Opinion ID: 2630997
Heading Depth: 5
Heading Rank: 2

Heading: willful neglect or misconduct

Text: Hawaii Ventures contends that: Where expenses have been caused by the negligence of the receiver, the receiver cannot maintain a claim for compensation. See Reardon v. Youngquist, 189 Ill.App. 3[, 7, 1914 WL 2783 (Ill.App.Ct.)] (1914) (The reckless and negligent manner in which the receiver conducted the affairs of the trust estate and the consequent loss to the creditors legally deprived the receiver of the right to commissions. The law does not compensate an officer for inefficiency and willful neglect of duty. [(Internal quotation marks and citation omitted.)]); Fed[.] Deposit Ins[.] Corp[.] v. 65 Lenox Road Owners Corp[.], 270 A.D.2d 303[, 704 N.Y.S.2d 613, (N.Y.App.Div.)] (2000) (well settled that compensation may be denied to a receiver who had grossly mismanaged the property). Where professional advisers have been complicit in the Receiver's actions, they must share the consequences. (Emphasis added.) Although stating that the Receiver should not be compensated for her negligence, Hawaii Ventures, in relying upon the aforementioned authorities, apparently asserts that Receiver Park and her professionals should not have been awarded their fees because of their willful neglect and misconduct. As previously discussed in section III.D.2 supra, Receiver Park, as a court-appointed official, is entitled to absolute judicial immunity when acting in the scope of [her] authority and in accordance with court order. Perry Center, Inc., 576 N.W.2d at 511 (citation omitted). However, [i]t is well settled that compensation may be denied a receiver who has grossly mismanaged the property in her possession, resulting in great loss to the estate. Title Guar. & Trust Co. v. Adlake Corp., 161 Misc. 27, 290 N.Y.S. 1007, 1010 (N.Y.Sup.1936) (citations omitted). As previously quoted, the appointment order specifically provided that the Receiver shall not be liable, in the Receiver's individual capacity, for any claims or demands for loss or damages, arising out of or in connection with this lawsuit . . . except in the event that Receiver's acts or omission constitute bad faith or fraud. The Special Master, in reviewing Receiver Park's final report, concluded that, [a]lthough [he] disagrees with the payment of certain pre-receivership liabilities by the Receiver, . . . such disputed payments do not rise to the level of `bad faith' or `fraud.' The aforementioned conclusion was ultimately adopted by the circuit court via its July 11, 2002 order approving the Special Master's report. However, as stated supra, Hawaii Ventures has not provided this court with any reason to suggest that the Special Master's conclusion and the circuit court's adoption thereof were erroneous. Accordingly, Hawaii Ventures' argument that Receiver Park's willful neglect and misconduct should preclude her from receiving fees for her services must fail.