Burelli v. Martin, 130 N.E.3d 661 (Ind. Ct. App. 2019) approved the appointment of a receiver to sell an expensive item of personal property, subject to the posting of a bond.
At a judgment creditor’s request, the trial court appointed a receiver under I.C. 32-30-5-1(1) and (2) to sell a multi-million dollar Corvette to satisfy the debts of the owners of the Corvette. Those sections are:
(1): In an action by a vendor to vacate a fraudulent purchase of property or by a creditor to subject any property or fund to the creditor's claim. [The judgment creditor alleged the Corvette was subject to his claim.]
(2): In actions between partners or persons jointly interested in any property or fund. [ The judgment creditor and the Corvette’s co-owners were all jointly interested in the Corvette, and the proceeds from its sale.]
The Court of Appeals affirmed the appointment a receiver.
However, the Court reversed the trial court for failing to require the receiver to post a bond. Although the parties apparently had stipulated to a $2.5 million insurance policy on the car, the insurance did not meet the bond obligation.
The Court held that the insurance policy only protected the receivership property (the Corvette). The statutory requirement for a bond (Section 3), on the other hand, insures the receiver’s conduct. The Court expanded on the point of the receiver's personal liability:
When a receiver breaches his duty by acting outside his statutory authority or orders of the appointing court or is guilty of negligence and misconduct in administering the receivership, he is personally liable for any loss to any interested party. A receiver must therefore post a bond to secure that obligation.
The Court remanded the case to the trial court to amend the receivership order to require the receiver to post “an appropriate bond to secure [the receiver’s] oath to faithfully discharge his duties.” The Court expressed no opinion on what would be an appropriate amount, however.
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