ARMOR CORRECTIONAL HEALTH SERVICES INC., a Florida corporation, Plaintiff/Appellee,
THE BOARD OF COUNTY COMMISSIONERS OF OKLAHOMA COUNTY, a subdivision of the State of Oklahoma, Defendant/Appellant.
FROM THE DISTRICT COURT OKLAHOMA COUNTY, HONORABLE ROGER H.
STUART, TRIAL JUDGE
Zsciesche and Marc Edwards, PHILLIPS MURRAH P.C., Oklahoma
City, Oklahoma for Plaintiff/Appellee,
Loving and Andrew W. Lester, SPENCER FANE LLP, Edmond,
Oklahoma, for Defendant/Appellant.
Medical provider sued the Board of County Commissioners of
Oklahoma County (County) for payment of medical services
provided to prisoners and detainees in the Oklahoma County
Jail. County admitted the prisoners and detainees received
the medical services in question and that the County had not
paid. County resisted the entry of a judgment, however, on
the ground that medical provider had not produced sufficient
evidence of the availability of funds to pay for the
services. The trial court granted summary judgment to medical
provider and County appealed. This Court retained the appeal
to address the public interest issue of government liability
for services mandated by the Oklahoma Constitution.
Armor Correctional Health Services, Inc., sued the Board of
County Commissioners of Oklahoma County (County) for payment
of medical services provided to prisoners and detainees in
the Oklahoma County Jail. County admitted that Armor provided
the medical services in question pursuant to a contract for
the period January 1, 2014 to June 30, 2014, and an extension
of this contract for the period July 1, 2014 to June 30,
2015. County did not dispute the accuracy of Armor's
monthly invoices for such services and admitted it had not
paid some invoices totaling $3, 302, 297.04.
Despite these admissions, County argued that judgment could
not be entered because Armor had not provided proof of the
availability of funds as required by 62 O.S.2001,
§§ 362  and 363 . In reply, Armor argued
that the County's obligation to pay for the medical
services to the prisoners and detainees was not a claim
founded on contract alone that is subject to the provisions
of §§ 362 and 363. Armor also argued that the
obligation was not "indebtedness" as addressed in
Article 10, § 26  of the Oklahoma Constitution. Armor
asserted the County's obligation to pay the medical
services provided to prisoners and detainees was incurred in
fulfillment of a governmental function mandated by the
Oklahoma Constitution. As such, the County's obligation
was exempt from Article 10, § 26 as well as §§
362 and 363.
The trial court ruled that Article 10, § 26 did apply,
but that Armor's summary judgment materials made a prima
facie case of the availability of funds. The trial court
concluded that the burden shifted to the County and that the
County's excuse of a revenue failure within the
Sheriff's budget did not bar payment. In so ruling, the
trial judge said "whenever there's a failure of
revenue within a particular department the County
Commissioners look to their general revenue and do what they
need to do in order to compensate vendors who are out there
that they have legal obligations to."
The trial court granted summary judgment to Armor in the
amount of $3, 302, 297.04 and County has appealed. We have
retained this appeal for de novo review of the summary
judgment and the important constitutional issue presented.
See Wathor v. Mutual Assurance Administrators, Inc.,
2004 OK 2, ¶ 4, 87 P.3d 559, 561. Upon review, we affirm
the summary judgment in favor of Armor, albeit for a
different reason than given by the trial court.
Article 17, § 2 of the Oklahoma Constitution established
the office of sheriff for each of the seventy-seven counties,
and Article 25, § 18 prescribed the duties of that
office by reference to and incorporation of the duties of
that office under territorial law.  Smartt v. Board of
County Commissioners of Craig County, 1917 OK 590,
¶¶ 3 and 4, 169 P. 1101, 1101. One such
constitutional duty imposed upon a sheriff was "[t]he
keeping of prisoners confided to his custody."
Id. at ¶4, 169. P. at 1102. Performance of this
and other constitutionally prescribed duties "are made
mandatory because necessary for the protection and well-being
of the people composing the state." Id. at
¶ 6, 169 P. at 1102.
In the Smartt case, this Court held that expenses
"incurred in the necessary discharge of his duties
imposed... by the imperative mandate of law, are not within
the limitation imposed by section 26, art. 10."
Id. This Court explained this holding by observing
that "[i]n many instances the amount necessary for a
proper performance of such duties could not be reasonably
foreseen, for it is not always possible to tell in advance
how much will be required." Id. at ¶ 20,
169 P. at 1104.
Financial obligations for the fulfillment of constitutionally
mandated functions are termed "compulsory" debts,
as distinguished from those based on contract alone.
Board of County Commissioners of Caddo County v.
Lawrence, 1938 OK 173, ¶ 11, 78 P.2d 669, 671. The
appropriation of funding for such obligations occurs by the
"force and vigor" of the Oklahoma Constitution, and
does not require further fiscal action to be effective,
although the better practice is to observe the formal
appropriation process. Edwards v. Carter, 1934 OK
46, ¶¶ 20-21, 29 P.2d 610, 613. The only limitation
upon either an appropriation or a judgment directing payment
for constitutionally mandated functions is that "the
items and amounts are reasonable, proper, and necessary to
the conduct of the government in accordance with [the
pertinent] constitutional provisions." Little v.
County Excise Board of Marshall County, 1932 OK 833,
¶ 9, 16 P.2d 1080, 1082.
