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Rumbin v. Utica Mutual Insurance Co.8/15/2000
. . ." 3 Restatement (Second), supra, ยง 322. The crucial phrase in that rule -- "unless a different intention is manifested" -- is one that this court never has interpreted. The generally accepted view, however, is that this phrase encompasses a dichotomy between the right to assign, and the power to assign, and that only an antiassignment provision that restricts the latter will render any assignment made in spite of that provision invalid.
The dichotomy between the right to assign and the power to assign, which is the starting point of the majority's analysis, is one with which I do not disagree. The fundamental source of my dissatisfaction with the majority's reasoning is the standard that the majority opinion announces for judging whether an antiassignment provision restricts the right to assign or the power to assign. In my mind, that standard imposes on contracting parties an illogical and arbitrary set contractual mantra that must be recited in order to draft a valid antiassignment clause.
As the majority notes, several courts, most notably those of New Jersey and New York, have adopted precise linguistic requirements relating to the manifestation of the intent necessary to render an assignment of rights ineffective. Those courts have held that "` o reveal the intent necessary to preclude the power to assign, or cause an assignment violative of contractual provisions to be wholly void, such clause must contain express provisions that any assignment shall be void or invalid if not made in a certain specified way.'" (Emphasis added.) Garden State Buildings, L.P. v. First Fidelity Bank, N.A., 305 N.J. Super. 510, 522, 702 A.2d 1315 (1997); accord Bel-Ray Co. v. Chemrite (Pty.) Ltd., 181 F.3d 435, 442 (3rd Cir. 1999) (interpreting New Jersey law); Pravin Banker Associates, Ltd. v. Banco Popular Del Peru, 109 F.3d 850, 856 (2d Cir. 1997) (New York law); Cedar Point Apartments, Ltd. v. Cedar Point Investment Corp., 693 F.2d 748, 754 (8th Cir. 1982) (Missouri law); Pro Cardiaco Pronto Socorro Cardiologica, S.A. v. Trussell, 863 F. Sup. 135, 137 (S.D.N.Y. 1994) (New York law); Lomas Mortgage U.S.A., Inc. v. W.E. O'Neil Construction Co., 812 F. Sup. 841, 843-44 (N.D. Ill. 1993) (Illinois law); Allhusen v. Caristo Construction Corp., 303 N.Y. 446, 450-51, 103 N.E.2d 891 (1952) (New York law).
The rationale adopted by these courts is "that contractual provisions limiting or prohibiting assignments operate only to limit a [party's] right to assign the contract, but not power to do so, unless the parties manifest an intent to the contrary with specificity." Bel-Ray Co. v. Chemrite (Pty.) Ltd., supra, 181 F.3d 442. In order to manifest that specific intent, "the assignment provision must generally state that nonconforming assignments (i) shall be `void' or `invalid,' or (ii) that the assignee shall acquire no rights or the nonassigning party shall not recognize any such assignment." Id. Greatly favoring the free assignability of contractual rights, these courts have adopted the previously mentioned bright-line test for antiassignment clauses.
A number of jurisdictions that have considered the issue, however, have not been so insistent on the use of particular phraseology. Those courts simply have examined whether the prohibitive language employed by the parties was clear and unambiguous, and upheld the antiassignment clause when such language was used. See, e.g., Grieve v. General American Life Ins. Co., 58 F. Sup. 2d 319, 324 (D. Vt. 1999) (antiassignment provisions were "unambiguous, bargained-for contract terms"); Parrish Chiropractic Centers, P.C. v. Progressive Casualty Ins. Co., 874 P.2d 1049, 1052 (Colo. 1994) (requiring antiassignment clause to "specifically [prohibit
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