Family sues state over unpaid $2.75M DCS settlement

A Wabash couple who had reached a $2.75 million settlement after an Indiana Department of Child Services family case manager was found to have made false allegations of abuse and neglect is now suing the state for not approving the settlement agreement.

Jason and Myka Kelly filed the complaint—Jason Kelly 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. v. The State of Indiana, Sandra Sell, Brandy Shaver, Valerie Eiler, John Lane, Julie Hobbs, and Larry Noland, 85C01-2206-CT-00329—June 8 in Wabash Circuit Court alleging breach of contract and violation of the 14^th Amendment.

The Kellys assert the state had an “implied obligation to make a reasonable and good faith effort” to get the settlement agreement approved. Also, they contend DCS’s removal of the children “without probable cause, without court order, and when the children were in no imminent danger, violated the 14^th Amendment’s due process rights and protections against unreasonable seizure.”

Brad Catlin of Williams & Piatt LLC in Indianapolis is representing the Kellys in the lawsuit and represented the family in an all-day mediation that ended with the settlement. He said he is stunned that the state initially agreed to compensate the family but then did not approve the final contract.

“I’ve never seen anything like this,” Catlin said. “… I am unaware of any time that a settlement like this was negotiated by the (Indiana) Attorney General’s Office with the relevant departments there … that it’s failed and it’s not going to be approved.”

Indiana Attorney General Todd Rokita’s office, the Indiana Department of Child Services and Gov. Eric Holcomb’s office all declined to comment on the pending litigation.

‘Inappropriate contact’

The Kellys entered mediation talks with the state following revelations that their family case manager, Sandra Sell, had concocted false allegations to get the children removed from their custody.

According to the Kellys’ complaint and a report from the Indiana inspector general, Sell was involved in a personal and sexual relationship with Larry Noland, the father of Myka Kelly’s child, A.S. Sell has admitted that her decisions to remove A.S. from Myka’s care and place the child with Noland were partly motivated by the relationship.

The two began their relationship in October 2020, about two months after Noland had been released from the Indiana Department of Correction for neglect of a dependent resulting in serious bodily injury. He pleaded guilty to the charges and was sentenced to 12 years after an infant in his care was found to have injuries consistent with shaken baby syndrome.

Text messages between Sell and Noland indicated she was going to “fast track” Noland’s custody of A.S. Also, she encouraged Noland to file for emergency custody even though he had just recently met A.S. for the first time.

Sell was assigned as the family case manager for the Kelly family in May 2020, when the six children were adjudicated as children in need of services and returned to their parents’ custody. The youngsters had been removed from the Kellys’ household following a January 2020 domestic dispute.

She met Noland in October when she was supervising a visit between him and A.S. The lawsuit alleges the relationship began immediately and Sell starting taking steps to “undermine A.S.’s placement with the Kellys.”

She allegedly accused Jason Kelly of sexually abusing A.S. even though she knew he had been exonerated of that charge. Also, she allegedly falsified a drug test for Noland’s girlfriend, loaned money to Noland, provided him with dishes and toys, and instructed him to not allow A.S. to communicate with Myka.

On Dec. 10, 2020, DCS petitioned to show cause as to why the Kellys should not be held in contempt for violating the CHINS court’s orders. The petition was based on an affidavit from Sell that “falsely asserted” that Jason had “destroyed” items in the home and caused “significant damage” to a vehicle. In addition, the affidavit described allegations of abuse and neglect of the Kelly children.

The children were removed from the Kellys’ custody the next day. All were placed in foster case except for A.S., who was placed with Noland.

According to the complaint, sometime before March 10, 2021, Julie Hobbs, the director of the DCS Wabash County office, learned about Sell’s relationship with Noland. Sell was subsequently fired and DCS moved to have A.S. placed in foster care because Noland, at that time, was homeless.

The Kellys learned about the “inappropriate contact” between Sell and Noland at a hearing on March 12, 2021. After the relationship was disclosed, DCS, a therapist and the court appointed special advocate all agreed the children should be returned to the Kellys.

The children were returned to the Kellys in April 2021 and the CHINS case was terminated in July 2021.

Catlin called DCS’s actions a cover up.

“If DCS knew about it and they knew their employee had been engaged in this behavior and they didn’t immediately come out and tell my clients and the court that, then I think calling it a ‘cover up’ is an appropriate thing to say,” Catlin said.

Undoing a settlement

In their lawsuit, the Kellys contend their children were removed from their care as a direct result of the relationship. They presented their complaints to the attorney general and then engaged in a mediation on Jan. 25, 2022.

According to Catlin, the state was represented by a deputy attorney general, and the chief of civil litigation for DCS was also present. He said he believes they were in communication with other officials.

The agreement was reached and sent to the governor’s office for approval. Catlin said he was optimistic.

“The fact that DCS was fully involved in the negotiations and fully on board, as far as I could tell, with the settlement led me to fully believe that it was all but a done deal,” he said.

However on May 12, the plaintiffs were informed the settlement was not approved. No reason was given.

“(The Kellys are) obviously really frustrated because they thought this case was behind them,” Catlin said. “They thought they were going to be able to move forward. Litigation is very difficult for every client. It’s not something they want to do. It’s something they have to do because they’ve been hurt so badly.”

The state has not filed a response to the complaint.

Pleading guilty

Sell was charged with one count of knowingly falsifying child abuse or neglect information or records as a Class A misdemeanor, one court of obstruction of justice as a Level 6 felony and one count of official misconduct as a Level 6 felony.

In a plea agreement, she pleaded guilty to the obstruction of justice charge and the other two charges were dismissed. The Wabash Circuit Court sentenced her June 6 to 1-1/2 years’ incarceration with 180 days suspended to probation.