[Cite as W. Broad Chiropractic v. Am. Family Ins., 122 Ohio St.3d 497, 2009-Ohio-3506.]




        WEST BROAD CHIROPRACTIC, APPELLANT, v. AMERICAN FAMILY
                                INSURANCE, APPELLEE.
                [Cite as W. Broad Chiropractic v. Am. Family Ins.,
                       122 Ohio St.3d 497, 2009-Ohio-3506.]
Assignment of settlement proceeds — Relevance of R.C. 3929.06 — Judgment
        affirmed.
     (Nos. 2008-1396 and 2008-1489 — Submitted April 21, 2009 — Decided
                                     July 23, 2009.)
    APPEAL from and CERTIFIED by the Court of Appeals for Franklin County,
                           No. 07AP-721, 2008-Ohio-2647.
                                 __________________
        LUNDBERG STRATTON, J.
        {¶ 1} We must determine whether Kristy Norregard, who was injured in
an automobile accident but who did not file suit or obtain a judgment against the
tortfeasor, may assign her right to proceeds from a prospective settlement or
judgment to appellant, West Broad Chiropractic (“West Broad”), in exchange for
medical care she received from West Broad for injuries resulting from the
accident.
        {¶ 2} The Tenth District Court of Appeals refused to enforce the
assignment of proceeds. The appellate court certified that its judgment was in
conflict with the judgments of other appellate districts. We agreed and accepted
the following two certified conflicts for review:
        {¶ 3} “May a person who has been injured in an automobile accident but
who has not yet established liability for the accident and a present right to
settlement proceeds, but who may have that right in the future, even if the future
existence of the proceeds is conditional, assign that right, in whole or in part, to
another under Ohio law?”
                             SUPREME COURT OF OHIO




       {¶ 4} “Does R.C. 3929.06 preclude an assignee of prospective settlement
proceeds from bringing a direct action against a third party insurer, who had prior
notice of such written assignment, after the insurer distributed settlement proceeds
in disregard of that written assignment?” W. Broad Chiropractic v. Am. Family
Ins., 119 Ohio St.3d 1469, 2008-Ohio-4911, 894 N.E.2d 330.
       {¶ 5} For the reasons that follow, we answer the first question in the
negative. A person who has been injured in an accident but who has not yet
established liability for the accident and a present right to settlement proceeds
may not assign the right to future proceeds of a settlement if the right does not
exist at the time of the assignment.
       {¶ 6} We answer the second question in the affirmative. R.C. 3929.06
precludes an assignee of prospective settlement proceeds from bringing a direct
action against a third-party insurer after the insurer distributed settlement
proceeds.
       {¶ 7} Consequently, we affirm the judgment of the court of appeals.
                          Facts and Procedural History
       {¶ 8} Kristy Norregard was injured in an automobile accident on July 6,
2002. Three days later, she sought treatment for her injuries at West Broad
Chiropractic. At that time, she executed a document entitled “Assignment of
Right to Receive Benefits and/or Proceeds of Settlement or Judgment” to assign
her right to receive from the tortfeasor’s insurance company compensation for
these injuries in exchange for her treatment. Payment was to be made directly to
West Broad before any payment was made to Norregard.
       {¶ 9} Almost two years later, on April 30, 2004, West Broad gave notice
of the assignment to appellee, American Family Insurance (“AFI”), which was
believed to have insured the driver of the automobile involved in the accident
with Norregard. The notice requested that AFI name West Broad as a co-endorser




                                         2
                               January Term, 2009




on any disbursement check issued or to issue a separate check payable to West
Broad directly. The notice did not identify the amount due West Broad.
       {¶ 10} In January 2006 and prior to filing any lawsuit, Norregard settled
her claim for injuries with AFI. AFI disbursed the settlement proceeds directly to
Norregard.
       {¶ 11} West Broad filed an action against AFI seeking a declaration that
the assignment was valid and enforceable and that AFI was obligated to pay West
Broad for the treatment provided to Norregard valued at $3830. The trial court
held that the assignment was enforceable and entered judgment for West Broad.
       {¶ 12} The Tenth District Court of Appeals reversed the judgment of the
trial court, concluding that Norregard had no “right in being” when she made the
assignment. W. Broad Chiropractic v. Am. Family Ins., Franklin App. No 07AP-
721, 2008-Ohio-2647, 2008 WL 2246653, ¶ 6. Instead, West Broad had only a
possibility of future settlement proceeds from AFI. Id. Furthermore, the court
determined that Norregard had no enforceable rights against AFI under R.C.
3929.06 until she obtained a judgment against the tortfeasor. Thus, the court
concluded, the assignment was ineffective, and it remanded the cause with
instructions to enter judgment in favor of AFI. Id at ¶18.
       {¶ 13} The appellate court certified that its judgment was in conflict with
judgments of the courts of appeals in the First, Ninth, Eleventh, and Twelfth
Districts. We determined that a conflict does exist on both issues. We accepted
West Broad’s discretionary appeal on the same issues and consolidated the cases.
W. Broad, 119 Ohio St.3d 1469, 2008-Ohio-4911, 894 N.E.2d 330.
                      Assignment of Settlement Proceeds
       {¶ 14} An assignment is a transfer to another of all or part of one’s
property in exchange for valuable consideration. Hsu v. Parker (1996), 116 Ohio
App.3d 629, 632, 688 N.E.2d 1099. A vested right in the assigned property is




