Shipley v. Keybank National Ass'n

821 N.E.2d 868, 2005 Ind. App. LEXIS 155, 2005 WL 236547
CourtIndiana Court of Appeals
DecidedFebruary 1, 2005
Docket02A03-0311-CV-461
StatusPublished
Cited by10 cases

This text of 821 N.E.2d 868 (Shipley v. Keybank National Ass'n) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shipley v. Keybank National Ass'n, 821 N.E.2d 868, 2005 Ind. App. LEXIS 155, 2005 WL 236547 (Ind. Ct. App. 2005).

Opinion

OPINION

SHARPNACK, Judge.

In this interlocutory appeal, Grant F. Shipley appeals a portion of the trial court's order, which granted him summary Judgment on one of the issues he raised and ordered him to return approximately $70,000 in attorney fees that he previously had received as the attorney for a former receivership to the receivership estate that is pending in another county court for distribution by that court. 1 Shipley also appeals the trial court's denial of his Ind. Trial Rule 60 motion to correct a clerical mistake in the dating of the summary judgment order, which had been issued nune pro tune. Shipley raises four issues, which we consolidate and restate as:

I. Whether the trial court erred by granting Shipley's motion for summary judgment on the issue of repayment of fees earned as attorney for a former receivership and by ordering Shipley to return the fees to the receivership pending in the Huntington Cireuit Court; and
II. Whether the special judge abused his discretion by concluding that the trial court's written summary judgment order was properly entered as a nune pro tunc order.

*871 We affirm. 2

The relevant facts follow. 3 This appeal stems from the trial court's summary judgment order, which ordered Shipley to return approximately $70,000 in attorney fees that he previously had received as the attorney for the receiver of New Friction Material Company, Inc.'s ("New Friction") receivership. This is the third appeal stemming from the New Friction receivership. See KeyBank Nat. Ass'n v. Michael, 737 N.E.2d 834 (Ind.Ct.App.2000) ("KeyBank I"); KeyBank Nat. Ass'n v. Michael, 770 N.E.2d 369 (Ind.Ct.App.2002), trans. denied ("KeyBank II"). We will first review the facts and prior litigation involving the New Friction receivership that lead to the cireumstances surrounding the trial court's current rulings.

A partial summary of the facts regarding the New Friction receivership was set out in KeyBank II:

Friction Material Company, Inc. (FMCI) defaulted on a loan made by KeyBank [National Association ("Key-Bank")]. As a result, KeyBank demanded immediate repayment of the outstanding balance of the loan, plus interest and collection expenses. Key-Bank then instituted proceedings [in Huntington Cireuit Court] requesting foreclosure and the appointment of a receiver. The court scheduled a hearing on the request for a receiver for November 4, 1999.
On November 3, 1999, New Friction Material Company, Inc. (New Friction), as the purported successor by merger to FMCI, filed its petition for voluntary dissolution and for appointment of a receiver. Also on November 8, a hearing on the dissolution of New Friction was held without notice to KeyBank. New Friction asserted that it had been incorporated "for the sole purpose of acquiring all assets and obligations of Friction Material Company, Inc., thereby domesticating its assets and operations and thus authorizing the initiation of a voluntary dissolution by court proceeding under IC 23-1-47-1(4)." Record at 185. New Friction's articles of dissolution asserted that it was incorporated on November 2, 1999, an assertion that was not accurate. New Friction requested the appointment of a receiver to liquidate the business.
On November 8, 1999, the trial court granted New Friction's petition for dissolution and the corporation was dissolved effective as of that date. The court concluded that New Friction's business and affairs should be wound up and liquidated in accordance with the relevant statutory provisions. The court also consolidated KeyBank's action with the action commenced by New Friction. A hearing was held on November 10, 1999 and two days later, the trial court ordered the appointment of a receiver pursuant to New Friction's request. The court appointed Stephen J. Michael as receiver and then granted Michael's application to employ Grant Shipley as attorney for the receiver. Shipley had earlier appeared for New Friction and FMCI at various stages of the proceedings....

KeyBank II, 770 N.E.2d at 371-372. Also on November 10, 1999, New Friction obtained a certificate of merger for the *872 merger of FMCI with New Friction. KeyBank I, 737 N.E.2d at 845.

In December 1999, the receiver filed a motion for leave to obtain secured credit, to grant a security interest in collateral, and to subordinate KeyBank's previous secured claims in favor of a new lender. Id. at 840. KeyBank: (1) challenged the validity of the merger between FMCI and New Friction; (2) argued that the trial court erred by denying KeyBank's petition for a receiver and by granting New Friction's petition for a receiver; (8) objected to the subordination of its claims; (4) petitioned the trial court to disqualify Shipley as counsel for the receiver on grounds of conflict of interest; and (5) challenged the payment of attorney fees and expenses to Shipley from the receivership estate. Id. at 840-844. Thereafter, the Huntington Circuit Court entered an order, which provided that: (1) there was a valid merger; (2) KeyBank was judicially estopped from challenging the appointment of a receiver; (3) the receiver was allowed to obtain secured credit in an amount not to exceed $350,000 and to subordinate KeyBank's prior security interest in order to resume business operations; (4) there was no conflict of interest in Shipley's role as counsel for the receiver of New Friction; and (5) the receiver's application of payment of fees and expenses to Shipley was granted. Id. at 840-844.

KeyBank filed an interlocutory appeal of the Huntington Cirevit Court's order, and we held that the merger between FMCI and New Friction was not valid because New Friction had dissolved by the time the merger occurred and that the Huntington Cireuit Court abused its discretion by granting New Friction's petition for a receiver and by failing to grant KeyBank's petition for a receivership. Id. at 845-848. We also held that the Huntington Circuit Court erred by allowing the receiver to subordinate KeyBank's security interest in favor of a new lender without KeyBank's consent. Id. at 849-851. 'We also concluded that Shipley, who had served as counsel for FMCI and New Friction, had an inherent conflict in properly serving the interests of KeyBank on behalf of the receiver and was disqualified to serve as such. Id. at 851-853. Finally, we held that because Shipley was not qualified to serve as counsel for the receiver, he was without authority to act. Id. at 858. Thus, we held that the fees and expenses paid to Shipley were not chargeable to the receivership estate, and we reversed the Huntington Circuit Court's orders granting of payment of fees and expenses to Shipley and remanded the case for further proceedings consistent with our opinion. 4 Id. at 853-854.

*873

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821 N.E.2d 868, 2005 Ind. App. LEXIS 155, 2005 WL 236547, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shipley-v-keybank-national-assn-indctapp-2005.