Acorn Investments, LLC v. Elsaesser: Clarifying the Narrow Commercial-Transaction Exception to the Non‑Assignability of Legal Malpractice Claims in Idaho

I. Introduction

The Idaho Supreme Court’s decision in Acorn Investments, LLC v. Elsaesser, No. 52007 (Idaho Nov. 19, 2025), addresses a recurring and doctrinally sensitive question: when, if ever, may a legal malpractice claim be assigned to a third party?

Idaho had previously recognized in St. Luke’s Magic Valley Regional Medical Center v. Luciani, 154 Idaho 37, 293 P.3d 661 (2013), a narrow exception to the general rule that legal malpractice claims are not assignable. That exception permits assignment of such claims when they are transferred as part of a larger commercial transaction involving the transfer of other business assets and liabilities.

In Acorn Investments, the Court confronts a more aggressive use of assignment: a creditor (Acorn) obtains a large stipulated judgment against its judgment debtors (the “Original Plaintiffs”), simultaneously agrees not to execute on that judgment, and in exchange receives an assignment of those debtors’ legal malpractice claims against their prior counsel (Elsaesser), whom the creditor alleges orchestrated a scheme to shield assets from collection.

The core issue is whether such an assignment—made in the context of a settlement with a covenant not to execute but without any actual transfer of operating businesses or their liabilities—falls within the Luciani “commercial transaction” exception. The Idaho Supreme Court holds that it does not, significantly constraining the reach of Luciani and reinforcing the non‑assignability of malpractice claims in most settings.

II. Factual and Procedural Background

A. The Brewing Business and Restructuring

Laughing Dog Brewing, Inc. (“LDB”), owned and managed by Lewis Patrick and Michele Sivertson, encountered financial instability in 2017. In response, Patrick and Sivertson deployed a network of affiliated entities:

LDB – the brewery itself.
AHR, LLC (“AHR”) – an affiliated entity managed by Patrick and Sivertson.
Fetchingly Good, LLC – another affiliated entity; it would later take over LDB’s operations.

Attorney Ford Elsaesser and his firm, Elsaesser Anderson, Chtd. (together, “Elsaesser”), simultaneously represented LDB, AHR, and Fetchingly Good. He crafted a restructuring plan that included:

Drafting a $1.3 million promissory note from LDB to AHR, secured by LDB’s assets.
Fetchingly Good purchasing LDB’s loan from Columbia Bank.
AHR and Fetchingly Good accepting LDB’s assets in satisfaction of secured obligations, thereby avoiding a public foreclosure sale.
LDB’s board (Patrick, Sivertson, and a third director) approving the transfer, after which Fetchingly Good took over LDB’s operations.
Later, LDB filing for Chapter 7 bankruptcy, allegedly on Elsaesser’s recommendation.

According to the later malpractice allegations, Elsaesser did not adequately disclose conflicts of interest arising from his concurrent representation of multiple entities with potentially adverse interests, nor did he fully advise his clients of the legal risks of this restructuring in light of creditor claims—particularly those of Acorn Investments.

B. Acorn’s Judgment and Its Creditor Litigation

Acorn Investments, LLC (“Acorn”) had previously obtained a judgment against LDB. After the restructuring, LDB’s assets had moved to AHR and Fetchingly Good, making collection difficult. Acorn then sued the Original Plaintiffs—LDB, AHR, Fetchingly Good, and the individual owners—asserting:

Claims under the Idaho Uniform Voidable Transactions Act (UVTA), Idaho Code § 55-910;
Federal RICO claims, 18 U.S.C. § 1962;
Idaho Racketeering Act claims, Idaho Code § 18‑7803; and
Successor liability and related theories to reach the assets now held by AHR and Fetchingly Good.

Elsaesser undertook the defense of the Original Plaintiffs in that creditor litigation, allegedly at no cost to them. During that litigation, he purportedly:

Failed to respond to discovery;
Ignored court orders; and
Exposed his clients to sanctions.

The Original Plaintiffs ultimately retained new counsel and sued Elsaesser for:

Legal malpractice;
Breach of contract; and
Breach of fiduciary duty.

This separate action is referred to in the opinion as the “legal malpractice case.”

