[WSBAPT] Off Topic - Contract issue

[Paul Grant]

I apologize in advance that this will sound like a law school exam!  I
need some assistance for a client that is signing a settlement
agreement....


Contractor (C) does some work for Homeowner (H) and has a contract.  The
work was being done via an insurance claim adjuster (A - the Insurance
Company).  Contract states that H assigns to C all payments from A.  Life
is good and C is doing work and A is directly paying C per the assignment.
Imagine that H and C didn't see eye-to-eye!  A stops paying C for billed
work and instead pays H directly.  H pockets the money and now H and C are
trying to make this all go away.  


H wants C to agree to not sue A as part of the settlement (gee-whiz, do
you think A is guiding H in the background).  My question is that if C
later wants to pursue a suit against A for not honoring the assignment can
A hide behind the agreement that they had no privity in?  I need some
basic info to try and give a full picture of the possibilities before
client signs anything.


I do not see how the agreement between H and C can bind C to not go after
another third-party with an independent course of action.  Does anyone
have some thoughts to help me on what I am missing? 


PS:  I am not trying to determine what course of action, if any, C may
have against A, I'm just stumped at the thought that the settlement
agreement could foreclose any possible action against A when they are not
a part of the agreement or settlement.


Paul H. Grant - JD, LL.M

Planning with Purpose, Inc
Lynnwood, WA 98036
425-939-9948
www.planningwithpurposeinc.com

Estate Planning. Business Planning. Wealth Succession.


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