For an assignment to be valid and enforceable against the assignor's creditor (the obligor), the assignor must make clear his intent to relinquish the right to the assignee and must not retain any control over the right assigned or any power of revocation. The assignment takes effect through the actions of the assignor and assignee and the obligor need not accept the assignment to render it valid.
Defendants' client was injured in an accident and sued for damages. Later, plaintiff performed surgery on the client for a condition unrelated to the accident. In lieu of payment, plaintiff agreed to accept from the client an "assignment of benefits" of any settlement the client might receive. Plaintiff notified defendants of the assignment. When the client's case was settled, defendants followed the client's instructions not to pay plaintiff, as the client indicated he would pay plaintiff directly. Payment was never received, and plaintiff sued defendants. Judgment in plaintiff's favor was affirmed.
Is an assignment of a future right to litigation valid?
The court held that the assignment of a future right to litigation proceeds was valid, and defendants were obligated to pay to plaintiff when they received notice of the assignment. In addition, defendants would not have violated any ethical rules by disregarding their client's later instructions, as the client had already validly assigned his right to the funds.