iowa-department-of-human-services-v-morse-healthcare-services-inc-dba ( 2015 )

IN THE SUPREME COURT OF IOWA
No. 14–1542
Filed April 10, 2015
IOWA DEPARTMENT OF HUMAN SERVICES,
Plaintiff-Appellee,
vs.
MORSE HEALTHCARE SERVICES, INC. d/b/a FAITH RIDGE LIFE
CENTER, MORSE ENTERPRISES, INC. d/b/a KEVINGTON LANE,
MANOR OF MALVERN, INC., KEVINGTON LANE, INC., and MARY
MORSE-BOLTON,
Defendants,
KLAASMEYER & ASSOCIATES, INC.,
Receiver-Appellee,
and
BANK IOWA,
Intervenor-Appellant.
Appeal from the Iowa District Court for Polk County, Mary Pat
Gunderson, Judge.
A bank appeals a district court decision permitting the payment of
receivership expenses out of property in which it has a prior perfected
security interest. REVERSED AND REMANDED WITH DIRECTIONS.
Steven H. Krohn, Smith, Peterson Law Firm, Council Bluffs, and
William B. Serangeli and Joseph M. Borg, Dickinson, Mackaman, Tyler &
Hagen, P.C., Des Moines, for appellant.
2
Thomas J. Miller, Attorney General, and Amy C. Licht, Assistant
Attorney General, for appellee Iowa Department of Human Services.
Jeffrey W. Courter, Nyemaster Goode, P.C., Des Moines, for
appellee Klaasmeyer & Associates, Inc.
Robert L. Hartwig, Johnston, for amicus curiae Iowa Bankers
Association.
3
PER CURIAM.
This is the companion interlocutory appeal with facts that mirror
Iowa Department of Human Services v. DeWitt Bank and Trust Co., ___
N.W.2d ___ (Iowa 2015), decided today.
As in DeWitt Bank, the Iowa Department of Human Services (DHS)
filed an application for relief against the defendant health care providers,
Morse Healthcare Services, Inc., Morse Enterprises Inc., Manor of
Malvern, Inc., Kevington Lane, Inc., and Mary Morse-Bolton, under Iowa
Code section 249A.44 (2015). See DeWitt Bank, ___ N.W.2d at ___. The
district court appointed a receiver without formal notice to Bank Iowa, a
lender that held perfected security interests in the defendant health care
providers’ property. Bank Iowa intervened and resisted the receiver’s
applications for fees and expenses. The district court ruled the
receivership expenses should be paid out of property in which Bank Iowa
had prior lien interests. Bank Iowa sought interlocutory review. We
granted its application and expedited the appeal.
In DeWitt Bank, we concluded that Iowa follows the common law
rule that receivership expenses can be charged to secured property only
if the secured creditor has consented to the receivership or benefited
therefrom. ___ N.W.2d at ___. Based on the reasoning set forth in DeWitt
Bank, we reverse the decision of the district court and remand the case
for further proceedings consistent with this opinion. Costs on appeal are
taxed against DHS.
REVERSED AND REMANDED WITH DIRECTIONS.
All justices concur except Waterman, J., who takes no part.
This opinion shall not be published.