Snow, Nuffer, Engstrom & Drake v. Tanasse

1999 UT 49, 980 P.2d 208, 369 Utah Adv. Rep. 36, 1999 Utah LEXIS 87, 1999 WL 308570
CourtUtah Supreme Court
DecidedMay 18, 1999
Docket970079
StatusPublished
Cited by26 cases

This text of 1999 UT 49 (Snow, Nuffer, Engstrom & Drake v. Tanasse) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Snow, Nuffer, Engstrom & Drake v. Tanasse, 1999 UT 49, 980 P.2d 208, 369 Utah Adv. Rep. 36, 1999 Utah LEXIS 87, 1999 WL 308570 (Utah 1999).

Opinions

DURHAM, Associate Chief Justice:

¶ 1 Defendant James Tanasse seeks review of a court of appeals’ decision upholding .the dismissal of his motion to set aside an execution sale of his legal malpractice cause of action against plaintiff law firm. In upholding the trial court’s dismissal, the court of appeals held that (a) it was unnecessary to determine whether a legal malpractice claim is assignable in Utah; (b) a legal malpractice cause of action is not beyond the reach of an involuntary transfer such as a judicially sanctioned execution sale; and (c) it is not against public policy in the state of Utah for a law firm to purchase in an execution sale a legal malpractice claim asserted against it in a separate lawsuit. Tanasse v. Snow, 929 P.2d 351, 352 (Utah Ct.App.1996). We affirm in part and reverse in part.

¶ 2 In 1992, Tanasse and Club St. George, Inc., retained defendant law firm Snow, Nuf-fer, Engstrom <& Drake (“Snow Nuffer”) to prepare a lease agreement between Club St. George as landlord, and Nedra Pauline and Terry Burchinal, doing business as Nedra’s Cafe, as tenants. Thereafter, a dispute arose between the parties to the lease. An eviction was subsequently prepared and executed on Burchinal. Following eviction, Burchinal, doing business as Nedra’s Cafe, filed suit against Tanasse and Club St. George for wrongful eviction.

¶ 13 Soon thereafter, Snow Nuffer withdrew as counsel for Tanasse and Club St. George due to nonpayment of attorney fees in the amount of approximately $14,000. Immediately after withdrawing as counsel, Snow Nuffer filed a lawsuit against Tanasse, Young-Tanasse, Inc., and Club St. George, seeking to collect on a promissory note for attorney fees. The law firm obtained a default judgment against Tanasse on June 8, 1993.

¶4 On September 7, 1993, the Burchinal wrongful eviction action came to trial. Ta-nasse and Club St. George had to retain new counsel to defend them. The wrongful eviction trial resulted in a judgment of over $100,000 entered against Tanasse and Club St. George.. Several months later, Tanasse, Young-Tanasse, and Club St. George filed a legal malpractice lawsuit against Snow Nuf-fer. Meanwhile, after obtaining the default judgment against Tanasse, Snow Nuffer sought to recover on its default judgment against Tanasse by executing on Tanasse’s interest in the legal malpractice action.

¶ 5 On December 1, 1994, the law firm purchased the malpractice claim for $10,000 at a sheriffs auction initiated by Snow Nuf-fer. The law firm had filed a praecipe requesting the Washington County Sheriff to execute on and sell all the right, title, equity, and interest of James A. Tanasse, Club St. George, and Young-Tanasse in the malpractice claim.

¶ 6 After purchasing the malpractice claim against it, Snow Nuffer filed a partial satisfaction of judgment in its collection action against Tanasse, leaving in place a deficiency judgment. Tanasse then filed a motion to set aside the sale, which was denied by the trial court. The court of appeals affirmed. We granted certiorari to review the question of whether a law firm may purchase at an execution sale a legal malpractice claim filed against it by the judgment debtor in order to extinguish the lawsuit.

