assignment of claims third party

FAC Number: 2024-05 Effective Date: 05/22/2024

Subpart 32.8 - Assignment of Claims

32.800 scope of subpart..

This subpart prescribes policies and procedures for the assignment of claims under the Assignment of Claims Act of1940, as amended, ( 31 U.S.C.3727 , 41 U.S.C.6305 ) (hereafter referred to as "the Act").

32.801 Definitions.

Designated agency , as used in this subpart, means any department or agency of the executive branch of the United States Government (see 32.803 (d)).

No-setoff commitment , as used in this subpart, means a contractual undertaking that, to the extent permitted by the Act, payments by the designated agency to the assignee under an assignment of claims will not be reduced to liquidate the indebtedness of the contractor to the Government.

32.802 Conditions.

Under the Assignment of Claims Act, a contractor may assign moneys due or to become due under a contract if all the following conditions are met:

(a) The contract specifies payments aggregating $1,000 or more.

(b) The assignment is made to a bank, trust company, or other financing institution, including any Federal lending agency.

(c) The contract does not prohibit the assignment.

(d) Unless otherwise expressly permitted in the contract, the assignment-

(1) Covers all unpaid amounts payable under the contract;

(2) Is made only to one party, except that any assignment may be made to one party as agent or trustee for two or more parties participating in the financing of the contract; and

(3) Is not subject to further assignment.

(e) The assignee sends a written notice of assignment together with a true copy of the assignment instrument to the-

(1) Contracting officer or the agency head ;

(2) Surety on any bond applicable to the contract; and

(3) Disbursing officer designated in the contract to make payment.

32.803 Policies.

(a) Any assignment of claims that has been made under the Act to any type of financing institution listed in 32.802 (b) may thereafter be further assigned and reassigned to any such institution if the conditions in 32.802 (d) and (e) continue to be met.

(b) A contract may prohibit the assignment of claims if the agency determines the prohibition to be in the Government’s interest.

(c) Under a requirements or indefinite quantity type contract that authorizes ordering and payment by multiple Government activities, amounts due for individual orders for $1,000 or more may be assigned.

(d) Any contract of a designated agency (see FAR 32.801 ), except a contract under which full payment has been made, may include a no-setoff commitment only when a determination of need is made by the head of the agency , in accordance with the Presidential delegation of authority dated October 3,1995, and after such determination has been published in the Federal Register. The Presidential delegation makes such determinations of need subject to further guidance issued by the Office of Federal Procurement Policy. The following guidance has been provided:

Use of the no-setoff provision may be appropriate to facilitate the national defense ; in the event of a national emergency or natural disaster; or when the use of the no-setoff provision may facilitate private financing of contract performance. However, in the event an offeror is significantly indebted to the United States , the contracting officer should consider whether the inclusion of the no-setoff commitment in a particular contract is in the best interests of the United States . In such an event, the contracting officer should consult with the Government officer(s) responsible for collecting the debt(s).

(e) When an assigned contract does not include a no-setoff commitment , the Government may apply against payments to the assignee any liability of the contractor to the Government arising independently of the assigned contract if the liability existed at the time notice of the assignment was received even though that liability had not yet matured so as to be due and payable.

32.804 Extent of assignee’s protection.

(a) No payments made by the Government to the assignee under any contract assigned in accordance with the Act may be recovered on account of any liability of the contractor to the Government. This immunity of the assignee is effective whether the contractor’s liability arises from or independently of the assigned contract.

(b) Except as provided in paragraph (c) of this section, the inclusion of a no-setoff commitment in an assigned contract entitles the assignee to receive contract payments free of reduction or setoff for-

(1) Any liability of the contractor to the Government arising independently of the contract; and

(2) Any of the following liabilities of the contractor to the Government arising from the assigned contract:

(i) Renegotiation under any statute or contract clause .

(ii) Fines.

(iii) Penalties, exclusive of amounts that may be collected or withheld from the contractor under, or for failure to comply with, the terms of the contract.

(iv) Taxes or social security contributions.

(v) Withholding or nonwithholding of taxes or social security contributions.

(c) In some circumstances, a setoff may be appropriate even though the assigned contract includes a no-setoff commitment ; e.g.-

(1) When the assignee has neither made a loan under the assignment nor made a commitment to do so; or

(2) To the extent that the amount due on the contract exceeds the amount of any loans made or expected to be made under a firm commitment for financing.

32.805 Procedure.

(a) Assignments.

(1) Assignments by corporations shall be-

(i) Executed by an authorized representative;

(ii) Attested by the secretary or the assistant secretary of the corporation; and

(iii) Impressed with the corporate seal or accompanied by a true copy of the resolution of the corporation’s board of directors authorizing the signing representative to execute the assignment.

(2) Assignments by a partnership may be signed by one partner, if the assignment is accompanied by adequate evidence that the signer is a general partner of the partnership and is authorized to execute assignments on behalf of the partner-ship.

(3) Assignments by an individual shall be signed by that individual and the signature acknowledged before a notary public or other person authorized to administer oaths.

(b) Filing. The assignee shall forward to each party specified in 32.802 (e) an original and three copies of the notice of assignment, together with one true copy of the instrument of assignment. The true copy shall be a certified duplicate or photostat copy of the original assignment.

(c) Format for notice of assignment. The following is a suggested format for use by an assignee in providing the notice of assignment required by 32.802 (e).

Notice of Assignment

To: ___________ [ Address to one of the parties specified in 32.802 (e) ].

This has reference to Contract No. __________ dated ______, entered into between ______ [ Contractor’s name and address ] and ______ [ Government agency, name of office, and address ], for ________ [ Describe nature of the contract ].

Moneys due or to become due under the contract described above have been assigned to the undersigned under the provisions of the Assignment of Claims Act of1940, as amended, ( 31 U.S.C.3727 , 41 U.S.C.6305 ).

A true copy of the instrument of assignment executed by the Contractor on ___________ [ Date ], is attached to the original notice.

Payments due or to become due under this contract should be made to the undersigned assignee.

Please return to the undersigned the three enclosed copies of this notice with appropriate notations showing the date and hour of receipt, and signed by the person acknowledging receipt on behalf of the addressee.

Very truly yours,

__________________________________________________ [ Name of Assignee ]

By _______________________________________________ [ Signature of Signing Officer ]

__________________________________________________ [ Titleof Signing Officer ]

__________________________________________________ [ Address of Assignee ]

Acknowledgement

Receipt is acknowledged of the above notice and of a copy of the instrument of assignment. They were received ____(a.m.) (p.m.) on ______, 20___.

__________________________________________________ [ Signature ]

__________________________________________________ [ Title ]

__________________________________________________ On behalf of

__________________________________________________ [ Name of Addressee of this Notice ]

(d) Examination by the Government. In examining and processing notices of assignment and before acknowledging their receipt, contracting officers should assure that the following conditions and any additional conditions specified in agency regulations, have been met:

(1) The contract has been properly approved and executed.

(2) The contract is one under which claims may be assigned.

(3) The assignment covers only money due or to become due under the contract.

(4) The assignee is registered separately in the System for Award Management unless one of the exceptions in 4.1102 applies.

(e) Release of assignment.

(1) A release of an assignment is required whenever-

(i) There has been a further assignment or reassignment under the Act; or

(ii) The contractor wishes to reestablish its right to receive further payments after the contractor’s obligations to the assignee have been satisfied and a balance remains due under the contract.

(2) The assignee, under a further assignment or reassignment, in order to establish a right to receive payment from the Government, must file with the addressees listed in 32.802 (e) a-

(i) Written notice of release of the contractor by the assigning financing institution;

(ii) Copy of the release instrument;

(iii) Written notice of the further assignment or reassignment; and

(iv) Copy of the further assignment or reassignment instrument.

(3) If the assignee releases the contractor from an assignment of claims under a contract, the contractor, in order to establish a right to receive payment of the balance due under the contract, must file a written notice of release together with a true copy of the release of assignment instrument with the addressees noted in 32.802 (e).

(4) The addressee of a notice of release of assignment or the official acting on behalf of that addressee shall acknowledge receipt of the notice.

32.806 Contract clauses.

(1) The contracting officer shall insert the clause at 52.232-23 , Assignment of Claims , in solicitations and contracts expected to exceed the micro-purchase threshold , unless the contract will prohibit the assignment of claims (see 32.803 (b)). The use of the clause is not required for purchase orders . However, the clause may be used in purchase orders expected to exceed the micro-purchase threshold , that are accepted in writing by the contractor, if such use is consistent with agency policies and regulations.

(2) If a no-setoff commitment has been authorized (see 32.803 (d)), the contracting officer shall use the clause with its AlternateI.

(b) The contracting officer shall insert the clause at 52.232-24 , Prohibition of Assignment of Claims , in solicitations and contracts for which a determination has been made under agency regulations that the prohibition of assignment of claims is in the Government’s interest.

Definitions

FAC Changes

Style Formatter

• Data Initiatives
• Regulations
• Smart Matrix
• Regulations Search
• Acquisition Regulation Comparator (ARC)
• Large Agencies
• Small Agencies
• CAOC History
• CAOC Charter
• Civilian Agency Acquisition Council (CAAC)
• Federal Acquisition Regulatory Council
• Interagency Suspension and Debarment Committee (ISDC)

ACQUISITION.GOV

An official website of the General Services Administration

CAAC Consultation to Issue a Class Deviation from the Federal Acquisition Regulation (FAR) to eliminate hard copy original documents, signatures, notarization, seals on bonds and other seals for certain contract requirements

Department of Commerce (DOC)

Department of Education

Department of Homeland Security (DHS)

Department of Interior (DOI)

Department of Health & Human Services (HHS)

Department of Energy (DOE)

Securities Exchange Commission (SEC)

Jurisdictions

Submissions, green guide, future lawyers, firms & lawyers, service providers, barristers’ sets, hall of fame, interview with…, in-house lawyer, gc powerlist, gc magazine, knowledge centre, legal business, news & developments, special reports, marketing resources, newsletters, comparative guides, legal 500 tv, deutschland de, assignment of claims: are there any constraints to assigning claims or seeking cost guarantees.

June 18, 2019 > > Litigation & Dispute Resolution

IR Global | View firm profile

The following article discusses session three in the IR Global Virtual Series on 'Litigation Funding: Handling commercial and financial disputes

Germany – FW The assignment of claims to a third party for the purpose of their recovery is allowed without further ado, if the assignee bears the full financial risk of recovering the claims and acts for his own account (e.g. factoring).

If an assignee collects debts for the account of the assignor and if the debt collection is conducted as a stand-alone business, this is considered a collection service (Inkassodienstleistung) under the Legal Services Act (Rechtsdienstleistungsgesetz).

Pursuant to the latter, persons who provide such collection services (collection service providers) have to seek the permission of competent authorities and have to be registered with the Legal Services Register (Rechtsdienstleistungsregister). The assignment of claims to a collection service provider which is not registered is null and void; the unauthorised collection service provider lacks the capacity to sue.

With regard to certain types of litigation, e.g. consumer actions, the assignment of claims (to registered collection service providers) is common. In general, such assignments appear reasonable to pool small claims in order to benefit from synergy effects and to create a certain ‘balance of power’ vis-à-vis more financially powerful counter-parties. With regard to bigger claims, however, litigation funding will usually be the better, or even only, option to get financial support from third parties.

Spain – DJ The situation is similar in Spain, because the Spanish civil courts were inspired by the Napoleonic French Code. A lot of opportunistic funds arrived in Spain following the economic crisis, to buy bad credits and assets from banks. This has led to a lot of assignments of claims and the courts have established that they are valid and enforceable.

France – MCC Contractual assignment of claims is valid under French law with a condition and a limit. As a condition, the claim has to be fundamentally legitimate and conform to the public order. The debtor’s consent is not required unless the right was provided to be non-assignable.

Unless the debtor has already agreed to it, the assignment may be set up against him only if it was previously served to him by a Bailiff, or he has acknowledged it. The debtor may set up against the assignee defences inherent to the debt itself, such as nullity, the defence of non-performance, termination or the right to set off related debts.

He may also set up defences which arose from the relations with the assignor before the assignment became enforceable against him, such as the grant of a deferral, the release of a debt, or the set-off of debts which are not related. The assignor and the assignee are jointly and severally liable for any additional costs arising from the assignment which the debtor did not have to advance. Subject to any contractual term to the contrary, the burden of these costs lies on the assignee.

As a limit, if the claim subject to assignment is litigious, the debtor may obtain a release from the assignee by reimbursing him the actual price paid for the assignment, plus costs and reasonable expenses, plus interest calculated from the date on which the assignee paid the price of the assignment made to him. The claim then disappears.

Because of this rule called ‘retrait litigieux’, assignees have to be very careful and research what happened before the assignment.

US – ES There is no prohibition in the US against assigning a claim, or part of a claim, to a third party, but, of course, any third party taking an assignment of all or part of the claim is subject to all potential offsets and defences that exist against the primary holder of the claim.

Assigning claims is done fairly often, mostly in the intellectual property patent world. Patent trolls are big in the US, buying up patent claims and aggressively litigating and pursuing those claims.

Sweden – DE Almost any claim can be assigned in Sweden, the main rule is that the original claimant must have initiated a lawful claim, then it can be assigned. Claims based on unlawful contracts (Pactum Turpe) can neither be enforced by the first holder of the claim, nor its successor. Apart from that, there are no restrictions of any kind, or any constraints to assigned claims.

As far as cost guarantees are concerned, we have the same situation as any other European country in that EU citizens or companies founded in another country within the EU cannot be forced to provide a guarantee for legal costs in litigation proceedings in Sweden.

The same applies for claimants in a country that has entered into an international agreement with Sweden, such as The Hague Convention.

Austria – KO If you are representing a client from outside the EU, the opponent may ask the court to order a cost deposit covering all the procedural costs of the defendant.

US – ES Is there a limit on that?

Austria – KO No, if you have a multi million-dollar dispute, your client pays the court fees of 1.2 per cent, plus also the estimated court-related fees including legal fees for the defendant. The policy is clear – if someone is suing us from somewhere in the world and we, as a defendant in Austria, end up winning the case, we might not be able to enforce our cost award against this claimant. As a result, there is an interest of security deposit which has to be paid upon request by a claimant outside the EU.

US – ES Do you find that a successful application by a defendant to require a large security deposit will often end a case?

Austria – KO Yes, it’s one of the best strategies to fend off a claimant or to make them reduce the claim, and a common strategy for the defendant’s lawyer to ask for a huge security deposit. It’s at the discretion of the judge, but overall you will have to deposit a huge amount of money to get the case going. There is discussion going on about legislation to reduce that, but there are two interests to be weighed against each other.

It’s another argument for why third-party funding can be crucial to get cases going.

As to assignments, one single action containing several claims is permitted if the claims get assigned to another legal entity; such legal entity acts as the sole claimant if the claims rely on the same or similar legal and factual basis. The concept has been approved by the Supreme Court.

Hong Kong – NG An order for security for costs in litigation offers protection to a party from the risk of their opponent not being able to pay the party’s litigation costs if ordered to do so.

Applications for security for costs are a common feature of civil litigation before the first-instance courts in Hong Kong. Sometimes liability for security for costs and the amount can be agreed between the parties. As for the form of the security for costs, the most common method to give security is to make a payment into court. Other methods included an undertaking to pay, a bond, a bank guarantee or a charge.