C. The Settlement and Assignment to Acorn

Acorn’s creditor lawsuit against the Original Plaintiffs was resolved by a Settlement Agreement that had three critical components:

Stipulated Judgment. LDB, AHR, and Fetchingly Good stipulated to judgment in favor of Acorn for $910,617.16.
Covenant Not to Execute. Acorn agreed not to execute or attempt to enforce that judgment against the Original Plaintiffs, and instead to pursue claims against others.
Assignment of Claims Against Elsaesser. The Original Plaintiffs broadly assigned to Acorn:
- All rights under any tolling agreements;
- All causes of action and claims against Elsaesser and his firm, including legal malpractice, breach of contract, breach of fiduciary duty, negligence, unjust enrichment, contribution, indemnity; and
- Claims for attorneys’ fees and costs incurred in the defense of Acorn’s creditor lawsuit.
The Agreement expressly stated that the assignment was to be construed as broadly as possible, with any ambiguity resolved in favor of assignment.

After the assignment, Acorn and the Original Plaintiffs jointly requested that Acorn be substituted as the plaintiff in the pending legal malpractice case against Elsaesser. Over Elsaesser’s objection, the district court allowed the substitution.

D. Summary Judgment in the District Court

Elsaesser then moved for reconsideration or, in the alternative, for summary judgment, arguing that the Original Plaintiffs’ legal malpractice claims could not be assigned to Acorn as a matter of Idaho law. The district court:

Denied reconsideration of the substitution order, but
Granted summary judgment to Elsaesser on the core legal issue, holding that the assignment was invalid.

The court reasoned that the transaction did not fit within the exception recognized in Luciani: Acorn had not acquired any business assets or liabilities of the Original Plaintiffs; it had only obtained a bare assignment of claims through a settlement in which it agreed not to execute on a judgment. The legal malpractice case was then dismissed without prejudice, and Acorn appealed.

III. Summary of the Idaho Supreme Court’s Decision

The Idaho Supreme Court affirmed the district court’s summary judgment in favor of Elsaesser. Its principal holdings are:

Legal malpractice claims remain generally non‑assignable in Idaho. The Court reiterated that the general rule is that legal malpractice claims cannot be assigned.
The Luciani “commercial transaction” exception is narrow. A malpractice claim can be assigned only when it is transferred in the context of a larger commercial transaction involving the transfer of other business assets and liabilities. The Court emphasized that this requirement is implicit in Luciani.
Assignments tied solely to a settlement and a covenant not to execute fall outside the exception. In this case, Acorn obtained only a bare assignment of causes of action against Elsaesser; it did not acquire the Original Plaintiffs’ businesses, operations, assets, or liabilities. That kind of assignment, even if negotiated in a commercial setting, is not the type of transaction contemplated by Luciani.
Public policy arguments could not broaden the exception. The Court rejected Acorn’s attempts to extend the Luciani exception based on:
- Concerns that Elsaesser might “escape liability”; and
- Arguments that assignment should be allowed when an attorney’s conduct allegedly violates ethical rules as part of litigation tactics.
The Court held that those considerations do not justify expanding the exception and pointed to the Idaho State Bar’s disciplinary process as the appropriate mechanism to address potential ethical violations.
No attorney fees on appeal. Although Elsaesser prevailed, neither party provided adequate legal argument to support an award of attorney fees, so the Court declined to award fees. Elsaesser was awarded ordinary costs as the prevailing party.

IV. Legal Framework and Precedents

A. General Rule: Legal Malpractice Claims Are Not Assignable

Idaho follows the widely accepted rule that legal malpractice claims are generally not assignable. The Court reaffirms this in reliance on prior authority, including Harrigfeld v. Hancock, which states:

“[A]n attorney will be held liable for negligence only to his or her client and not to someone with whom the attorney does not have an attorney-client relationship.”

This rule reflects several traditional policy concerns:

The personal and fiduciary nature of the attorney-client relationship;
Fear that malpractice claims could become tradeable commodities in secondary markets;
The risk of collusive lawsuits, especially assignments to litigation adversaries or hostile third parties; and
The goal of preserving client autonomy and confidentiality, without turning a lawyer’s duty of loyalty into an asset for sale.

