Allstate Insurance Co. v. Medical Lien Management, Inc.

Summary

The Colorado Supreme Court reversed the court of appeals and held that the purported assignment of an indeterminate portion of future proceeds from a personal injury claim was not effective against Allstate. The assignment failed to identify a sufficiently definite portion of the proceeds and would have imposed an impermissible additional burden and risk on Allstate as obligor. The court did not decide whether personal injury claims or their proceeds are generally assignable before settlement or judgment in Colorado.

Holdings

1. An agreement purporting to grant the assignee payment from personal injury proceeds in an amount equal to medical fees and costs does not effect a present assignment against the obligor when it fails to describe either an existing contract right or a determinable portion of the proceeds.
2. The Restatement (Second) of Contracts distinguishes conditional rights arising under an existing contract from future rights expected to arise under a contract not yet in existence. A purported assignment of a future contract right operates only as a promise to assign the right when it arises and does not constitute an assignment effective against the future obligor.
3. The complaint failed to state a claim for breach of assignment against Allstate because the purported assignment was not effective against Allstate as obligor.

Questions Presented

1. Whether the Lien and Security Agreement effected a present assignment to Medical Lien Management of an existing contract right or a sufficiently identifiable portion of future personal injury proceeds.
2. Whether the purported assignment of an indeterminable amount of future personal injury proceeds was effective and enforceable against Allstate as the alleged obligor.
3. Whether the complaint stated a claim for breach of assignment against Allstate under Colorado Rule of Civil Procedure 12(b)(5).

Disposition

reversed