Despite their abolition in some other common law jurisdictions, the crimes and torts of maintenance and champerty are still part of Hong Kong law. Third party funding is considered to infringe the doctrines of champerty and maintenance, so it is not generally permitted for litigation in the Hong Kong courts (except for specific cases).

Litigation funding is allowed in some insolvency cases, because debtors often siphon away assets when insolvent, yet liquidators or trustees in bankruptcy often find themselves without sufficient funds to recover assets or pursue other legitimate claims in the name of the debtor.

In light of this, the Hong Kong law has accepted litigation funding arrangements as a legitimate practice in liquidation proceedings. Such arrangements may include the sale and assignment by a liquidator or trustee in bankruptcy, of an action commenced in the bankruptcy, to a purchaser for value.

As far as arbitration is concerned, the Arbitration Ordinance or AO (Cap. 609) has recently been amended, such that the common law tort and offence of champerty and maintenance no longer apply to third party funding of arbitration and mediation.

Under the AO, a Code of Practice sets out the standards with which third party funders are ordinarily expected to comply in connection with arbitration funding. It states the requirements for funding agreements, the minimum amount of capital a third-party funder is required to have, the procedure for addressing conflicts of interest and whether third party funders will be liable to funded parties for adverse costs.

Contributors

Klaus Oblin (KO) Oblin Melichar – Austria www.irglobal.com/advisor/dr-klaus-oblin

Marie-Christine Cimadevilla (MCC) Cimadevilla Avocats – France www.irglobal.com/advisor/marie-christine-cimadevilla

Daniel Jimenez (DJ) SLJ Abogados – Spain www.irglobal.com/advisor/daniel-jimenez

Erwin Shustak (ES) Shustak Reynolds & Partners – US – California www.irglobal.com/advisor/erwin-shustak

Nick Gall (NG) Gall Solicitors – Hong Kong www.irglobal.com/advisor/nick-gall

Dan Engström (DE) Advokatfirman Nova AB – Sweden www.irglobal.com/advisor/dan-engstrom

Florian Wettner (FW) METIS Rechtsanwälte – Germany www.irglobal.com/advisor/florian-wettner

More from IR Global

No. III.2 - Assignment of claim

(a) The creditor (assignor) may assign his claim by contract to the assignee. An assignment is not subject to any form requirements. The assignment is valid irrespective of whether the debtor has been notified of the assignment. 

(b) A claim for the payment of a sum of money may be assigned in part. A claim for a non-monetary performance may be assigned in part only if the debtor consents to the assignment; or the claim is divisible and the assignment does not render performance significantly more burdensome for the debtor.

(c) An assignment is invalid if the assigned claim does not exist. A future claim may be the subject of an assignment but the transfer of the claim depends on its coming into existence and being identifiable as the claim to which the assignment relates.

(d) In a b2b-context, a contractual prohibition of, or restriction on, the assignment of a claim, agreed upon by the parties to the contract out of which the claim arises, does not affect the assignability of that claim.

(e) A claim is not assignable, if the parties intended that the promisee alone should be entitled thereto. Such an intention is presumed if the nature of the transaction involves personal confidence between the parties, or is otherwise such that personal consideration is of the essence of the contract. 

(f) An accessory right securing performance of the assigned claim is transferred to the assignee without a new act of transfer notwithstanding any agreement between the assignor and the debtor or other party granting that right, limiting in any way the assignor’s right to assign the receivable or the right securing payment of the assigned claim. If a non-accessory right is, under the law governing it, transferable only with a new act of transfer, the assignor is obliged to transfer such right and any proceeds thereof to the assignee.

(g) As soon as the assignment becomes effective the assignor ceases to be the creditor and the assignee becomes the creditor in relation to the claim assigned.

(h) The debtor may put forward against the assignee any defenses which at the date the assignment becomes effective were available to him against the assignor.

Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable or delegable by any party hereto without the prior written consent of the other party, and any attempt to assign or delegate any right, remedy, obligation or liability hereunder without such consent shall be void. Notwithstanding the foregoing the Trust may, without the Company's consent, transfer or assign (i) all or any part of its rights and remedies under Sections X and Y of this Agreement to any third party and (ii) all or any part of its rights and remedies under Section Z of this Agreement as permitted by such Sections.

Neither party may, unless upon written consent of the other party, transfer all or part of rights or obligations to the third party

Customer may not assign, rent, transfer, or sell any of it rights under this temporary Software license without the prior written consent of X (...) Customer may not assign its rights nor delegate its obligations under this Agreement unless X's written consent is obtained prior thereto and any such assignment or delegation without such consent shall be void

The benefits and responsibilities of this Contract shall be binding upon the respective successors and assigns of the parties hereto, but neither party may assign any portion of this contract to a separate legal entity without the prior written consent of the other party - International Contracting: Law and Practice - Larry A. DiMatteo - §2.05 B - S. 28

Any assignment of Seller's Contrct rights or delegation of Seller's duties shall be void, unless prior written consent is given by the Purchaser. Seller shall be responsible for all works or goods performed/supplied by sub-contractors under this Contract - International Contracting: Law and Practice – Larry A. DiMatteo – §6.05 A – S. 203

To accomplish the purposes of this Agreement and the Voting Trust Agreement, any transfer, sale, assignment, hypothecation, encumbrance, or alienation, regardless of the manner, circumstances, timing, or nature or such transfer, whether intervivos or at death (collectively, "Transfer"), of any Certificate(s) is void and transfers no right, title, or interest in or to those shares to the purported transferee, buyer, assignee, pledgee, or encumbrance holder, except as specifically provided herein.

The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by either party without the prior written consent of Buyer (...)

This Contract shall be binding upon and inure to the benefit of the successors, assigns, personal representatives, and heirs of the respective Parties hereto, and the covenants, conditions, rights and obligations of this Contract shall run for the full term of this Contract. No assignment of this contract, in whole or in part, will be made without the prior written consent of the non-assigning party, which consent will not be unreasonably withhold or delayed; provided, however, either Party may transfer its interest to any parent or affiliate by assignment, merger or otherwise without the prior approval of the other Party. Upon any transfer and assumption, the transferor shall not be relieved of or discharged from any obligations hereunder unless such assumption is made in the transfer/assumption agreement.

None of the Parties is entitled to transfer its rights and obligations under the present Contract to the third Party without the other Party's previous written consent (such consent shall not be unreasonably withheld or delayed) (...)

(...) The rights and obligations of the Issuer, the Lessee and the Purchaser under this Paragraph X shall not be assignable upon any partial transfer of the Bonds.

X shall not assign its rights or delegate its obligations under this Agreement except as provided in Section X.

Without the prior written consent of the other Parties to this Agreement, no Party shall be entitled to assign any rights or claims under this Agreement, provided, however, that the Purchaser shall be entitled to transfer any rights or obligations under this Agreement and the entire Agreement to an entity which is directly or indirectly controlled by an entity directly or indirectly controlling the Purchaser or to any provider of debt finance for the purpose of security (being debt finance provided for the purposes of this Agreement)

(...) Merchant shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Company which consent may be withheld in the Company's sole discretion (...)

The terms, covenants and conditions herein contained shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. Buyer may not assign its rights under this Agreement without first obtaining Seller's written approval, which approval may be given or withheld in Seller's sole and absolute discretion. No assignment shall release or otherwise relieve Buyer from any obligations hereunder.

This Bond Purchase Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns, except that no party hereto may assign any of its rights or obligations hereunder without the consent of the other parties.

X shall have the right to assign its rights and obligations under this Agreement to any entity owning or acquiring all or substantially all of its stock or assets unless such assignment would materially diminish or otherwise materially adversely affect Y’s rights under the Agreement.

Neither party may, unless upon written consent of the other party, transfer all or part of rights or obligations to the third party.

The Contract shall extend to and be binding upon the successors and assigns of the Parties, but neither this Contract nor any part, specifically including the right to receive payment, shall be assigned or transferred by either Party or by law without the prior written consent of the other Party which shall not be unreasonably withheld, and any assignment or transfer made by either Party without the other Party's written consent need not be recognized by and shall not be binding upon the other Party.

Neither this Agreement nor any of the rights, interests or obligations provided by this Agreement may be assigned or delegated by any Party (whether by operation of law or otherwise) without the prior written consent of the other Parties, and any such assignment or delegation without such prior written consent shall be null and void (...)

This Agreement and the rights of the Parties hereunder may not be assigned by operation of law or otherwise (...)

If any Contract, Transferred Equity Interest (or any interest therein), Permit or other asset, which by the terms of this Agreement, is intended to be included in the Purchased Assets is determined not capable of being assigned or transferred (whether pursuant to Sections 363 or 365 of the Bankruptcy Code) to Purchaser at the Closing without the consent of another party thereto, the issuer thereof or any third party (including a Governmental Authority) ("Non-Assignable Assets"), this Agreement shall not constitute an assignment thereof, or an attempted assignment thereof, unless and until any such consent is obtained (...)

This Agreement and the performance of any duties hereunder may not be assigned, transferred, delegated (except as set forth below), sold or otherwise disposed of by a party other than with the prior written consent of the other party. Notwithstanding the foregoing, either party may delegate its performance to, or exercise its rights through, one or more Affiliates and may subcontract performance of its obligations hereunder in accordance with its practices prior to the Letter Agreement Effective Date or as otherwise expressly permitted herein; provided that in the event of any such delegation, exercise or subcontract, each party will remain liable and fully responsible for its Affiliates' and subcontractors' performance of and compliance with such party's applicable obligations and duties under this Agreement. Any assignment, transfer, delegation, sale or other disposition in violation of this Section X will be null and void.

The rights granted in this Agreement are personal to Newco and may not be assigned, in whole or in part, except to X or a Controlled Affiliate of X. In particular, any transferee of any shares of Series E Preferred Stock held by Newco (other than X or a Controlled Affiliate of X) will not acquire any rights hereunder. Subject to the foregoing, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

No assignment of this Agreement or of any rights or obligations hereunder may be made by any of the parties, directly or indirectly (by operation of law or otherwise), without the prior written consent of the other parties hereto and any attempted assignment without the required consents shall be void (...). No assignment of any obligations hereunder shall relieve the parties hereto of any such obligations. Upon any such permitted assignment, the references in this Agreement to the assigning party shall also apply to any such assignee unless the context otherwise requires.

Without the written consent of the other Party, no Party shall be entitled to assign any rights or claims under this Agreement to any third party (...)

(...) Seller hereby consents to the assignment of any claims of Purchaser under this Agreement to any banks or other lenders as collateral for any debt incurred by Purchaser or any Affiliate of Purchaser in connection with the financing of the Purchase Price or any other obligations of Purchaser under this Agreement.

This Agreement will bind and inure to the benefit of each Party's permitted successors and assigns. Neither party may assign this Agreement, in whole or in part, without the other Party's prior written consent, which consent shall not be unreasonably withheld or delayed (...)

Any Y Noteholder may at any time sell or assign all or any part of its rights and obligations under this Agreement and the Y Notes, with the prior written consent of X (such consent not to be unreasonably withheld or delayed), to one or more financial institutions or other entities (an "Acquiring Note Purchaser") pursuant to an assignment and assumption agreement, substantially in the form of Exhibit B (the "Assignment and Assumption Agreement"), executed by such Acquiring Note Purchaser, such assigning Y Noteholder and X; provided that the consent of X to such sale shall not be required if such Acquiring Note Purchaser is an Affiliate of Z and the assigning Y Noteholder promptly provides notice of such assignment to X and the Administrator.

Neither Party may assign, sell, transfer or otherwise convey, pledge or encumber any of its rights, obligations or interests under this Agreement without the prior written consent of the Party.

This Agreement may not be assigned by any party hereto without the other party's written consent (...)

Neither this Agreement nor any interest hereunder will be assignable in part or in whole by either party without the prior written consent of the non-assigning party, which consent will not be unreasonably withheld, conditioned or delayed.

Unless otherwise permitted pursuant to Clause X, the Buyer's rights under this Clause Y may not be assigned, sold, transferred, novated or otherwise alienated by operation of law or otherwise, without the Seller's prior written consent, which will not be unreasonably withheld. Any transfer in violation of this Clause Y will, as to the particular Aircraft involved, void the rights and warranties of the Buyer under this Clause X and any and all other warranties that might arise under or be implied in law.

Except as hereinafter provided, neither party may sell, assign, novate or transfer its rights or obligations under this Agreement to any person without the prior written consent of the other, except that either party may sell, assign or transfer its rights or obligations under this Agreement to any of its Affiliate without the other party's consent, provided that the assigning party will remain ultimately responsible for fulfillment of all obligations undertaken by such party in this Agreement.

Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any Party without the prior written consent of the other Parties. Subject to the foregoing, this Agreement and the rights and obligations set forth herein shall inure to the benefit of, and be binding upon, the Parties, and each of their respective successors and permitted assigns.

This Agreement shall inure to the benefit of and be binding upon and enforceable by the parties and their successors and permitted assigns. However, neither party may assign or delegate any of its rights or obligations under this Agreement without the prior written consent of the other party, except that X may assign its right to purchase the New Shares to one of its Subsidiaries in accordance with Section X but no such assignment shall relieve X of its obligations hereunder without the prior written consent of the Company.

This Letter Agreement and the rights and obligations hereunder shall not be assignable or transferable by either party (including by operation of law in connection with a merger or consolidation of such party) without the prior written consent of the other party hereto. Any attempted assignment in violation of this Section X shall be void. This Letter Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such assigns, any legal or equitable rights hereunder .

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that this Agreement (and any of the rights, interests or obligations of any party hereunder) may not be assigned by any party without the prior written consent of the other parties hereto (such consent not to be unreasonably withheld) except as set forth in Section X). Any purported assignment of a party's rights under this Agreement in violation of the preceding sentence shall be null and void.

Neither party may assign its rights and obligations under this Agreement without the prior written consent of the other (...) – International Contracting: Law and Practice – Larry A. DiMatteo – §8.06 – S. 286

Distributor understands and acknowledges that the rights and duties set forth in this Agreement are personal to Distributor, and that Company has granted this Agreement in reliance on Distributor´s business, skill, financial capacity and the personal character of its principals. Accordingly, Distributor agrees that Company´s prior written consent shall be a necessary condition precedent to the sale, assignment, transfer, delegation, conveyance, pledge, mortgage, encumbrance, hypothecation or other disposition of any direct or indirect interest or rights in this Agreement - (International Contracting: Law and Practice – Larry A. DiMatteo – §9.02 – S. 326)

This License Agreement is personal to the licensee. The licensee shall not sublicense, franchise, assign or delegate to third parties any of the rights acquired hereunder. Neither this License Agreement nor any of the rights hereunder shall be sold, transferred or assigned by the licensee - (International Contracting: Law and Practice – Larry A. DiMatteo – §10.18 – S. 364)

(...) This Agreement may not be assigned by either party without the prior written consent of the other party

This Agreement may not be assigned by either party without the prior written consent of the other, except that X may assign the Agreement to its parent, any subsidiary or affiliate of X, or any successor in interest of X, without the consent of Y. Prior to retaining subcontractors to provide fulfillment, enrollment, authorization or records collection or maintenance for the Product or Services, Y will obtain the X's prior written consent authorizing the use of any such subcontractors. Each party will remain fully liable for its performance under this Agreement and actions of its subcontractors

The rights and liabilities of this Agreement shall be binding on and inure to the benefit of the respective parties and their respective heirs, legal representatives, successors and assigns. Neither party shall have the right to sell, transfer, assign, sublicense, or subcontract any right or obligation hereunder without first obtaining prior written consent from the other party

Except as expressly provided herein, the rights and obligations hereunder may not be assigned or delegated by any Party without the prior written consent of the other Party. Any purported assignment, sale, transfer, delegation or other disposition of such rights or obligations by a Party, except as permitted herein, shall be null and void. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns

Except to the extent provided by the foregoing, neither this Agreement nor any of the rights, interests or obligations of either party shall be assigned or delegated without the prior written consent of the other party. Notwithstanding the foregoing, either party may assign this Agreement to a successor in interest upon a change of control, merger, reorganization, or sale of all or substantially all of the assets of the assigning party. Any unauthorized assignment or delegation shall be null and void ab initio. All of the terms and conditions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the respective successors and permitted assigns of the parties hereto.