B. The Limited Exception: St. Luke’s Magic Valley Regional Medical Center v. Luciani

In Luciani, the Court recognized a narrow exception. The facts there:

Magic Valley Regional Medical Center (“MVRMC”), owned by Twin Falls County, faced wrongful termination and False Claims Act litigation.
Luciani and his firm defended MVRMC.
Before that litigation concluded, Twin Falls County transferred MVRMC and its operations to St. Luke’s Health System through a comprehensive sale and lease agreement that included transfer of assets and liabilities, including obligations related to the pending litigation.
After the sale, St. Luke’s settled the employment litigation, then sued Luciani for legal malpractice.

The question certified to the Idaho Supreme Court by the federal district court was whether the malpractice claim was assignable to St. Luke’s as part of the sale.

The Court held:

“[W]hile legal malpractice claims are generally not assignable, where the legal malpractice claim is transferred to an assignee in a commercial transaction, along with other business assets and liabilities, such a claim is assignable.” (Luciani, 154 Idaho at 43, 293 P.3d at 667) (emphasis added).

The Luciani Court looked carefully at how other jurisdictions approached this issue, and particularly relied on Cerberus Partners, L.P. v. Gadsby & Hannah, 728 A.2d 1057 (R.I. 1999).

C. Cerberus Partners and the Commercial-Transaction Rationale

In Cerberus, a group of financial institutions purchased from original lenders certain loans extended to a debtor that later went bankrupt. The plaintiff assignees claimed that the lenders’ attorneys had negligently failed to perfect the security interests, thereby reducing the value of the loans.

The Rhode Island Supreme Court held that the legal malpractice claims were assignable when transferred:

“along with other assets and obligations to an assignee in a commercial transaction.” (Cerberus, 728 A.2d at 1061.)

The court emphasized the distinction between:

A “voluntary assignment of a bare legal claim for malpractice”, which it disfavored; and
The assignment of a malpractice claim as one component of a broader commercial transfer that includes “a panoply of other assigned rights, duties, and obligations.”

Luciani expressly adopted this reasoning and its limitation: only when the malpractice claim is embedded in a larger commercial asset/liability transfer is assignment permitted. The idea is that the assignee, as a successor in interest to the business, should inherit both the benefits (assets) and burdens (liabilities and potential claims), including claims against former counsel.

D. Other Authorities Cited

The Idaho Supreme Court in Acorn Investments also noted several other cases addressing assignment:

Richter v. Analex Corp., 940 F. Supp. 353 (D.D.C. 1996) – Upheld the assignment of a legal malpractice claim where the plaintiff had purchased assets and liabilities of another entity; distinguished such assignments from those involving mere sale of standalone malpractice claims, especially to opponents or unrelated third parties.
Learning Curve International, Inc. v. Seyfarth Shaw, LLP, 911 N.E.2d 1073 (Ill. App. Ct. 2009) – Recognized similar principles regarding assignment in the context of corporate transactions.
Thurston v. Continental Casualty Co., 567 A.2d 922 (Me. 1989) – Allowed assignment where the assignee had an “intimate connection” with the underlying lawsuit.
Hedlund Manufacturing Co., Inc. v. Weiser, Stapler & Spivak, 539 A.2d 357 (Pa. 1988) – Allowed an assignment of “all rights and causes of action” against attorneys related to mishandling of a patent application, declining to let the concept of the attorney-client relationship serve as a shield from malpractice liability.

These authorities collectively illustrate that courts often balance:

The need to prevent commodification and abuse of malpractice claims; and
The need to ensure that successor entities and legitimate assignees can pursue claims integral to the value of the business they acquire.

V. The Court’s Legal Reasoning in Acorn Investments

A. Summary Judgment Framework

The Court applied the familiar Idaho standard for summary judgment:

Summary judgment is appropriate when there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law (I.R.C.P. 56(a)).
All disputed facts and reasonable inferences are construed liberally in favor of the non‑moving party.
The non‑moving party must show evidence establishing each essential element of its case on which it bears the burden at trial.

Notably, the key question here was purely legal: even if all factual assertions about the assignment were accepted as true, was the legal malpractice claim assignable under Idaho law?

B. Application of the Luciani Exception

1. The “Implicit” Requirement of a Larger Asset/Liability Transfer

The Court agreed with the district court’s reading of Luciani: for the exception to apply, the malpractice claim must be transferred as part of a broader commercial transaction in which other business assets and liabilities also change hands.

The Court stressed:

“Implicit in Luciani is the requirement that the legal malpractice claim be transferred to an assignee as part of a larger commercial transaction.”