                                         3
                            SUPREME COURT OF OHIO




required to confer a complete and present right on the assignee. Christmas v.
Griswold (1858), 8 Ohio St. 558, 563-564.
       {¶ 15} When Norregard entered into the agreement with West Broad, she
had a cause of action against the tortfeasor that had accrued at the time of the
accident. See Pilkington N. Am., Inc. v. Travelers Cas. & Sur. Co., 112 Ohio
St.3d 482, 2006-Ohio-6551, 861 N.E.2d 121; Cincinnati v. Hafer (1892), 49 Ohio
St. 60, 65, 30 N.E. 197. However, Norregard had not filed a claim based on that
cause of action. She had not established liability or the right to damages. No
settlement proceeds existed at the time of the assignment.
       {¶ 16} Nevertheless, Norregard executed a document that purported to
assign to West Broad her “right to receive or collect any check or monies offered
for compensation to [her] by any person for any injury for which [she] received
treatment from West Broad Chiropractic.” Because no settlement proceeds existed
at the time of the assignment and Norregard then had no right to any funds, she
had no rights to assign. Thus, we hold that the agreement could not operate as an
assignment because Norregard had no right in any settlement proceeds to transfer
to West Broad.
       {¶ 17} West Broad contends that Norregard’s expectation of a settlement
was assignable even though it was contingent upon proving liability and damages.
West Broad, however, relies on cases in which the expected interest was based
upon real property or contingent estates of inheritance of a property interest that
was in existence. See Moore v. Foresman (1962), 172 Ohio St. 559, 565, 18
O.O.2d 123, 179 N.E.2d 349; Hite v. Hite (1929), 120 Ohio St. 253, 260-261, 166
N.E. 193. In this case, Norregard had not asserted a claim against the tortfeasor
and had not established liability or the right to damages. The right to proceeds of
a future settlement was unresolved.     Consequently, Norregard’s right to any
settlement proceeds was merely a possibility at the time she executed the
assignment to West Broad.




                                         4
                                January Term, 2009




       {¶ 18} In Pennsylvania Co. v. Thatcher (1908), 78 Ohio St. 175, 85 N.E.
55, syllabus, the court held that an equitable assignment in the prospective
proceeds of a settlement could not be enforced by the assignee against the
tortfeasor in a suit at law. In Thatcher, the victim of a railroad accident attempted
to assign to his attorney the proceeds of his claim, although no cause of action had
been filed. The court acknowledged that the assignee may have a right to recover
from the assignor; however, the assignment was not legally binding in a suit for
money damages against a third party who had not agreed to the terms of the
assignment. Id. at 189.
       {¶ 19} Thatcher rejected the notion that notice of an assignment could
legally obligate an unrelated third party in the absence of a contractual or other
relationship between the parties, particularly when the notice assigned “a portion
of whatever may be paid in suit or settlement.” Id., 78 Ohio St. at 175, 85 N.E.
55. The court held that a notice so indefinite was insufficient to reach the funds in
the hands of a third-party tortfeasor.       Id. at paragraph two of the syllabus.
Thatcher also reasoned that giving effect to such an assignment would introduce
the interests of a third party who had not been involved in the accident into
settlement negotiations and may compromise a settlement between the injured
person and the tortfeasor. Id. at 191. In addition, an assignment occurs only
when the fund or property to be transferred exists.        However, there are no
settlement proceeds until the tortfeasor simultaneously pays funds in exchange for
a release. Id.
       {¶ 20} We find the legal reasoning of Thatcher still persuasive a century
later. Consistent with Thatcher, because Norregard had no present right to any
settlement funds at the time of the assignment, she had no rights to assign. West
Broad had a contract that may be enforceable against Norregard, but it is not
legally binding upon AFI.




                                         5
                             SUPREME COURT OF OHIO




       {¶ 21} The conflict cases relied on public policy reasons to justify
upholding such assignments.       Some districts believed that such assignments
would encourage settlement and avoid litigation. See Roselawn Chiropractic
Ctr., Inc. v. Allstate Ins. Co., 160 Ohio App.3d 297, 2005-Ohio-1327, 827 N.E.2d
331, ¶ 16; Cartwright Chiropractic v. Allstate Ins. Co., Butler App. No. CA2007-
06-143, 2008-Ohio-2623, 2008 WL 2231651, ¶ 9. They also reasoned that the
assignments would promote timely medical treatment for injured persons who
may not otherwise be able to pay, while at the same time assuring medical-care
providers that they will be compensated. Cartwright at ¶ 9, 16; Akron Square
Chiropractic v. Creps, Summit App. No. 21710, 2004-Ohio-1988, 2004 WL
840131, ¶ 12, fn. 2; Roselawn, ¶19-20.
       {¶ 22} On the other hand, there are circumstances under which such
assignments might encourage and promote litigation and discourage settlement.
A chiropractor or other assignee expects full payment and lacks interest in
negotiating the amount of the debt. Likewise, the third-party insurer lacks the
ability to dispute the amount or reasonableness of the charges. The insurer must
take these factors into account when settling the claim, and the result may be less
to the injured party, forcing him or her to litigate in hopes of obtaining a greater
recovery. Attorneys may therefore be deterred from taking smaller claims when
the proceeds are taken by assignees, leaving little to no funds for the injured party
or the attorney’s fee.
       {¶ 23} Furthermore, if an injured person executes multiple assignments to
a variety of creditors, the third-party insurer may be faced with determining the
priority of assignments and how to distribute settlement proceeds pro rata among
numerous assignees if the debt exceeds the amount of the settlement. Generally,
the injured person is represented by counsel, who receives the settlement funds
and who may negotiate a lesser payment with his client’s creditors. West Broad’s
proposition, however, places the obligation on the insurer to identify and locate