Neither Party shall assign any right or Interest under this Agreement (other than the right to receive payments) nor delegate or assign any obligation to be performed under this Agreement, nor assign the entire Agreement without the other Party's prior written consent. Any attempt to assign any right, interest or obligation of this Agreement without such consent shall be void

(...) Except as otherwise expressly provided in this Agreement, neither Party may assign this Agreement or any rights or obligations hereunder, without the prior written consent of the other Party, and any such assignment shall be void; provided that either Party may assign this Agreement to a successor entity in conjunction with such Party's reincorporation in another jurisdiction or into another business form

This Agreement shall be binding upon, inure to the benefit of and be enforceable by the respective successors and assigns of the Borrower, the Equity Contributor, the Collateral Agent, the Loan Servicer and the Credit Parties; provided, however, that neither the Borrower nor the Equity Contributor may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each of X and Y. The Collateral Agent may not assign or transfer any of its rights or obligations hereunder except as permitted pursuant to the Common Agreement. Any other Credit Party may assign or transfer its rights hereunder in connection with an assignment or transfer of all or any part of its interest in Secured Obligations owed to it in accordance with the provisions of the Common Agreement. Any attempted assignment in contravention of this Section {X} shall be null and void.

Party B undertakes that during the period of bilateral cooperation, it will not transfer its rights and duties in this agreement to any third party.

The Parties may not assign any of their respective rights under this Agreement in whole or in part without the prior written consent of the other Party, which consent may be withheld in the sole discretion of such other Party. This Agreement is binding upon and inures to the benefit of the Parties and their successors and permitted assigns

The Collateral Agent shall have no authority to grant, convey or assign the Certificates of Title or change the notation of a security interest thereon or deal with the Certificates of Title in any way except as expressly provided herein.

(...) The parties hereto may not assign either this Agreement or any of their respective rights, interests or obligations hereunder (...)

Neither party shall assign its rights or delegate its duties hereunder without the prior written consent of the other, except to a third party pursuant to a merger, sale of all or substantially all assets, or other corporate reorganization. Any attempted assignment or delegation in contravention of this Article {X} shall be void and of no effect

Neither Party may assign and transfer its rights or obligations under or pursuant to the Implementation Agreement without the prior consent of the other Party and the Lenders; provided, however, that for the purpose of financing the construction, insurance, operation and maintenance of the Facility, {X} may assign or create security over its rights and interests (...)

The Purchaser may terminate the Contract in whole or in part, without prejudice to Purchaser's any other rights or remedies (...) if the Contractor shall assign or transfer the Contract or any right, without the consent in writing of the Purchaser

The Contractor shall not assign to any third party the Contract or any part thereof or any right, benefit, obligation or interest therein or thereunder without prior written approval by the Purchaser

The Parties hereby acknowledge and agree that no party shall have any right to assign, transfer or dispose of the benefit (or any part thereof) or the burden (or any part thereof) of this Agreement without the prior written consent of the other parties

This Agreement shall benefit and be binding upon the Parties hereto and shall not be sold, assigned, or otherwise transferred

The Borrower shall not assign or delegate any of its rights or duties hereunder without the prior written consent of the Lender and any attempted assignment without such consent shall be null and void.

The provisions contained herein shall be binding upon, and inure to the benefit of, the heirs and successors of the parties hereto. This Note may not be assigned by either party without the prior written consent of the other party, which consent shall not be reasonably withheld.

This Note and any interest herein may not be transferred, pledged or hypothecated by the holder hereof without the prior written consent of Parent; provided, however, that after the Maturity Date, if the Note is not satisfied by the issuance of the Note Satisfaction Shares, this Note shall not require such prior written consent of Parent for transfer (...)

This Note will be binding on and inure to the benefit of Parent and the Stockholder Representative and their respective successors and assigns; provided, however, that (i) Parent may not assign this Note in whole or part without the prior written consent of the Stockholder Representative and (ii) the Stockholder Representative may not assign this Note in whole or part on or prior to the Maturity Date without the prior written consent of Parent; provided, further, however, that this clause (ii) will not prevent any successor Stockholder Representative duly appointed and serving in such capacity pursuant to Section X of the Merger Agreement from succeeding as the holder of this Note in accordance with Section X hereof.

This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may not assign this Agreement or any rights or obligations under it without Bank's prior written consent (which may be granted or withheld in Bank's discretion) (...)

All of the provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that neither the Parent Guarantor nor the Borrower may assign or transfer any of its rights or obligations under this Agreement without the consent of all Lenders.

This Note shall not be transferred, pledged, hypothecated, or assigned by either party without the written consent of the other party, which consent may be withheld in the other party's sole discretion. Notwithstanding the above, Payor may assign or transfer this Note to its parent company or to another wholly-owned subsidiary of Payor or its parent company, and Payor will notify Holder of any such transfer, pledge, hypothecation or assignment within five (5) business days thereof.

The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) (...)

All covenants and agreements contained by or on behalf of Borrower shall bind Borrower's successors and assigns and shall inure to the benefit of Lender, its successors and assigns. Borrower shall not, however, have the right to assign Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender.

This Agreement shall inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign its rights and obligations hereunder (...) the Borrower agrees to execute any documents reasonably requested by the Lender in connection with any such assignment (...)

(...) Any attempted assignment, transfer, conveyance or other disposition (other than as aforesaid) of any interest in the rights of Employee to receive any form of compensation hereunder shall be null and void.

Unless otherwise provided by the Agreement, without the written consent of the other party, a party may assign any of its rights or obligations under the Agreement.

This Agreement may not be assigned by Manager or Consultant without the prior written consent of the other party, except that if this Agreement is assigned by Consultant to X or any subsidiary of the X, and such assignment is consented to by Manager, then the X (or its assignee) may, without prior consent, further assign this Agreement to any of its wholly-owned subsidiaries that is a taxable real estate investment trust subsidiary or if, necessary to satisfy REIT requirements and to maintain its REIT status, any other entity.

(...) No assignment or delegation of this Agreement or of any rights or obligations hereunder may be made by either the Company, Parent or Purchaser (by operation of law or otherwise) without the prior written consent of the other parties hereto and any attempted assignment or delegation without the required consents shall be void, provided that Purchaser may assign or delegate some or all of its rights or obligations hereunder to one or more Subsidiaries formed by it prior to the Closing. No assignment or delegation of any obligations hereunder shall relieve the parties hereto of any such obligations. Upon any such permitted assignment or delegation, the references in this Agreement to the Company, Parent or Purchaser shall also apply to any such assignee or delegatee unless the context otherwise requires.

Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, in whole or in part, by operation of law or otherwise by any of the Parties without the prior written consent of the other Parties, and any assignment without such consent shall be null and void; provided, however, that, prior to the Closing, Parent and Merger Sub may assign this Agreement (in whole but not in part) to Parent or any of its direct or indirect wholly owned Subsidiaries after providing written notice thereof to the Company at least five (5) Business Days prior to such assignment and/or to any parties providing the Debt Financing solely for purposes of creating a security interest herein or otherwise assign as collateral in respect of such Debt Financing. No assignment by any Party shall relieve such Party of any of its obligations hereunder. Subject to the immediately preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.

Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise by any of the parties hereto without the prior written consent of the other parties hereto, and any such assignment without such prior written consent shall be null and void (...)

The Pledgor shall not transfer or assign the Pledge without prior written approval from the Pledgee prior to the full settlement and fulfillment of the Secured Obligations.

The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit of the Grantors, the Agent and their respective successors and assigns (including all persons who become bound as a debtor to this Security Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Security Agreement or any interest herein, without the prior written consent of the Agent (...)

This Agreement shall be binding upon and inure to the benefit of the successors and assigns of each Party hereto. Neither this Agreement nor any right or obligation hereunder may be assigned or delegated by either Party in whole or in part to any other Person, including by operation of law or in connection with any acquisition, merger, or change of control of a Party, without the prior written consent of the nonassigning Party.

In case any party to the joint venture intends to assign all or part of its investment subscribed to a third party, written consent shall be obtained from the other party to the joint venture, and approval from the examination and approval authority shall be required. If any Party proposes to transfer all or any part of its interest of the Joint Venture, the Party shall notify the other Party in writing of the terms and conditions of the proposed transfer at least thirty (30) days in advance. If a Party proposes to transfer all or any part of its interest of the Joint Venture to a third party, the other Party shall have a pre-emptive right to purchase such interest. If the other Party does not exercise its pre-emptive right of purchase within ninety (90) days after delivery of such notice, such other Party shall be deemed to have consented to such transfer. Neither Party can sell its ownership to the third Party with terms and conditions better than the offer to the other Party to the Joint Venture.

This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of each party hereto. Except as otherwise specifically provided in this Agreement, neither this Agreement nor any right or obligation hereunder may be assigned or delegated in whole or in part to any other Person.

No party hereto shall have the right, directly or indirectly, by operation of law or otherwise, to assign, sell, pledge, mortgage, encumber or otherwise transfer all or any portion of its right, title or interest under this Agreement, except to an entity under common Control with such party and upon prior written notice to the other party. Any assignment, sale, pledge, mortgage, encumbrance or other transfer prohibited hereunder shall be null and void.

Except in connection with any lawful assignment of the Lease with the consent of the Landlord, the Tenant shall not, and shall not agree to, assign, transfer or otherwise encumber or attempt to assign, transfer or otherwise encumber the Letter of Credit and neither Landlord nor its successors in title and assigns shall be bound by any such assignment, transfer or encumbrance, attempted assignment, attempted transfer or attempted encumbrance.

(...) not to assign the whole of the Premises without the prior written consent of the Landlord (which consent shall not be unreasonably withheld or delayed).

This Bond Purchase Agreement will inure to the benefit of and be binding upon the parties hereto and their successors and assigns (...)

Any Financial Institution of the X Group may at any time and from time to time assign to one or more Persons (Purchasing Financial Institutions) all or any part of its rights and obligations under this Agreement pursuant to an assignment agreement, substantially in the form set forth in Exhibit VII hereto (the Assignment Agreement) executed by such Purchasing Financial Institution and such selling Financial Institution. The consent of X will be required prior to the effectiveness of any such assignment (...)

Any Financial Institution of the X Group may at any time and from time to time assign to one or more Persons (“Purchasing Financial Institutions”) all or any part of its rights and obligations under this Agreement pursuant to an assignment agreement, substantially in the form set forth in Exhibit X hereto (the “Assignment Agreement”) executed by such Purchasing Financial Institution and such selling Financial Institution (...)

(...) Buyer may assign its right to purchase Assets or delegate the duty to assume Assumed Liabilities in whole or in part to any Affiliate without the consent of the Company, but without releasing Buyer from any of its obligations hereunder. No assignment of any obligations hereunder shall relieve the parties hereto of any such obligations. Upon any such permitted assignment, the references in this Agreement to the assigning party shall also apply to any such assignee unless the context otherwise requires.

(...) X may assign this Agreement in its entirety to Y, provided that (i) such assignment shall not have the effect of causing a reduction in the level of performance of Agreement; and (ii) X guarantees Y's performance under the Agreement (...)

The Parties agree that Buyer may assign the right to purchase certain of the Purchased Assets to one or more Buyer Designees or that one or more Buyer Designees may enter into a Collateral Agreement. Notwithstanding any such assignment or execution of a Collateral Agreement by a Buyer Designee, Buyer shall remain liable for, and any such assignment or execution shall not relieve Buyer of, its obligations hereunder or thereunder. Any reference to Buyer in this Agreement shall to the extent applicable also be deemed a reference to the applicable Buyer Designee, except where in context of this Agreement such use would not be appropriate.

This Agreement may not be assigned by any party hereto without the other party's written consent; provided, that Buyer may transfer or assign in whole or in part to one or more Buyer Designee its right to purchase all or a portion of the Purchased Assets, but no such transfer or assignment will relieve Buyer of its obligations hereunder (...)

The Buyer will be entitled to assign its rights under this Agreement at any time due to a merger, consolidation or a sale of all or substantially all of its assets without the consent of the Seller, provided that: (i) the surviving or acquiring entity has executed an assumption agreement, in form and substance reasonably acceptable to the Seller, agreeing to assume all of the Buyer's obligations under this Agreement; (ii) at the time, and immediately following the consummation, of the merger, consolidation or sale, no Buyer Termination Event exists or will have occurred and be continuing; and (iii) there exists with respect to the surviving or acquiring entity no basis for a Buyer Termination Event.

Company shall have the right to transfer, assign or delegate, all or any part of its rights or obligations under this Agreement to any subsidiary, affiliate or successor or assign - (International Contracting: Law and Practice – Larry A. DiMatteo – §9.02 – S. 326)

X recognizes that Company may assign its rights and obligations hereunder (...) without X's prior approval in its sole discretion. X shall not assign its rights or delegate its obligations hereunder without the prior consent of the Company

(...) Y agrees to assign any such agreements to X that are freely assignable by Y and to request the consent of the customer to assign such agreements to X where consent by the customer for assignment is required, upon amendment or termination of the Distribution Agreement, as the case may be.

(...) Investor may at any time sell, assign, grant participations in, or otherwise transfer to any other Person all or part of the obligations of Company under this Bridge Note and the other Transaction Documents (...)

The Lender may assign to one or more Persons all or a portion of its interests, rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it), pursuant to documentation acceptable to the Lender and the assignee. From and after the effective date specified in such documentation, such assignee shall be a party hereto and, to the extent of the interest assigned by the Lender, have the rights and obligations of the Lender under this Agreement and the assigning Lender thereunder shall, to the extent of the interest assigned by the Lender, be released from its obligations under this Agreement (...)

(...) Bank has the right, without the consent of or notice to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any interest in, Bank's obligations, rights, and benefits under this Agreement and the other Loan Documents.

The Lender may assign to one or more Eligible Assignees (as defined below) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it). For purposes of this Agreement, "Eligible Assignee" means any Person other than a natural Person that is (i) a Lender, an Affiliate of any Lender or, with respect to any Lender that is an investment fund, any other investment fund that is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor, (ii) a commercial bank, insurance company, investment or mutual fund or other Person that is an "accredited investor" (as defined in Regulation D under the Securities Act) or (iii) a corporate entity that possesses financial sophistication and standing similar to that of the Lender (...)

