Burnison v. Johnston, 277 Neb. 622, 764 N.W.2d 96 (2009)

Brief Summary
Nebraska lawyers may assign the right to collect unpaid fees from former clients.

Complete Summary
Law firm Martin & Martin P.C. had uncollected fees from former client Kathleen Johnston. The firm assigned the right to collect those fees to Mary Burnison, and she then sued Johnston for the unpaid fees. The Nebraska Supreme Court held that the assignment was valid and therefore that Burnison had standing to sue Johnston.

Although the trial court found an impermissible assignment of legal services, the high court noted the lower court’s failure to distinguish between the assignment of contractual rights versus contractual duties. Unlike duties, the court noted, contractual rights are generally assignable unless: the obligor reasonably intended otherwise, the contract terms validly preclude assignment, or the assignment is contrary to public policy or statute.

The court cited precedent allowing the assignment of fees due under a personal services contract. Because a right to payment for personal services was at issue in the present case, the court held the assignment valid.

Johnston further argued the assignment was against public policy. Johnston, who had filed a legal malpractice counterclaim, argued the assignment violated the rule against assigning legal malpractice claims. But the policy reasons behind this rule were not at issue in this case, the court noted, and the validity of the assignment was a separate issue from whether Martin & Martin had committed malpractice.

Significance of Opinion
This opinion makes clear that Nebraska law firms may assign the right to collect unpaid fees from former clients. 

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