Unruh Chiropractic Clinic v. De Smet Insurance Company Of South Dakota

782 N.W.2d 367 (2010)

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Nature of the Case

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Facts

Henry and Dorothy Lentsch were involved in an automobile accident with Opal Omanson. Omanson was insured by D. D conceded that Omanson was at fault. P began treating the Lentsches for injuries sustained in the accident. Prior to treatment, Lentsches each signed separate documents entitled 'ASSIGNMENT OF PROCEEDS.' They transferred all right, title, and interest in and to any settlement, judgment, or recovery from Opal Omanson to the extent of any unpaid chiropractic charges owed by the patient to P. P served copies of the assignments and notices of the assignments on D. The notices informed D that any proceeds of insurance for Lentsches' claims should be paid directly to P to the extent of any unpaid chiropractic services. The notices further informed D that if P was not named as a payee on any settlement checks, D would be required to make a second payment directly to P. Lentsches continued treatment until July 2007. Settlement negotiations with D were initiated. Lentsches disputed some of P's charges and they refused to settle with D if it included P as a payee on the check. They executed releases of Omanson and D in exchange for cash settlements. The releases provided that Lentsches would be responsible for paying their medical care providers. D delivered the settlement checks directly to Lentsches. D did not include P as a payee on the settlement checks. The settlement amount exceeded P's unpaid charges. The Lentsches refused to pay and P demanded payment from D. D refused to pay. P filed this action to enforce the assignments in small claims court. D removed the case to the formal side of magistrate court, and both parties moved for summary judgment. The court acknowledged the common-law prohibition on the assignment of personal injury claims. The court concluded that there was a legal distinction between assignments of claims and assignments of proceeds of claims. The court ordered enforcement of the assignments. The circuit court affirmed. The circuit court concluded there was 'no danger of champerty or any public policy reason to preclude the assignment of expected proceeds from a personal injury claim.' D appealed.