(...) the Lender may at any time (i) assign all or any part of its rights and obligations hereunder to any other Person with the consent of the Borrower, such consent not to be unreasonably withheld, provided that no such consent shall be required if the assignment is to an affiliate of the Lender or if an Event of Default exists, and (ii) grant to any other Person participating interests in all or part of its rights and obligations hereunder without notice to the Borrower (...)

As of the effective time of an applicable Restructuring Transaction, any Executory Contract or Unexpired Lease to be held by any Debtor or another surviving, resulting or acquiring corporation in an applicable Restructuring Transaction, will be deemed assigned to the applicable Entity, pursuant to section 365 of the Bankruptcy Code.

On the Effective Date, or as soon as reasonably practicable thereafter, the Debtors will transfer and assign to the Liquidating Trust the Liquidating Trust Assets, which shall be deemed vested in the Liquidating Trust. On and after the Effective Date, the Liquidating Trustee shall have discretion with respect to the timing of the transfers of Liquidating Trust Assets. Any checks of the Debtors issued prior to the Effective Date that remain un-cashed three (3) months after the Confirmation Date shall revert to the Liquidating Trust (...)

(...) Notwithstanding the foregoing, (i) Acquiror may assign this Agreement and any of its rights, interests or obligations hereunder, in connection with a merger, acquisition, sale or all or substantially all of its assets or other change in control transaction, and (ii) Acquiror may assign its rights and delegate its obligations hereunder to its Affiliates as long as Acquiror remains ultimately liable for all of Acquiror's obligations hereunder.

The Pledgee may transfer or assign all Secured Obligations and his right to the Pledge to any third party at any time. In this case, the assignee shall enjoy and undertake the same rights and obligations herein of the Pledgee as if the assignee is a party hereto. When the Pledgee transfers or assigns the Secured Obligations and its rights to the Pledge, at the request of the Pledgee, the Pledgor shall execute the relevant agreements and/or documents with respect to such transfer or assignment.

I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries, ideas, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company (collectively referred to as “Inventions”), except as provided in Section X below. I further acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company and which are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act. I understand and agree that the decision whether or not to commercialize or market any invention developed by me solely or jointly with others is within the Company’s sole discretion and for the Company’s sole benefit and that no royalty will be due to me as a result of the Company’s efforts to commercialize or market any such invention.

Now therefore, in consideration of the mutual covenants herein contained, the parties agree for themselves, their successors and assigns, as follows: Assignor hereby assigns, transfers, conveys and delivers to Assignee, effective as of {Month} {Day}, {Year} (the "Effective Date"), all of Assignor's right, title and interest in, to and under the Assets, subject to any existing liens and encumbrances on the Assets in favor of X arising under the terms of the Satellite Purchase Contract, but free and clear of all other liens and encumbrances. Assignee hereby accepts such assignment and agrees to assume, from and after the Effective Date, all of Assignor's rights, duties and obligations in, to and under the Assets set forth in SCHEDULE X, subject to any liens and encumbrances on the Assets in favor of X arising under the terms of the X Purchase Contract, but free and clear of all other liens and encumbrances. Upon such assignment and assumption, Assignor shall be released from all rights, duties and obligations with respect to the Assets, and Assignee agrees to reimburse Assignor for and hold Assignor harmless against any obligation to perform any of the assigned duties and obligations included in the Assets.

• Environment
• Science & Technology
• Business & Industry
• Health & Public Welfare
• Topics (CFR Indexing Terms)
• Public Inspection
• Presidential Documents
• Document Search
• Advanced Document Search
• Public Inspection Search
• Reader Aids Home
• Office of the Federal Register Announcements
• Using FederalRegister.Gov
• Understanding the Federal Register
• Recent Site Updates
• Federal Register & CFR Statistics
• Videos & Tutorials
• Developer Resources
• Government Policy and OFR Procedures
• Congressional Review
• My Clipboard
• My Comments
• My Subscriptions
• Sign In / Sign Up
• Site Feedback
• Search the Federal Register

This site displays a prototype of a “Web 2.0” version of the daily Federal Register. It is not an official legal edition of the Federal Register, and does not replace the official print version or the official electronic version on GPO’s govinfo.gov.

The documents posted on this site are XML renditions of published Federal Register documents. Each document posted on the site includes a link to the corresponding official PDF file on govinfo.gov. This prototype edition of the daily Federal Register on FederalRegister.gov will remain an unofficial informational resource until the Administrative Committee of the Federal Register (ACFR) issues a regulation granting it official legal status. For complete information about, and access to, our official publications and services, go to About the Federal Register on NARA's archives.gov.

The OFR/GPO partnership is committed to presenting accurate and reliable regulatory information on FederalRegister.gov with the objective of establishing the XML-based Federal Register as an ACFR-sanctioned publication in the future. While every effort has been made to ensure that the material on FederalRegister.gov is accurately displayed, consistent with the official SGML-based PDF version on govinfo.gov, those relying on it for legal research should verify their results against an official edition of the Federal Register. Until the ACFR grants it official status, the XML rendition of the daily Federal Register on FederalRegister.gov does not provide legal notice to the public or judicial notice to the courts.

Design Updates: As part of our ongoing effort to make FederalRegister.gov more accessible and easier to use we've enlarged the space available to the document content and moved all document related data into the utility bar on the left of the document. Read more in our feature announcement .

Federal Acquisition Regulation; Part 12 and Assignment of Claims

A Rule by the Defense Department , the General Services Administration , and the National Aeronautics and Space Administration on 01/10/2001

This document has been published in the Federal Register . Use the PDF linked in the document sidebar for the official electronic format.

• Document Details Published Content - Document Details Agencies Department of Defense General Services Administration National Aeronautics and Space Administration Agency/Docket Numbers FAC 97-22 FAR Case 1999-021 Item IV CFR 48 CFR 52 Document Citation 66 FR 2139 Document Number 01-14 Document Type Rule Pages 2139-2140 (2 pages) Publication Date 01/10/2001 RIN 9000-AJ05 Published Content - Document Details
• View printed version (PDF)
• Document Dates Published Content - Document Dates Effective Date 03/12/2001 Dates Text Effective Date: March 12, 2001. Published Content - Document Dates

This table of contents is a navigational tool, processed from the headings within the legal text of Federal Register documents. This repetition of headings to form internal navigation links has no substantive legal effect.

FOR FURTHER INFORMATION CONTACT:

Supplementary information:, a. background, b. regulatory flexibility act, c. paperwork reduction act, list of subjects in 48 cfr part 52, part 52—solicitation provisions and contract clauses, contract terms and conditions—commercial items (mar 2001).

This feature is not available for this document.

Additional information is not currently available for this document.

• Sharing Enhanced Content - Sharing Shorter Document URL https://www.federalregister.gov/d/01-14 Email Email this document to a friend Enhanced Content - Sharing
• Print this document

Document page views are updated periodically throughout the day and are cumulative counts for this document. Counts are subject to sampling, reprocessing and revision (up or down) throughout the day.

This document is also available in the following formats:

More information and documentation can be found in our developer tools pages .

Document headings vary by document type but may contain the following:

• the agency or agencies that issued and signed a document
• the number of the CFR title and the number of each part the document amends, proposes to amend, or is directly related to
• the agency docket number / agency internal file number
• the RIN which identifies each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions

See the Document Drafting Handbook for more details.

Department of Defense

General services administration, national aeronautics and space administration.

• 48 CFR Part 52
• [FAC 97-22; FAR Case 1999-021; Item IV]
• RIN 9000-AJ05

Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

Final rule.

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed on a final rule amending the Federal Acquisition Regulation (FAR) to add, in the contract clause addressing terms and conditions for commercial items, the prohibition for a contractor to assign its rights to receive payment in accordance with the Assignment of Claims Act ( 31 U.S.C. 3727 ) when a third party makes payment under the contract ( e.g., use of the Governmentwide commercial purchase card). This prohibition is currently in the contract clause addressing terms and conditions required to implement statutes or Executive orders for commercial items.

Effective Date: March 12, 2001.

The FAR Secretariat, Room 4035, GS Building, Washington, DC 20405, (202) 501-4755, for information pertaining to status or publication schedules. For clarification of content, contact Ms. Victoria Moss, Procurement Analyst, at (202) 501-4764. Please cite FAC 97-22, FAR case 1999-021.

Paragraph (e) of the clause at FAR 52.232-36, Payment by Third Party, states that a contractor may not assign its rights to receive payment under the assignment of claims terms of the contract if payment is made by a third party ( e.g., use of the Governmentwide commercial purchase card). This clause is included in paragraph (b)(25) of the clause at FAR 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders—Commercial Items.

Paragraph (b) of the clause at FAR 52.212-4, Contract Terms and Conditions—Commercial Items, states that a contractor may assign its rights to receive payments due as a result of performance of the contract, but paragraph (b) does not include the prohibition against the assignment of claims if payment is made by a third party ( e.g., use of the Governmentwide commercial purchase card). FAR 12.302(b) further states that the contracting officer shall not tailor FAR 52.212-4(b).

The purpose of this rule is to correct the inconsistency between FAR 52.212-4(b) and FAR 52.212-5(b)(25). The rule revises FAR 52.212-4(b) to add the prohibition against the assignment of claims when payment is made by a third party.

This is not a significant regulatory action, and therefore, was not subject to review under Section 6(b) of Executive Order 12866 , Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804 .

The final rule does not constitute a significant FAR revision within the meaning of FAR 1.501 and Public Law 98-577, and publication for public comments is not required. However, the Councils will consider comments from small entities concerning the affected FAR part 52 in accordance with 5 U.S.C. 610 . Interested parties must submit such comments separately and should cite 5 U.S.C. 601 , et seq. (FAC 97-22, FAR case 1999-021), in correspondence.

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501 , et seq.

• Government procurement

Dated: December 22, 2000.

Acting Director, Federal Acquisition Policy Division.

Therefore, DoD, GSA, and NASA amend 48 CFR part 52 as set forth below:

1. The authority citation for 48 CFR part 52 continues to read as follows:

Authority: 40 U.S.C. 486(c) ; 10 U.S.C. chapter 137 ; and 42 U.S.C. 2473(c) .

2. Amend section 52.212-4 by revising the date of the clause and paragraph (b) to read as follows:

(b) Assignment. The Contractor or its assignee may assign its rights to receive payment due as a result of performance of this contract to a bank, trust company, or other financing institution, including any Federal lending agency in accordance with the Assignment of Claims Act ( 31 U.S.C. 3727 ). However, when a third party makes payment ( e.g., use of the Governmentwide commercial purchase card), the Contractor may not assign its rights to receive payment under this contract.

[ FR Doc. 01-14 Filed 1-9-01; 8:45 am]

BILLING CODE 6820-EP-P

• Executive Orders

Reader Aids

Information.

• About This Site
• Legal Status
• Accessibility
• No Fear Act
• Continuity Information

When Assigning the Right to Pursue Relief, Always Remember to Assign Title to, Or Ownership in, The Claim

• Posted on: Oct 4 2016

Whether a party has standing to bring a lawsuit is often considered through the constitutional lens of justiciability – that is, whether there is a “case or controversy” between the plaintiff and the defendant “within the meaning of Art. III.” Warth v. Seldin, 422 U.S. 490, 498 (1975). To have Article III standing, “the plaintiff [must have] ‘alleged such a personal stake in the outcome of the controversy’ as to warrant [its] invocation of federal-court jurisdiction and to justify exercise of the court’s remedial powers on [its] behalf.” Id. at 498–99 (quoting Baker v. Carr , 369 U.S. 186, 204 (1962)).

To show a personal stake in the litigation, the plaintiff must establish three things: First, he/she has sustained an “injury in fact” that is both “concrete and particularized” and “actual or imminent.” Lujan v. Defenders of Wildlife , 504 U.S. 555, 560 (1992) (internal quotation marks omitted). Second, the injury has to be caused in some way by the defendant’s action or omission. Id . Finally, a favorable resolution of the case is “likely” to redress the injury. Id . at 561.

When a person or entity receives an assignment of claims, the question becomes whether he/she can show a personal stake in the outcome of the litigation, i.e. , a case and controversy “of the sort traditionally amenable to, and resolved by, the judicial process.’” Sprint Commc’ns Co., L.P. v. APCC Servs., Inc., 554 U.S. 269, 285 (2008) (quoting Vt. Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765, 777–78 (2000)).

To assign a claim effectively, the claim’s owner “must manifest an intention to make the assignee the owner of the claim.” Advanced Magnetics, Inc. v. Bayfront Partners, Inc. , 106 F.3d 11, 17 (2d Cir. 1997) (internal quotation marks and brackets omitted). A would-be assignor need not use any particular language to validly assign its claim “so long as the language manifests [the assignor’s] intention to transfer at least title or ownership , i.e., to accomplish ‘a completed transfer of the entire interest of the assignor in the particular subject of assignment.’” Id. (emphasis added) (citations omitted). An assignor’s grant of, for example, “‘the power to commence and prosecute to final consummation or compromise any suits, actions or proceedings,’” id. at 18 (quoting agreements that were the subject of that appeal), may validly create a power of attorney, but that language would not validly assign a claim, because it does “not purport to transfer title or ownership” of one. Id.

On September 15, 2016, the New York Appellate Division, First Department, issued a decision addressing the foregoing principles holding that one of the plaintiffs lacked standing to assert claims because the assignment of the right to pursue remedies did not constitute the assignment of claims.  Cortlandt St. Recovery Corp. v. Hellas Telecom., S.à.r.l. , 2016 NY Slip Op. 06051.

BACKGROUND :

Cortlandt involved four related actions in which the plaintiffs – Cortlandt Street Recovery Corp. (“Cortlandt”), an assignee for collection, and Wilmington Trust Co. (“WTC”), an indenture trustee – sought payment of the principal and interest on notes issued in public offerings. Each action alleged that Hellas Telecommunications, S.a.r.l. and its affiliated entities, the issuer and guarantor of the notes, transferred the proceeds of the notes by means of fraudulent conveyances to two private equity firms, Apax Partners, LLP/TPG Capital, L.P. – the other defendants named in the actions.

The defendants moved to dismiss the actions on numerous grounds, including that Cortlandt, as the assignee for collection, lacked standing to pursue the actions. To cure the claimed standing defect, Cortlandt and WTC moved to amend the complaints to add SPQR Capital (Cayman) Ltd. (“SPQR”), the assignor of note interests to Cortlandt, as a plaintiff. The plaintiffs alleged that, inter alia , SPQR entered into an addendum to the assignment with Cortlandt pursuant to which Cortlandt received “all right, title, and interest” in the notes.

The Motion Court granted the motions to dismiss, holding that, among other things, Cortlandt lacked standing to maintain the actions and that, although the standing defect was not jurisdictional and could be cured, the plaintiffs failed to cure the defect in the proposed amended complaint. Cortlandt St. Recovery Corp. v. Hellas Telecom., S.à.r.l. , 47 Misc. 3d 544 (Sup. Ct., N.Y. Cnty. 2014).

