dissenting.
I respectfully dissent from the majority opinion. I must first depart from my colleagues' reliance on Everts and Hines, which emanate from two of our sister states. Although those opinions may be well reasoned and thoughtful, I believe that the more appropriate source of wisdom regarding the Indiana Securities Act is caselaw analyzing the statutory scheme on which our State's Act is based-the Federal Securities Act of 1983.
Indiana Code section 23-2-1-19, which sets forth the affirmative defense of reasonable care at issue herein, "is based upon Section 410 [now Section 509] of the Uniform Securities Act of 1956, which in turn is modeled after section 12 of the Federal Securities Act of 1983...." Kirchoff v. Selby, 686 N.E.2d 121, 128 (Ind.Ct. App.1997), vacated in part on other grounds, 7083 N.E.2d 644 (Ind.1998). This relationship becomes apparent when we compare the affirmative defense set forth in the Indiana statute, which provides that the defendant has the "burden of proof that the person did not know and in the exercise of reasonable care could not have known of the violation," I.C. § 238-2-1-19(a), with that set forth in the federal statute, which provides that the defendant has the "burden of proof that he did not know, and in the exercise of reasonable care could not have known, of such untruth or omission ...," 15 U.S.C. § 77l(a) ("seetion 12(2)"). In Kirchoff we said:
the resemblance of the Uniform Seeurities Act and the Federal Securities Act is intended to '... make for an interchangeability of federal and state judi-
*84cial precedence in this very important area.' Louis Loss and Edward W. Cow-ett, Blue Sky Law, 391 (1958).
Further, it is generally accepted in Indiana that when a state statute is modeled after a federal statute, we may look to the cases interpreting the federal statute for guidance in interpreting the Indiana statute.
Id. (omission in original). -
Turning, therefore, to opinions interpreting the reasonable care defense set forth in section 12(2) of the 1988 Act, it is apparent that whether a defendant has established that he could not have known of the violation had he exercised reasonable care is a question of fact that is rarely appropriate for disposition on summary judgment. See, eg., Sanders v. John Nuveen & Co., Inc., 619 F.2d 1222, 1228 (Tth Cir.1980) (holding that what constitutes reasonable care under section 12(2) depends upon the circumstances). In In re Software Toolkworks, Inc. Securities Litigation, the Ninth Cireuit concluded that section 12(2)'s reasonable care defense is analogous to section 11's reasonable investigation defense. 50 F.3d 615, 621 (9th Cir.1994) (citing to 15 U.S.C. §§ 77k, -77l). The court then concluded that under both sections, "summary judgment is generally an inappropriate way to decide questions of reasonableness. . . ." Id. More specifically, it held that
reasonableness "becomes a question of law and loses its triable character if the undisputed facts leave no room for a reasonable difference of opinion." Accordingly, "reasonableness [is] appropriate for determination on [a] motion for summary judgment when only one conclusion about the conduct's reasonableness is possible."
Id. at 621-22 (quoting West v. State Farm Fire & Cas. Co., 868 F.2d 348, $50-51 (9th Cir.1989)) (citations omitted) (alterations in original). From the outset, therefore, I am troubled that the instant case was disposed of by summary judgment.
As to the substance of section 12(2)'s reasonable care defense, the Software Toolworks court observed that in determining whether a defendant has met the burden of proving reasonable care, " 'the standard of reasonableness shall be that required of a prudent man in the management of his own property' ... Thus, due diligence is, '[iJn effect, ... a negligence standard"" 50 F.3d at 621 (quoting 15 U.S.C. § 7ik(c) and Ernst & Ernst v. Hochfelder, 425 U.S. 185, 208, 96 S.Ct. 1875, 47 L.Ed.2d 668 (1976)) (citations omitted).
It is apparent that the duty of reasonable care may include a duty to inquire into and/or investigate " 'whether the ever present possibility of fraud is in fact a reality....'" Sanders, 619 F.2d at 1228 (quoting Sanders v. John Nuveen & Co., Inc. (Sanders D), 524 F.2d 1064, 1071 (7th Cir.1975)). But as noted above, what a defendant must do to fulfill these duties is a matter of fact that depends upon the cireumstances of the particular case. The Sixth Circuit has set forth a number of factors to assist an analysis of section 12(2)'s reasonable care defense:
(1) the quantum of decisional (planning) and facilitative (promotional) partic-pation, such as designing the deal and contacting and attempting to persuade potential purchasers,
(2) access to source data against which the truth or falsity of representations can be tested,
(3) relative skill in ferreting out the truth (for example, in this case [the defendant's]l manager had comparatively greater skill in evaluating judgments based on subsidiary facts, since he performed a similar function in the process *85of investigating the creditworthiness of borrowers),
(4) pecuniary interest in the completion of the transaction, and
(5) the existence of a relationship of trust and confidence between the plaintiff and the [defendant].
These are the circumstances that determine whether a person has exercised due care in this context [of a section 12(2) reasonable care defense].
Davis v. Aveo Fin'l Servs., Inc., 739 F.2d 1057, 1068 (6th Cir.1984); see also, eg., Riedel v. Acutote of Colo., 773 F.Supp. 1055, 1063 (S.D.Ohio 1991) (applying Davis factors).
Here, the record reveals that Lean assumed his position as an outside director of GOLI on February 18, 2000. A mere 88 days later, on March 28, 2000, Lean attended his first board of directors meeting, at which the GOLLI board first discussed the proposed transaction with Abacus. On March 31, 2000, three days after the board meeting, the GOLI-Abacus transaction was consummated. Lean did not specifically inquire whether the registration of GOLI securities under the ISA had been completed properly because he assumed that GOLI management, legal counsel, and the due diligence process had taken care of the issue. Lean presented an expert who testified that determining whether a corporation's securities have been registered is not a detail that would normally rise to the level of inquiry by the board of directors in the ordinary course of conducting a board meeting.
Turning to the Davis factors, I reach the following conclusions based upon the ree-ord:
(1) Lean had no planning or promotional participation in this deal, inasmuch as he had only been an outside director for 38 days before the transaction was first proposed to the board by GOLI management;
(2) Lean likely had access to source data in the form of financial reports and people of whom he could have inquired regarding the securities registration status;
(3) there is no evidence that Lean had special relative skill in ferreting out the truth, inasmuch as he was an outside director who had only been on GOLI's board for 38 days at the time the decision was made;
(4) it is unclear from the record whether Lean had a personal pecuniary interest in the transaction; and
(5) there is no evidence of a relationship of trust and confidence between Reid, Reinken, and Lean.
At the least, it is readily apparent from reviewing the circumstances of this case that there is an issue of fact regarding whether Lean exercised reasonable care. Moreover, although Lean admits that had he inquired into the registration of GOLI securities under the ISA he would have learned that the process had not been completed, I do not believe that we can determine as a matter of law that, to exercise reasonable care, Lean had a duty to so inquire. Lean was a brand-new outside director of GOLI with no prior involvement in the transaction. Under these circumstances, I believe that there is ample room for a reasonable difference of opinion.
I certainly do not mean to suggest that a director may remain in blissful or willful ignorance and thereby avoid liability under the Indiana Securities Act. I merely conclude, based upon the federal authorities cited above, that whether a defendant has proved the affirmative defense of reasonable care is nearly always a question of *86fact. Although it is possible that a rare case could include undisputed facts that lead unerringly to only one conclusion regarding the defendant's exercise of reasonable care, I do not believe that this is that case. Thus, I would reverse the trial court's order and remand for trial on this issue.