Judgment Creditor Cannot Force Judgment Debtor To Assign Legal Malpractice Claim

YCB INTERNATIONAL, INC. v. UCF TRADING CO., LTD., Dist. Court, ND Illinois 2014 – Google Scholar.

This is an opinion by Judge Holderman who held that a judgment creditor cannot force a judgment debtor to assign a potential legal malpractice claim to the creditor. Here, upon obtaining the judgment YCB asked UCF to assign to YCB any legal malpractice claims against UCF’s former counsel, Schopf & Weiss. This is a potentially ugly result for the lawyers, who defended their client before they withdrew, only to risk being thrown to the wolves to fund a settlement. Judge Holderman rejected the proposed assignment.

While Illinois law allows the assignment of a claim held by the debtor, it does not allow the assignment of a potential or unasserted claim. The court explained that under Illinois law permits assignments of claims.

“YCB claims it is entitled to the assignment under either 735 ILCS 5/2-1402(c)(5) or 735 ILCS 5/2-1402(c)(6), (Dkt. No. 343 ¶¶ 3-4), which state:

When assets or income of the judgment debtor not exempt from the satisfaction of a judgment, a deduction order or garnishment are discovered, the court may, by appropriate order or judgment: . . .

(5) Compel any person cited to execute an assignment of any chose in action or a conveyance of title to real or personal property or resign memberships in exchanges, clubs, or other entities in the same manner and to the same extent as a court could do in any proceeding by a judgment creditor to enforce payment of a judgment or in aid of the enforcement of a judgment.

(6) Authorize the judgment creditor to maintain an action against any person or corporation that, it appears upon proof satisfactory to the court, is indebted to the judgment debtor, for the recovery of the debt…”

Here, the proposed assignment was not appropriate because UCF had not asserted any claim against its former lawyers. The proposed claim was a “potential” chose in action, not an actual chose in action (or claim).

The court does not discuss the more troubling aspects of the proposed assignment where lawyers who defended a client unsuccessfully are used as pawns in an effort to extract money to satisfy a judgment. In my opinion, such an assignment of a claim is inappropriate.

Edward X. Clinton, Jr.