The Motion Court’s Ruling

As an initial matter, the Motion Court cited to the reasoning of the court in Cortlandt Street Recovery Corp. v. Deutsche Bank AG, London Branch , No. 12 Civ. 9351 (JPO), 2013 WL 3762882, 2013 US Dist. LEXIS 100741 (S.D.N.Y. July 18, 2013) (the “SDNY Action”), a related action that was dismissed on standing grounds.  The complaint in the SDNY Action, like the complaints before the Motion Court, alleged that Cortlandt was the assignee of the notes with a “right to collect” the principal and interest due on the notes. As evidence of these rights, Cortlandt produced an assignment, similar to the ones in the New York Supreme Court actions, which provided that as the assignee with the right to collect, Cortlandt could collect the principal and interest due on the notes and pursue all remedies with respect thereto. In dismissing the SDNY Action, Judge Oetken found that the complaint did not allege, and the assignment did not provide, that “title to or ownership of the claims has been assigned to Cortlandt.” 2013 WL 3762882, at *2, 2013 US Dist. LEXIS 100741, at *7. The court also found that the grant of a power of attorney (that is, the power to sue on and collect on a claim) was “not the equivalent of an assignment of ownership” of a claim. 2013 WL 3762882 at *1, 2013 US Dist. LEXIS 100741 at *5. Consequently, because the assignment did not transfer title or ownership of the claim to Cortlandt, there was no case or controversy for the court to decide ( i.e. , Cortlandt could not prove that it had an interest in the outcome of the litigation).

The Motion Court “concur[red] with” Judge Oeken’s decision, holding that “the assignments to Cortlandt … were assignments of a right of collection, not of title to the claims, and are accordingly insufficient as a matter of law to confer standing upon Cortlandt.”  In so holding, the Motion Court observed that although New York does not have an analogue to Article III, it is nevertheless analogous in its requirement that a plaintiff have a stake in the outcome of the litigation:

New York does not have an analogue to article III. However, the New York standards for standing are analogous, as New York requires “[t]he existence of an injury in fact—an actual legal stake in the matter being adjudicated.”

Under long-standing New York law, an assignee is the “real party in interest” where the “title to the specific claim” is passed to the assignee, even if the assignee may ultimately be liable to another for the amounts collected.

Citations omitted.

Based upon the foregoing, the Motion Court found that Cortlandt lacked standing to pursue the actions.

Cortlandt appealed the dismissal. With regard to the Motion Court’s dismissal of Cortlandt on standing grounds, the First Department affirmed the Motion Court’s ruling, holding:

The [IAS] court correctly found that plaintiff Cortlandt Street Recovery Corp. lacks standing to bring the claims in Index Nos. 651693/10 and 653357/11 because, while the assignments to Cortlandt for the PIK notes granted it “full rights to collect amounts of principal and interest due on the Notes, and to pursue all remedies,” they did not transfer “title or ownership” of the claims.

The Takeaway

Cortlandt limits the ability of an assignee to pursue a lawsuit when the assignee has no direct interest in the outcome of the litigation. By requiring an assignee to have legal title to, or an ownership interest in, the claim, the Court made clear that only a valid assignment of a claim will suffice to fulfill the injury-in-fact requirement. Cortlandt also makes clear that a power of attorney permitting another to conduct litigation on behalf of others as their attorney-in-fact is not a valid assignment and does not confer a legal title to the claims it brings. Therefore, as the title of this article warns: when assigning the right to pursue relief, always remember to assign title to, or ownership in, the claim.

Tagged with: Business Law

The lid is off the policy . . .But what’s next?

Winning and collecting from an insurer a judgment that exceeds the policy limits.

You’ve sent your letter-perfect policy-limit demand, providing the other party’s insurer with a clear and unequivocal opportunity to settle within their policy limits. The demand was sent at a time when the other party’s liability was reasonably clear and any judgment was likely to exceed the amount of the demand. ( Johansen v. California State Auto. Ass’n Inter-Ins. Bureau (1975) 15 Cal.3d 9, 16; CACI 2334.) And it provided the insurer with whatever information and documents (medical records, police reports, witness statements) were available at the time. Finally, it gave the insurer a reasonable time for acceptance – the longer the insurer had to investigate, the less time it needed to respond to the demand. ( Coe v. State Farm Mut. Auto. Ins. Co. (1977) 66 Cal.App.3d 981, 994; Kelley v. British Commercial Ins. Co. (1963) 221 Cal.App.2d 554.)

But the insurer rejected the policy limit demand, or it failed to respond in a timely fashion. When an insurer “fails to accept a reasonable settlement offer within policy limits,” it “will be held liable in tort for the entire judgment against the insured, even if that amount exceeds the policy limits.” ( Rappaport-Scott v. Interinsurance Exch. (2007) 146 Cal.App.4th 831, 836.) The “lid” is off the insurance policy. But how do you obtain and eventually recover an excess judgment? There are a number of important steps. One of the most critical is to obtain an assignment of rights from the insured – one assigning all of their assignable rights against the insurer to your client. After that, the options depend on one crucial detail – whether the insurer is providing a defense to their insured.

Obtain an assignment from the insured

An assignment is one of the only ways for the third-party claimant to proceed directly against the insurer to recover an excess judgment. In essence, an assignment of rights in exchange for a covenant not to execute “frees the insured from monetary liability and, in turn, allows the plaintiff to step into the shoes of the insured and bring suit against the insurance company for whatever claims the insured might have had.” ( Executive Risk Indem., Inc. v. Jones (2009) 171 Cal.App.4th 319, 325.)

The assignment can be entered into at any time after expiration of the time to accept the offer within policy limits – even before judgment. This is true regardless of whether the insurer is defending or not. The failure to accept the reasonable settlement demand constitutes a change in the relationship between insurer and insured: “[w]hen the insurer breaches its obligation of good faith settlement, it exposes its policyholder to the sharp thrust of personal liability . At that point, there is an acute change in the relationship between policyholder and insurer.” ( Critz v. Farmers Ins. (1964) 230 Cal.App.2d 788, 801 (emphasis added).) Although the insured must still cooperate in defense of the action (by appearing to testify and telling the truth), “he need not indulge in financial masochism,” nor “bare his breast to the continued danger of personal liability.” ( Id. at 801.) As recognized by the California Supreme Court, “an insured breaches no duty to the insurance company when he assigns his rights against the company to the injured plaintiff for a covenant not to execute.” ( Samson v. Transamerica (1981) 30 Cal.3d 220, 241.)

The major caveat

There is one major caveat to obtaining an assignment from the insured. In California, an insured can assign to a third-party claimant all assignable claims and causes of action against an insurer, except claims for emotional distress and punitive damages, which are not assignable as a matter of law, and are retained by the insured. ( Murphy v. Allstate Ins. Co . (1976) 17 Cal.3d 937, 942.). When entering into an assignment agreement, it is important that both the third-party claimant (the assignee) and the insured (the assignor) have an understanding about whether the non-assigned claims for emotional distress and/or punitive damages will be pursued. This is to avoid an improper “splitting” of the bad-faith cause of action.

If an insured intends to pursue non-assigned claims for emotional distress and punitive damages, they must be brought in a joinder action along with the third party claimant’s prosecution of the assigned claims. If the assigned and non-assigned claims are pursued in separate actions, it would constitute an improper “splitting” of a cause of action and neither action could proceed. ( Purcell v. Colonial Insurance Company (1971) 20 Cal.App.3d 807; Cain v. State Farm Mutual Automobile Insurance Company (1975) 47 Cal.App.3d 783.) Because of the rule established in Purcell and Cain , the assignment agreement should specifically address whether and how the non-assigned claims will be pursued. The assignment agreement should expressly state that the non-assigned claims will not be pursued, or if pursued, will be done in a joinder action to avoid an improper “splitting” of a cause of action.

Finally, some additional items to bear in mind when obtaining an assignment of rights in exchange for a covenant not to execute: (1) obtain the assignment before trial/judgment – insureds may be less cooperative after being subjected to cross-examination or after a large judgment has been rendered against them; (2) include an assignment by the insured of any Brandt attorney’s fees incurred to recover or obtain policy benefits; (3) be mindful that an assignment is not a “settlement agreement” or a “release agreement” and should not include language to that effect – it is merely an assignment in exchange for a covenant not to execute on any eventual judgment; and (4) before granting a covenant not to execute on any excess judgment, investigate the insured’s financial status to make sure there are no other assets to satisfy the judgment.

Control of the defense

When the insurer defends the action against its insured, the insurer retains the right to control the defense and settlement of that action. For the purposes of evaluating an insurer’s duty to accept a reasonable settlement demand, it makes no difference whether the insurer is defending the insured in the third-party claimant’s action. The California Supreme Court has held insurers liable for an excess judgment, without regard to policy limits, in either context. (See Johansen v. California St. Auto. Assn. Inter-Ins. Bur ., 15 Cal.3d 9, (where the insurer was defending but refused to settle within policy limits), and Samson v. Transamerica Ins. Co ., 30 Cal.3d 220, (where the insurer refused to either defend or settle).) The difference lies in the options available to the claimant and insured after the insurer’s failure to settle. When an insurer provides a defense, those options are much more limited.

Even where an insurer failed to accept a reasonable opportunity to settle within policy limits, so long as it continues to provide a defense to its insured, the insurer retains the right to control settlement and defense of the action. Thus, the insured has no right to settle directly with the injured party, no right to enter into a stipulated judgment, and no right to attempt to sabotage the insurer’s defense. ( Hamilton v. Maryland Casualty Co. (2002) 27 Cal.4th 718, 726.) “[N]either the adequacy of the representation nor the effectiveness of the defense are relevant to the question whether the [insured] can enter into a binding settlement without the insurer’s consent.” ( Safeco Ins. Co. v. Superior Court ( McKinney ) (1999) 71 Cal.App.4th 782, 789.)

In essence, this means that if the insurer is providing a defense, the third-party claimant must proceed to trial and obtain an excess judgment against the insured. The primary step for the third-party claimant to take then is to acquire the assignment of rights from the insured and prosecute the lawsuit. With the assignment in hand, the third-party claimant can proceed directly against the insurer upon the rendering of an excess judgment.

If the insurer refuses to provide a defense

If the insurer refuses to provide a defense, additional options are available. “An insurance company ‘bears a duty to defend its insured whenever it ascertains facts which give rise to the potential of liability under the policy.’ Wrongful failure to provide coverage or defend a claim is a breach of contract.” ( Pruyn v. Agric. Ins. Co. (1995) 36 Cal.App.4th 500, 514-15, as modified on denial of reh’g (July 27, 1995), quoting Isaacson v. California Ins. Guarantee Assn . (1988) 44 Cal.3d 775, 791.) By breaching its contractual duty to defend the insured, the insurer forfeits its right to control the settlement and defense of the action. The insured, in addition to assigning his or her rights to the third-party claimant, has additional options for resolving the action brought against them, such as: (1) an uncontested trial, which is binding on the insurer; (2) a default judgment, also binding on the insurer; and (3) a stipulated judgment, which is subject to attack by the insurer in the subsequent bad-faith action.

• Undergoing an uncontested trial

In Samson v. Transamerica , (1981) 30 Cal.3d 220, one of the insured’s carriers, State Farm, agreed to defend the insured, while the other, Transamerica, denied a defense. Consequently, the insured and State Farm collectively entered into an agreement with the Samsons, the underlying plaintiffs, before the action went to trial. The agreement provided that, in exchange for State Farm’s payment of its $100,000 policy limit and the insured’s assignment of any rights against Transamerica, the Samsons would sign a covenant not to execute any judgment ultimately obtained against the insured. Moreover, the insured agreed to cooperate with the plaintiffs in the action against him. This agreement was reached without the knowledge of Transamerica.

At trial, the insured did not contest liability or damages, presented no defenses, and did not cross-examine witnesses. Although Transamerica had been informed of the pendency of the action, it was not informed of the trial date. The trial court ultimately awarded the Samsons $725,000. Thereafter, the Samsons, as judgment creditors and assignees, sued Transamerica.

The Samson court was called upon to “decide whether this insurance company is bound to pay the entire judgment entered against its insured in an action to which it was not a party, because it refused to defend its insured and rejected a settlement offer.” ( Id. at 224.) Transamerica argued that “even if coverage is found Transamerica should have an opportunity to litigate the amount of damage,” and that it should only be liable up to its $300,000 policy limit. ( Id. at 236.)

But Samson found that “an insurer who fails to accept a reasonable settlement offer within policy limits because it believes the policy does not provide coverage assumes the risk that it will be held liable for all damages resulting from such refusal, including damages in excess of applicable policy limits.” ( Id. at 237.) Thus, the insurer was bound by the judgment, despite it being an uncontested trial. Similarly, in National Union Fire Ins. Co. v. Lynette C. (1994) 27 Cal.App.4th 1434, 1449, the court observed that a judgment entered by a court after an uncontested trial was an “independent adjudication of the facts based on an evidentiary showing” because “[the parties] did not resolve the issues of liability and damages in the [underlying] action. A court did.” ( Ibid .)

The case law is clear that once an insurer refuses to defend in an underlying action, and refuses to intervene by filing a motion to vacate the judgment in the underlying action, it cannot later collaterally attack the evidence of damages which were introduced and proven in the underlying action. The controlling case is Clemmer v. Hartford Ins. Co. (1978) 22 Cal.3d 865, 885-886, a decision by the California Supreme Court. In Clemmer , the Court held that an insurer has standing to seek to set aside a judgment entered against its insured that it may be held responsible to pay. Clemmer further held that when an insurer declines to exercise this option, it is later precluded from re-litigating the issue of damages. ( Id . at 888.)

The Clemmer Court noted that since the insurer had ample notice of the adverse judgment; it had six months to file a motion in the underlying action to set aside the judgment, and that its failure to do so precluded it from raising its defense in a collateral attack on the judgment. The Clemmer court explained that the insurer had standing to seek to move to set aside the judgment, but failed to do so. ( Id . at 886.) The Court explained that because the insurer “chose to remain silent, resting on its claim of noncoverage” and “[h]aving failed to pursue remedies thus available to it, it cannot now claim prejudice or lack of opportunity to litigate damages.” ( Id . at 886).

Based on the foregoing, in order to preclude a later attempt to collaterally attack the judgment, the recommended course is to have an independent adjudication of the underlying action and then give notice of the judgment to the insurer. This can be accomplished either through the uncontested trial, or the default judgment below. Both will be binding on the insurer.

Obtaining a default judgment

This route for obtaining an excess judgment was specifically approved in Amato v. Mercury Casualty Co. (1997) 53 Cal.App.4th 825. In Amato , the insured (Amato) tendered to his insurer, Mercury, but Mercury refused to defend. The plaintiff in that action offered to settle for the $15,000 policy limit, a demand that was also rejected by Mercury. The insured couldn’t afford to defend himself, so the plaintiff obtained a default judgment against Amato for $165,750. Mercury, similar to the example above in Clemmer , failed to do anything to set aside the default.

Amato considered that “[a] default judgment for personal injury results only after the court conducts a hearing to consider the plaintiff’s evidence and to award such damages as that evidence shows to be just.” ( Id. at 838, citing Code Civ. Proc., § 585, subd. (b).) Thus, the judgment that resulted involved “significant independent adjudicatory action by the court, thus mitigating the risk of a fraudulent or collusive settlement between an insured and the claimant. Final judgments entered under ... these circumstances are binding on the insurer which has wrongfully abandoned its insured and may be enforced directly under Insurance Code section 11580.” ( Amato, 53 Cal.App.4th at 838, quoting Pruyn, supra, 36 Cal.App.4th at 517, 523.)