                                         6
                                 January Term, 2009




each assignee at the time of settlement to determine the current liability and may
subject the insurer to multiple lawsuits.
        {¶ 24} Upholding the legality of such assignments opens the door for
other creditors to seek debt protection through assignments: the pharmacy, the
automobile repair shop, other medical providers. If the injured person executes an
assignment to satisfy a debt that is not related to the accident, i.e., a landlord or
consumer debt, the insurer would be thrust into a credit situation that is
completely unrelated to the underlying accident, and the unrelated third party
becomes a de facto collection agent that must prioritize and pay debts to avoid
personal liability.
        {¶ 25} Finally, we disfavor such assignments based upon their similarities
to champertous agreements that are void as a matter of law. See Rancman v.
Interim Settlement Funding Corp., 99 Ohio St.3d 121, 2003-Ohio-2721, 789
N.E.2d 217, ¶ 19. Here, West Broad agreed to forgo payment for Norregard’s
treatment in exchange for an interest in future settlement proceeds. Although
Norregard would remain liable for her medical bills if she did not settle, under the
circumstances of this case, West Broad’s interest in potential future proceeds
could influence Norregard’s interest in resolving her case, including delaying and
holding out for a greater settlement because she had no current obligation to pay
for her medical treatment.
        {¶ 26} Therefore, our answer to the first certified question is no. A person
may not assign the right to the future proceeds of a settlement if the right to the
proceeds does not exist at the time of the assignment. Norregard had no present
right to any settlement funds at the time of the assignment and thus had no rights
to assign. West Broad had a contract that may be enforceable against Norregard,
but it is not legally binding upon AFI.
                             Application of R.C. 3929.06




                                            7
                             SUPREME COURT OF OHIO




       {¶ 27} The second question for review asks whether R.C. 3929.06
precludes an assignee from bringing a direct action against the third-party insurer
who had prior notice of the assignment but nevertheless paid the settlement
proceeds contrary to the written assignment.
       {¶ 28} R.C. 3929.06(B) precludes an injured person from bringing a civil
action against the tortfeasor’s insurer until the injured person has first obtained a
judgment for damages against the insured and the insurer has not paid the
judgment within 30 days.
       {¶ 29} West Broad contends that R.C. 3929.06 applies only when the
insurer does not pay insurance proceeds after liability has been judicially
determined. The conflict cases likewise interpreted R.C. 3929.06 more literally.
Akron Square notes that the statute does not mention assignments, and the court
of appeals refused to read into the statute a prohibition on assigning potential
settlement proceeds.    2004-Ohio-1988, 2004 WL 840131, ¶ 10.            Cartwright
rejected the application of R.C. 3929.06 because the injured party in that case
settled without having to file suit.     Thus, that court considered the statute
inapplicable to the facts. 2008-Ohio-2623, 2008 WL 2231651, ¶ 18-19.
       {¶ 30} The court of appeals in this case acknowledged that the statute
does not directly address written assignments. W. Broad, 2008-Ohio-2647, 2008
WL 2246653, ¶ 17. Nevertheless, the court, applying the law of assignments to
the statute, reasoned that if an injured person has no direct action against the
tortfeasor’s insurer until 30 days after judgment and an injured person may assign
only those rights that presently exist, then it follows that at the time of the
assignment, Norregard had no direct right of recovery against AFI that could be
assigned to West Broad. Id. at ¶ 16.
       {¶ 31} This approach was also applied in Knop Chiropractic, Inc. v. State
Farm Ins. Co., Stark App. No. 2003CA00148, 2003-Ohio-5021, 2003 WL
22176668. In that case, a chiropractor filed an action to enforce a patient’s




