The county is asking the court to require the state to pay actual damages and an accrued interest rate of 10 percent per year on the reimbursement amounts withheld since July 19, 2017.

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The state contracts with Cascade County for housing the state’s inmates and under the agreement, the state guaranteed payment for a minimum of 76 inmates per day per month with a per diem rate set per state inmate, according to the county’s lawsuit.

That contract was executed in 2016 and expires in 2024, according to the county.

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In June 2016, the state and county agreed to a daily per diem rate of $69 for each inmate at the county facility. That agreement required the state to “pay for confinement of an inmate upon oral pronouncement of a felony sentence of imprisonment or commitment to the DOC, unless the inmate continues to serve a county jail sentence of incarceration or the inmate continues to be held with bond on a pre-trial felony,” according to the county’s complaint.

In July 2017, the state and county entered into a subsequent agreement with the $69 daily per diem rate, but that agreement specifically omitted the exception for the state not to pay for inmates who continue to be held with bond on a pre-trial felony, according to the county.

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“Instead of abiding by the terms and conditions set forth in the 2017 reimbursement agreement, defendant continued to reimburse according to the terms of the 2016 reimbursement agreement to the disagreement of the plaintiff,” according to the county’s complaint. “The defendant has erroneously interpreted that in cases where plaintiff acquires authority of a DOC offender that such authority dissolves the defendant of all responsibility to pay costs associated with the DOC offender’s confinement at the detention center.”

The 2017 agreement requires the state to reimburse costs up until the inmate begins serving a county jail sentence, according to the county.

Under the agreement, a person arrested by the state is the financial responsibility of the state from the time of arrest until sentencing, according to the county’s complaint.

In August 2017, the county invoiced the state for July 2017 and the state paid in full.

The county sent a reimbursement in September 2017 for August 2017, but the state only made a partial payment, leaving an outstanding balance of $12,834, according to the county.

According to the court documents, the county made the state aware of the error in October 2017 and in April 2018, “it was clear to the plaintiff that defendant recognized their omission of the provision contained in the 2016 reimbursement agreement from the 2017 reimbursement agreement when they attempted to modify the 2017 reimbursement agreement by adding the provision excluding the defendant’s inmate costs if the inmate continues to be held with bond on pre-trial felony in a county proceeding. Plaintiff did not agree to defendant’s proposed modification.”

The state continued to refuse payment for DOC inmates being held with bond on a pre-trial felony in county proceedings, according to the court documents.

In August 2018, the state sent a letter to the county indicating that the state was not responsible for the costs of housing DOC inmates unless they are solely under the state’s authority.

County and state officials met in September 2018 to discuss the reimbursement issue without resolution, according to the county. During that meeting, the county provided a full accounting of the state’s unpaid costs from August 2017 through August 2018. According to the county, the state has not paid an invoice in full since August 2017 while the county has continued to provide services for the state’s inmates.