17 We review the following three -issues as framed and addressed by the court of appeals:

(1) Are legal malpractice claims ássigna-ble? (2) Even if they are not, may they be reached by execution? (3) Even assuming that a legal malpractice cause of action can generally be levied upon by a judgment creditor through an execution sale, does public policy preclude the very law, firm against whom the claim is asserted from purchasing the claim?

Tanasse, 929 P.2d at 352. These questions of law are reviewed under a correction of error standard. State v. Pena, 869 P.2d 932, 936 (Utah 1994). We consider the issues before us as follows.

[210]*210I. ASSIGNABILITY OF LEGAL MALPRACTICE CLAIMS

¶ 8 We affirm the court of appeals’ determination that there is no need to decide whether a legal malpractice claim is assignable under Utah law in order to resolve this particular dispute. Tanasse, 929 P.2d at 353. Tanasse never attempted to voluntarily assign his legal malpractice claim, and Snow Nuffer has not tried to assign the claim since acquiring it through execution. Acquisition of a legal malpractice claim through purchase at a sheriffs auction in order to satisfy a default judgment is not the same as acquiring it through a voluntary assignment. Thus, the issue of the claim’s assignability was not before the court of appeals and is not before us.

II. INVOLUNTARY TRANSFER OF LEGAL MALPRACTICE

CLAIMS

¶ 9 We also affirm the court of appeals’ holding that a legal malpractice claim can be reached through an involuntary transfer such as execution. Tanasse, 929 P.2d at 354. Rule 69 of the Utah Rules of Civil Procedure states that a sheriff shall “execute the writ [of execution] against the non-exempt property of the judgment debtor by levying on a sufficient amount of property, if there is sufficient property; collecting or selling the choses in action and selling the other property in the manner set forth herein.” Utah R. Civ. P. 69(f). A “chose in action” has been defined as “a claim or debt upon which a recovery may be made in a lawsuit. It is not a present possession, but merely a right to sue; it becomes a ‘posses-sory thing’ only upon successful completion of a lawsuit.” Barron’s Laiv Dictionary 71 (3d ed.1991). Accordingly, we hold that a legal malpractice claim, like any other chose in action, may ordinarily be acquired by a creditor through attachment and execution.

¶ 10 While this is a question of first impression in Utah, we note that a number of states permit a “judgment creditor to execute upon a judgment debtor’s cause of action against its insurer.” Denham v. Farmers Ins. Co., 213 Cal.App.3d 1061, 1070, 262 Cal.Rptr. 146, 151 (Ct.App.1989) (referencing Bergen v. F/V St. Patrick, 686 F.Supp. 786 (D.Alaska 1988); Whitehead, v. Van Leuven, 347 F.Supp. 505 (D.Idaho 1972); Steffens v. American Standard Ins. Co. of Wis., 181 N.W.2d 174 (Iowa 1970)). Medical malpractice claims, for example, have been held to be subject to attachment and execution by creditors. Woody’s Olympia Lumber, Inc. v. Roney, 9 Wash.App. 626, 513 P.2d 849, 850-54 (1973). The Denham court interpreting Nevada law, held that, absent direct language to the contrary, all causes of action are subject to execution. See Denham, 262 Cal.Rptr. at 152. Like Nevada, Utah’s rules of civil procedure contain no direct language exempting causes of action from execution.1 See Utah R. Civ. P. 69. Rather, as the court of appeals noted, the term “chose in action” is used “in the Utah version of Rule 69 without restriction of any sort.” Tanasse, 929 P.2d at 354. Thus, we view rule 69 to encompass all choses in action, including causes of action for legal malpractice.

¶ 11 Ikuno v. Yip, 912 F.2d 306

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Bluebook (online)
1999 UT 49, 980 P.2d 208, 369 Utah Adv. Rep. 36, 1999 Utah LEXIS 87, 1999 WL 308570, Counsel Stack Legal Research, https://law.counselstack.com/opinion/snow-nuffer-engstrom-drake-v-tanasse-utah-1999.