Is A Receiver’s Property Manager Protected By The Barton Doctrine and Quasi-Judicial Immunity?

Q: I am a property manager for a receiver who is administrating a large apartment complex. The receiver has directed that I make certain repairs, but not others demanded by some of the tenants. Some of the tenants have threatened to sue me for not making the unauthorized repairs, for what they claim is shoddy work, and for disrupting the quiet enjoyment of their units, because of the authorized work. The receiver has told me not to worry, that I can’t be sued without prior court approval. While that may be true, what happens if the court allows such lawsuits? While I understand the receiver may have immunity, what about me?

A: The receiver is correct, you should not worry. Prior court approval to sue a receiver, known as the Barton Doctrine, Barton v. Barbour, 104 U.S. 126 (1881), has been extended to a receiver’s agents, including a receiver’s property manager. Ariel Preferred Retail Group, LLC et. al. v. CW Capital Asset Management, et. al., 883 F. Supp. 2d 797 (E.D. Mo. 2012); see also, Benta v. Christie’s Inc., 2017 WL 1345218 (D. V. I. 2017) (citing cases where Barton was applied to bar lawsuits against a receiver’s attorneys, investigators, auctioneers, real estate professionals, management companies and an antique company). The Supreme Court in Barton actually said leave of court was needed to sue a receiver for the receiver’s actions “or that of his servants.” Barton, supra. at 137.

Similarly, the immunity given to receivers, who act as agents of the court, has been extended to receivers’ agents for the same reasons. Receivers have been given immunity because they act for the court in carrying out its orders. Courts have held such immunity is required, otherwise litigants might try to circumvent court orders by attacking the court’s agent. “It would make the receiver a lightning rod for harassing litigation aimed at judicial orders. In addition to the unfairness of sparing the judge who gives an order while punishing the receiver who obeys it,…” Kermit Const. Corp. Banco Credito Y Ahorro Onceno, 547 F.2d 1,3 ( 1st Cir. 1976). Courts have also pointed out that absent such immunity “such persons will be reluctant to accept court appointments or provide work product for the Court’s use. Additionally, the threat of civil liability  may affect the manner in which they perform their jobs.” Howard v. Drapkin, 222 Cal. App. 3d 843, 901 (1990). These grounds for receiver immunity apply equally to a receiver’s agent, who is aiding a receiver in carrying out a court’s orders.

In a recent case a receiver was appointed to manage three nursing homes. The receiver hired a management company to operated the nursing homes. After the receiver sold the nursing homes, the buyer sued the management company for conversion, unjust enrichment and gross negligence related to its management of the nursing homes. The court dismissed case, finding the management company shared the receiver’s immunity. “As an agent of the Receiver, Benchmark [the management company] is entitled to quasi-judicial immunity for actions taken in carrying out the court’s order to operate the nursing homes.” Micha US LLC v. Benchmark Healthcare Consultants LLC, 2022 WL 2867183 *4 (E.D. Mich. 2022). The court went on to note: “This limitation of liability is consistent with the general rule that receiver’s and their agents are entitled to quasi-judicial immunity for actions taken within the scope of their authority as officers of the court.” Id. See also, Blacktail Mountain Ranch Co., LLC. v. Jones, 611 Fed. App. 430 (9th Cir. 2015) ( dismissing case against receiver and “receiver’s agents” based on judicial immunity); Smallwood v. U.S., 358 F. Supp. 398 ( E.D. Mo. 1973) (same). Therefore, to quote Bobby McFerrin, “Don’t worry be happy, in every life we have some trouble, but when you worry you make it double.”


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