                                         8
                                   January Term, 2009




assignment of prospective claim proceeds against a third-party automobile
insurer. The court in Knop concluded, per R.C. 3929.06, that the assignment was
not enforceable against State Farm because it was created before the injured
person had filed a civil action against the tortfeasor. Thus, the assignment was
not founded on a right in being and was not enforceable. Id. at ¶ 19, 20.
       {¶ 32} The underlying premise of R.C. 3929.06 reinforces our conclusion
that Norregard had no existing right in proceeds to assign to West Broad.
Therefore, our answer to the second certified question is yes: R.C. 3929.06
precludes an assignee of prospective settlement proceeds from bringing a direct
action against a third-party insurer after the insurer has distributed settlement
proceeds in disregard of the written assignment.
                                      Conclusion
       {¶ 33} When Norregard executed the agreement with West Broad, she had
no right in proceeds from a prospective settlement or judgment. Because there
must be an existing right in order for there to be a valid assignment, Norregard
had nothing to assign that would have created a right in the assignee. At most,
West Broad had a contractual right against Norregard for medical bills, but no
legal right to enforce the agreement against AFI.
       {¶ 34} In addition, Norregard had no direct right of action against AFI at
the time of the assignment because she had not met the terms of R.C. 3929.06.
Thus, because West Broad’s rights as assignee are no greater than Norregard’s,
West Broad was also prohibited from filing a direct action against AFI.
       {¶ 35} Consequently, we affirm the judgment of the court of appeals.
                                                               Judgment affirmed.
       O’DONNELL, J., concurs.
       O’CONNOR and LANZINGER, JJ., concur in the judgment and the answers
to the certified questions only.
       MOYER, C.J., and PFEIFER and CUPP, JJ., dissent.




                                           9
                             SUPREME COURT OF OHIO




                               __________________
        MOYER, C.J., dissenting.
        {¶ 36} I dissent from the judgment because I find the assignment between
Kristy Norregard and West Broad Chiropractic (“West Broad”) to be enforceable.
Therefore I would hold that West Broad should be permitted to recover from
American Family Insurance for its failure to pay West Broad pursuant to the
assignment. Additionally, I would hold that R.C. 3929.06 does not prohibit an
assignee of an injured person from filing suit to collect from the insurer on the
assignment when the insurer has disregarded the assignment while distributing
settlement proceeds.
                                           I
         Assignment of the right to contingent future settlement proceeds
                       is permitted as an equitable assignment
        {¶ 37} In the first certified-conflict issue, we are asked whether an injured
party may assign its right to conditional, future compensation for its injuries when
the injured party has not yet established the liability of the tortfeasor or a present
right to such compensation. I would answer this question in the affirmative,
based upon our prior cases concerning assignments of future interests. Therefore,
I dissent from the majority’s holding on the first certified-conflict issue.
        {¶ 38} The lead opinion states that in order to validly assign a contingent
interest, the assignor must have a “property right that [is] in existence.”
According to the lead opinion, Norregard’s assignment of any future
compensation for her personal injuries to West Broad for chiropractic care is
invalid because Norregard had no present right to settlement proceeds, nor did
any proceeds exist. However, in attempting to explain our precedent, the lead
opinion actually imposes requirements for an equitable assignment that do not
exist in our case law. These new requirements unduly constrict the ability to
assign a future interest.




                                          10
                                January Term, 2009




       {¶ 39} A contingent, future property interest is an uncertain right at best.
This is so because the existence of the property in question is speculative, its
existence depending not only on the occurrence of some specified future
condition but also on the caprice of fate. Additionally, contingent interests, by
definition, do not vest a present property right in the holder of the interest,
although they may give rise to rights enforceable in equity. Therefore, in general,
such assignments were not enforced as contracts at law because an expectancy
was deemed too intangible. Hite v. Hite (1929), 120 Ohio St. 253, 262-264, 166
N.E. 193; and Moore v. Foresman (1962), 172 Ohio St. 559, 566, 18 O.O.2d 123,
179 N.E.2d 349; Pennsylvania Co. v. Thatcher (1908), 78 Ohio St. 175, 188, 85
N.E. 55.     However, a right to enforce assignments of future interests was
recognized in equity. Id. at 188-189, 85 N.E. 55. In order for an assignment to be
enforced in equity, we require that the assignor have an “expectancy” in the object
of the assignment. Hite, 120 Ohio St. at 260-261, 166 N.E. 193. At common law,
assignments were held to a stricter requirement: that the assignor have a “right in
being” in the object of the assignment. Needles v. Needles (1857), 7 Ohio St. 432,
442-443. A right in being is a cognizable expectation, founded on some provision
of law or instrument or some legal act, that in the future, the assignor will possess
the object of the assignment. Id.
       {¶ 40} When such an expectancy or right in being exists, certain
privileges belong to the holder of the contingent interest, such as the ability to
assign the contingent interest. Id.; Hite, 120 Ohio St. at 260-261, 166 N.E. 193.
These assignments will be enforced in equity once the contingency has occurred
and property rights to the subject matter of the assignment vest in the assignor.
Hite at 262-264, 166 N.E. 193; Moore, 172 Ohio St. at 566, 18 O.O.2d 123, 179
N.E.2d 349; Thatcher, 78 Ohio St. at 188-189, 85 N.E. 55. (Here, Norregard is
the “assignor,” West Broad is the “assignee,” and American Family is the
“debtor.”)




