Brief Fact Summary. This case involves an assignment of proceeds from a personal injury claim to a physician to pay for medical expenses.
Synopsis of Rule of Law. Proceeds to be received from pending litigation may be validly assigned.
After receiving notice of the assignment, the obligor cannot lawfully pay the amount assigned either to the assignor or to his other creditors and if the obligor does make such a payment, he does so at his peril because the assignee may enforce his rights against the obligor directly.View Full Point of Law
Issue. Can future proceeds from pending litigation be validly assigned to a third-party?
Held. Yes. Judgment affirmed.
The court held that this assignment was valid because Jones’ letter gave no indication that he wished to retain control over the funds.
The court also held that enforcing the assignment did not interfere with Defendants’ ethical obligations as attorneys.
Discussion. The court noted that an assignor must not retain any control over the right of the assigned funds. It found that Jones did not retain any such control when he requested that the payment be made to Plaintiff. Also, Defendant had notice of the assignment and therefore was obligated to enforce it. The court also examined the Maine Bar rules and found no ethical rule barring a lawyer from assigning his client’s proceeds from a pending lawsuit to a third party.