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Himes v. Safeway Insurance Company3/27/2003
contained two separate sets of assignments by Botma in return for a covenant not to execute against Botma's personal assets. Under one set of assignments, Botma assigned his rights against Safeway for breach of contract and bad faith. Under the other, Botma assigned his rights against the attorneys Safeway retained to represent him in the Himes lawsuit.
It is the assignment of claims against Botma's lawyers that Safeway contends to be illegal. This claim was the subject of our recent decision in Botma v. Huser, 202 Ariz. 14, 3 P.3d 538 (App. 2002). In Botma we affirmed the decision of the trial court to dismiss Himes' claim against the attorneys on the grounds that Botma's assignment of his legal malpractice claim was the assignment of a personal injury claim and was therefore unenforceable. Safeway contends on appeal in this case that the assignment of Botma's legal malpractice action is not a severable portion of the agreement. It argues that the claim is illegal and vitiates the entire settlement agreement upon which the Damron/Morris agreement is based. The trial court rejected Safeway's position. We agree with the trial court.
Assuming (without deciding) that Safeway has standing to make this argument, it fails on the merits. The invalid portions of the agreement may be severed. Our cases provide that:
If it is clear from its terms that a contract was intended to be severable, the court can enforce the lawful part and ignore the unlawful part.
Olliver/Pilcher Ins. Inc. v. Daniels, 148 Ariz. 530, 533, 715 P.2d 1218, 1221 (1986); see also Hackin v. Pioneer Plumbing Supply Co. 10 Ariz. App. 150, 157, 457 P.2d 312, 319 (1960) ("A lawful promise made for a lawful consideration is not invalid merely because an unlawful promise was made at the same time for the same consideration.") The Damron/Morris agreement in this case expressly provided that:
To the extent that he can legally do so, Botma hereby assigns to the plaintiff all of the claims he has against Safeway and Safeway's lawyers[.] (Emphasis added.)
We have no hesitation in determining that the two sets of claims in the Damron/Morris agreement, under the circumstances of this case, are severable. The agreement specifically includes a phrase that expressly qualifies the assignment ("To the extent that he can legally do so"). At a minimum, this was a recognition that the claims against the lawyers hired by Safeway to defend Botma stood on a different legal footing than the claims directly against Safeway and needed to be treated separately. This was a recognition of the need for severability. Additionally, and important to our analysis here, the challenge to severability is made by a non-party. The claim against severability in this case simply fails in the face of the language of the agreement itself and the lack of any such claim by a party to the agreement. There was no error in declining Safeway's attempt to have the Damron/Morris agreement declared unenforceable on these grounds.
VII.
For the reasons set forth above, we reverse the determination of reasonableness entered by the trial court. The judgment is vacated. We likewise vacate the evidentiary ruling at issue and remand this matter for a reasonableness determination consistent with this opinion.
DANIEL A. BARKER, Presiding Judge
CONCURRING:
E. G. NOYES, JR., Judge
EDWARD C. VOSS, Judge
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