                                         11
                            SUPREME COURT OF OHIO




       {¶ 41} In this case, Norregard’s expectation of compensation for her
injury rested on the cognizable provision at law of the right to seek redress for
injuries already sustained. Norregard had an expectancy and a right in being in
the nature of a legally recognized remedy for her injuries. Her future interest was
contingent on her success in pursuing that right. Thus, her expectation is founded
in relief recognized in law and may be assigned.
       {¶ 42} The premise of the lead opinion—that property or a property
interest must exist—is contradicted by our precedent concerning equitable
assignments. In Gen. Excavator Co. v. Judkins (1934), 128 Ohio St. 160, 166,
190 N.E. 389, which is ignored by the lead opinion, we enforced an equitable
assignment for the future proceeds of a contract, although the work had not yet
been performed and no proceeds were due. We held that an equitable assignment
is created by “an intention on one side to assign and an intention on the other to
accept, supported by sufficient consideration, and disclosing a present purpose to
make an appropriation of a debt or fund.” Id. at 165, 190 N.E. 389.
       {¶ 43} As is apparent from the facts in Gen. Excavator, the assignor did
not have a present right to the property at issue, nor was the property in existence
at the time the assignment was made. Gen. Excavator Co., 128 Ohio St. at 165-
166, 190 N.E. 389. No work had been performed on the contract, so the assignor
had received no payment and had no right to payment. Id. Thus, as to the first
element of the assignment—the “debt or fund”—the assignor had merely an
expectation interest. Yet the court in Gen. Excavator held that the assignment
was valid. Id. at 167, 190 N.E. 389. It was apparently sufficient for the court that
the property would exist upon the exercise of an expectancy or right in being,
namely the assignor’s privilege to perform the work specified in a contract. That
is, the assignor had an assignable interest in the future proceeds of the contract,
although those proceeds would not exist until the assignor performed work under
the contract and received payment for that work. Thus, as long as the assignor




                                        12
                               January Term, 2009




has the present purpose to make an appropriation from a fund—even a fund that
does not exist and to which the assignor has no present right—then the first
element of Gen. Excavator is met.
       {¶ 44} In this case, no one questions the existence of the other elements of
a valid equitable assignment under Gen. Excavator: the intent of the parties to
create an assignment or the underlying consideration. Gen. Excavator Co., 128
Ohio St. at 165, 190 N.E. 389. Rather, the appellee and the majority deny the
right of Norregard to the funds at issue. However, Gen. Excavator indicates that
the assignor need not have a present right to funds, nor do the funds need to be in
existence. Gen. Excavator is analogous to this case. There is no meaningful
difference between assigning the right to the uncertain proceeds of a future
contract and assigning the right to proceeds of a future lawsuit or settlement. In
either case, the property depends for its existence on the assignor’s successful
pursuit of “rights in being.” Accordingly, as in Gen. Excavator, we have here a
valid equitable assignment without a present property interest or property in
existence. Therefore, I would hold that the elements of an equitable assignment
under Gen. Excavator have been met in this case.
       {¶ 45} The cases cited in the lead opinion, Hite, 120 Ohio St. at 253, 166
N.E. 193, and Moore, 172 Ohio St. at 559, 18 O.O.2d 123, 179 N.E.2d 349, do
not alter this result. Neither Hite nor Moore supports the premise of the lead
opinion that the only expectations that may be assigned are those in which the
future interest is based upon “a property right that was [already] in existence.” In
fact, both Hite and Moore recognized that a future interest based on rights and
property not in actual existence could be assigned in equity. Hite at 260-261, 166
N.E. 193; Moore, paragraph one of the syllabus.
       {¶ 46} In Hite, the assignor assigned his expected inheritance from his
mother’s estate to his sister, the assignee. Hite, 120 Ohio St. at 256, 166 N.E.
193. The Hite court held that the assignment was not enforceable at law, but was




                                        13
                              SUPREME COURT OF OHIO




enforceable in equity, because it would have been inequitable to allow the
assignor to retain both the inheritance and the consideration given by the assignee
in the event that the assignor actually inherited the res, i.e. the subject matter, of
the assignment. Id. at 260-261, 166 N.E. 193. The Hite court enforced the
assignment, even though at the time of the assignment, the assignor had no
present rights to the property, the property did not exist when the assignment was
made, and the assignor’s expectancy had only “potential existence,” contingent on
the occurrence of a future event. Id. Thus, Hite is no support for the conclusion
that an expectation interest can be assigned only when it is a “property interest
[already] in existence.”
       {¶ 47} In Moore, we came to the unsurprising conclusion that because
Ohio law recognized a protectable right to equitable or beneficial ownership of
property held in trust (although the beneficiary had no present legal ownership),
the beneficiary could assign that interest in equity. Moore, 172 Ohio St. at 566,
18 O.O.2d 123, 179 N.E.2d 349. The holding in Moore was premised on the
already established rule that a contingent future interest was alienable and the
widely recognized rule that “[e]quitable or beneficial ownership and interest in
securities is alienable and may be conveyed.”         Id. at paragraph two of the
syllabus. Simply put, Moore did nothing more than recognize that an equitable
ownership in securities is alienable and therefore can be assigned in equity.
Moore does not affect the issue before us beyond providing another example of
the assignability of a contingent future interest.
       {¶ 48} The lead opinion reads Hite and Moore to require a present interest
in property or the existence of the property before a contingent interest may be
assigned. Yet, as Hite and Moore illustrate, contingent interest will rarely—if
ever—involve presently existing property rights or property in actual existence.
The Hite court expressly recognized that the assignor’s right to property was
based upon a “mere expectancy” of that right, that the assignor had no existing




