Gito, Inc. v. Axis Architecture, P.C.

Summary

The Pennsylvania Superior Court held that a contractual clause prohibiting assignment of an agreement did not bar assignment of a post-performance claim for breach-of-contract damages. The court concluded that Greater Latrobe School District’s assignment of its claims to Gito, Inc. was effective because it did not delegate the School District’s contractual duties or performance. The court reversed the order sustaining preliminary objections and dismissing the action, and remanded for further proceedings.

Holdings

1. Under Pennsylvania law, a contractual clause that prohibits only assignment of the contract or agreement does not bar assignment of a post-performance claim for damages. Article 9.5 therefore did not invalidate the School District's assignment of its breach-of-contract claim to Gito.
2. The possibility of overlapping damages in the assignee's assigned claim and its separate claim did not make the assignment invalid. Any risk of duplicative recovery could be addressed through consolidation or coordination of the actions.

Questions Presented

1. Whether Article 9.5, which prohibited assignment of the architectural agreement without written consent, barred the School District's post-performance assignment to Gito of its claim for damages arising from Axis's alleged breach.
2. Whether the assignment was ineffective because permitting it could create a risk of duplicative recovery.

Disposition

reversed_and_remanded