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COA holds law firms are judgment creditors, owe restitution

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In a dispute over whether two law firms should have to repay money from a judgment they received by way of attorney liens, the Indiana Court of Appeals held that the law firms are judgment creditors, so they are liable to pay restitution to the state of Indiana.

The issue arose in Debra Minott, Faith Laird, Patti Bailey v. Lee Alan Bryant Health Care Facilities, Inc.; Parkview Residential Care Center, L.L.C.; Parke County Residential Care Center, L.L.C., et al., 49A05-1305-PL-213, in which several residential care facilities that provided services funded by the Family and Social Services Administration’s Residential Care Assistant Program sued the FSSA after it suspended funding for new RCAP residents and imposed fixed reimbursement rates. The providers were awarded $176,664.25 in damages. The money was disbursed among two banks and two law firms – Lewis & Kappes in Indianapolis and Chicago firm Williams Bax & Saltzman P.C., which had filed attorney liens. The firms received $72,399.22 of the damages award.

But the Court of Appeals reversed the judgment and ordered more proceedings. At the trial court level, the final judgment order entered Nov. 8, 2012, did not address restitution to the state for the damages paid out. The state sought reimbursement from the law firms and the banks, but the trial court denied the state’s motion.

The law firms argued that the state’s motion for restitution was untimely and, even if it wasn’t, restitution following a reversal on appeal cannot be extended to non-party creditors.

The Court of Appeals was not persuaded by the firm’s claims, ruling first that the state’s motion for restitution is timely.

“The issue of restitution arose only after this court’s decision to reverse the trial court’s judgment. The trial court’s November 8th order neither addressed nor disposed of that lingering issue. Therefore, it was not a true final judgment,” Chief Judge Margret Robb wrote.

The judges then ruled that the law firms and banks are liable for restitution of the funds paid by the state to the providers. The banks and law firms are judgment creditors or their lawful equivalent, so they are liable. The COA pointed to an agreed order entered by the trial court in 2011 that gave the law firms and creditor banks the right to enforce the judgment.

“Because the creditors had the power to enforce the judgment in their own favor, they are judgment creditors and should be treated as such for the State’s request for restitution,” she wrote.

 

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  1. Hail to our Constitutional Law Expert in the Executive Office! “What you’re not paying attention to is the fact that I just took an action to change the law,” Obama said.

  2. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  3. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  4. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  5. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

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