Opinion ID: 2634605
Heading Depth: 2
Heading Rank: 5

Heading: Assignment of the Claim v. Assignment for Collection

Text: According to I.C. § 26-2223(2), if PurCo was attempting to collect on the claim it owned, then it was not acting as a collection agency. In other words, if Thrifty's claim was assigned in its entirety to PurCo, without recourse, then PurCo would be collecting on its own behalf. However, if the assignment was only for purposes of collection, then PurCo would be collecting on behalf of Thrifty, in violation of the Act. Assignment is defined as the transfer of rights or property. Black's Law Dictionary 115 (7th ed.1999). American Jurisprudence, Second Edition, defines assignment as: ... a transfer of property or some other right from one person (the `assignor') to another (the `assignee'), which confers a complete and present right in the subject matter to the assignee. An assignment is a contract between the assignor and the assignee, and is interpreted or construed in accordance to rules of contract construction. Ordinarily, the word `assignment' is limited in its application to a transfer of intangible rights, including contractual rights, choses in action, and rights in or connected with property, as distinguished from transfer of the property itself. According to the Restatement of Contracts, an assignment of a right is a manifestation of the assignor's intention to transfer it by virtue of which the assignor's right to performance by the obligor is extinguished in whole or in part and the assignee acquires a right to such performance. 6 Am.Jur.2d Assignment § 1 (1999). To be effective, an assignment must be completed with a delivery, and the delivery must confer a complete and present right on the transferee. The assignor must not retain control over the property assigned, the authority to collect, or the power to revoke. 6 Am.Jur.2d Assignment § 132 (1999). Idaho recognizes that choses in action are generally assignable. McCluskey v. Galland, 95 Idaho 472, 474-75, 511 P.2d 289, 291-92 (1973). An assignment may be done in such a way to be construed as a complete sale of the claim. 6 Am.Jur.2d Assignment § 147 (1999). However, an assignment that is absolute in form can be shown to be for purposes of collection only. Id. In order to determine the intent of the assignment, the Court looks to the contract between the assignor and assignee. Id. An assignment of the chose in action transfers to the assignee and divests the assignor of all control and right to the cause of action, and the assignee becomes the real party in interest. McCluskey, 95 Idaho at 474, 511 P.2d at 291. Only the assignee may prosecute an action on the chose in action. Id. The PurCo Agreement requires Thrifty, the assignor to sue in its own name in small claims court. According to McCluskey, this demonstrates it is Thrifty that is the real party in interest as to the claim, not PurCo. See id. The Agreement also requires PurCo to provide Thrifty with information and instruction necessary for Thrifty to prosecute actions in small claims. Further, Thrifty was not divested of control and right to the cause of action. The PurCo Agreement allows Thrifty to access the claim and obtain copies of any correspondence and documents regarding the claim while it is in PurCo's possession. It is evident from the agreement on its face that PurCo did not receive a complete assignment of the claim. Pursuant to the PurCo Agreement, Thrifty also had the right to revoke the assignment with thirty (30) days' written notice. This is inconsistent with an assignment of a chose in action. See 6 Am.Jur.2d § 132 (1999). An assignee for collection holds any proceeds of the assigned claim in trust for the assignor. 6 Am.Jur.2d Assignment § 174 (1999). According to the PurCo Agreement, monies collected are to be placed in a trust account, from which PurCo disburses the appropriate sums to Thrifty after retaining a percentage of monies collected. The assignment created between PurCo and Thrifty was for the purpose of collection. The PurCo Agreement does not support PurCo's argument that it was collecting on a claim it owned. Thrifty maintained control over the files and the claim, and it could sue in its own name. With thirty (30) days' written notice, either party could revoke the assignment. There is ample evidence that PurCo collected on Thrifty's behalf, in violation of the Act. II. IS THE DEPARTMENT ENTITLED TO ATTORNEY FEES ON APPEAL? The Department requests attorney fees pursuant to I.A.R. 41 and I.C. § 12-121. This rule does not provide a basis for awarding attorney fees on appeal, but simply allows the appellate court to award fees if some other contractual or statutory authority permits attorney fees. Robbins v. County of Blaine, 134 Idaho 113, 120, 996 P.2d 813, 820 (2000). The Department cites United States Nat'l Bank of Oregon v. Cox, 126 Idaho 733, 736, 889 P.2d 1123, 1126 (Ct.App.1995), as authority for an award of attorney fees, if the court is left with an abiding belief that the appeal has been brought or defended frivolously, unreasonably, or without foundation. The central issues on appeal are the interpretation of the word claim, as found in I.C. § 26-2223(2), and whether the PurCo Agreement was an assignment for collection purposes or an assignment of the entire claim. These are issues of first impression for this Court. A case of first impression does not constitute an area of settled law; therefore, the request for attorney fees should be denied. Kidd Island Bay Water Users Co-op. Ass'n, Inc. v. Miller, 136 Idaho 571, 575, 38 P.3d 609, 613 (2001).