Iowa Dep’t of Human Servs. v. Morse Healthcare Servs., Inc.

This case was the companion interlocutory appeal with facts that mirrored Iowa Dep’t of Human Servs. v. DeWitt Bank and Trust Co., decided on the day of this opinion. As in DeWitt Bank, the Iowa Department of Human Services filed an application for relief against defendant healthcare providers under Iowa Code 249A.44. The district court appointed a receiver. Bank Iowa, a lender that held perfected security interests in Defendants’ property, intervened and challenged the receiver’s applications for fees and expenses. The district court concluded that receivership expenses should be paid out of property in which the Bank had prior lien interests. The Supreme Court reversed based on the reasoning set forth in DeWitt Bank, holding that Iowa follows the common law rule that a receiver may be charged against a third party’s security interest only to the extent the secured creditor has received a benefit from the receivership or the secured creditor has consented to the receivership. Remanded. View "Iowa Dep’t of Human Servs. v. Morse Healthcare Servs., Inc." on Justia Law