Under Amato , the insurer who breaches the duty to defend, where the insured suffers a default judgment because they are unable to defend themselves, will be liable for the default judgment “which is a proximate result of its wrongful refusal to defend.” ( Amato, at 829.) The “insured is not required . . . to conduct a ‘trial within a trial’ in order to recover the amount of the default judgment.” ( Ibid. ) The court in Xebec Development Partners Ltd. v. National Union Fire Ins. Co . (1993) 12 Cal.App.4th 501, made the same point, observing that the prove-up proceeding that is necessary to obtain a default judgment provides the requisite independent adjudication necessary to bind an insurer. ( Id ., 12 Cal.App.4th at 541, 544.)

Thus, when an insurer refuses to defend, a default judgment will be binding on the insurer in the subsequent bad-faith action as a consequential damage where the insured could not afford to defend the action.

Stipulated judgment subject to attack by insurer

A stipulated judgment can be subject to attack by the insurer − it only provides an evidentiary presumption in favor of the excess judgment and is not binding. When a “liability insurer wrongfully denies coverage or refuses to provide a defense, then the insured is free to negotiate the best possible settlement . . . including a stipulated judgment accompanied by a covenant not to execute.” ( Pruyn, supra, at 509.) But when that agreement purports to fix the amount of damages suffered by the third-party claimant by way of a stipulated judgment or settlement, it calls into question whether the settlement properly represents the amount of damages sustained, or whether it was collusive. ( Id., at 518.) The concern arises in this situation because it is in the insured’s interest to agree to damages in any amount as long as the agreement provides that the insured will not be personally responsible for payment. ( Ibid .)

Pruyn specifically addressed whether a stipulated judgment between the insured and the third-party claimant would be binding on the insurer. The claimant argued that it should be binding because the stipulated judgment was found to constitute a “good-faith” settlement under Code of Civil Procedure section 877.6. But Pruyn surveyed the law and determined that the rule that a final judgment entered against an insured would be binding on the insurer did not apply when there was a stipulated judgment that had only been subject to approval under section 877.6.

Pruyn held that a stipulated judgment approved as a good-faith settlement would not be treated as the equivalent of a judgment entered after a default hearing or an uncontested trial. Instead, the insurer would be given an opportunity that is generally not available when there is a judgment entered after an adjudicatory proceeding – the opportunity to attack the amount of the settlement as the product of fraud and collusion. ( Pruyn, at 526.)

But note that the settlement “will raise an evidentiary presumption in favor of the insured (or the insured’s assignee) with respect to the existence and amount of the insured’s liability.” ( Id. at 509.) The effect of the presumption – and of the settlement – is to “shift the burden of proof to the insurer” to affirmatively show that the settlement was unreasonable or the product of fraud or collusion. ( Ibid. )

As the previous decisions demonstrate, the underlying judgment is binding on the insurers when there was an independent adjudication of liability and damages. ( Pruyn , 36 Cal.App.4th at 527; Amato, 53 Cal.App.4th at 838.). But where the adjudication is made by the parties, the judgment is only entitled to a rebuttable presumption. Accordingly, while a stipulated judgment is permissible when an insurer has refused to both defend and settle, the better practice is to proceed to judgment with an independent judicial adjudication.

The CCP 638 reference hearing

A preferable alternative that will be binding on the insurer when it refuses to defend? Undergoing a California Code of Civil Procedure section 638 reference hearing.

To be enforceable against an insurer, a ‘judgment need not be based on a contested or adversarial trial, but may rest upon a default hearing following a settlement or an uncontested trial where the insured settled with the claimant and thereafter provided no defense.

( Garamendi v. Golden Eagle Ins. Co. (2004) 116 Cal.App.4th 694, 739-740.)

These circumstances necessarily involve significant independent adjudicatory action by the court thus mitigating the risk of fraudulent or collusive settlement between an insured and the claimant. Final judgments entered under either of these circumstances are binding on the insurer which has wrongfully abandoned its insured…

( Id. at 740.)

One way to proceed with the “significant independent adjudicatory action” is to have, as part of the assignment, an agreement among all parties to appoint a referee pursuant to California Code of Civil Procedure section 638 (herein CCP 638). Under that section, “a referee may be appointed upon the agreement of the parties . . . (a) to hear and determine any or all of the issues in an action or proceeding, whether of fact or of law, and to report a statement of decision.” In addition, “[a] statement of decision reported by a referee under a voluntary general reference [CCP 638] is the equivalent of a statement of decision rendered by a superior court . . . .” ( Central Valley General Hosp. v. Smith (2008) 162 Cal.App.4th 501, 513.)

Functionally, the way to proceed is to have the parties, as part of the assignment agreement, agree to undergo a CCP 638 reference by the referee of their choice (preferably a retired judicial officer), who will be appointed to determine all issues in the matter, including facts, law, liability, and damages. With the executed assignment agreement in hand, the parties jointly file a stipulation with the Superior Court to appoint the CCP 638 referee on the same terms as the assignment agreement and to determine all issues in the case. Once the referee is ap- pointed, the parties can select a mutually agreeable date for the CCP 638 reference hearing, preferably at a neutral site, or the referee’s office. The insurer should be invited to attend, in writing. Following the hearing, the referee will render a statement of decision, which can be confirmed by the Superior Court, with judgment entered pursuant to the terms of that decision.

This judgment, because it involved significant independent adjudicatory action by the court and its designated referee, will be binding on the insurer to the same extent as an uncontested trial or default judgment. This procedure provides greater autonomy, quicker resolution, and an independent statement of decision that establishes the facts, decision, law, and damages in the underlying action.

Final tips after failure to settle

An important consideration for the follow-up bad-faith action against the insurer is the matter of the plaintiff. With an assignment of rights, the third-party claimant can directly proceed against the insurer for the entire excess judgment, but cannot claim emotional distress or punitive damages without also including the insured as a plaintiff. And, as above, both the third-party claimant and the insured would have to proceed as plaintiffs against the insurer in the same action . It calls for a decision – does the insured, the tortfeasor in the underlying case, make a sympathetic and believable plaintiff? And are the emotional distress damages and punitive exposure sufficient to justify their inclusion and the added complexity? It calls for a case-by-case determination.

An alternative to the assignment of rights agreement is an assignment of proceeds agreement. There, the insured prosecutes the entirety of the bad-faith action against the insurer, and agrees to assign the proceeds of that action to the third-party claimant. But this raises issues of its own – including settlement control, consent to settle, how proceeds are shared, and the control of the litigation. Both approaches have their benefits and drawbacks.

But the importance of an assignment cannot be overstated – it is the only way for a third-party claimant to proceed directly against the insurer for the excess judgment. That is not to say the third-party claimant lacks options though. Insurance Code section 11580(b)(2) provides that “whenever judgment is secured against the insured . . . in an action based upon bodily injury, death, or property damage, then an action may be brought against the insurer on the policy and subject to its terms and limitations, by such judgment creditor to recover on the judgment.”

The import of Insurance Code section 11580 is that an adjudicated claimant becomes a third-party beneficiary under the policy. They can then file an action to collect the judgment that is “on the policy” – i.e., the amount of the judgment within the policy limits. This can be initiated even without an assignment. Should the insurer refuse to pay the judgment on the policy, an action against the insurer for bad faith failure to pay can be directly brought by the third-party claimant. But to collect any “excess” judgment over the amount “on the policy,” the third-party claimant must have an assignment from the insured. ( Murphy v. Allstate (1976) 17 Cal.3d 937; Hand v. Farmers (1994) 23 Cal.App.4th 1847.)

Finally, regardless of the route taken to obtain the excess judgment, be it CCP 638 reference, uncontested trial, or default judgment, be certain to take the necessary steps to work up the case. Hire the proper experts, obtain the necessary testimony, and collect the relevant evidence and workup to maximize the value of the underlying case. The excess judgment is the foundation for the future bad-faith case. Notably, the judgment provides presumptive proof of the value of the claim. “The size of the judgment recovered in the personal injury action, although not conclusive, furnishes an inference that the value of the claim is the equivalent of the amount of the judgment and that acceptance of an offer within those limits was the most reasonable method of dealing with the claim.” ( Crisci v. Security Ins. Co. of New Haven (1967) 66 Cal.2d 425, 430.)

Perfecting an excess judgment and working to recover the entire amount from the insurer takes practice, but generally follows the same series of steps. After the insurer has rejected a reasonable opportunity to settle within policy limits, begin discussions for an assignment in exchange for a covenant not to execute. With the assignment in hand, the determining factor is then whether the insurer is defending the underlying action. If so, prosecute your case and strive for an excess judgment. If not, engage in one of the options above that requires substantial judicial intervention and management – a default judgment, uncontested trial, or preferably, a CCP 638 reference – and obtain an excess judgment. At that point, with an assignment and excess judgment in hand, you’re ready to proceed with an action against the insurer to recover the entire amount of the excess judgment.

Ricardo Echeverria

Ricardo Echeverria is a trial attorney with Shernoff Bidart Echeverria LLP, where he handles both insurance bad-faith and catastrophic personal-injury cases.  He is currently the incoming President of CAALA and was named the 2010 CAALA Trial Lawyer of the Year, the 2011 Jennifer Brooks Lawyer of the Year by the Western San Bernardino County Bar Association, and a 2012 Outstanding Trial Lawyer by the Consumer Attorneys of San Diego. He was also a finalist for the CAOC Consumer Attorney of the Year Award in both 2007 and 2009, and is also a member of ABOTA and the American College of Trial Lawyers.

Matthew Clark

Matthew Clark is a partner with the Irvine-based law firm of Bentley & More LLP, where he handles complex, law-and-motion, and appellate matters in fields ranging from insurance bad faith, to catastrophic personal injury and public-entity liability. He was recognized as a Rising Star by Super Lawyers magazine in 2015, 2016, and 2017 and attended the University of Michigan and Notre Dame Law School.

Copyright © 2024 by the author. For reprint permission, contact the publisher: Advocate Magazine

• Featured Articles
• Recent Issues
• Advertising
• Contributors Writer's Guidelines
• Search Advanced Search

• What’s New on the Watch?
• COVID-19 Updates
• Private Equity Webinar Series
• Private Equity Finance
• Global PE Update
• Glenn West Musings
• Quarterly Private Funds Update
• Ancillary Agreements
• Co-investments
• Cybersecurity
• Going Privates
• Legal Developments
• Minority Investments
• Portfolio Company Matters
• Purchase Agreements
• R&W Insurance
• Secondaries
• Securities Laws
• Shareholder Agreements
• Specialist Areas
• Contributors
• Global Team
• Privacy Policy

Private Equity

Watch Your Inbox!

Get the latest views and developments in the private equity world from the Global Private Equity Watch team at Weil.

• Search Menu

Sign in through your institution

• Advance articles
• Author Guidelines
• Submission Site
• Open Access
• Why Publish?
• About Uniform Law Review
• About UNIDROIT
• Editorial Board
• Advertising and Corporate Services
• Journals Career Network
• Self-Archiving Policy
• Dispatch Dates
• Journals on Oxford Academic
• Books on Oxford Academic

• < Previous

The law applicable to third-party effects of assignments of claims: the UN Convention and the EU Commission Proposal compared

• Article contents
• Figures & tables
• Supplementary Data

Spyridon V Bazinas, The law applicable to third-party effects of assignments of claims: the UN Convention and the EU Commission Proposal compared, Uniform Law Review , Volume 24, Issue 4, December 2019, Pages 609–632, https://doi.org/10.1093/ulr/unz032

• Permissions Icon Permissions

In October 2019, the U.S. ratified the United Nations Convention on the Assignment of Receivables in International Trade (the “Convention”) by the US, thus creating a new impetus for the broad adoption and entry into force of the Convention and with that for the facilitation of international receivables finance. In March 2018, the E.U. Commission issued a Proposal for a Regulation of the European Parliament and of the Council on the law applicable to the third-party effects of assignments of claims (the “Commission Proposal” or “Proposal”). The Commission Proposal includes a first draft of the proposed Regulation (the “draft Regulation”). An alignment of the main rule of the draft Regulation with the equivalent rule in the Convention could result in an internationally uniform conflict-of-laws rule on this matter, which would remove the legal divergences existing among legal systems and reduce the uncertainty as to the law applicable to the third-party effects of assignments of claims. The purpose of this article is to compare the relevant rules of the Convention and the draft Regulation, determine whether this coordinated approach is achieved and, if not, make suggestions as to how it can be achieved to the benefit of all parties involved in international receivables finance.

Personal account

• Sign in with email/username & password
• Get email alerts
• Save searches
• Purchase content
• Activate your purchase/trial code
• Add your ORCID iD

Institutional access

Sign in with a library card.

• Sign in with username/password
• Recommend to your librarian
• Institutional account management
• Get help with access

Access to content on Oxford Academic is often provided through institutional subscriptions and purchases. If you are a member of an institution with an active account, you may be able to access content in one of the following ways:

IP based access

Typically, access is provided across an institutional network to a range of IP addresses. This authentication occurs automatically, and it is not possible to sign out of an IP authenticated account.

Choose this option to get remote access when outside your institution. Shibboleth/Open Athens technology is used to provide single sign-on between your institution’s website and Oxford Academic.

• Click Sign in through your institution.
• Select your institution from the list provided, which will take you to your institution's website to sign in.
• When on the institution site, please use the credentials provided by your institution. Do not use an Oxford Academic personal account.
• Following successful sign in, you will be returned to Oxford Academic.

If your institution is not listed or you cannot sign in to your institution’s website, please contact your librarian or administrator.

Enter your library card number to sign in. If you cannot sign in, please contact your librarian.

Society Members

Society member access to a journal is achieved in one of the following ways:

Sign in through society site

Many societies offer single sign-on between the society website and Oxford Academic. If you see ‘Sign in through society site’ in the sign in pane within a journal:

• Click Sign in through society site.
• When on the society site, please use the credentials provided by that society. Do not use an Oxford Academic personal account.

If you do not have a society account or have forgotten your username or password, please contact your society.

Sign in using a personal account

Some societies use Oxford Academic personal accounts to provide access to their members. See below.

A personal account can be used to get email alerts, save searches, purchase content, and activate subscriptions.

Some societies use Oxford Academic personal accounts to provide access to their members.

Viewing your signed in accounts

Click the account icon in the top right to:

• View your signed in personal account and access account management features.
• View the institutional accounts that are providing access.

Signed in but can't access content

Oxford Academic is home to a wide variety of products. The institutional subscription may not cover the content that you are trying to access. If you believe you should have access to that content, please contact your librarian.

For librarians and administrators, your personal account also provides access to institutional account management. Here you will find options to view and activate subscriptions, manage institutional settings and access options, access usage statistics, and more.

Short-term Access

To purchase short-term access, please sign in to your personal account above.

Don't already have a personal account? Register

Email alerts

Citing articles via.

• Recommend to your Library

Affiliations

• Online ISSN 2050-9065
• Print ISSN 1124-3694
• Copyright © 2024 Unidroit - The International Institute for the Unification of Private Law
• About Oxford Academic
• Publish journals with us
• University press partners
• What we publish
• New features  
• Open access
• Rights and permissions
• Accessibility
• Advertising
• Media enquiries
• Oxford University Press
• Oxford Languages
• University of Oxford

Oxford University Press is a department of the University of Oxford. It furthers the University's objective of excellence in research, scholarship, and education by publishing worldwide

• Copyright © 2024 Oxford University Press
• Cookie settings
• Cookie policy
• Privacy policy
• Legal notice

Assignment of claims

The European Commission proposes to harmonise conflict of laws rules on the third-party effects of assignment of claims

When claims are assigned across borders, it's not always easy for investors, credit providers and other market participants to know which national law applies to determine who owns the assigned claims. Different national rules about the third-party (or ownership) effects of assignments of claims complicate the use of claims as collateral and make it difficult for investors to price the risk of debt investments.

