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Homeowner cannot sue court-appointed receiver for negligence

Mark and Randa Mangano became embroiled in a dispute with their attorney.  Apparently they had financial trouble, generally, and the attorney sued them for fees.  The Manganos had moved from their home in Canton Township to Tennessee, when a judgment for the attorney was entered against them.  The Court appointed a receiver to take custody of the Canton residence and the current tenants moved out.  The Manganos filed for bankruptcy and the Tennessee-area bankruptcy referee assumed control of the home.  In the meantime, the home had suffered frozen pipes and water damage.

The Manganos attempted to sue the Receiver, the District Court Judge who appointed him, and the District Court for negligence. They argued that the defendants did not exercise due care in controlling the property and that the receiver should have visited the property more frequently.  The Court of Appeals upheld the dismissal of the Manganos' claim, concluding that the defendants--as governmental actors--were immune from claims of negligence.  The Court held that "mere errors in business judgment" will not make a court-appointed receiver responsible for damage to property under his or her control and that to recover against the receiver, the property owner must allege and prove "bad faith."

The Court also noted that the cause of action for "conversion" alleged by the Manganos applies only to personal property--not real estate.

Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
Toll Free: 1-800-678-1307
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