Friday, October 5, 2012

Clapp v. Orix Credit Alliance, Inc. case brief

Clapp v. Orix Credit Alliance, Inc.
192 Ore. App. 320

-The driver was an independent contractor who drove for the trucking company, which agreed to be an undisclosed agent for the driver in the purchase of a highway tractor. The finance company was a secured creditor in the transaction. Although the finance agreement prohibited assignment, the trucking company assigned its contract to the driver. When the truck was totalled in an accident, the driver requested disbursement of the excess insurance proceeds, but the finance company paid the proceeds to the trucking company
-On appeal, the court held that the driver’s motion for partial summary judgment against the finance company on the claim for money should have been granted. The trucking company’s assignment of its right, title, and interest in the sale contract also conveyed the right to the insurance proceeds. The court also held that the prohibition of assignment without the seller’s prior consent applied only to the delegation of the contractual obligations created under the sale contract, because Or. Rev. Stat. § 72.2100 only prohibited the delegation of a contractual obligation and that, under Or. Rev. Stat. § 79.0401(2), the assignment was not ineffective.

Procedural History:
-Plaintiff truck driver filed suit against defendants, a trucking company and a secured finance company, alleging a claim for money had and received arising from the insured loss of a vehicle in a secured transaction. The Circuit Court of Multnomah County (Oregon) denied the driver’s motion for partial summary judgment against the finance company and granted the finance company’s cross-motion. The driver appealed.

-When a person obtains a right against a third person by subrogation or assignment, the law is that if the third person has notice of the subrogation or assignment and nevertheless pays the assignor or subrogor, rather than the assignee or subrogee, the third person continues to be liable to the assignee or subrogee.

-An assignment of “the contract” or of “all my rights under the contract” or an assignment in similar general terms is an assignment of rights.
Because Orix had notice of the assignment when it paid the net insurance proceeds to Laser, it remained liable to plaintiff, the assignee of the right to receive the insurance proceeds.

-The court reversed the grant of summary judgment to the finance company and the denial of the driver’s motion for partial summary judgment. The court further remanded the case to the trial court for entry of an order granting the driver’s motion for partial summary judgment

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