                            In the
 United States Court of Appeals
              For the Seventh Circuit
                        ____________

No. 07-1878
KENTUCKIANA HEALTHCARE, INC.,
                                             Plaintiff-Appellant,
                               v.

FOURTH STREET SOLUTIONS, LLC, et al.,
                                          Defendants-Appellees.
                        ____________
             Appeal from the United States District Court
     for the Southern District of Indiana, New Albany Division.
   No. 4:04-CV-0022-DFH/WGH—David F. Hamilton, Chief Judge.
                        ____________
    ARGUED JANUARY 7, 2008—DECIDED FEBRUARY 19, 2008
                        ____________


  Before POSNER, ROVNER, and WOOD, Circuit Judges.
  POSNER, Circuit Judge. This is a diversity suit, principally
for conversion, governed by Indiana law. The Scott
County Nursing & Wellness Center (SCNW) owned a
health care facility that for a time was managed by
Kentuckiana Healthcare, the plaintiff. Then defendant
Fourth Street Solutions was substituted as manager,
and SCNW also contracted for data-processing and ac-
counting services from defendant Sage Health Services,
an affiliate of Fourth Street. Sage was managed, so far as
bears on this case, by Kenneth Ross and Joan Dugan. Ross
2                                              No. 07-1878

is another defendant, as is Dugan’s estate (she died dur-
ing the litigation).
  After the substitution of Fourth Street Solutions for
Kentuckiana, SCNW continued for a time to receive
Medicare and Medicaid reimbursements for services
that Kentuckiana had performed when it managed the
health care facility. (Kentuckiana had been deemed the
provider of the services and so had billed the govern-
ment directly for them.) But SCNW failed to forward
the reimbursements to Kentuckiana, which brought
this suit to recover them. Initially it named SCNW as a
defendant, but SCNW declared bankruptcy and
Kentuckiana was unable to obtain any money from
the bankrupt estate. It contends that the remaining defen-
dants converted that reimbursement money and must
therefore make Kentuckiana’s loss good. The district
court granted summary judgment for the defendants.
  If the Medicare and Medicaid reimbursements were
indeed Kentuckiana’s property, then any of the defendants
who, being without authorization to do so, exercised
“control” over that property committed the tort of conver-
sion. Ind. Code §§ 35-41-1-23, 43-4-3; Inlow v. Inlow, 797
N.E.2d 810, 818 (Ind. App. 2003); Kopis v. Savage, 498
N.E.2d 1266, 1270 (Ind. App. 1986); Eggert v. Weisz, 839
F.2d 1261, 1264-65 (7th Cir. 1988) (Illinois law). The de-
fendants argue that the reimbursements were not the
property of Kentuckiana but merely a debt owed to it, and
the distinction between a debt and property is indeed
critical in deciding whether there has been a conversion.
Stevens v. Butler, 639 N.E.2d 662, 666-67 (Ind. App. 1994);
Kopis v. Savage, supra, 498 N.E.2d at 1270-71. If you simply
owe someone money and fail to pay it, you have
broken a contract but you have not taken your creditor’s
No. 07-1878                                              3

property. But suppose you render a service to someone,
and he sends you a check, but by the time it arrives you
have moved, and instead of forwarding the check the
person who now lives at your old address deposits it in his
account and invites you to sue him for it. That would be
a clear case of conversion. This case is only a little less
clear. Kentuckiana rendered services and billed Medicare
and Medicaid, and they paid; but by the time they
got around to paying, Kentuckiana had moved on. That
did not entitle SCNW to put the money in its pocket.
   But that is to say that SCNW converted the Medicare
and Medicaid reimbursements, and it is no longer a
defendant. In desperation Kentuckiana has sued two
firms that rendered services to SCNW, and those firms’
key managers. The critical question is whether SCNW’s
arrangements with those firms and individuals put
them in its shoes so far as control over the receipt and
disbursement of the reimbursements due Kentuckiana
is concerned.
  Fourth Street Solutions was to manage the health care
facility on a day-to-day basis and its management re-
sponsibilities included “participat[ion] in the financial
management of the Facility,” subject however “to the
supervision and review of Owner,” that is, of SCNW. Even
apart from the “subject to” proviso, Fourth Streets Solu-
tions’ participation in financial management was limited.
“All receipts and monies arising from the operation of
the Facility shall be deposited in bank accounts to which
representatives of Owner are signatories. Owner shall
disburse and pay from such bank accounts all costs and
expenses of the Facility, and Manager [Fourth Street
Solutions] shall prepare checks for such disbursements
by Owner.” So Fourth Street Solutions had no authority
4                                              No. 07-1878

