Professional Negligence Law Reporter

The Nevada Supreme Court held that the proceeds of a legal negligence action may not be assigned to an adverse party in the underlying litigation.

Yacov Hefetz sued Christopher Beavor, whose personal residence guaranteed a loan Hefetz had made to an LLC, alleging breach of the guaranty agreement. The jury returned a verdict for Beavor. After the verdict, Beavor hired a new attorney, Joshua Tomsheck, who filed an opposition to Hefetz’s motion for new trial. The trial court granted the motion for new trial, and Tomsheck later withdrew as Beavor’s attorney. Hefetz and Beavor later reached a settlement, including an agreement that Beavor agree to prosecute his legal negligence claim against Tomsheck and to assign any recovery or proceeds to Hefetz. Beavor complied with the settlement agreement and sued Tomsheck for legal negligence. Tomsheck moved for summary judgment, arguing that Beavor had impermissibly assigned his negligence claim to Hefetz. The trial court granted the motion.

Affirming in part and reversing in part, the state high court found that assigning a negligence claim or the proceeds of such a claim to an adversary carries the risk that the negligence claim will be used as a bargaining chip in the settlement of a client’s case. Moreover, the court said, such assignments create the opportunity and incentive for collusion. Citing case law, the court added that an assignment could turn a negligence claim into a commodity to be exploited.

The court found, however, that a plaintiff’s right to bring a cause of action is not vitiated by an invalid assignment. The court therefore remanded, holding that the plaintiff here could proceed with his negligence suit.

Citation: Beavor v. Tomsheck, 2022 WL 16857165 (Nev. Nov. 10, 2022).