IN THE SUPREME COURT OF THE STATE OF IDAHO
Docket No. 33059
HOWARD R. FOLEY, )
)
Petitioner-Appellant, )
)
Boise, May 2007 Term
v. )
)
2007 Opinion No. 95
JAMIE R. GRIGG, a/k/a JAMES R. GRIGG, )
SAFECO LIFE INSURANCE COMPANY, )
Filed: June 29, 2007
ROYAL INSURANCE COMPANY OF )
AMERICA, SETTLEMENT CAPITAL )
Stephen W. Kenyon, Clerk
CORPORATION, ROBERT CHRIS, and )
PIONEER FEDERAL CREDIT UNION, )
)
Defendants-Respondents. )
Appeal from the District Court of the Fourth Judicial District, State of Idaho, Ada
County. Honorable Kathryn A. Sticklen, District Judge.
District court decision assigning annuity payment, reversed and remanded.
Foley Freeman Borton, PLLC, Meridian, for appellant. Joseph Walden Borton
argued.
Moffatt, Thomas, Barrett, Rock & Fields, Boise, for respondent Settlement
Capital Corporation. James L. Martin argued.
Hall, Farley, Oberrecht & Blanton, Boise, for respondent Safeco Life Insurance
Company.
Elam & Burke, Boise, for respondent Royal Insurance Company.
Ashcraft and Miller, PLLC, Mountain Home, for respondent Pioneer Federal
Credit Union.
Richard L. Harris, Caldwell, for respondent Robert Chris.
__________________________________
BURDICK, Justice
Defendant James R. Grigg settled a wrongful death claim and received a structured
settlement. Grigg then allegedly assigned his entire final annuity payment to both Appellant
Howard R. Foley and Respondent Settlement Capital Corporation. The district court determined
1
that Settlement Capital Corporation was entitled to the annuity payment. Foley now appeals that
decision. We reverse and remand.
I. FACTUAL AND PROCEDURAL BACKGROUND
In the spring of 1984 Grigg’s mother was killed in a car accident. Foley represented
Grigg and his father in the wrongful death action. As part of the settlement of that case, Grigg
received structured payments, funded through an annuity contract purchased from Safeco Life
Insurance Company (Safeco) by Royal Insurance Company of America (Royal), the insurer of a
defendant in the wrongful death case. The settlement called for a limited number of monthly
payments and then two lump sum payments of $50,000 due May 1, 1995, and May 1, 2005.
These payments were first to be paid to a conservator and then directly to Grigg when he became
of legal age. The settlement was approved by the court and the order approving the settlement
noted that Grigg was to receive seventy-five percent of the settlement, with twenty-five percent
going toward litigation costs and expenses. In 1990, after Grigg reached the age of majority, the
conservatorship was terminated by court order.
Sometime in the mid-1990’s, Grigg began attempting to sell his May 2005 lump sum
payment. 1 In September 1997 Grigg assigned the May 2005 lump sum payment of $50,000 to
Foley for $10,000. Foley did not notify Safeco or Royal of this assignment, nor did he record
notice of this assignment with the Secretary of State; however, at that time Foley had no
statutory obligation to do so. 2 Then in February 2001 Grigg approached Settlement Capital
Corporation (SCC) about selling his interest in the May 2005 payment. As part of the sale, and
pursuant to the newly enacted provisions of I.C. § 28-9-109, SCC sought court approval of the
1
The Memorandum Decision and Order notes that Grigg attempted to sell the payment to Canco Credit Union, and
that the manager of Canco, Timothy Johnson, purchased Grigg’s interest in the payment. Later, Johnson assigned
this interest to Third Party Defendant Robert Chris. Chris then pledged this interest as collateral for a loan from
Canco. Defendant Pioneer Federal Credit Union is the successor to Canco. However, according to the district
court’s findings, none of these parties have an interest in the annuity payment; moreover, none of them have
appealed that decision. Therefore, since judgments not appealed from are final, see, e.g., Rodriguez v. Dep’t of
Corr., 136 Idaho 90, 94, 29 P.3d 401, 405 (2001), we will determine the rights to the annuity payment as between
the parties to this appeal.
2
The parties recognize that the Structured Settlement Protection Act was not enacted until after Grigg’s assignment
to Foley.
