Opinion ID: 1209999
Heading Depth: 1
Heading Rank: 2

Heading: analysis

Text: We review de novo the district court's grant of summary judgment. Matthews v. Milwaukee Area Local Postal Workers Union, AFL-CIO, 495 F.3d 438, 441 (7th Cir.2007). On cross-motions for summary judgment, the party whose motion was denied may appeal as that judgment has merged into the final judgment [granting the opposing motion] and is therefore appealable as well. Santaella v. Metro. Life Ins. Co., 123 F.3d 456, 461 (7th Cir.1997). Summary judgment is appropriate if there is no genuine issue as to any material fact and ... the movant is entitled to a judgment as a matter of law. FED.R.CIV.P. 56(c). The Stilwells argue that American General breached the insurance contract by overpaying Tuscola. Tuscola, they maintain, held only one valid assignmentfor $250,000  because Janko's attempt to transfer Mrs. Stilwell's first two assignments was invalid. Their argument is based largely on the fact that the notice to American General was styled as a release and not a reassignment. They also argue that Tuscola's joint claim with First Mid-Illinois was an acknowledgment that it knew it was under-secured; James Stilwell's debt to Tuscola far exceeded the $250,000 assignment from Mrs. Stilwell, so it needed to bring itself within the larger assignment she had made to its lender. The parties agree that Illinois law controls. An assignment is the manifestation of the assignor's intention to transfer a right so that the assignee acquires the right to performance by the obligor. RESTATEMENT (SECOND) OF CONTRACTS § 317(1) (1981); see also Season Comfort Corp. v. Ben A. Borenstein Co., 281 Ill.App.3d 648, 211 Ill.Dec. 682, 655 N.E.2d 1065, 1069 (1995) (It is necessary that the assignor manifests an intent to transfer his rights under the contract to the assignee.). General contract law governs the making of assignments. The existence of an assignment is determined according to the intention of the parties, and that intention is a question of fact to be derived not only from the instruments executed by them, but from the surrounding circumstances. Nw. Diversified, Inc. v. Desai, 353 Ill.App.3d 378, 288 Ill.Dec. 818, 818 N.E.2d 753, 761 (2004) (citation omitted); see also Chemetall GMBH v. ZR Energy, Inc., 320 F.3d 714, 720-21 (7th Cir.2003). We take the Stilwells' arguments in reverse order; their last argument is an indirect one and can be dispatched quickly. The Stilwells suggest that the only reason Tuscola filed a joint claim with First Mid-Illinois was because it feared that its only valid assignment was the one Mrs. Stilwell made in 2000 for $250,000, well below what Amishland owed. There is, they insist, no other valid explanation for the joint claim. This argument ignores the language of the 2000 consignment agreement between Amishland and Tuscola. Amishland agreed to maintain a life-insurance policy on James's life with TFG [Tuscola] and BANK [First Mid-Illinois] named as beneficiary. Any proceeds would be used first to pay BANK for the amount TFG owes BANK in order to release its lien on the Amish furniture. After James Stilwell died, Tuscola and First Mid-Illinois sought $512,974.50, which included the amount Tuscola owed to First Mid-Illinois. Far from an acknowledgment by Tuscola that it only had one valid assignment worth $250,000, the joint claim made perfect sense in light of the requirements of the 2000 consignment agreement. The parties also engage in an immaterial semantic debate over whether this was a joint claim or two claims filed jointly; we need not weigh in. Whether the claim by Tuscola and First Mid-Illinois was a single joint claim or two claims filed jointly has no bearing on the validity of the reassignments made by Janko to Tuscola. So much for the indirect argument. The Stilwells' direct attack on the validity of the reassignment focuses on the notice sent by Janko to American General. They claim that the reassignment from Janko to Tuscola was invalid because Janko transferred the underlying debt to Tuscola a full two weeks before sending the notice to American General. This argument appears to rest on the faulty assumption that the notice sent by Bianchi to American General was the reassignment. But that form did not alter the legal relations between Janko and Tuscola; it was, rather, an attempt to notify American General that Janko had reassigned its rights to Tuscola under the assignment and assumption agreement, as Bianchi noted by indicating that the release was in favor of Tuscola. The assignment and assumption agreement was a valid manifestation of Janko's intent to transfer its rights under the life-insurance policy to Tuscola in return for Tuscola assuming Janko's obligation to finance Amishland's retail-furniture business. Bianchi's attempt to notify American General of the transaction had no effect on the validity of the underlying assignment because the assignment was complete upon finalization of the agreement. See Desai, 288 Ill.Dec. 818, 818 N.E.2d at 761 (An assignment, `oral or written, occurs when there is a transfer of some identifiable interest from the assignor to the assignee.' (quoting Klehm v. Grecian Chalet, Ltd., 164 Ill.App.3d 610, 115 Ill.Dec. 662, 518 N.E.2d 187, 191 (1987))). Finally, the Stilwells argue that the Release or Assignment form signed by Bianchi was an invalid notice of reassignment and therefore American General should not have paid Tuscola's claim (that is, should not have paid any amount in excess of the $250,000 assignment Mrs. Stilwell made directly to Tuscola). The Stilwells invoke the provision in the insurance policy stating that [n]o assignment of this policy will be binding on us [American General] until filed with us in writing and recorded by us. Based on the release language in the notice (and notwithstanding Bianchi's handwritten notation in favor of Tuscola on the form), the Stilwells argue that because American General initially recognized the notice as a release of the first two assignments and not a reassignment of them, the notice was insufficient. Bianchi's belated explanation, they claim, is not a cure. This argument appears to assume that the sufficiency of the notice to the insurer determines the validity of the assignment; this is not so. Janko's ambiguous attempt at notification had no effect on the validity of its assignment of its interest in the insurance policy to Tuscola. Only the insurer may object to any noncompliance with the notice provision in the insurance policy. Absent a statutory requirement to the contrary, notice to the debtor is not essential to the validity of an assignment, unless the debtor acted to his prejudice because of lack of notice or before receiving notice of the assignment. Grunloh v. Effingham Equity, Inc., 174 Ill.App.3d 508, 124 Ill.Dec. 140, 528 N.E.2d 1031, 1039 (1988); 6A C.J.S. Assignments § 80 (2008). The policy's notice provision is for the benefit of the insurer. Gray v. Penn Mut. Life Ins. Co. of Phila., 5 Ill. App.2d 541, 126 N.E.2d 409, 414 (1955); 3 LEE R. RUSS & THOMAS F. SEGALLA, COUCH ON INSURANCE § 36:41 (3d ed. 1995 & Supp.2008) ([A] requirement of notice is designed for the protection of the insurer and it alone may raise the objection that notice was not given to it as required by the policy.); 22 ILLINOIS LAW AND PRACTICE, INSURANCE § 197 (West 1956 & Supp.2008) (Provisions of a life insurance policy requiring notice of an assignment to be given to the insurer are for the benefit of it alone, and no one else may object because of failure to comply with such provisions.). American General satisfied itself that Bianchi's explanation of the notice was accurate and verified the existence of the reassignment from Janko to Tuscola. Under these circumstances, American General was required to pay Tuscola before the Stilwells; the policy specifies that the rights of the policy owner and beneficiaries are subject to the rights of any assignee. Accordingly, summary judgment for American General was properly entered. The judgment of the district court is AFFIRMED.