Key Decisions

November 2012- The Assignment Of A Claim

(filed under: Key Decisions Archive | November 20, 2012)

The Assignment Of A Claim On A Contract Was Valid

Fink v. Shemtov
(Cal. Ct. of App., 4th Dist.), filed September 28, 2012

Stone Center Corporation extended credit to Moses Shemtov for the purchase of certain building materials.  When Shemtov failed to make any payments, Stone Center assigned its claims against him to David Fink.  In connection with the assignment, Fink agreed to pay half of any recovery to Stone Center.

Acting in propria persona, Fink sued Shemtov, S&E Stone, Inc. and others on those claims.

The trial court entered a judgment in favor of S&E based on its finding that the assignment to Fink was void as against public policy.  It reasoned the agreement between Stone Center and Fink was not an assignment, but rather a joint venture for the prosecution of a lawsuit and that, as such, Fink was practicing law without a license.

The Court of Appeal reversed in part and affirmed in part.  It concluded the assignment was valid as it completely transferred all of Stone Center’s claims.  The agreement to split the recovery did not change this.  Assignments are valid in collections cases and do not create an attorney-client relationship.  Therefore, S&E was not entitled to judgment.