Removing legal uncertainties about the ownership of claims after they have been assigned on a cross-border basis is important for the assignor and the assignee of the claims. However, it is also essential for market participants who are not party to the assignment but who interact with any of the parties and need certainty about who has legal title over the assigned claims.

Commission initiatives

The  Action plan on building a capital markets union , adopted by the Commission in September 2015, envisaged targeted action on securities ownership rules and third-party effects of assignments of claims.

In order to consult all interested parties, in February 2017 the Commission published an  inception impact assessment  providing an overview of the problems to be addressed and the possible solutions.

In April 2017, the Commission launched a public consultation ( consultation on conflict of laws rules for third party effects of transactions in securities and claims ) and established an Expert group on conflict of laws regarding securities and claims. The members of the Expert group assisted the Commission by providing specialist advice on private international law and financial markets as a sound basis for policymaking.

On 12 March 2018, the Commission proposed the adoption of common conflict of laws rules on the third-party effects of assignments of claims . The proposal provides that, as a rule, the law of the country where the assignor has its habitual residence will govern the third-party effects of the assignment of claims. As an exception, the law of the assigned claim will govern the third-party effects of the assignment of specific claims. By introducing legal certainty, the new rules will promote cross-border investment, enhance access to credit and contribute to market integration. The proposal, which deals with the law applicable to the ownership questions of assignments of claims, complements the rules in the Rome I Regulation , which deal with the law applicable to the contractual questions of assignments of claims.

Previous work in relation to claims

The question of the third-party effects of assignments of claims was raised when the  Rome Convention  was being transformed into the Rome I Regulation ( Regulation (EC) No 593/2008 ). The Rome I Regulation did not address the issue, but required the Commission to prepare a report on the matter. To that effect, the Commission asked the British Institute of International and Comparative Law (BIICL) to carry out a study and the Commission presented its report in September 2016

Law applicable to the third-party effects of assignments of claims

The assignment of a claim refers to a situation where a creditor (the assignor) transfers the right to claim a debt from the debtor to another person (the assignee) who then becomes a creditor vis-a-vis the debtor (replacing in this role the original creditor). This mechanism is used by companies to obtain liquidity and access credit. At the moment, there is no legal certainty as to which national law applies when determining who owns a claim after it has been assigned in a cross-border case. The new rules proposed by the Commission will clarify which national law is applicable for the resolution of such disputes. As a general rule, the law of the country where assignors have their habitual residence applies, regardless of which Member State's courts or authorities examine the case. This proposal will promote cross-border investment and access to cheaper credit, and prevent systemic risks. Both Parliament and Council have adopted their positions, and the proposal is currently the subject of trilogue negotiations. Second edition. 'EU legislation in progress' briefings are updated at key stages throughout the legislative procedure.

• EN (PDF - 685 KB)

About this document

Publication type.

• DELIVORIAS Angelos

Policy area

• Economics and Monetary Issues
• Financial and Banking Issues

Geographical area

• EU Member States

California Supreme Court Overrules Existing Law on Assignment of Claims After Loss

On August 20, 2015, the California Supreme Court issued its unanimous opinion in Fluor Corp. v. Superior Court , Opinion No. S205889, an appeal from Fluor Corp. v. Superior Court (2012) 208 Cal.App.4th 1506, review granted and opinion superseded sub nom. Fluor Corp. v. S.C. (Cal. 2012) 149 Cal.Rptr.3d 675 (" Fluor ").  Petitioner Fluor Corporation asked the California Supreme Court to revisit its opinion in Henkel Corp. v. Hartford Accident and Indemnity Co. (2003) 29 Cal.4th 934 (" Henkel ").

Overruling Henkel , in an opinion written by Chief Justice Cantil-Sakauye, the Court unanimously sided with Fluor, holding that:

For the reasons set forth, Insurance Code section 520 applies to third party liability insurance. Under that provision, after personal injury (or property damage) resulting in loss occurs within the time limits of the policy, an insurer is precluded from refusing to honor an insured's assignment of the right to invoke defense or indemnification coverage regarding that loss. This result obtains even without consent by the insurer — and even though the dollar amount of the loss remains unknown or undetermined until established later by a judgment or approved settlement.

The Court remanded the case to the Court of Appeal for proceedings consistent with the Court's opinion.

The State of the Law Prior to Fluor .

This dispute arises out of the enforceability of anti-assignment clauses that are commonly included in insurance policies.  A typical anti-assignment clause reads:

Your rights and duties under this policy may not be transferred without our written consent except in the case of death of an individual named insured.

Henkel addressed the issue of whether the insured conveyed its liability insurance policies by operation of law when it sold certain assets to a successor corporation, where those assets included liabilities (i.e., a chemical products business).  Claimants sued the successor corporation for personal injuries allegedly caused by the predecessor corporation's chemical products business.  The predecessor corporation's liability insurers refused to defend the claim against the corporate successor, contesting the assignment of the insurance policies.  The successor corporation sued the liability insurers for refusing to defend. 

Henkel held that anti-assignment clauses in liability insurance policies are enforceable except if:

(1) at the time of the assignment the benefit has been reduced to a claim for money due or to become due, or

(2) at the time of the assignment the insurer has breached a duty to the insured, and the assignment is of a cause of action to recover damages for that breach.

( Henkel at 945.)  In other words, with regard to a liability policy, a court will enforce an anti-assignment clause unless the claim has already been reduced to a judgment or settlement, or the insurer has committed an assignable breach.

Fluor's facts are nearly identical to Henkel's . A successor corporation seeks coverage for asbestos claims under a predecessor corporation's liability policies. ( Fluor at 528.)  The policyholder, seeking to avoid an anti-assignment clause, argues that Henkel was wrongly decided.  The policyholder argues that Henkel ignored California Insurance Code section 520, enacted in 1872, which states "[a]n agreement not to transfer the claim of the insured against the insurer after a loss has happened, is void if made before the loss...."  In other words, Henkel appears to conflict with Insurance Code section 520. 

The Court of Appeal began its opinion by noting:

During the 130 years since its enactment, the 1872 statute has been cited only once. No one raised it in Henkel . This decision will be the second judicial opinion in the history of the state to even mention the statute, and the first to address it.  ( Id. )

After reviewing cases in both California and other states, the court of appeal concluded:

Here is the nub. The 1872 Legislature drew no bright lines and made no controlling pronouncements about liability insurance, or about how "loss" in the context of such policies is to be defined. We see nothing in Insurance Code section 520 or in Henkel to support Fluor–2's assumption that the Supreme Court would have reached a different result had the parties in that appeal briefed or argued the statute's applicability. In the absence of an express legislative directive, stare decisis controls.  ( Id . at 537.)

In sum, Henkel held that a policyholder can assign its rights, despite an anti-assignment clause, only after liability had been established (or a breach occurred).  Fluor Corporation argued, based on statute and on common law grounds, that a policyholder can assign its rights any time after a "loss" has occurred.  In the case of a liability policy, the "loss" is the event that triggers coverage under the policy (e.g., "bodily injury" or "property damage").

The California Court of Appeal in Flour sided with Hartford. The Court of Appeal concluded that section 520 does not apply to liability insurance. The appellate court further suggested that even assuming the statute applies to such policies, it should be construed to reflect the same rule articulated in Henkel .  On appeal to the California Supreme Court, Fluor argued against both propositions. 

The California Supreme Court's Opinion in Fluor .

In a unanimous decision written by the Chief Justice, the Supreme Court agreed with Fluor on both issues.  The Court, applying section 520, found that the statute applies to third party liability insurance, and that, properly construed in light of its relevant language and history, section 520 bars an insurer from refusing to honor an insured's assignment of policy coverage regarding injuries that predate the assignment.  The Court concluded that "It follows that the decision in Henkel, which assessed the proper application of a consent-to-assignment clause under common law principles, cannot stand in view of the contrary dictates of the controlling statutory provisions of section 520." (Slip Op. at 3.)

The Court concluded:

As further explained below, the rule embodied in section 520 is consistent with the overwhelming majority of cases decided before and since Henkel. The principle reflected in those cases — precluding an insurer, after a loss has occurred, from refusing to honor an insured's assignment of the right to invoke policy coverage for such a loss — has been described as a venerable one, borne of experience and practice, facilitating the productive transformation of corporate entities, and thereby fostering economic activity. ( Id .)

In short, after the Fluor decision the law in California is that courts will not enforce anti-assignment provisions in liability insurance policies after the loss has occurred.  With regard to standard occurrence-based liability policies, the "loss" is the coverage-triggering event, such as "property damage" or "bodily injury," and not the finding of liability.

Related Professionals

Colorado Court of Appeals Clarifies When Insureds May Assign Claims Against Insurers

by Hall and Evans | Feb 23, 2021

The case arose out of an auto accident in which Ms. Goddard and two others were injured. The driver, Mr. Griggs, was insured under an auto policy issued by State Farm. The policy afforded $25,000 per person, $50,000 aggregate limits. Goddard and the two others all asserted claims against Griggs. Prior to litigation, Goddard’s counsel sent State Farm a letter with a time-limited demand for the policy’s limits; the letter documented $2,410 in medical expenses, noting that the hospital charges remained pending, and claiming loss of income of $141.60. The demand did not claim any future medical care was needed. The demand imposed a time limit for acceptance. Prior to the deadline, State Farm offered $5,000; Goddard did not respond to the offer. She later provided documentation of additional treatment, including neurological evaluation and psychotherapy. At that point, State Farm had settled the other two claims and offered her the remaining limits of $18,500. Again, Goddard did not respond to the offer but pursued litigation against Griggs.

State Farm defended Griggs. Goddard informed Griggs that she was not willing to settle for the remaining limits but offered to enter into a Nunn agreement. She later amended her complaint to add a claim for punitive damages and some months after that the parties entered into a Nunn agreement whereby Griggs admitted liability for the accident, agreed to arbitrate Goddard’s damages, and assigned all contract and extracontractual claims he had against State Farm to Goddard. Goddard agreed not to execute or enforce the judgment against Griggs’ assets. State Farm did not consent to the agreement. The parties then arbitrated the damages and State Farm continued to provide Griggs a defense; the arbitration award was for $837,193.36.

After the arbitration award was entered State Farm filed a declaratory judgment action asserting that Griggs breached the policy by, among other things, entering into the Nunn agreement. Goddard, as assignee, counterclaimed and asserted a bad faith claim against State Farm for failure to settle within the policy limits. The case was tried and the jury found in favor of State Farm, determining that Griggs breached the contract and that Goddard failed to prove State Farm acted in bad faith.

The Goddard decision clarifies when an insured may enter into an enforceable Nunn agreement. The decision rejects the proposition that such agreements can never, as a matter of law, constitute a breach of the insured’s duties under the policy. The decision also explains that each of these issues entail fact questions for juries to decide.

The decision clarifies that “before an insured is justified in stipulating to a judgment and assigning its claims against the insurer to a third-party claimant, it must first appear that the insurer has unreasonably refused to defend the insured or to settle the claim within policy limits.” The court distinguished this standard – when an insured may enter into an assignment – from when such an agreement is enforceable against the insurer. Colorado law requires a finding that the insurer acted in bad faith before such agreements are enforceable against it as the measure of damages for its bad faith. But the court held this was too harsh a standard to impose on insureds when entering a Nunn agreement; insureds need only establish that the insurer appeared to act unreasonably in denying a defense or rejecting a policy limits demand. The court observed that “it is conceivable that an insurer may appear to have acted unreasonably in rejecting a policy-limits offer, but not actually acted unreasonably in settling the claim. Under that scenario, the insured would not have breached the insurance contract and the insurer would not have acted in bad faith.”

Goddard urged that, because the Colorado Supreme Court expressly recognizes insureds may protect themselves by utilizing such assignments, entry into such an agreement can never, as a matter of law, constitute a breach of the insured’s duties under an insurance policy. The court rejected this proposition emphasizing that Griggs was entitled to enter into the assignment only if it appeared State Farm unreasonably rejected the offer. Whether State Farm’s actions were reasonable, and whether it appeared that its actions were unreasonable, were fact questions for the jury. The court upheld the jury’s verdict that Griggs breached the policy.

If you would like further details of the case and its implications, please contact Stephanie A. Montague, [email protected] , 303.628.3494.

Click to view a PDF of this article .

Related Team Members:

• Stephanie A. Montague

Recent Posts

• Hall & Evans Joins Mansfield Rule Certification Initative
• Four Attorneys Named to 2025 Edition of “Best Lawyers: Ones to Watch in America”
• Eighteen Attorneys Named to 2025 Edition of “Best Lawyers In America”
• Patrice Stephenson-Johnson Honored with National Bar Association Women Lawyers Division Annual Achievement Award
• Three Recognized in 2024 Mountain States Super Lawyers List
• Legal Updates

• Election 2024
• Entertainment
• Newsletters
• Photography
• AP Buyline Personal Finance
• AP Buyline Shopping
• Press Releases
• Israel-Hamas War
• Russia-Ukraine War
• Global elections
• Asia Pacific
• Latin America
• Middle East
• Delegate Tracker
• AP & Elections
• 2024 Paris Olympic Games
• Auto Racing
• Movie reviews
• Book reviews
• Financial Markets
• Business Highlights
• Financial wellness
• Artificial Intelligence
• Social Media

Election deniers moving closer to GOP mainstream, report shows, as Trump allies fill Congress

FILE - Supporters of President Donald Trump hold signs as they stand outside of the Clark County Elections Department in North Las Vegas,Nov. 7, 2020. As former President Donald Trump makes a comeback bid to return to power, Republicans in Congress have become even more likely to cast doubts on President Joe Biden’s 2020 victory.(AP Photo/Wong Maye-E, File)

FILE - Rioters loyal to President Donald Trump rally at the U.S. Capitol in Washington on Jan. 6, 2021. As Trump makes a comeback bid to return to power, Republicans in Congress have become even more likely to cast doubts on President Joe Biden’s 2020 victory. (AP Photo/Jose Luis Magana, File)

• Copy Link copied

WASHINGTON (AP) — In the hours after the attack on the U.S. Capitol on Jan. 6, 2021 , Ohio’s then-Republican senator, Rob Portman, voted to accept President Joe Biden’s win over the defeated former president, Donald Trump , despite Trump’s false allegations that Biden only won because of fraud.

But as Trump charges toward his rematch with Biden in 2024 , Portman has been replaced by Sen. JD Vance , a potential vice presidential pick who has echoed Trump’s false claims of fraud and said he’ll accept the results this fall only “if it’s a free and fair election.”

South Carolina Sen. Tim Scott and Florida Sen. Marco Rubio, other possible VP picks , also declined to object to Biden’s victory over Trump, but have been less committal this year. Rubio said recently if “things are wrong” with November’s election, Republicans won’t stand by and accept the outcome.