2
transfer of payment. SCC gave notice of this action to Grigg, Royal and Safeco. 3 The court
approved the transfer.
Apparently because the notice of SCC’s petition was sent to Grigg in care of Foley, Foley
notified Safeco, in January 2002, of his 1997 assignment from Grigg. In 2003 Foley sought a
declaratory judgment, and in early 2005 the parties settled the suit with Foley and SCC agreeing
to share the payment. Based on this settlement, the court entered judgment. However, shortly
before the 2005 payment, Safeco received a letter from another party indicating that this party
was entitled to the payment. Safeco immediately moved for relief from the prior judgment, and
the court granted that motion. The case was then set for a court trial. However, the parties
agreed that the district court could determine who was entitled to the 2005 payment based on the
record.
The district court then entered its memorandum decision and order finding SCC was
entitled to the entire $50,000 lump sum payment. Foley appeals from this decision.
II. STANDARD OF REVIEW
“Review of the trial court’s decision is limited to ascertaining whether the evidence
supports the findings of fact and whether the findings of fact support the conclusions of law.”
Roell v. Boise City, 134 Idaho 214, 216, 999 P.2d 251, 253 (2000). “[T]his Court exercises free
review over the lower court’s conclusions of law to determine whether the court correctly stated
the applicable law, and whether the legal conclusions are sustained by the facts found.” Id.
3
Between the time Grigg allegedly assigned Foley his rights in the settlement and the time Grigg sold his rights to
SCC, our legislature adopted Idaho Code § 28-9-109(d)(13)(B)(v), regulating the transfer of structured settlement
payments. This subsection provides, in pertinent part:
Procedure for approval of transfers
...
2. Not less than twenty (20) days prior to the scheduled hearing on any application for
approval of a transfer of structured settlement payment rights under paragraph (B)(iii) of
this subsection, the transferee shall file with the court and serve on all interested parties a
notice of the proposed transfer and the application for its authorization, including with
such notice[.]
I.C. § 28-9-109(d)(13)(B)(v)(2). “With respect to any structured settlement,” interested party is defined as “the
payee, any beneficiary irrevocably designated under the annuity contract to receive payments following the payee’s
death, the annuity issuer, the structured settlement obligor, and any other party that has continuing rights or
obligations under such structured settlement[.]” I.C. § 28-9-109(d)(13)(B)(i)(6).
3
The interpretation of a statute is a question of law over which this Court exercises free
review. Carrier v. Lake Pend Oreille School Dist. # 84, 142 Idaho 804, 807, 134 P.3d 655, 658
(2006).
III. ANALYSIS
This Court first must determine whether the district court erred when it awarded SCC the
entire lump sum payment, and then must determine whether SCC is entitled to attorney fees on
appeal.
A. Annuity Payment
Foley maintains that SCC did not acquire a right to the final annuity payment; he argues
that he is an interested party pursuant to I.C. § 28-9-109(d)(13)(B)(i)(6) because he had
continuing rights and obligations under the settlement and that SCC failed to give him the
required statutory notice when it petitioned the court to approve the transfer of Grigg’s
settlement. As such, Foley concludes, his due process rights have been violated and the district
court should not have recognized the transfer and instead determined that he was entitled to the
full $50,000. SCC argues that Foley had no interest under the annuity contract because the
contract provided that Safeco would not be bound by an assignment until Safeco had received
notice of the assignment and Foley did not give Safeco notice; therefore, SCC maintains, Foley
was not an interested party and was due no notice.
However, the parties have incorrectly identified the issue before the Court as whether
Foley could be identified as an interested party at the time SCC petitioned the court to approve
the transfer of Grigg’s settlement. Rather, the issue for this Court to determine is whether SCC
had any right to the annuity payment because of Grigg’s prior assignment of it to Foley.4 If SCC
had no right to the annuity payment, then notice or lack thereof to Foley is irrelevant, as Foley’s
due process rights would be violated by the award of the lump sum payment to SCC. 5
4
It is very clear that the Structured Settlement Protection Act does not affect transfer agreements reached prior to its
enactment. See I.C. §§ 28-9-109(d)(13)(B)(vi)(5); 28-9-109(d)(13)(B)(vii). Therefore the Structured Settlement
Protection Act cannot work to cut off the rights of previous assignees, such as Foley.
