No error in granting receiver’s turnover motion after deposits in out-of-state bank account, COA affirms

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A trial court did not err in issuing a turnover order to obtain assets in a case involving millions of dollars in promissory notes, the Court of Appeals of Indiana has ruled in affirming a lower court’s decision.

David Steingart, Bruce Steingart and Kevin Steingart are member-owners of Ameribridge LLC, which executed four promissory notes in favor of German American Bank between July 2019 and March 2021. The notes exceeded a total of $9 million.

In April 2021, Ameribridge and the Steingarts together executed a promissory note in favor of the bank for $1.5 million.

The bank filed a lawsuit in November 2021 against Ameribridge and the Steingarts, alleging, among other things, that the promissory notes were in default. The bank also requested the appointment of a receiver.

In October 2022, the receiver moved to settle and compromise two separate causes of action that Ameribridge had pending against Greenwalt CPAs Inc. and Watermark Group LLC for accounting services the firms provided.

The Bartholomew Superior Court granted the motions.

The receiver then filed his “First Motion for Turnover” requesting the court to order David to return certain assets of Ameribridge, specifically funds totaling $296,847.81.

The court granted that motion.

David moved to stay the turnover order and then filed an interlocutory appeal. The Steingarts later filed a separate notice of appeal of the court’s orders to settle and compromise and alleged the appeal was interlocutory as of right.

The Court of Appeals consolidated the two appeals.

The receiver then moved to partially dismiss the appeal, contending the trial court’s orders to settle and compromise are interlocutory orders that aren’t appealable as of right.

The motions panel for the Court of Appeals voted to deny the receiver’s motion.

In appealing the turnover order, the Steingarts argued the receiver’s concerns of misappropriation of funds were unfounded.

In his motion for turnover, the receiver informed the court that a total of about $382,000 of Ameribridge’s assets were deposited into a bank account David opened in Minnesota. The receiver alleged that was done without notice or authorization, contrary to the trial court’s order appointing the receiver.

The Court of Appeals disagreed with the Steingarts.

“The turnover order — the order now at issue — merely ordered the Steingarts’ compliance with the court’s previous receivership order,” the opinion says. “A receivership is a means of safeguarding an entity’s assets. To that end, property in receivership remains under the court’s control and continuous supervision, and it is the duty of the receivership court to protect the property from interference.”

The Court of Appeals remanded for the sole purpose of amending the order to direct turnover of either $276,689.81 or $255,689.81.

The Steingarts also argued the trial erred by granting the receiver’s motions to settle and compromise.

Though the motions panel already voted to deny the receiver’s motion to dismiss, the Court of Appeals said it is “well established that we have inherent authority to reconsider the ruling while an appeal remains pending,” citing Pryor v. State, 189 N.E.3d 167 (Ind. Ct. App. 2022).

The Steingarts contended the subject of the contested orders is aligned with Appellate Rule 14(A)(3), which provides that appeals from interlocutory orders compelling the delivery or assignment of “things in action” can be taken as a matter of right.

The question, the Court of Appeals said, is whether the trial court’s orders line up with the rule.

“Under the facts of this case, we believe they are,” the opinion says.

Still, the Court of Appeals ruled the trial court’s decision to authorize the receiver to compromise Ameribridge’s claim against Watermark Group doesn’t constitute an abuse of discretion.

“Though it is clear the trial court was not dealing with certainties, it pragmatically undertook a careful weighing and balancing of a variety of considerations in arriving at a conclusion as to the course of prudence under the circumstances,” the opinion says.

Senior Judge Randall Shepard wrote the opinion. Judges Cale Bradford and Leanna Weissmann concurred.

The case is David J. Steingart, Bruce A. Steingart, and Kevin C. Steingart v. Robert P. Musgrave, 22A-CC-2936.

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