ILNews

Court rules on bank interpleader case

Michael W. Hoskins
January 1, 2007
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The Indiana Supreme Court has issued a decision on how a state statute governs recovery when a financial institution interpleads and pays into court-deposited funds that are subject to an adverse claim.

A unanimous opinion came Wednesday in Porter Development, LLC v. First National Bank of Valparaiso, No.64S04-0606-CV-236, stemming from a Porter Superior case involving the bank and the development company.

First National initiated the action as an interpleader, alleging it was the holder of a $100,000 certificate of deposit owned by Porter Development and eventually assigned to another party, Eagle Services Corp., which refused to consent for withdrawing the funds as the development company wanted. Both asserted their rights to the deposit and filed suits.

The trial court determined the assignment to Eagle Services was invalid and Porter Development was the true owner, but it granted summary judgment to the bank on the interpleader action and partial summary judgment to Porter on a request to recover attorney fees and costs. The Court of Appeals affirmed that decision, and now the justices have done the same.

"We conclude that Indiana's Adverse Claim Interpleader statute is mandatory and establishes the right of a depository financial institution that pays funds subject to an adverse claim into a court 'to recover and collect the costs and expenses, including attorney's fees, incurred by the depository financial institution'...."Justice Brent Dickson wrote. "We hold, however, that such a right to recovery only includes those costs and expenses that are extended in bringing a proper interpleader, or successfully defending its use of interpleader."

Justices reversed the trial court's partial summary judgment denying the bank attorney fees, remanding it to determine reasonable expenses and how Eagle Services - if at all - should be involved in the payment.
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  2. 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.

  3. 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.

  4. 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.

  5. 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.

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