This larger transaction must involve something akin to the sale of a business—its operations, contracts, physical assets, and associated obligations—rather than a targeted assignment of a cause of action.

2. Why the Acorn Assignment Did Not Qualify

The Court carefully examined the Settlement Agreement between Acorn and the Original Plaintiffs and concluded that:

The only transfer was an assignment of claims against Elsaesser; no other business assets, liabilities, operations, or obligations were transferred.
Acorn did not:
- Purchase or acquire AHR, Fetchingly Good, or LDB;
- Take over or merge with these entities;
- Take over buildings, properties, operating businesses, contracts, or ongoing obligations.
AHR and Fetchingly Good remained separate, active entities; Fetchingly Good continued to operate LDB’s main asset, Laughing Dog Brewing.

Thus, unlike the comprehensive sale in Luciani or the loan portfolio transfer in Cerberus, this arrangement:

Did not make Acorn a successor or acquirer of an ongoing business; and
Constituted what the district court described as an “isolated purchase” of the malpractice claim, rather than a transfer of “the bulk” of the entities’ assets and liabilities.

The Supreme Court endorsed this characterization and concluded that the transaction fell outside the Luciani exception.

3. Rejection of Acorn’s “Equity Interest” Argument

Acorn argued that, by:

AHR’s execution of the settlement and stipulation to judgment; and
AHR and Fetchingly Good’s consent to entry of a monetary judgment,

Acorn effectively acquired AHR’s “equity interest” in certain property and thereby became more than a mere assignee of claims. The Court rejected this argument as:

Unsupported by the record; and
Directly contradicted by the Settlement Agreement’s plain language.

Key language in the Settlement Agreement underscored that:

Acorn agreed not to execute or attempt to enforce the judgment against the Original Plaintiffs;
Acorn agreed instead to “pursue its claims against others” (i.e., Elsaesser) based on the assignment; and
Acorn agreed to file a “full satisfaction of judgment” in favor of the defendants once the assigned claims had concluded.

In short, there was no transfer of equity, no transfer of lien rights in a meaningful sense, and no assumption of operational liabilities. The only true assignment was of the causes of action themselves.

C. “Bare Assignment” Versus Embedded Malpractice Claim

Borrowing the conceptual framework from Cerberus, the Court characterized the transaction here as a bare assignment of legal claims:

“The Settlement Agreement merely transferred, through a single paragraph, the assignment of rights stemming from causes of action and claims that may exist against Elsaesser.”

By contrast, the type of assignment contemplated in Luciani is one in which:

The assignee steps into the shoes of the business as an ongoing concern;
The assignee takes both benefits and burdens—assets and liabilities; and
The malpractice claim is simply one of the many rights and obligations that naturally follow the transfer of the business itself.

This distinction is crucial: it demarcates acceptable business‑successor assignments from disfavored claim‑trading.

D. Public Policy Arguments and Their Limits

1. “Escape Liability” Concerns Distinguished from Luciani

Acorn heavily relied on a passage in Luciani where the Court worried that, if assignment were barred, Luciani could potentially:

“entirely escape liability” for malpractice due to the mere “fortuity” of a corporate ownership change.

In Luciani, this concern stemmed from the fact that the original client entity (MVRMC) no longer existed after the sale; only St. Luke’s, as purchaser, could enforce the malpractice claim. Without assignment, no one would have standing to sue.

The Court in Acorn Investments found this rationale inapplicable:

AHR and Fetchingly Good still exist and remain capable of suing Elsaesser directly.
Indeed, they had already filed the legal malpractice case and, apart from the assignment, could continue to pursue it.

Although counsel for the Original Plaintiffs conceded at oral argument that his clients lack the funds to pursue the malpractice case, the Court held that this financial inability:

Is not a valid policy justification for expanding the Luciani exception; and
Does not equate to the structural inability present in Luciani, where the client entity no longer existed.

2. Using Ethical Violations as a Basis for Assignment

Acorn argued that assignment should be allowed, or Luciani should be extended, in “unique cases” where an attorney allegedly violates the Idaho Rules of Professional Conduct as a litigation tactic—here, by structuring transactions that allegedly rendered LDB judgment‑proof while simultaneously defending the related defendants.

