Foley, J.
Jason and Myka Kelly, for themselves and their minor children A.S., A.T.M., A.E.M., A.C.M., J.T.K., and J.E.K. (collectively, “the Kellys”), appeal the order granting summary judgment to the State on their claim, as assignees of Sandra Sell (“Sell”), that the State wrongfully failed to defend and indemnify Sell against civil rights claims the Kellys brought against Sell. Concluding that the State is not obligated to defend and indemnify Sell, a former employee of the Indiana Department of Child Services (“DCS”), for civil liability stemming from her own criminal conduct, we affirm summary judgment for the State.
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II. Statutory Duty to Defend and Indemnify
Indiana Code section 34-13-4-1 provides that when a public employee “is or could be subject to personal civil liability for a loss occurring because of a noncriminal act or omission within the scope of the public employee’s employment [that] violates the civil rights laws of the United States,” the governmental entity shall—subject to certain provisions—pay any judgment and “all costs and fees incurred by or on behalf of a public employee in defense of the claim or suit.” Our Supreme Court recently addressed this statute’s “noncriminal” requirement in State ex rel. Department of Natural Resources v. Leonard, 226 N.E.3d 198, 203 (Ind. 2024). The Court explained that, for an act to be “noncriminal,” the act must be one for which “the State cannot establish a prima facie showing of criminal conduct.” Leonard, 226 N.E.3d at 203.
The Kellys ask us to interpret Indiana Code section 34-13-4-1 as a form of “insurance” for State employees, arguing that we should apply common law indemnification principles developed in the context of insurance law… Thus, rather than abrogate common law principles of indemnification, Indiana Code section 34-13-4-1 partially waives the State’s sovereign immunity by establishing specific circumstances under which the State will defend and indemnify its employees. Because the statute creates liability where none existed at common law, we must strictly construe the statute against establishing liability and cannot expand the statute’s reach beyond its express terms….
Having established that we must strictly construe the statute’s requirements against liability, we turn to whether Sell’s claimed “loss occur[red] because of a noncriminal act or omission.” I.C. § 34-13-4-1. Below, the State obtained summary judgment on the basis that Sell’s liability stemmed from her own criminal conduct. The Kellys respond that even though Sell engaged in some criminal conduct, the State still had a duty to defend and indemnify her because their complaint against Sell included allegations of noncriminal conduct, such as “loan[ing] money to [an] abusive father so he could buy dishes and toys” and “instruct[ing] the abusive father not to allow the child to communicate with his mother.” Appellants’ Br. pp. 22–23. The Kellys assert that these noncriminal acts supported “distinct claims based on different constitutional rights.” Id.
Although the Kellys point out that their complaint included allegations about noncriminal conduct, the statutory language focuses our inquiry differently. The statute asks whether the “loss occur[red] because of a noncriminal act or omission.” I.C. § 34-13-4-1. Here, the Kellys are pursuing claims as Sell’s assignee under the Agreement, which specified that their $6 million settlement was premised on the fact that “the wrongful removal of children from their home can be extremely damaging” and that “jury awards in such cases are large.” Appellants’ App. Vol. 2 p. 27. Moreover, the Agreement stated that, “as a result of Sell’s actions, the Kelly children were removed” from their home. Id. at 26. Thus, our analysis of this issue properly focuses on whether Sell’s conduct that caused the removal of the Kelly children was criminal in nature.
The designated evidence established that Sell’s criminal conduct was inextricably linked to the removal of the children… Because Sell’s criminal conduct was not merely incidental to but rather an integral part of the circumstances leading to the damages claimed under the Agreement, we conclude that Sell’s conduct fell outside the scope of Indiana Code section 34-13-4-1, and therefore, the State had no duty to indemnify Sell for the settlement.
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Conclusion
Because Sell’s criminal conduct was integral to her alleged loss under the Agreement, the State had no obligation to indemnify Sell for the loss. The limited waiver of sovereign immunity under Indiana Code section 34-13-4-1 does not extend to such circumstances, and the State’s preliminary involvement in settlement discussions before Sell’s guilty plea did not compel the State to indemnify Sell. Thus, summary judgment was properly entered for the State.
Affirmed.
Bailey, J. and Bradford, J., concur.