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2004AP2743 M&I Marshall & Ilsley Bank v. Reinhart

By: dmc-admin//September 19, 2005//

2004AP2743 M&I Marshall & Ilsley Bank v. Reinhart

By: dmc-admin//September 19, 2005//

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Accordingly, we reverse the appealed order insofar as it denies Reinhart’s motion to intervene. Because we conclude that Reinhart must be permitted to intervene in this action, we affirm the circuit court’s order denying Reinhart’s request for leave to commence a separate action against the receiver.

“In addition to any provisions set forth in an appointing order, a receiver who is appointed by a court to operate a business also incurs a statutory obligation to obtain and pay for items necessary to the continuation of the business….Furthermore, we doubt that M&I would advance an argument that, had the receiver determined that roof repairs were necessary to preserve and protect the property during the receivership, the receiver would be under no obligation to pay for the repairs unless the sale of the property generated a surplus over the secured debt. In our view, Reinhart stands in the same position as the hypothetical roofing contractor because Reinhart provided goods necessary to the continued operation of the nursing homes during the receivership, thereby preserving their value by permitting them to be sold as going concerns. …

“As for whether Reinhart’s interests are adequately represented by the existing parties, we easily conclude they are not. …None of the existing parties in this action are aligned with Reinhart or its interests. M&I certainly has no interest in seeing that Reinhart gets paid because any plausible source of payment to Reinhart will diminish the sum M&I will realize from its foreclosure action against Urquhart. The foreclosure defendants also presumably want to see M&I’s cash recovery maximized so as to maximize the reduction of their debt and any resulting deficiency judgment. Finally, the receiver would have little or no personal interest in seeing that Reinhart gets paid for the food it delivered. At this point in the proceeding, the receiver would seem to be most interested in being discharged by the court as promptly as possible. The fact that the receiver has aligned himself with M&I on appeal to oppose Reinhart’s intervention demonstrates the point. …

“For the reasons stated above, we reverse the trial court’s order insofar as it denies Reinhart’s motion to intervene in the receivership proceeding. We emphasize again (see footnote four) that we do not decide in this opinion whether Reinhart is entitled to the payment it seeks or, if so, who is liable for any sum Reinhart may be due. On remand, the parties will have the opportunity to make the necessary factual record and legal arguments addressing these questions. Our present conclusion is only that Reinhart must be permitted to intervene in this action in order to present its claim.”

Reversed and remanded.

Recommended for publication in the official reports.

Dist III, Shawano County, Grover, J., Deininger, J.

Attorneys:

For Appellant: Samuel Conrad Wisotzkey, Milwaukee

For Respondent: David I. Cisar, Milwaukee; Rebecca Hansen Simoni, Milwaukee

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