October 13, 2020

Receiver’s Immunities & Procedure for Suing Receivers.

A receiver, as an agent of the court, has historically been entitled to certain immunities and protections.  Section 33-2617(A) provides that a receiver appointed under the act is entitled to all of the defenses and immunities “provided by law” for any act or omission which is “within the scope” of his appointment.  Note that this immunity will not insulate the receiver from liability for actions which exceed or violate the terms of the order appointing her as the receiver.   This statutory protection is consistent with well-reasoned recent Arizona case law.  See Mashni v. Foster, ex rel. County of Maricopa, 234 Ariz. 522, 527, 323 P.3d 1173, 1178 (Ariz.App. 2014)(holding that “a receiver is immune from suit unless the appointing court specifically finds that the receiver has acted outside the scope of the appointment order. . . . Like the court itself, the receiver’s immunity from suit exists by virtue of the context in which he acts, not the content of his actions.”).

As a separate matter, the Act codifies the Barton Doctrine set forth by the United States Supreme Court in Barton v. Barbour, 104 U.S. 126, 129, 26 L.Ed. 672 (1881).    Therefore, the gating function for a person to sue a receiver personally for any act or omission as a receiver is that he must prove to the court which appointed the receiver that she “acted without authority.”   A.R.S. §33-2617(B). 

A court in deciding whether a receiver’s specific actions fall within the scope of the Barton Doctrine must review “the nature of the function that the [receiver] or his counsel was performing during commission of the actions for which liability is sought. . . .  [If the receiver acted] ‘within the context’ of [her] role of ‘recovering assets for the estate,’ leave must be obtained.  . . . Acts are presumed to be part of the duties of the [receiver] or his counsel ‘unless Plaintiff initially alleges at the outset facts demonstrating otherwise.’ ”  McDaniel v. Blust, 668 F.3d 153, 157 (4th Cir. 2012).   Even allegations of intentional misconduct, including fraud, by a receiver, are covered by the doctrine such that a cause of action alleging such a claim must be approved by the appointing court before it is filed.  Id., 688 F.3d at 158.   

Although not relying or citing to Barton, the Arizona Court of Appeals in Mashni reached the same result and even clarified that receivers in Arizona do not owe fiduciary duties to all of the creditors of the receivership.  Instead, a receiver has a duty of fidelity to the court and its orders.  See Mashni supra, 234 Ariz. at 528.

A receiver appointed under the Act may, therefore, take great comfort in more than 130 years of case law from federal courts and the recent decision from the Arizona Court of Appeals establishing that a court which appoints a receiver has control over if and when he or she can be sued.   She also should not fear that she can be charged with breaching chimerical fiduciary duties to unsecured creditors so long as she acts in accordance with the terms of the order appointing her.

View Full Article



Back to News & Events

Copyright © 2024 Tiffany & Bosco PA. All rights reserved. Site by Blufish

Legal Disclaimer

The owner of this website has made a commitment to accessibility and inclusion, please report any problems that you encounter using the contact form on this website. This site uses the WP ADA Compliance Check plugin to enhance accessibility.