A manhunt for a suspected gunman in a shootout involving police ended early Friday morning with the deaths of two people, a police dog and injuries to two officers.After an overnight lockdown of the city of Pendleton, the shooting suspect -- Kenneth Jim Bailey, 59, of New Castle -- was found dead from an apparent self-inflicted gunshot wound. Watch Report: Neal Shull, 48, who police described as an innocent bystander, was fatally shot.Police said Shull was only two doors from the home where Bailey was headed, and Shull was forced to stop behind Bailey's vehicle.No words were spoken and no confrontation occured between the two men, but Bailey turned on Shull and opened fire, killing him.Police said Bailey then went into ambush mode and began firing indiscriminately during the standoff at a home in the 300 block of Water Street, investigators said.Shull was the owner of N.S. Painting Co., a residential and commercial painting business in Pendleton and was well-known in the community."He was a friend of mine," said Pendleton Police Chief Mark Farrer, choking up. "I've known him for years, and he's deceased. Innocent victim -- he was totally in the wrong place at the wrong time."Shull's wife, Noelle, told RTV6's Julie Pursley that they had just moved to a new house and that Neal was moving items from the old one to the new one when he was killed, two doors away from the new house. View Slideshow: Police told everyone to stay inside, including Noelle, who frantically tried to call him dozens of times. When he didn't answer, she said she knew he was dead."I called him over 100 times. He didn't just not answer his phone, and he did not just not come home, not ever, not once," Shull said.Police had been called to the home about 10:30 a.m. on a report of a disturbance involving Bailey and his ex-wife, Farrer said.Neighbors reported hearing rapid gunshots soon after officers arrived. Two officers, one from Pendleton and another from Anderson, were shot during the standoff.Both were taken to hospitals with injuries not believed to be life-threatening.Anderson police Officer Marty Dulworth, an 11-year veteran of the force, was shot in the legs. He underwent surgery at an Indianapolis hospital early Friday morning, Anderson police Detective Joel Sandefur said.
The Pendleton officer, Sgt. Shane Isaacs, was grazed by a bullet, police said. Both were hospitalized in good condition Friday afternoon.A police dog, Kilo, was also killed in the shootout. Police said after Dulworth was shot, Kilo was protecting his handler and would not allow crews to get Dulworth out of danger, so they had to kill the dog. Kilo and Dulworth had been working together since 2010."Kilo is the first Anderson Police Department K-9 to have died in the line of duty," Sandefur said.
Officer Marty Dulworth
Police said Bailey had been armed with an AK-47, two handguns, lots of ammunition, a flak jacket and a gas mask."He came with an ill intent," Farrer said. "We do not know if any police officer bullets struck him. We do know they fired back."The woman involved in the domestic disturbance was not injured, police said.
Four SWAT units were used to evacuate several homes nearby during the standoff. Residents were allowed to go back to their homes after Bailey was found dead."People live here. They feel safe here, and they should. You never know when an incident like this could occur," Farrer said.