Opinion ID: 169059
Heading Depth: 2
Heading Rank: 1

Heading: Breach of Contract and Good Faith Claims

Text: 67 Kansas law requires that every legal action be prosecuted by the real party in interest. Kan. Stat. Ann. § 60-217(a). In causes of action arising from a contract, only parties to the contract may enforce the contract because the person who possesses the right sought to be enforced is the real party in interest. O'Donnell v. Fletcher, 9 Kan.App.2d 491, 681 P.2d 1074, 1076 (1984). Kansas law, however, allows an injured party to assign his right to recovery under a contract to a third party. Alldritt v. Kan. Centennial Global Exposition, Inc., 189 Kan. 649, 371 P.2d 181, 187 (1962) (In this state all choses in action, except torts, are assignable. Accordingly it has been held that a cause of action for damages for breach of contract is assignable. (citations omitted)). Where the injured party assigns all of his rights to a third party, the assignee becomes the real party in interest and the assignor can no longer pursue a claim on his own behalf. See Army Nat'l Bank v. Equity Developers, Inc., 245 Kan. 3, 774 P.2d 919, 932 (1989); First Nat'l Bank of Topeka v. United Tel. Ass'n, Inc., 187 Kan. 29, 353 P.2d 963, 970 (1960) (explaining that the assignee of an account [is] its legal holder and therefore the proper representative of the account as against the debtor). 68 As part of the confession of judgment between Mr. Nguyen and Mr. Wade, the two men entered into a Covenant Not to Execute and Assignment of Rights. App. 839-41. The agreement provided, in pertinent part: 69 Wade assigns to Nguyen, his executors, administrators, legal representatives, agents, successors and assigns all of his rights flowing from any interest he may have giving rise to a claim against any insurer to pay damages Wade is legally obligated to pay Nguyen, including without limitation insurance policies issued by EMC. 70 Id. at 840. Once Mr. Wade assigned all of his contractual rights under his insurance policy to Mr. Nguyen, Mr. Wade no longer possessed the right to enforce the contract against EMCASCO. He is therefore not the real party in interest and cannot maintain a cause of action against EMCASCO for breach of contract or breach of the duty of good faith arising from the contract.