                                          14
                                     January Term, 2009




right, and that no property existed at the time of the assignment. Hite, 120 Ohio
St. at 260-261, 166 N.E. 193. It is hard to imagine which, if any, contingent
interests will remain assignable following the majority’s holding.
        {¶ 49} Furthermore, it is apparent from the number of cases addressing
this type of assignment that such an assignment is a common means for injured
persons to receive medical treatment while waiting for monetary relief.1 Injured
persons have an expectation of relief that equity recognizes without first requiring
instigation of courtroom proceedings.
        {¶ 50} Therefore, I would hold that the law permits West Broad to enforce
its equitable assignment. Courts have historically enforced such assignments
once the contingency has occurred and the object of the assignment has come into
existence. Hite, 120 Ohio St. at 262-264, 166 N.E. 193; Moore, 172 Ohio St. at
566, 18 O.O.2d 123, 179 N.E.2d 349; Thatcher, 78 Ohio St. at 188, 85 N.E. 55.
The question remains whether West Broad may enforce the assignment against
American Family Insurance, a third party to the assignment.
                After notice, the assignee may sue a third-party debtor
                       who did not pay pursuant to the assignment
        {¶ 51} The majority holds that equitable assignments cannot be enforced
against third parties who did not consent to the agreements. But this holding is


1. The parties have cited six Ohio court of appeals cases, two cases from the courts of last resort
of other states, and several state and federal trial court cases, including the following: Akron
Square Chiropractic v. Creps, Summit App. No. 21710, 2004-Ohio-1988, 2004 WL 840131;
Cartwright Chiropractic v. Allstate Ins. Co., Butler App. No. CA2007-06-143, 2008-Ohio-2623,
2008 WL 2231651; Fletcher v. Nationwide Mut. Ins. Co., Darke App. No. 02CA1599, 2003-Ohio-
3038, 2003 WL 21360646; Knop Chiropractic, Inc. v. State Farm Ins. Co., Stark App. No.
2003CA0018, 2003-Ohio-5021, 2003 WL 22176668; Mt. Lookout Chiropractic Ctr., Inc. v.
Motley (Dec. 1, 1999), Hamilton App. No. C-980987, 1999 WL 1488971; Roselawn Chiropractic
Ctr., Inc. v. Allstate Ins. Co., 160 Ohio App.3d 297, 2005-Ohio-1327, 827 N.E.2d 331; Charlotte-
Mecklenburg Hosp. Auth. v. First of Georgia Ins. Co. (1995), 340 N.C. 88, 455 S.E.2d 655;
Hernandez v. Suburban Hosp. Assn., Inc. (1990), 319 Md. 226, 572 A.2d 144; Midtown
Chiropractic v. Illinois Farmers Ins. Co. (Ind.2006), 847 N.E.2d 942; Bernstein v. Allstate Ins.
Co. (1968), 56 Misc.2d 341, 288 N.Y.S.2d 646; and In re Petry (Bankr.N.D.Ohio 1986), 66 B.R.
61.




                                                15
                             SUPREME COURT OF OHIO




directly contrary to precedent established in Pittsburg, Cincinnati, Chicago & St.
Louis Ry. Co. v. Volkert (1898), 58 Ohio St. 362, 367, 50 N.E. 924, and Gen.
Excavator, 128 Ohio St. 160, 190 N.E. 389. Furthermore, the lead opinion’s
reliance on the reasoning in Thatcher, 78 Ohio St. 175, 85 N.E. 55, is misplaced,
because Thatcher addressed only money damages in an action at law, and the
reasoning cited from Thatcher is dicta. Id. at syllabus.
       {¶ 52} In Volkert, an attorney had assigned his fee from an unpaid
judgment to the assignee, but the judgment debtor disregarded the assignment and
paid the attorney’s client instead. Volkert, 58 Ohio St. at 368, 50 N.E. 924. We
held that the attorney’s assignment was enforceable in equity. Id. at 369-371, 50
N.E. 924.    We also held that equity permitted the assignee to enforce the
assignment against the third-party debtor, even though it had not consented to pay
pursuant to the assignment. Id. at 372, 50 N.E. 924. Indeed, we required the
debtor, which knew of the assignment, to pay the assignee, despite having already
paid the full debt amount to the client; “the [debtor], while it had a full right to
compromise, was simply required to deal with all parties in interest, including
those holding a valid property interest in the judgment, and entitled to a portion of
the proceeds.” Id. at 377, 50 N.E. 924.
       {¶ 53} We applied the rule in Volkert in Gen. Excavator in an opinion
issued well after Thatcher, 78 Ohio St. 175, 85 N.E. 55. Gen. Excavator, 128
Ohio St. at 165, 190 N.E. 389. In Gen. Excavator, we held, “The consent of a
debtor, i.e., the one obligated to an assignor, is not required to an assignment,
even though it be for only a part of an entire debt or claim. Such assignment will
be enforced against the debtor in equity.” Id., citing Volkert, 58 Ohio St. at 362,
50 N.E. 924. The majority’s holding today improperly displaces the rule of law
announced in these cases.
       {¶ 54} Moreover, Thatcher is not controlling or even applicable. The
holding of Thatcher—that equitable assignments must be enforced in equity and




