Court Decision Holds State Responsible for Paying Local Board of Education Judgment

On April 26 the Maryland Court of Appeals made a final ruling in the case of Beka Industries, Inc. v. Worcester County Board of Education.  The case arose from a payment dispute between Beka, a contractor, and the board over the construction of an elementary school.  Beka sued the board in circuit court and won.  The board appealed to the Court of Special Appeals and the Special Appeals Court overturned the circuit court’s decision and remanded the case for a new trial.  Beka appealed the decision to the Court of Appeals.

The key issue for the counties concerned the determination of whether a county board of education is entitled to sovereign immunity in a contract action and if not, who is the party responsible for paying any judgment – the county board, the county, or the State.  The Court of Appeals held that a county board is subject to a limited waiver of sovereign immunity in an action based upon a written contract but under the provisions of Section 12-203 of the State Government Article, payment of any judgment entered against a county board shall be funded by the State and is not a responsibility of the county.  The Court of Appeals also remanded the case back to circuit court for additional consideration.

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