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Keywords

contractlawsuitsettlementbreach of contractattorneylease

contractsettlementbreach of contractjurisdictionlitigationattorneymotionsummary judgmentleaseappellantappelleemotion for summary judgment

Related Cases

Winship v. Gem City Bone & Joint, P.C., 185 P.3d 1252, 2008 WY 68

Facts

Brand Jackman retained attorney Stephen Winship for a personal injury case against Wyoming Technical Institute. Gem City Bone and Joint, P.C. treated Jackman and provided a release form that authorized Winship to pay Gem City directly from any settlement proceeds. Although Winship signed the release, Jackman sent it directly to Gem City without returning it to Winship. After a settlement was reached, Winship distributed the proceeds without paying Gem City, leading to the medical provider's lawsuit against him for breach of contract and other claims.

Gem City filed an action against Mr. Winship seeking payment of Mr. Jackman's medical bills. Gem City included claims for breach of contract, breach of obligation imposed by law, and quantum meruit. Mr. Winship filed a motion for summary judgment.

Issue

Whether an attorney, who distributes the proceeds of a personal injury action without paying a medical provider's bills after his client executed, with the attorney's knowledge, an assignment of the proceeds to the provider, is liable to the medical provider for the amount of those bills.

Whether the district court erred in ruling that, as a matter of law, the terms of the Authorization to Release Medical Records and Consent to Lien obligated Appellant to directly pay Appellee the amount of outstanding medical charges from his client's settlement proceeds.

Rule

An attorney must honor his client's assignment of the proceeds of his claim to a creditor, particularly when the attorney knows of or participated in the assignment.

The majority of courts that have addressed the issue have concluded that, when an attorney participates in or knows of an assignment of or lien against litigation proceeds, then the attorney is obligated to honor that assignment by paying the proceeds directly to the assignee.

Analysis

The court found that the language in the release clearly indicated Jackman's intention to transfer his right to the proceeds of his personal injury action to Gem City for payment of his medical bills. The court emphasized that the attorney's obligation to honor the assignment was established by the law of assignments, which holds that an obligor who has notice of an assignment and fails to honor it is responsible to the assignee.

The release clearly indicated that Mr. Jackman, who was the owner of the claim, intended to transfer the proceeds to Gem City for payment of his medical bills. It makes no difference whether the language authorizes or directs the obligor to honor the assignment as long as it indicates that the assignor intended to transfer his right to the assignee.

Conclusion

The Supreme Court affirmed the district court's ruling that attorney Winship was liable to Gem City for the amount of the medical bills due to his failure to honor the assignment.

The district court properly held Mr. Winship responsible to Gem City and entered judgment against the attorney in the amount of Mr. Jackman's medical bills.

Who won?

Gem City Bone and Joint, P.C. prevailed in the case because the court found that the attorney had a legal obligation to honor the assignment of proceeds for medical bills.

The district court stated, 'this Court is compelled to follow the persuasive path set by the majority of sister jurisdictions that have addressed the issue in concluding that, as a matter of law, Winship is liable to Gem City for the amount of the assignment.'

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