                                          16
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cannot be enforced in actions at law—has no bearing on this case, particularly
because of the now defunct distinction between actions at law and at equity. See
Thatcher, 78 Ohio St. at 187, 85 N.E. 55; Civ.R. 2 (“There shall be only one form
of action, and it shall be known as a civil action”).
       {¶ 55} The Thatcher court noted in dicta that under the facts of that case,
the suit was “questionable” in equity as well, because of the circumstances of the
particular assignment in that case, in which it appeared that a portion of the
underlying claim—not the proceeds of settlement—had been assigned (i.e., the
assignor had assigned a “chose in action,” giving the right to pursue a portion of
her cause of action to a third party). Id. at 192, 85 N.E. 55, citing Weller v. Jersey
City, Hoboken & Paterson Street Ry. Co. (1904), 66 N.J.Eq. 11, 18-19, 57 A. 730.
The Thatcher court suggested that under such circumstances, the assignee would
have no right in equity to enforce his assigned “portion” of the underlying cause
of action against the debtor alone because (1) doing so would interject the
interests of an uninjured third party into settlement negotiations, undermining the
needs of the injured party; and (2) the fund of the resulting assignment would not
come into existence until the tortfeasor had been released from liability. Id. at
190-192, 85 N.E. 55.
       {¶ 56} This viewpoint likely stems from the then existing rule that
although choses in action were generally assignable, choses in action for personal
injury were generally not. Cincinnati v. Hafer (1892), 49 Ohio St. 60, 66, 30 N.E.
197. And the dicta of Thatcher reflect the general policy against champerty and
maintenance (i.e., the interference with the maintenance of a lawsuit by a third
party who has agreed to assist in the litigation in exchange for a portion of the
proceeds) by prohibiting assignments that may undermine the needs of the injured
party, needlessly complicate litigation, and frustrate settlement by introducing a
self-interested third party to the litigation and settlement process.      See, e.g.,




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Rancman v. Interim Settlement Funding Corp., 99 Ohio St.3d 121, 2003-Ohio-
2721, 789 N.E.2d 217, at ¶ 10.
        {¶ 57} Thus, Thatcher addresses, in dicta, the undesirability of permitting
equitable assignment of choses in action (or portions of the underlying cause of
action) for personal-injury torts. Yet Norregard did not assign her injury or right
of action against the tortfeasor; she assigned her right to settlement proceeds.
There is an important difference between assigning a cause of action and
assigning the proceeds from future pursuit of that cause of action. The former
would insert a self-interested third party into the litigation and raise concerns of
champerty. The latter imparts no cognizable right in the litigation of the cause of
action to the third party and gives the third party an enforceable right only to the
extent that there are proceeds from resolution of the cause of action.            This
distinction has been recognized as significant by the courts of last resort of at least
three other states, as appellant points out. Charlotte-Mecklenburg Hosp. Auth.,
340 N.C. at 91, 455 S.E.2d 655; Achrem v. Expressway Plaza Ltd. Partnership
(1996), 112 Nev. 737, 740-741, 917 P.2d 447; Hernandez, 319 Md. at 235, 572
A.2d 144. Each of those courts has permitted assignments similar to those in this
case.
        {¶ 58} Accordingly, the assignment in this case—of the proceeds of a
future settlement—does not raise the concerns noted in Thatcher and Rancman:
the assignee will not have a right to be involved in the litigation of the injury
claim or the resulting settlement discussion, and the assignment will not
compromise the ability of the tortfeasor to settle with the injured party.
        {¶ 59} Therefore, I would hold that the rule in Volkert is the proper rule to
apply and that West Broad may recover from American Family Insurance, which
had notice of the assignment but did not pay according to its terms.
                                          II




                                          18
                                January Term, 2009




R.C. 3929.06 does not bar a lawsuit by an assignee against a third-party insurer
who paid settlement proceeds in disregard of an assignment of which it had notice
       {¶ 60} With regard to the second certified issue, the lead opinion reasons
that R.C. 3929.06 precludes an assignee from suing an insurer who paid
settlement proceeds in disregard of an assignment of which it had notice. I
disagree. Courts are charged to apply statutes as plainly written. MedCorp, Inc.
v. Ohio Dept. of Job & Family Servs., 121 Ohio St.3d 622, 2009-Ohio-2058, 906
N.E.2d 1125, ¶ 9 (“When construing a statute, we first examine its plain language
and apply the statute as written when the meaning is clear and unambiguous”).
And R.C. 3929.06(B) is plainly inapplicable to the situation at hand.
       {¶ 61} R.C. 3929.06 provides:
       {¶ 62} “(A) (1) If a court in a civil action enters a final judgment that
awards damages to a plaintiff for injury, death, or loss to the person or property of
the plaintiff or another person for whom the plaintiff is a legal representative and
if, at the time that the cause of action accrued against the judgment debtor, the
judgment debtor was insured against liability for that injury, death, or loss, the
plaintiff or the plaintiff's successor in interest is entitled as judgment creditor to
have an amount up to the remaining limit of liability coverage provided in the
judgment debtor's policy of liability insurance applied to the satisfaction of the
final judgment.
       {¶ 63} “(2) If, within thirty days after the entry of the final judgment
referred to in division (A)(1) of this section, the insurer that issued the policy of
liability insurance has not paid the judgment creditor an amount equal to the
remaining limit of liability coverage provided in that policy, the judgment creditor
may file in the court that entered the final judgment a supplemental complaint
against the insurer seeking the entry of a judgment ordering the insurer to pay the
judgment creditor the requisite amount. Subject to division (C) of this section, the




