293 P.3d 661
Idaho2013Background
- Luciani and his firm represented Magic Valley in the Suter litigation; Magic Valley hired another firm and Luciani was terminated in 2006.
- A sale-lease agreement transferred Magic Valley’s assets and liabilities to St. Luke’s, with the aim that all property and interests be transferred to St. Luke’s, including related claims.
- St. Luke’s assumed responsibility for the Suter litigation after the transaction and eventually settled for $4.25 million, incurring substantial defense costs.
- Magic Valley ceased to exist post-transaction; St. Luke’s operated the medical center and treated Magic Valley as its successor for purposes of the litigation.
- St. Luke’s sued Luciani for legal malpractice in 2008 seeking about $10 million and argued the malpractice claim was assignable as part of the asset/liability transfer, while Luciani argued the claim could not be assigned.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a legal malpractice claim transferred with other assets is assignable in Idaho | St. Luke’s, as successor, should be able to step into Magic Valley’s shoes | Idaho generally bars malpractice claim assignment to strangers; argues no surviving assignment to successor | Assignable when transferred with other assets in a commercial transaction |
Key Cases Cited
- MacLeod v. Stelle, 43 Idaho 64 (1926) (injury to property-related injury can be assignable; survivability matters)
- Purco Fleet Servs., Inc. v. Idaho State Dep’t of Fin., 140 Idaho 121 (2004) (choses in action generally assignable; assignee becomes real party in interest)
- Goodley v. Wank & Wank, Inc., 133 Cal.Rptr. 83 (1976) (public policy against assignment of legal malpractice claims; concerns about attorney-client relationship)
- Cerberus Partners, L.P. v. Gadsby & Hannah, 728 A.2d 1057 (R.I. 1999) (assignment of legal malpractice claims may be allowed in market/asset-transfer contexts)
- Richter v. Analex Corp., 940 F. Supp. 353 (D.D.C. 1996) (assignment allowed where assignee acquired assets/liabilities and rights; not an isolated malpractice claim)
- Hedlund Mfg. Co., Inc. v. Weiser, Stapler & Spivak, 539 A.2d 357 (Pa. 1988) (assignment of all rights and causes of action against attorneys relating to mishandling of patent application held valid)
- Learning Curve Int., Inc. v. Seyfarth Shaw, LLP, 331 N.E.2d 1073 (Ill.App.3d 2009) (no reason to prohibit assignment where intimate connection to underlying lawsuit exists)