The Honorable Andrew W. Bogue, United S tates District Judge for the District 1 of South Dakota. United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 96-4039

___________ First Colony Life Insurance Company, * * Plaintiff, * * v. * * Appeal from the United States Daniel R. Berube, * District Court for the * District of South Dakota Appellant, * * v. * * Nancy R. Cox, also known as Nancy R. * Walker, * * Appellee. *

___________ Submitted: December 1, 1997 Filed: December 10, 1997

___________ Before McMILLIAN, BEAM, and MURPHY, Circuit Judges.

___________ McMILLIAN, Circuit Judge. Daniel R. Berube appeals from the final order of the United S tates District Court 1 for the District of South Dakota, granting summary judgment and attorney & s fees toSection 62-4-42 provides: 2 Assig nment

of payments prohibited -- Certain compensatio n exempt from claims of creditors. No claim for compensation under this title is assignable, and al l compensation and claims therefor are exempt from all claims of creditors except those for child and spousal support obligations. -2- Nancy R. Cox in this diversity interpleader action. For the reason s discussed below, we affirm.

In a 1988 settlement of his workers & compensation claim, Berube received a lump-sum distribution, a portion of which went to purchase a “nonrefund singl e p remium life annuity,” which guaranteed Berube a payment of $857.42 per month for life. In 1991, Berube entered into an agree ment with Cox, by which Cox agreed to pay Berube $54,640 in exchange for an assignment of his monthly annuity payments for a perio dof 240 months. The agreement set the amount of the deemed principal at $75,599.90. The agreement further provided for remedies in the event of a breach and stated that should “either party ins titute[ ] legal action for the enforcement of any right, obligation, provision or covenant of this agreement, the preva iling party shall be entitled to a reasonable attorney & s fee in addition to costs of suit.”
In 1995, Berube demanded of the insurance carrier reinstatement of his monthly annuity benefits. The i nsurance carrier brought this interpleader action against Berube
an dCox in district court and deposited the annuity payments into the registry of th e court. The district court thereafter discharged the insurance carrier fro m further liability.
Berube moved for summary judgment, arguing the agreement with Cox was void beca use S.D. Codified Laws § 62-4-42 prohibited the assignment of his workers & 2 compensation ben efits. In a cross-claim against Cox, Berube alternatively argued that he was entitled to rescind the agreement, because he did not understand the meaning-3-

of “deemed principal.” Cox answered the complaint and cross-claim, affirmativel y pleading breach of contract and seeking, inter alia, attorney & s fees and costs. She also moved for summary judgment and attached Berube & s deposition testimony, in which he acknowledged that he could not read because of dyslexia , that he did not read the entire agreement befor

e signing it, and that, notwithstanding his inability to understand all of the agreement & s provisions, he did not seek advice from an attorney or an explanation from anyone else.
Noting that the South Dakota Supreme Court had never addressed whether § 62-4-42 prohibited assigning annuity benefi ts purchased with the proceeds of a lumpsum workers & compensation award, the district court conc luded that it did not, and thus, the assignment to Cox was valid. The district court also concluded Berube could not show he was entitled to rescind the agreement with Cox, b ecause Berube & s mistake was caused by his neglec t of a legal duty, that is, he failed to read the written agreement or have someone explain it to him. The district court granted summary judgment to Cox and, foll owing a hearing, also awarded Cox attorney & s fees and costs in the amount of $10,968.53.

We rev iew the grant of summary judgment de novo. See Walker v. State Farm Mut. Auto. Ins. Co. , 973 F.2d 634, 636 (8th Cir. 1992). We also review de novo a district court's app lication of state law in diversity cases. See Salve Regina College v. Russell , 499 U.S. 225, 239 (1991). In the absence of controlling state law, we mus t pre dict how the state & s highest court would decide the issue. See Brandenburg v

. Allstate Ins. Co. , 23 F.3d 1438, 1440 (8th Cir. 1994).

We agree wi th the district court that the South Dakota Supreme Court woul d conclude that the assignment here is not prohibited by § 62-4-42. The anti-assignment provision of that statute is limited to “claims for compensation,” and thus is no t appl icable, because Berube received his lump-sum distribution and he could use th e proceeds for whatever purpose he saw fit. See Highland Park State Bank v. Salazar , 555 S.W.2d 484, 487 (Tex. Civ. App. 1977, writ ref’d n.r.e.) (claim for compensation-4-

me ans right of action against employer; to prohibit assignment of proceeds woul d disable employee from using money for intended purposes); Rhea v. Park , 211 Tenn. 589, 366 S.W.2d 765, 768 (1963) (claim for compensation covers every stage before act ualpayment of award); cf. In re Sloma , 43 F.3d 637, 639-40 (11th Cir. 1995 ) (assignment of monthly payments received under annuit y purchased as award to injured employee not prohibited under Longshor e and Harbor Workers & Compensation Act, 33 U.S.C. § 9 16). Berube & s reliance on In re Delgado , 967 F.2d 1466, 1468 (10th Cir

. 1992), is misplaced, because that case relies on a Kansas statute which also prohibits
ass ignment

of “compensation agreed upon, awarded, adjudged, or paid,” Kan. Stat

. Ann. § 44-514 (1986).

We also agree that Berube is not entitled to rescission for mistake, because his mistake was caused by the neglect of a legal duty, which extended to making sure he understood the contents of the contract before he signed it. See S.D. Codified Laws § 53-4-9; Sutherland v. Sutherland , 187 Kan. 599, 358 P.2d 776, 785 (1961) (duty to read and obtain explanation of contract contents); Beatty v. Depue , 78 S.D. 395, 10 3 N.W .2d187, 191 (1960) (mistake must not result from want of ordinary care an d diligence exercised by reasonable person).

Fin ally, we agree with the district court that Cox was entitled to attorney & s fees and cost s under the terms of the agreement, because Berube & s cross-claim, whic h required Cox to defend the legality and seek enforcement of the agreement, qualifies as “inst ituting” legal action relating to the enforcement of the parties & rights under th e agreement, and she was the prev ailing party. Berube has not challenged the amount of the fees.
Accordingly, we affirm the judgment of the district court.-5-

A true copy.
Attest: CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.