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civil action based on the supplemental complaint shall proceed against the insurer
in the same manner as the original civil action against the judgment debtor.
       {¶ 64} “(B) Division (A)(2) of this section does not authorize the
commencement of a civil action against an insurer until a court enters the final
judgment described in division (A)(1) of this section in the distinct civil action for
damages between the plaintiff and an insured tortfeasor and until the expiration of
the thirty-day period referred to in division (A)(2) of this section.”
       {¶ 65} R.C. 3929.06(B) is the portion of the statute at issue. That portion
of the statute requires an injured party to wait 30 days after judgment against a
tortfeasor before filing suit against the tortfeasor’s insurer to collect on that
judgment. The majority does not dispute this reading of R.C. 3929.06. Thus, the
statute confines itself to one type of lawsuit—a suit by an injured person to collect
from an insurer after a judicial determination of the liability of a tortfeasor—and
the prohibition in the statute pertains only to the filing of a lawsuit to collect on
such a judgment after 30 days have passed from the final judgment of damages.
       {¶ 66} I cannot follow the rationale that stretches the words of R.C.
3929.06 to preclude a suit by an assignee to collect on an assignment when the
insurer distributed settlement money in disregard of the assignment.             R.C.
3929.06(B) simply does not apply to such a cause of action.
       {¶ 67} Moreover, the statute has no application to the facts of this case.
The statute applies to suits to collect on a judgment and has no application unless
a civil judgment has been entered as described in R.C. 3929.06(A)(1). In this
case, there was no judgment or need to collect on a judgment—the insurer settled
with the injured party out of court. When the assignee files suit because the
insurer paid in disregard of the assignment, the statute, by its own terms, has no
application to such a suit.
       {¶ 68} At best, the majority’s holding with regard to R.C. 3929.06 is a
non sequitur. The lead opinion states that the “underlying premise” of R.C.




                                          20
                               January Term, 2009




3929.06 confirms the conclusion that the assignment was invalid, because
Norregard had no existing property or property rights to assign. The majority
then answers the second certified question “yes,” concluding that R.C. 3929.06
precludes an assignee from bringing a direct action against a third-party insurer
after the insurer has distributed settlement proceeds in disregard of the written
agreement. This conclusion is odd because if the majority’s reasoning is correct
and the assignment was invalid, then West Broad never had a cause of action, and
there is nothing for R.C. 3929.06 to preclude. If the majority’s view were carried
to its logical conclusion, then we should not reach the second certified question—
the statute does not preclude the action; rather, the lack of a valid assignment
precludes the action against the insurer, and the second certified question is moot.
As argued above, I do not agree that the assignment was invalid; therefore, I
cannot agree with the majority’s holding with regard to R.C. 3929.06.
       {¶ 69} Furthermore, the majority ignores the settled law on suits to collect
on an improperly paid assignment. An assignee of an equitable assignment may
sue a third-party debtor who had notice of the assignment but did not pay
accordingly. Volkert, 58 Ohio St. 362, 50 N.E. 924, paragraphs one, two, and
three of the syllabus; Gen. Excavator, 128 Ohio St. at 165, 190 N.E. 389. We
have held that the third-party debtor is liable in such circumstances, even when
that debtor did not consent to pay pursuant to the assignment. Volkert, 58 Ohio
St. 362, 50 N.E. 924, paragraph three of the syllabus.
       {¶ 70} Therefore, I would hold that R.C. 3929.06(B) does not prohibit an
assignee from suing an insurer who distributed settlement proceeds in disregard of
an assignment of which it had notice.
                                        III
       {¶ 71} Norregard had a right in being to seek a remedy for her injuries.
Therefore, I would hold that her future interest in the proceeds of a lawsuit or
settlement was assignable. West Broad, the assignee, is entitled to enforce the




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assignment against American Family Insurance, the third-party debtor, under
settled law. R.C. 3929.06 does not apply to prohibit West Broad from suing
American Family for failure to properly distribute the proceeds under the terms of
the assignment.
       {¶ 72} Therefore, I dissent.
       PFEIFER and CUPP, JJ., concur in the foregoing opinion.
                             __________________
       Katz, Teller, Brant & Hild and James F. McCarthy III, for appellant.
       Frost, Maddox & Norman Co., L.P.A., and Mark S. Maddox, for appellee.
       Boehm, Kurtz & Lowry and John P. Lowry; and Montgomery, Rennie &
Jonson and George D. Jonson, urging reversal for amici curiae Ohio State
Chiropractic Association and Ohio Osteopathic Association.
       Roetzel & Andress, Laura M. Faust, and Jerome G. Wyss, urging
affirmance for amicus curiae Ohio Association of Civil Trial Attorneys.
                           ______________________




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