Nothing in the record suggests that the medical services
provided by Armor for the prisoners and detainees in the
Oklahoma County Jail were not "reasonable, proper, and
necessary." As those services and the charges therefor
were in fulfillment of the sheriff's constitutional duty
for "the keeping of prisoners confided to his custody,
" Armor is entitled to a judgment in the amount of $3,
CONCUR: COMBS, C.J., KAUGER, WATT, WINCHESTER, EDMONDSON,
COLBERT, REIF, and WYRICK, JJ.
CONCURS IN JUDGMENT: GURICH, V.C.J. (By separate writing.)
Gurich, V.C.J., concurring in judgment:
1 Although I agree that Armor Correctional Health Services is
entitled to judgment in the amount of $3, 302, 297.04 for
medical services it provided to the Oklahoma County Detention
Center, I reach that conclusion for a different reason.
Article 10, § 26 of the Oklahoma Constitution limits a
county's ability to become indebted, and provides in
relevant part that:
[N]o county, city, town, township, school district, or other
political corporation, or subdivision of the state, shall be
allowed to become indebted, in any manner, or for any
purpose, to an amount exceeding, in any year, the income and
revenue provided for such year without the assent of
three-fifths of the voters thereof, voting at an election, to
be held for that purpose.... 
purpose behind this constitutional provision is to force
cities and municipalities [and counties] to operate on a cash
basis, and to prevent indebtedness extending beyond one
year." City of Del City v. Fraternal Order of
Police, Lodge No. 114, 1993 OK 169, ¶ 5, 869 P.2d
This Court, however, has exempted certain debts from the
purview of Art. 10, § 26 if "the indebtedness
arises from a claim based on a constitutional governmental
function" pursuant to this Court's decision in
Smartt v. Board of County Commissioners of Craig
County, 1917 OK 590, 169 P. 1101.  However, the
Smartt exception, has been "met with a great
deal of criticism, " and has "caused considerable
confusion" since it was decided in 1917. City of Del
City, 1993 OK 169, ¶ 19, 869 P.2d at 314.
Rightfully, over the last 100 years, the Smartt
exception has been "narrowly construed to avoid allowing
the exception to swallow the constitutional rule"
against indebtedness extending beyond one year.
In Protest of Kansas City Southern Railway Co., 1932
OK 328, 11 P.2d 500, the Court explained when the
Smartt exception should be invoked. In that case, an
appropriation had been made for the performance of a
constitutional governmental function, specifically
"feeding of prisoners in the county jail and the
supplies necessary for the maintenance of the county jail,
" but such appropriation was insufficient due to
unforeseen conditions in revenue collection. The Court
[W]here a county officer, in good faith, requests an
appropriation to be made and where the county taxing
officials, in good faith, make an appropriation for the
conduct of his office and by reason of unforeseen conditions
the appropriation so made is insufficient... it is [the
officer's] duty to apply to the county taxing officials
for a supplemental appropriation for the conduct of his
office, and a supplemental appropriation therefor should
be made, although to make it requires the transfer of funds
from unexpended appropriations theretofore made for other
purposes. In the event that no such supplemental
appropriation may be made, then and then only does the rule
stated in the 'Smart[t]' Case apply....
The case now before this Court is distinguishable from
Smartt, and thus, we need not invoke the exception
in this case. In Smartt, the sheriff sought to
recover monies from the Board of County Commissioners for
expenses incurred for boarding prisoners. The commissioners
denied the Sheriff's request because the county's
revenue fund had "been exhausted prior to the accrual or
presentation" of the sheriff's claim.  In other
words, in Smartt, the county actually had no funds
to reimburse the sheriff. In this case, the record makes
clear that Oklahoma County withheld payment to Armor
Correctional Health Services not because it lacked
the funds to do so. Rather, the County withheld payment after
being advised to do so by the District Attorney.
The record reveals that on January 22, 2014, Oklahoma County
entered into an Inmate Health Care Services Agreement with
Armor Correctional Health Services (Armor) under which Armor
provided designated health-related services for inmates of
the Oklahoma County Detention Center. On June 25, 2014, the
County extended the Agreement for an additional year,
effective July 1, 2014, through June 30, 2015 (FY 2014-2015).
 Under such contract, Armor was to be
paid a base compensation, in equal installments in the amount
of $7, 360, 638.82. In addition, Armor was entitled to
invoice the County for costs incurred by Armor over and above
an aggregate limit of $1, 050, 000.00 for hospitalization,
off-site, and on-site specialty services, emergency
transportation services, and pharmacy costs.
The Armor contract was fully appropriated by the
County for FY 2014-2015 and was to be paid in part from the
Sheriff's Special Revenue Fund and in part from the
County's General Revenue Fund. Armor performed all duties
and responsibilities as required under the contract, and
until February of 2015, the County paid all invoices
submitted to it by Armor for services provided by Armor under
the contract.  Due to unforeseen circumstances, the
Sheriff's Special Revenue Fund had a revenue failure
during FY 2014-2015, and Armor stopped receiving payments
from the County. When certain county officials became aware
that Armor invoices were not being paid, "members of the
Budget Board began looking at ways to amend the County Budget
to make a supplemental appropriation using available funds of
the County to pay the balance due on the contract."
 However, the District Attorney
advised the County to continue to withhold payment, citing
Art. 10, § 26 of the Oklahoma Constitution. Armor then
sued for breach of contract in the District Court of Oklahoma
County to recover payment. 
A contract claim against a County is specifically governed by
62 O.S. 2011 ...