And the new speaker of the House, Mike Johnson , helped organize Trump’s failed legal challenge to Biden’s win. He demurred when asked if he believed the 2020 election was legitimate during an event with other Trump allies about the upcoming election.

As Trump makes a comeback bid to return to power, Republicans in Congress have become even more likely to cast doubts on Biden’s victory or deny it was legitimate, a political turnaround that allows his false claims of fraud to linger and lays the groundwork to potentially challenge the results in 2024.

A new report released Tuesday by States United Action, a group that tracks election deniers, said nearly one-third of the lawmakers in Congress supported in some way Trump’s bid to overturn the 2020 results or otherwise cast doubt on the reliability of elections. Several more are hoping to join them, running for election this year to the House and Senate.

“The public should have a real healthy dose of concern about the real risk of having people in power who’ve shown they’re not willing to respect the will of the people,” said Lizzie Ulmer of States United Action.

The issue is particularly stark for Congress given its constitutional role as the final arbiter of the validity of a presidential election. It counts the results from the Electoral College, as it set out to do on Jan. 6, 2021, a date now etched in history because of the violent assault on the U.S. Capitol by a pro-Trump mob.

In its report, States United found that in Congress, 170 representatives and senators out of 535 lawmakers overall can be categorized as election deniers. Heading into the fall elections, two new Senate candidates and 17 new House candidates already are on the ballot this fall seeking to join them.

It’s not just Congress that has been seeded with people who supported trying to overturn Trump’s 2020 loss, but the highest ranks of the Republican Party .

“This is deeply alarming,” said Wendy Weiser, the vice president for democracy programs at the Brennan Center for Justice at New York University. “A democracy can only function if the participants commit to accepting the results of popular elections. That is it. That’s the entire political system.”

The former president picked Michael Whatley , who has echoed Trump’s election lies , to become co-chairman of the Republican National Committee, with his daughter-in-law, Lara Trump. Christina Bobb, who was recently indicted for her alleged involvement in a scheme to recruit fake electors in Arizona, has been named the RNC’s head of “election integrity.”

What to know about the 2024 Election

• Today’s news: Follow live updates from the campaign trail from the AP.
• Ground Game: Sign up for AP’s weekly politics newsletter to get it in your inbox every Monday.
• AP’s Role: The Associated Press is the most trusted source of information on election night, with a history of accuracy dating to 1848. Learn more.

Under Trump’s direction, the RNC is making the elections process its top priority, bringing in the new personnel and adding resources, said Danielle Alvarez, an adviser to both the Trump campaign and the party committee.

Rioters loyal to President Donald Trump rally at the U.S. Capitol in Washington on Jan. 6, 2021. (AP Photo/Jose Luis Magana, File)

“Biden is in the White House, that’s true,” Alvarez said, “but there were issues in the election.”

To be clear, there was no widespread fraud in the 2020 election that cost Trump reelection. Recounts , audits and reviews in the battleground states where he contested his loss all affirmed Biden’s victory, and courts rejected dozens of lawsuits filed by Trump and his allies.

States United’s report details how successful election deniers have been in bolstering their congressional ranks. It examines the results of congressional party primaries in the 13 states that have held them this year and found that in each state, at least one election denier has made it to the general election for a House or Senate seat.

The report defines election deniers as people who falsely claimed Trump won in 2020, spread misinformation about that election or took steps to overturn it, or refused to concede a separate race. It finds that at least 67 will be on the ballot in the House in November, including 50 incumbents. Three will be running for the Senate — one of whom, Republican Sen. Ted Cruz of Texas, is an incumbent.

There have been high-profile losses among election deniers, as well. Last week in West Virginia, Republican Rep. Carol Miller, who also voted against accepting Biden’s victory, successfully fended off a primary challenge from Derrick Evans, who was convicted of a felony civil disorder charge after storming the Capitol on Jan. 6. Numerous election deniers in 2022 lost bids for swing state offices such as governor or secretary of state that would have given them direct power over voting in 2024.

Still, the movement has grown by dominating Republican primaries. In the race for the nomination to challenge Democratic Sen. Sherrod Brown in Ohio, businessman Bernie Moreno, who has previously said Trump was “right” to call 2020 “stolen,” won his primary . In Indiana, Republican Sen. Mike Braun voted to certify Biden’s win, but he will step down this year to run for governor and is poised to be replaced by Rep. Jim Banks, a prominent election denier who easily won the GOP primary in that state.

The report classifies neither Rubio or Scott as election deniers, but skepticism about the trustworthiness of voting has become an organizing GOP principle, particularly for the Republican-controlled House of Representatives.

Before becoming the House speaker, Johnson recruited colleagues to support a lawsuit, which ultimately failed, filed by Trump’s allies to overturn his 2020 loss.

More recently Johnson met with Trump at the former president’s Mar-a-Lago resort to shore up his own political support amid a far-right rebellion seeking to oust him as speaker . He emerged promising House legislation that would be designed to stop immigrants in the country illegally from voting.

During a press conference on the Capitol steps to announce the bill, the speaker acknowledged it’s hard to prove that certain immigrants are wrongfully casting ballots. Election experts say it is extremely rare for immigrants who are ineligible to vote to break federal law to do so.

While Congress passed legislation putting in safeguards to better protect against interference after the Capitol attack, it’s lawmakers who will ultimately be asked to accept the 2024 results from their states.

Vance stood by his recent remarks. And Rubio said he expects there will be lawsuits in jurisdictions where the final tallies are close, as sometimes happens.

“When people ask me, ‘Are you going to accept the outcome?’ I think what some people are arguing is if there’s things wrong with this election, we’re going to point it out,” Rubio said in a short interview.

Riccardi reported from Denver.

This story has been corrected to fix the spelling of the last name of the States United spokeswoman, Lizzie Ulmer.

We’re sorry, this feature is currently unavailable. We’re working to restore it. Please try again later.

• Our network

The Sydney Morning Herald

• Investigation

Tracking staff, family deals: Health council in ‘chaos’ amid claims of service failures

By eryk bagshaw and angus thomson, save articles for later.

Add articles to your saved list and come back to them any time.

One of the state’s key taxpayer-funded medical councils is in chaos amid allegations of staff being digitally tracked, a rugby league sponsorship backflip, nepotism and critical delivery failures in some of Australia’s most disadvantaged communities.

The Aboriginal Health and Medical Research Council of NSW (AHMRC) has gone through four chief executives in less than two years and now faces allegations that it fostered a toxic workplace and delivered contracts to friends and family far above their market rate.

The peak body, which represents Aboriginal community-controlled health services in NSW, receives $11 million a year in taxpayer funding from the state and federal government.

NSW Premier Chris Minns at the Aboriginal Health and Medical Research Council training centre in Sydney’s Little Bay in June 2023. Credit: Edwina Pickles

In announcing $1.5 million in fresh funding at its new Sydney training centre last year, Premier Chris Minns said health workers trained at the AHMRC would go on to treat tens of thousands of patients across NSW.

“Aboriginal-controlled health services are helping people across our state,” he said.

But six current and former staff members say the AHMRC is failing in its mission to improve the lives of thousands of Indigenous people living in NSW.

Nicole Turner, the peak body’s fourth chief executive in two years, has called in a third set of auditors after two recent inquiries by Catalina Consultants and Workwize investigated potential conflicts of interest and allegations of staff tracking. Workwize concluded further investigations were necessary. Investigators from PwC are now looking into the culture, governance and finances of the council.

Staff have raised concerns about a number of transactions, including a mystery $22,000 fee paid to rent a room in Dubbo, the collapse of a proposed $27,000 rugby league sponsorship that did not have board approval and a catering contract below market rate.

“Everything that we spend has to be linked to some program, whether it’s mental or sexual health, but we’re not able to justify it,” said one former staff member.

“The ripple effect will be happening down to the community. We’re not able to deliver because we are too stuck within our office trying to sort out the mess.”

AHMRC chair Jamie Newman said the board had appointed Turner as interim chief executive “to review and action any necessary changes following recent instability”.

Charlie Coyle, an accountant working remotely from Palm Beach in Queensland, has been stood down on paid leave from his role as the AHMRC’s head of finance while the investigation into the organisation unfolds.

Charlie Coyle, the director of finance at the Aboriginal Health and Medical Research Council. Credit: Nathan Perri

Six current and former staff members who requested anonymity to discuss internal issues say the day-to-day operations of the NSW council were effectively taken over by Coyle.

Coyle denied wrongdoing but declined to answer questions about how he managed conflicts of interest, handled invoices and implemented a staff tracking system. He said he was “just an employee”.

In April, lawyers from Williamson Barwick recommended further investigation into Coyle’s “compliance with AHMRC’s Code of Conduct and Conflict of Interest policies” – particularly in relation to his involvement in signing contracts and handling the invoices of both the council’s original auditor and a catering company.

Documents show Coyle’s signature on a deal giving Urban Cooking Collective access to the council’s taxpayer-funded commercial cooking facilities in Little Bay, NSW, for $500 a month. Other cooking facilities in Sydney are rented for at least $750 per week.

Three staff members said Coyle was open about his personal connection to the owner of the catering company.

“Why would we be paying all of the utilities, water, electricity and cleaning?” said one current staff member who asked not to be identified to protect their employment.

The company was allegedly also given preferential tendering for catering AHMRC events, charging the council $49 per student per day.

“If we were having a meeting for six head count we’d get an invoice for $600 for sandwiches,” said one former staff member.

In another instance, the AHMRC paid a mystery invoice containing sparse details about an office room that was rented at the Bila Muuji Aboriginal Medical Centre in Dubbo for $22,000. Coyle also ran the finance for Bila Muuji centre, though it is not suggested he profited from the deal. It is run by a family member of former AHMRC chair Phil Naden.

Naden said he was not affiliated with Bila Muuji and all declarations of conflicts of interest were made at the time. Bila Muuji also used the same auditor as AHMRC.

Documents show AHMRC’s auditor was paid by Coyle within minutes of submitting a $27,500 invoice in August 2023, while staff say there were often delays paying teachers and other essential service providers.

A third investigator is now reviewing the conflict management procedures that were followed to identify any governance issues and is yet to make any findings.

In March 2024, the Arthur Beetson Foundation claimed Naden told them in person that the AHMRC NSW would spend $27,500 in taxpayer funding sponsoring a rugby league game at Redcliffe Dolphins in Queensland. The foundation, which promotes Indigenous football, said the offer was verbally confirmed four days later.

After the event went ahead, the AHMRC claimed Naden did not have board approval, leaving the foundation chasing thousands of dollars.

“We now find ourselves in a financial hole as the event was cash neutral event given we spent all funds we had committed on the event,” the foundation wrote to the AHMRC.

Naden denied committing the funding to the charity and said he had no contact with them during his tenure as chairman.

The expenses inflamed tensions within the peak body as staff struggled with what some called a toxic work environment that has seen at least eight staff resign or go on WorkCover since 2022.

“It’s a very colourful office,” one former staff member said of the council’s headquarters on Pitt Street in Sydney’s CBD.

In 2022 staff were asked to log into an app that would track their location by GPS raising questions about “whether these actions complied with the Workplace Surveillance Act” according to an internal review of an auditors report.

“[Coyle] pretty much controlled everything,” said one current staff member. “He is a non-Aboriginal male. He just didn’t really understand the impacts of that.”

In a letter to Coyle on the outcome of its investigation in December 2023, Catalina Consultants said it had determined the AHMRC should remove “geo-location tracking” from its systems and that Coyle “displayed behaviours that go against workplace standards under Safe Work NSW’s Code of Practice for Managing Psychosocial Hazards at Work”.

Coyle also clashed with then-chief executive Boe Rambaldini, who was appointed to the job in July last year but lasted less than two months.

Rambaldini filed an unfair dismissal case against his former employer, which was settled in the Federal Court earlier this month.

In documents filed to the court, Rambaldini alleged he was dismissed after raising concerns about a number of financial management issues, including that some employees were not being paid their correct wages. He said others who had left the organisation still had access to its Westpac bank accounts.

Rambaldini sent Naden a report detailing his concerns on the morning of September 15, according to the statement of claim. An hour later, he said he received an email from Naden terminating his employment for “serious misconduct”.

In a letter sent to members earlier this year, Rambaldini said he was “not alone in having suffered as a result of the poor governance and decision-making”.

“Our communities have an undeniable right to have a say in how to address this chaos,” he said.

In its defence, the council said Rambaldini was dismissed after management became aware he had approved two loans to his executive assistant without authority from the board. It denied his dismissal was related to the concerns he had raised with Naden.

Following the settlement, the peak body’s board said it “regrets the circumstances which led to Boe’s employment coming to an end” and acknowledged Rambaldini’s “commitment and service over many decades to Aboriginal people”.

Rambaldini was replaced by 26-year-old Shana Quayle, who had a series of convictions for stalking, assaults on workers, and damaging property between 2019 and 2023. Her tenure as acting chief executive lasted six months.

“She just didn’t have this skill set to be a CEO of a multimillion-dollar organisation and that showed,” said one former board member. Quayle declined to comment.

Naden denied the leadership turmoil had affected the council’s ability to deliver services to regional communities.

“There’s been no instability around the CEO, because all it is is someone acting in the capacity until we fill the position,” he said.

Quayle was replaced by current interim chief executive Nicole Turner, who reported to a board that had a turnover of 24 directors in four years.

Turner said she was committed to ensuring the organisation was “best placed to support our member services and the broader sector, with the strength that our long history and legacy demands”.

In a statement, the AHMRC board said it was in “the process of understanding historical challenges within our organisation, and in partnership, are addressing them appropriately to ensure our organisation’s stability into the future”.

As a member of the coalition of Aboriginal peak bodies, the council has shared accountability with state and federal governments for meeting the targets of the 2020 Closing the Gap agreement.

In figures released earlier this month, the Productivity Commission revealed the country will fall short of its goal of closing the gap in life expectancy between Indigenous and non-Indigenous Australians by 2031.

Maari Ma Health Aboriginal Corporation chief executive, Richard Weston. Credit: Rhett Wyman

Richard Weston, chief executive of Maari Ma Health Aboriginal Corporation in Broken Hill, said it was frustrating to see his peak body mired in court battles and financial mismanagement instead of advocating for more resources and better support for services on the ground.

“They [Indigenous health workers] come with this love for what they’re doing, and our leadership doesn’t honour it,” he said.

“I don’t think our leaders know how to be leaders.”

‘A huge impact on the community’

Brendon Adams, a Ku-ku Yalangii and Woppaburra man living in Wilcannia in western NSW, said his type 2 diabetes would be impossible to manage without Maari Ma. The closest dialysis centre is a four-hour round trip away in Broken Hill.

“Wilcannia suffered from a lot of people coming into this community with promises … and they leave and then they never come back,” Adams said.

Wilcannia community leader Brendon Adams. Credit: Rhett Wyman

AHMRC member services and staff at the peak body say its purpose is crucial, but those running it have lost sight of their mission – to improve the health of Indigenous people across NSW.

“If it completely shuts down, it will have a huge impact on the community, and it will be a disaster,” said one former staff member.

Another staff member, who regularly visits member services across NSW, said many had lost faith in their peak body.

“People ask, ‘what is going on at the AHMRC?’ There is absolutely no confidence in those of us that are visiting these services,” the staff member said. “They don’t even take us seriously.”

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter .

• For subscribers
• State Parliament
• New South Wales

Most Viewed in National