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Lingel v. Olbin8/29/2000
Lingels argued that the rule prohibiting the assignment of personal injury claims does not apply to wrongful death claims and any resulting proceeds, that the contract claims for UIM benefits and life insurance benefits were fully assignable as well as severable, that the statute of frauds was inapplicable, and that a material question of fact existed as to whether Rick had violated any duty he owed the Olbins. In their cross-motion for partial summary judgment, the Lingels contended there was no triable issue of fact about the enforceability of their agreement "to equally share all insurance benefits." The trial court granted the Olbins' motion, finding the common law rule prohibiting the assignment of personal injury claims and the proceeds therefrom applicable to actions for wrongful death and any resulting proceeds. The court also found that genuine issues of material fact existed as to whether the entire agreement was void, whether the parties must return life insurance proceeds they had already exchanged, and whether the Lingels were required to return items from Erik's estate. The trial court agreed that the contract claim for life insurance benefits was severable, but denied the remainder of the Lingels' motion, stating:
he fact that the claim(s) were paid from a liability policy of [the driver] and an underinsured policy covering [Erik] is irrelevant and has no effect on the non-assignability of the claims . . . . The sole issues for trial concerning insurance policy assignments are the assignments of life insurance policies and how those assignments were obtained.
Pursuant to Rule 54(b), Ariz. R. Civ. P., 16 A.R.S., the trial court entered judgment in favor of the Olbins, and this appeal followed.
Standard of Review
In ruling on a motion for summary judgment, a trial court must decide whether a genuine issue of material fact exists and whether the moving party is entitled to judgment on the merits as a matter of law. Ariz. R. Civ. P. 56(c), 16 A.R.S.; Orme School v. Reeves, 166 Ariz. 301, 802 P.2d 1000 (1990). In reviewing the ruling, we "determine whether the trial court correctly applied the substantive law to facts." St. Luke's Health Sys. v. State, 180 Ariz. 373, 376, 884 P.2d 259, 262 (App. 1994). We are not bound by the trial court's legal conclusions and review those questions de novo. Elia v. Pifer, 194 Ariz. 74, 977 P.2d 796 (App. 1998).
Assignment of Wrongful Death Actions
It is well established in Arizona, and the Lingels acknowledge that, absent statutory authorization, an assignment of a cause of action for personal injuries against a third-party tortfeasor is void and unenforceable. Allstate Ins. Co. v. Druke, 118 Ariz. 301, 576 P.2d 489 (1978); State Farm Fire & Cas. Co. v. Knapp, 107 Ariz. 184, 484 P.2d 180 (1971); Lo Piano v. Hunter, 173 Ariz. 172, 840 P.2d 1037 (App. 1992). The Lingels contend, however, that the trial court improperly expanded existing law in concluding that "any agreement made by a personal injury or wrongful death plaintiff to pay another person part of the proceeds of a personal injury or wrongful death action is unenforceable in Arizona." To determine whether proceeds of a wrongful death action are assignable, we first consider whether the underlying action itself may be assigned, examining the history and rationale of the rule prohibiting the assignment of claims for personal injury. No Arizona court has directly addressed this question.
Historically, the assignment of tort actions for personal injuries has been prohibited because, among other reasons, such actions do not survive the death of the injured person in the absence of statute. See Karp v. Speizer, 132 Ar
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