either to deposit the Medicare and Medicaid reimburse-
ments for services provided by Kentuckiana in its own
account or to forward those reimbursements to
Kentuckiana. As for Sage Health Services, besides its data-
processing duties, which are irrelevant to this case, it
was to perform accounting services for SCNW such as
preparation of tax documents, creation and maintenance
of vendor payment plans, monitoring accounts receiv-
able, and maintenance of the general ledger.
  There is nothing in either contract to suggest that SCNW
had ceded control over its finances to any of the defen-
dants, whether jointly or severally (we are content to treat
Fourth Street Solutions and Sage Health Services as a
single entity for purposes of this appeal). But Kentuckiana
argues that the relationship between SCNW and the
defendants was different in practice from what the con-
tracts said, and that could certainly be material to a
claim of conversion—for suppose that having received the
reimbursements SCNW had turned them over to Sage
and told it to deposit them in a secret Swiss bank account.
Nothing so egregious occurred. What did occur was that
Dugan and Ross were added as signatories to SCNW’s
bank account. With suspicious coyness, Kentuckiana has
made no effort to determine how often if ever either
Dugan or Ross wrote and signed a check on the account
without consulting the chief executive officer of SCNW.
There is no evidence that they ever signed a large check.
Since they had signature authority, they probably could
have written a large check (Kentuckiana claims to be owed
almost $400,000 in Medicare and Medicaid reimburse-
ments, which seems a large amount, although we can
find nothing either in the record or online to indicate
the total budget of the health care facility). But almost
No. 07-1878                                                  5

certainly that would have violated their contract with
SCNW, which even if modified in practice was not, so
far as the record indicates, modified beyond the modest
extent that we have suggested.
  But if the money in question was Kentuckiana’s property,
maybe the limitations of the contract did not bind Dugan
and Ross. If an agent receives property on behalf of his
principal but knows that a third party (in this case
Kentuckiana) has a right to immediate possession of it,
he must render the property to that third person or be
guilty of conversion. Thoms v. D.C. Andrews & Co., 54 F.2d
250, 252-53 (2d Cir. 1931); Beckwith v. Independent Transfer &
Storage Co., 141 S.E. 443 (W.Va. 1928); Restatement (Second)
of Torts § 230 and comments b and d (1965); compare
Foreign Car Center, Inc. v. Essex Process Service, Inc., 821
N.E.2d 483, 489 (Mass. App. 2005). Alternatively, Dugan
and Ross might be thought finders of property, and if
they knew it belonged to Kentuckiana they would have
been obliged to return it upon Kentuckiana’s demand,
Employers Ins. of Wausau v. Titan International, Inc., 400 F.3d
486, 490-91 (7th Cir. 2005); Hendle v. Stevens, 586 N.E.2d
826, 833 (Ill. App. 1992); cf. Ind. Code § 32-34-1-26; Uniform
Unclaimed Property Act § 7 (1995), minus the expense
of returning it.
  But there is a difference between a duty to render
property in your control to one whom you know to be
the true owner entitled to immediate possession, even if
you are an agent of someone else, and a duty to assist
in the return to the true owner of property that is not in
your control. The Medicare and Medicaid reimburse-
ments that Kentuckiana should have received were paid
to SCNW and deposited in its bank accounts. Because
Dugan and Ross had signing authority, they could have
6                                                 No. 07-1878

written a check to Kentuckiana. But they were not the
recipients of the reimbursements. SCNW was. You do not
convert someone’s property by failing to save it, unless
you have a duty to do so; there is no general liability
for failing to be a Good Samaritan even when you could
save a person’s life at no risk or other cost to yourself.
Mullin v. Municipal City of South Bend, 639 N.E.2d 278, 284-
85 (Ind. 1994); Stockberger v. United States, 332 F.3d 479, 480-
85 (7th Cir. 2003) (Indiana law). And here just property
is at stake. If you noticed that your boss had in his office
an Etruscan vase that under international art law belonged
to the Italian government, you could not be sued just
because you took no steps to restore the vase to its rightful
owner. For you did not possess the vase; your control,
like that of Dugan and Ross, was potential rather than
actual.
  Some states, it is true, impose a duty to report crimes,
see, e.g., Colo. Stat. § 18-8-115, a duty that might or might
not be enforceable in a civil suit. But Indiana does not,
except with regard to child abuse or neglect. Ind. Code
§ 31-33-5-1. Nor is there any suggestion that the defend-
ants committed crimes.
  So the conversion claim fails, and while Kentuckiana
also argues that the defendants should be treated as
constructive trustees of the reimbursements, that they
breached fiduciary duties to it, and that they were negli-
gent in failing to transfer the reimbursements to it, it
admits that these alternative formulations of its claim are
all premised on the assumption that the reimbursements
were property of Kentuckiana that the defendants con-
trolled. They were property of Kentuckiana, all right,
but the defendants did not control it, and so these claims
fall with the conversion claim.
                                                    AFFIRMED
No. 07-1878                                            7

A true Copy:
       Teste:

                      _____________________________
                      Clerk of the United States Court of
                        Appeals for the Seventh Circuit




                USCA-02-C-0072—2-19-08
