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FOR PUBLICATION

ATTORNEY FOR APPELLANT: STEVEN L. BLAKELY Acton & Snyder, LLP Danville, Illinois

ATTORNEY FOR APPELLEE: CATHLEEN M. SHRADER Barrett & McNagny, LLP Fort Wayne, Indiana

IN THE COURT OF APPEALS OF INDIANA
KEYBANK NATIONAL ASSOCIATION, Appellant-Plaintiff, vs. GRANT F. SHIPLEY, Appellee-Defendant. ) ) ) ) ) ) ) ) )

No. 02A03-0509-CV-440

APPEAL FROM THE ALLEN SUPERIOR COURT The Honorable Nancy E. Boyer, Judge The Honorable David Avery, Special Judge Cause No. 02D01-0111-CP-2323

April 26, 2006 OPINION - FOR PUBLICATION

VAIDIK, Judge

Case Summary KeyBank National Association ("KeyBank") appeals the trial court's grant of summary judgment in favor of attorney Grant Shipley on its negligence claim. Specifically, KeyBank contends that Shipley, who was the attorney for a receiver, owed a duty to KeyBank, a creditor of the receivership. Although a receiver owes a duty to a creditor, Indiana courts have not yet addressed whether an attorney for a receiver owes a duty to a creditor. After analyzing our case law, the law of other states, and various public policies, we conclude that a receiver's attorney does not owe a duty to a creditor and therefore cannot be held liable for negligence. Instead, the creditor's remedy is to sue the receiver, which in turn can sue its attorney for malpractice. We therefore affirm the trial court. 1 Facts and Procedural History This is the fourth appeal stemming from the receivership of Friction Material Company, Inc. ("FMCI"). The lengthy and complicated facts that underlie this appeal were set forth by this Court in KeyBank National Ass'n v. Michael, 737 N.E.2d 834 (Ind. Ct. App. 2000) (KeyBank I), and we now summarize those facts here. FMCI, a Delaware corporation with its operations in Huntington, Indiana, defaulted on a loan made by KeyBank. KeyBank had a first priority lien on most of FMCI's assets, including inventory, accounts receivable, equipment, and real estate. As a result of FMCI's default, KeyBank demanded immediate repayment of the outstanding

We held oral argument in the Court of Appeals' courtroom on March 30, 2006. We commend counsel for their excellent presentations.

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balance of the loan ($891,776.08) plus interest and collection expenses. KeyBank then instituted proceedings in the Huntington Circuit Court requesting foreclosure of FMCI and the appointment of a receiver pursuant to Indiana Code

Download Keybank National Association v. Grant F. Shipley.pdf

Indiana Law