In this case we decide that a legal malpractice claim may be assigned; that before the 1987 amendments to Maine’s partnership law, a Maine partnership was not a suable entity (except in certain real estate related matters); that an insured’s insolvency and inability to pay an excess judgment do not foreclose a damage claim against its insurance carrier and lawyer for *923 failure to defend or settle within policy-limits; and that certain other related issues involve genuine issues of material fact. We therefore remand for entry of an order dismissing the partnership defendant, but otherwise vacate the summary judgment of the Superior Court (Cumberland County, Fritzsche, /.). Because we are reviewing the defendants’ motions to dismiss and for summary judgment, we recount the facts and consider the allegations of the pleadings in a light most favorable to the plaintiff.
Inadequate legal representation and misconduct of 3K Kamper Ko.’s insurance carrier in a products liability action allegedly caused 3K to suffer judgment far in excess of its policy limits. The case could have been settled well within the amount of the policy. At the time of the judgment, 3K was not actively engaged in business, had entered into a settlement with its bank creditor by which it surrendered all its assets, and had allowed itself to be suspended as a corporation. In addition, 3K’s two principals had been killed in an accident prior to the trial.
3K has been unable to pay the excess judgment. 3K’s stockholders, in order to settle some claims by the products liability plaintiff against them, agreed to have 3K assign to her all 3K’s rights against its lawyers and insurance carrier. As a result, she has brought this action against the insurance carrier, the individual lawyer and law firm for legal malpractice and failure to defend or settle. Since her rights are only those of 3K Kamper Ko., however, we shall refer to 3K throughout to avoid confusion.
ASSIGNMENT OF A LEGAL MALPRACTICE CLAIM
We hold first that there is no reason to prohibit the assignment of a legal malpractice claim in a situation such as this. We are not here confronted with the establishment of a general market for such claims; this assignee has an intimate connection with the underlying lawsuit. Although some cases from other jurisdictions flatly prohibit the assignment of any legal malpractice claim,
e.g., Goodley v. Wank and Wank, Inc.,
A PARTNERSHIP AS A SUABLE ENTITY
The next issue is whether one defendant, a law partnership, was properly before the Superior Court. In 1852, the Law Court recognized the common law rule that a partnership was not a legal entity that could be sued; instead individual partners had to be named specifically.
Macomber v. Wright,
In 1987 we decided that a partnership could sue or be sued in a lawsuit involving real estate held in the partnership’s name, but expressly limited our decision to that situation.
New England Herald Dev. Group v. Falmouth,
Against this background, we conclude that the Uniform Partnership Act as adopted in Maine before its 1987 amendment did not permit partnerships to be sued directly in cases like this. The Law Court’s 1852 pronouncement of the common law rule to that effect was unequivocal; the 1973 adoption of the Uniform Partnership Act did not address the issue; and there is no argument comparable to that in partnership real estate cases that led us to decide in 1987 that “it is appropriate that the partnership should be allowed to sue or be sued in its partnership name” in circumstances where title is held in the partnership name and “can only be conveyed in the partnership name,”
DAMAGE CLAIMS FOR AN EXCESS JUDGMENT
In debating the ability of 3K to recover any damages without having first paid the excess judgment, the parties disagree over whether the summary judgment evidence competently established that 3K was insolvent. We conclude that even if the defendants’ proof has established that 3K was insolvent at the time of the excess judgment, that fact does not foreclose damages for the defendants’ alleged malpractice or failure to defend or settle. It may be that 3K has not been damaged in the full amount of the excess judgment, for the proof may show that no such judgment could ever have been recovered against 3K. There are other elements of damages, however — for example, injury to credit rating, injury to reputation (3K may be able to prove that its name’s good will possessed a value that would have been worth transferring to another had it not been for the excess judgment), and expenses incurred in dealing with the existence of the judgment and settling the claim. 1 The point is that the choice is not between collecting the entire excess judgment and no damages at all.
To that extent, we align ourselves with those states that have determined that an insured need not pay an excess judgment in order to recover damages.
2
See, e.g., Frankenmuth Mut. Ins. Co. v. Keeley,
MISCELLANEOUS
In their motion to dismiss, the defendants challenged the effectiveness of 3K’s assignment to the plaintiff because of asserted inadequacies in the assignment process. The complaint, however, alleged that 3K had assigned the claims. That is all that was necessary to survive the motion to dismiss.
The entry is:
Judgment vacated and remanded for entry of an order dismissing the partnership defendant and for further proceedings consistent with the opinion herein.
All concurring.
Notes
. There is also a claim for punitive damages. We express no opinion on its viability, or whether the causes of action here sound in contrdct or tort. These issues have not been briefed or argued.
. The collectability of the excess judgment against 3K is a different issue from the collectability issue we considered in
Jourdain v. Dineen,
.We agree with the Superior Court that evidence that 3K ordered its lawyers not to settle is an insufficient basis for summary judgment; *925 there was no evidence that the lawyers had fully informed 3K of the risks.