Rose Group, L.L.C. v. Miller
Rose Group, L.L.C. v. Miller
Opinion of the Court
¶ 1 Plaintiff/Appellant, Rose Group, L.L.C. (Assignee), assignee of a tort judgment, sued Defendants/Appellees, the judgment debtor, and his alleged insiders and affiliates (collectively Debtor), to recover for fraud, fraudulent conveyances, conspiracy to commit fraud, and constructive trust arising from the judgment creditor’s attempts to collect the judgment. Debtor moved to dismiss the petition on the ground Assignee’s claims did not arise out of contract and therefore were not assignable pursuant to 12 O.S.1991 § 2017(D).
¶ 3 Assignee asserted causes of action against Debtor for fraud, fraudulent conveyances, conspiracy, and constructive trust. In his motion to dismiss, Debtor argued these causes of action do not arise out of contract and therefore pursuant to 12 O.S.1991 § 2017(D), the Irelands could not assign those claims to Assignee. In response, As-signee argued (1) the original tort claim, once it was reduced to judgment, was assignable, (2) its claims are assignable because they survive the victim and arise out of contract between Miller and the insiders and affiliates, (3) the purpose of requiring that actions be prosecuted by the real party in interest is to protect the defendant from being sued by another upon the same demand, and that purpose has been satisfied here, (4) it may join its claims and remedies in the same action pursuant to 12 O.S.1991 § 2018(B), and (5) it is entitled to pursue creditors’ remedies provided by 24 O.S.1991 § 119 and 12 O.S.1991 § 850. The trial court granted the motion to dismiss without specifying its reasoning.
¶ 4 Section 2017(D) prohibits the assignment of claims not arising from contract. This section embodies the common law rule that a chose in action arising out of a pure tort is not assignable. Kansas City M. & O. Ry. Co. v. Shutt, 1909 OK 110, 24 Okla. 96, 104 P. 51, 53. However, the common law prohibition on assignment applied only to tort claims before judgment.
¶ 5 The Irelands’ claims arising from Debtor’s conduct after the judgment do not arise out of contract and are not assignable. 12 O.S.1991 § 2017(D). Therefore, As-signee acquired no right of action against Debtor by virtue of the assignment. However, when Assignee acquired the judgment by assignment, it became a creditor entitled to statutory creditors’ remedies in its own right. It is entitled to pursue in its own name such remedies as those provided by the Uniform Fraudulent Transfer Act, 24 O.S.1991 § 112 et seq., and by 12 O.S.1991 § 850.
¶ 6 For the foregoing reasons, we AFFIRM to the extent the trial court dismissed Assignee’s tort claims for fraud, conspiracy to commit fraud, and constructive trust, and REVERSE to the extent the trial court dismissed Assignee’s fraudulent conveyance claim. We REMAND for further proceedings consistent with this opinion.
. 12 O.S.1991 § 2017(D) provides,
ASSIGNMENT AND SUBROGATION OF CLAIMS. The assignment of claims not arising out of contract is prohibited. However, nothing in this section shall be construed to affect the law in this state as relates to the transfer of claims through subrogation.
. Eg., Gamble v. Central R. & Banking Co., 80 Ga. 595, 7 S.E. 315, (1888) ("A judgment recovered in an action for a tort is not assignable before it comes into being.”), and Hunt v. Conrad, 47 Minn. 557, 50 N.W. 614 (1891) ("A right to recover damages for a personal tort (false imprisonment) is a mere personal right, and not assignable even after verdict, but before judgment."). See also Portillo v. Farmers Ins. Exchange, 238 Cal.App.2d 58, 47 Cal.Rptr. 450, 453 (1965) ("A cause of action for a tort is not assignable, but 'such a claim, when merged in a judgment, becomes a debt and may be assigned.' ”).
. The Oklahoma Legislature has modified this rule as to workers’ compensation claims by prohibiting assignment of claims and benefits. 85 O.S.Supp.1994 § 48, and Gaunce v. State ex rel. Dept. of Human Services, 1994 OK CIV APP 98, 885 P.2d 688.
Reference
- Full Case Name
- ROSE GROUP, L.L.C., an Oklahoma Limited Liability Company v. Brian R. MILLER, individually Julie Miller, individually Taurcanus Oil & Gas Corp., an Oklahoma Corporation Belisarius, Ltd., an Oklahoma Corporation Dennis Blakemore, individually Lakeland Petroleum Corporation, an Oklahoma Corporation Business Accounting Systems, Inc., an Oklahoma Corporation and, Main Street, Inc., an Oklahoma Corporation
- Cited By
- 11 cases
- Status
- Published