Villanueva v. First American Title Insurance
292 Ga. 630
| Ga. | 2013Background
- Villanueva acted as closing attorney for a May 2007 mortgage refinance; Homecomings Financial funded, First American issued title insurance.
- Funds wired to escrow were withdrawn by a non-lawyer and used to pay off earlier mortgages; First American paid off the mortgages and was subrogated to Homecomings' rights.
- First American sued appellants, the estate of another attorney, the escrow account, the non-lawyer who withdrew funds, and others for legal malpractice and breach of contract.
- Trial court denied summary judgment; Court of Appeals affirmed that the subrogation was an assignment and that legal malpractice claims may be assignable under OCGA 44-12-22 and 44-12-24.
- Court of Appeals deferred resolution on whether any legal malpractice claims are categorically unassignable due to the attorney-client relationship.
- Georgia Supreme Court granted certiorari to address whether legal malpractice claims are per se unassignable and if assignment could be upheld consistent with public policy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are legal malpractice claims per se unassignable? | Villanueva contends assignment is permissible when injury is pecuniary. | First American argues public policy disfavors assignability due to attorney-client relationship. | Not per se unassignable; assignability can occur under OCGA 44-12-22 and 44-12-24. |
| Does assignment of a legal malpractice claim implicate public policy prohibitions? | Public policy does not categorically bar assignment when pecuniary injury is involved. | Public policy disfavors assignments to adversaries or promotes champerty and loyalty concerns. | Public policy does not prohibit assignment; minority and several jurisdictions permit it under conditions. |
| What is the controlling statutory framework for assignability of such claims? | OCGA 44-12-22 and 44-12-24 support assignability of contract-based or property-right claims. | Public policy concerns may limit assignment of legal malpractice claims. | OCGA 44-12-22 and 44-12-24 allow assignability, with exceptions for personal torts or fraud. |
Key Cases Cited
- Robeson v. Intl. Indemnity Co., 248 Ga. 306 (1981) (duty and remedies in contract-based actions; relevance to assignability)
- Carter v. Banks, 254 Ga. 550 (1985) (assignment principles for contract and property-based choses in action)
- H Hutcherson v. Durden, 113 Ga. 987 (1901) (injuries to the person distinguished from property injuries)
- Hedlund Mfg. Co. v. Weiser, Stapler & Spivak, 517 Pa. 522 (1988) (economic harm vs. personal injury; public policy not to bar assignability in some contexts)
- Gregory v. Lovlien, 174 Or. App. 483 (2001) (voluntary assignment of legal malpractice claim not categorically barred)