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Snow5/18/1999
No. 970079
This opinion is subject to revision before final publication in the Pacific Reporter.
Fifth District, St. George Dep't The Honorable James L. Shumate
Defendant James Tanasse seeks review of a court of appeals' decision upholding the dismissal of his motion to set aside an execution sale of his legal malpractice cause of action against plaintiff law firm. In upholding the trial court's dismissal, the court of appeals held that (a) it was unnecessary to determine whether a legal malpractice claim is assignable in Utah; (b) a legal malpractice cause of action is not beyond the reach of an involuntary transfer such as a judicially-sanctioned execution sale; and (c) it is not against public policy in the state of Utah for a law firm to purchase in an execution sale a legal malpractice claim asserted against it in a separate lawsuit. Tanasse v. Snow, 929 P.2d 351, 352 (Utah Ct. App. 1996). We affirm in part and reverse in part.
In 1992, Tanasse and Club St. George, Inc., retained defendant law firm Snow, Nuffer, Engstrom and Drake ("Snow Nuffer") to prepare a lease agreement between Club St. George as landlord, and Nedra Pauline and Terry Burchinal, doing business as Nedra's Cafe, as tenants. Thereafter, a dispute arose between the parties to the lease. An eviction was subsequently prepared and executed on Burchinal. Following eviction, Burchinal, doing business as Nedra's Cafe, filed suit against Tanasse and Club St. George for wrongful eviction.
Soon thereafter, Snow Nuffer withdrew as counsel for Tanasse and Club St. George due to nonpayment of attorney fees in the amount of approximately $14,000. Immediately after withdrawing as counsel, Snow Nuffer filed a lawsuit against Tanasse, Young-Tanasse, Inc., and Club St. George, seeking to collect on a promissory note for attorney fees. The law firm obtained a default judgment against Tanasse on June 8, 1993.
On September 7, 1993, the Burchinal wrongful eviction action came to trial. Tanasse and Club St. George had to retain new counsel to defend them. The wrongful eviction trial resulted in a judgment of over $100,000 entered against Tanasse and Club St. George. Several months later, Tanasse, Young-Tanasse, and Club St. George filed a legal malpractice lawsuit against Snow Nuffer. Meanwhile, after obtaining the default judgment against Tanasse, Snow Nuffer sought to recover on its default judgment against Tanasse by executing on Tanasse's interest in the legal malpractice action.
On December 1, 1994, the law firm purchased the malpractice claim for $10,000 at a sheriff's auction initiated by Snow Nuffer. The law firm had filed a praecipe requesting the Washington County Sheriff to execute on and sell all the right, title, equity, and interest of James A. Tanasse, Club St. George, and Young-Tanasse Inc. in the malpractice claim.
After purchasing the malpractice claim against it, Snow Nuffer filed a partial satisfaction of judgment in its collection action against Tanasse, leaving in place a deficiency judgment. Tanasse then filed a motion to set aside the sale, which was denied by the trial court. The court of appeals affirmed. We granted certiorari to review the question of whether a law firm may purchase at an execution sale a legal malpractice claim filed against it by the judgment debtor in order to extinguish the lawsuit.
We review the following three issues as framed and addressed by the court of appeals:
"(1) Are legal malpractice claims assignable? (2) Even if they are not, may they be reached by execution? (3) Even assuming that a legal malpractice cause of action can generally be levied upon by a judgme
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