2013 COA 88
Colo. Ct. App.2013Background
- MLM sued Allstate and Martinez for breach of assignment; court dismissed MLM's complaint under C.R.C.P. 12(b)(5).
- MLM paid Martinez medical bills totaling $9,938 under a March 2007 lien/assignment agreement.
- October 2008 Martinez settled his personal injury claim; Allstate paid Martinez but did not pay MLM.
- The agreement grants MLM all rights to payment from Martinez's personal injury claim up to MLM's costs; MLM attached the agreement and an account statement to the notice of assignment.
- The trial court concluded the agreement was vague and that MLM stood in Martinez's shoes, leading to dismissal; on appeal the court reverses.
- The court holds the assignment valid, notices adequate, debtor bound to pay the assignee, and Twombly not controlling in Colorado; case is remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| validity of the assignment of proceeds | MLM asserts a valid present assignment of Martinez's proceeds | Allstate argues the agreement is vague and does not assign proceeds | assignment valid and enforceable |
| adequacy of notice to Allstate | MLM provided notice describing the assignment and proceeds | Allstate contends notice was insufficient | notice adequately identified subject matter and sums; binding on Allstate |
| Allstate's liability despite not being party to the agreement | After valid assignment, debtor must pay the assignee; Allstate bound | No need for consent or direct obligation against third party insurer | debtor must pay the assignee; Allstate bound regardless of signatory status |
| applicability of pleading standard (Twombly) | Twombly should apply heightened pleading standard | Colorado follows Conley standard; Twombly not adopted | Twombly not applied; Conley standard governs |
Key Cases Cited
- Hemmann Mgmt. Servs. v. Mediacell, Inc., 176 P.3d 856 (Colo. App. 2007) (notice-pleading standard retained; de novo review on dismissals)
- Yadon v. Lowry, 126 P.3d 332 (Colo. App. 2005) (document reference allowed in Rule 12(b)(5) ruling)
- Lookout Mountain Paradise Hills Homeowners' Ass'n v. Viewpoint Assocs., 867 P.2d 70 (Colo. App. 1993) (intent to assign may be inferred from acts; no formal words needed)
- Trevino v. HHL Fin. Servs., Inc., 928 P.2d 766 (Colo. App. 1996) (after notice, payment to assignee discharges debtor's obligation to assign(e)es)
- U.S. Fax Law Ctr., Inc. v. T2 Technologies, Inc., 183 P.3d 642 (Colo. App. 2007) (assignee may sue on the assigned claim; assigns standing in shoes of assignor)
- Parrish Chiropractic Cirs., P.C. v. Progressive Cas. Ins. Co., 874 P.2d 1049 (Colo. 1994) (assignment of contract rights generally permissible; anticipatory rights assignable)
- Cross v. District Court, 643 P.2d 39 (Colo. 1982) (settlement contracts are enforceable; assignmentable)
- Yaekle v. Andrews, 195 P.3d 1101 (Colo. 2008) (settlement contract can be governed by contract principles; assignment context cited)
- Goodson v. Am. Standard Ins. Co., 89 P.3d 409 (Colo. 2004) (insurer duty to third party generally limited to insured; not dispositive on contract assignment enforcement)