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Nonetheless, SCC’s notice in its petition to transfer did not meet the statutory requirements of I.C. § 28-9-
109(d)(13)(B)(v)(2). SCC argues that in its due diligence it did not discover that Foley had an interest in the
settlement payment. However, the purpose behind this provision is to protect the payee from unscrupulous practices
by requiring court approval of structured settlement transfers. See Daniel W. Hindert and Craig H. Ulman,
Transfers of Structured Settlement Payment Rights: What Judges Should Know About Structured Settlement
Protection Acts, 44 Judges J. 19, 19 (Spring 2005). If a transferee can claim that it need not provide notice to any
4
An assignment is a transfer of rights or property from one person to another. Purco Fleet
Servs., Inc. v. Idaho State Dep’t of Fin., 140 Idaho 121, 125, 90 P.3d 346, 350 (2004) (quoting
Black’s Law Dictionary 115 (7th ed. 1999); 6 Am. Jur. 2d Assignment § 1 (1999)). An
assignment “confers a complete and present right in the subject matter to the assignee.” Id.
(quoting 6 Am. Jur. 2d Assignment § 1 (1999)). “[A]n assignee takes the subject of the
assignment with all the rights and remedies possessed by and available to the assignor.” 6 Am.
Jur. 2d Assignment § 144 (1999) (emphasis added). Once an assignor makes an assignment, he
no longer retains control of the subject of the assignment. See First State Bank of Eldorado v.
Rowe, 142 Idaho 608, 612, 130 P.3d 1146, 1150 (2006).
Here, the district court determined that Grigg had assigned the $50,000 payment to
Foley. 6 Therefore, as a matter of law, Foley had all the property rights to the payment, and
Grigg no longer had control over or any rights to the payment. As such, Grigg retained nothing
to assign to SCC, and his “assignment” to SCC transferred nothing to SCC. Instead, Foley had
all the property rights to the payment and all the rights to control the payment.
Moreover, the order in which Safeco received notice—from SCC and then from Foley—
is irrelevant to the determination of this case. Although SCC argues that Foley failed in his duty
to give Safeco notice as required by the annuity contract, the requirement that Safeco receive
notice before being bound by an assignment serves a bookkeeping function and protects Safeco
only. See I.C. § 28-9-318 (1979) (currently codified at I.C. § 28-9-406 (2001)). This provision
in the annuity contract does not create a race-notice situation, and it cannot operate to determine
the rights between Grigg and Foley. Rather, contract law operates to determine the right to the
assignment. Therefore, the district court erred when it awarded SCC the entire $50,000 payment.
interested party it does not know about, it encourages less diligence on the transferee’s part and could possibly leave
an unsophisticated payee subject to legal action from a “jilted” claimant. Id. at 27.
Here, Foley had an assignment of the payment; therefore, as he had a continuing right to payment under the contract,
and he was an interested party pursuant to I.C. § 28-9-109(d)(13)(B)(i)(6). Idaho Code § 28-9-109(d)(13)(B)(v)
requires SCC to “file with the court and serve on all interested parties a notice of the proposed transfer and the
application for its authorization” at least 20 days before the hearing. Since Foley is an interested party, SCC had a
mandatory duty to provide him with notice of its petition to transfer.
6
The parties do not dispute that the district court’s factual findings are correct. Furthermore, there is ample
unambiguous evidence in the record to support that Grigg assigned the payment to Foley, rather than taking it as
collateral for a loan.
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B. Attorney Fees
SCC requests attorney fees pursuant to I.C. § 12-121. This statute authorizes the award
of attorney’s fees to the prevailing party. Schneider v. Howe, 142 Idaho 767, 775, 133 P.3d
1232, 1240 (2006). Since we reverse the decision below, SCC is not a prevailing party and is not
entitled to an award of attorney fees.
IV. CONCLUSION
We reverse the decision of the district court because Grigg had no rights left in the
payment to assign to SCC. We decline to award SCC attorney fees. Costs to Appellant.
Chief Justice SCHROEDER and Justices TROUT, EISMANN and JONES, CONCUR.
6