The Court decisively rejected this argument for several reasons:

Doctrinal Floodgates. Almost every legal malpractice claim includes allegations of ethical violations. If ethics violations were enough to justify assignment, the narrow exception would effectively swallow the general rule of non‑assignability.
Separation of Remedies. Alleged violations of ethical rules are appropriately addressed through the disciplinary mechanisms of the Idaho State Bar, under the Idaho Bar Commission Rules (e.g., Rules 505 and 506 governing grounds and sanctions).
Caution in Expanding Exceptions. The Court described itself as “reticent” in Luciani to allow assignment at all, and saw no principled basis to broaden the exception based on alleged misconduct beyond the scope already defined.

Thus, while potential ethical breaches might aggravate the substance of a malpractice claim, they do not justify expanding who may assert that claim by assignment.

E. Attorney Fees on Appeal

Both parties requested attorney fees on appeal but did so in a conclusory fashion. The Court reaffirmed that:

A party must both cite the statutory or rule basis for fees and provide meaningful legal analysis or argument in support of that request.
“The mere reference” to a statute or rule is inadequate.

Because:

Acorn did not prevail, and
Elsaesser’s request lacked adequate argument,

the Court declined to award attorney fees to either side, though Elsaesser, as the prevailing party, was awarded costs.

VI. Simplifying Key Legal Concepts

A. What Is an “Assignment” of a Legal Claim?

An assignment is a legal transfer of rights from one party (the assignor) to another (the assignee). For example, if Company A has a claim against Lawyer X for malpractice, it can sometimes transfer (“assign”) that claim to Company B, which can then sue Lawyer X in its own name.

In many areas of law, assignment is commonplace. Contract rights, accounts receivable, and many forms of property rights are freely assignable. Legal malpractice claims are treated differently because of the personal nature of the attorney‑client relationship and policy concerns about trading in such claims.

B. “Bare Assignment” Versus Assignment in a Commercial Transaction

Bare Assignment: The stand‑alone sale or transfer of a legal claim by itself—especially to an adversary or unrelated third party—without any broader transfer of business assets or obligations.
Assignment in a Commercial Transaction: The transfer of a legal claim as part of a broader business transaction, such as:
- The sale of a company or its operating divisions;
- The sale of a loan portfolio with related rights and obligations;
- A merger or acquisition where the buyer assumes the seller’s liabilities.

Idaho permits assignment of malpractice claims only in the second context, not the first.

C. “Covenant Not to Execute” and “Judgment Plus Assignment” Structures

A covenant not to execute is an agreement by a judgment creditor not to collect on a judgment against a debtor. It is sometimes paired with:

An agreed‑upon judgment amount; and
An assignment of the debtor’s claims against third parties (often insurers or lawyers).

The goal is often to:

Protect the debtor from collection; and
Enable the creditor to pursue the assignee’s claims against solvent third parties.

Acorn Investments confirms that in Idaho, such a structure does not, by itself, satisfy the Luciani exception for assignability of legal malpractice claims: a creditor cannot transform itself into the plaintiff in a malpractice case merely by agreeing not to execute and obtaining an assignment.

D. “Commercial Transaction” in This Context

The Court uses “commercial transaction” not in the broad sense (any transaction between businesses) but in a more specific sense:

A transaction that transfers the business itself (or a substantial operating unit), together with its assets, liabilities, contracts, and ongoing operations.

Examples that likely qualify:

The sale of a hospital system (Luciani);
The sale of a loan portfolio and associated rights (Cerberus);
Merger or acquisition where the buyer takes over the seller’s operations and liabilities.

In contrast, a settlement agreement that only assigns a cause of action, plus a promise not to execute on a judgment, is not such a transaction.

E. Role of Bar Discipline Versus Malpractice Litigation

The Court explicitly distinguished:

Disciplinary proceedings before the Idaho State Bar (under Idaho Bar Commission Rules 505 and 506), which address violations of professional conduct standards; and
Civil malpractice actions, which seek compensation for damages caused by an attorney’s negligence, breach of contract, or breach of fiduciary duty.

The existence of alleged ethical violations does not expand who may sue; it only affects the merits of a malpractice claim that the proper party (the client or a qualifying assignee under Luciani) may bring.

VII. Practical Implications and Impact on Idaho Law

A. For Creditors and Judgment Enforcement Strategies

This decision has important ramifications for creditors who might seek to leverage a judgment debtor’s malpractice claims against their prior counsel:

Creditors cannot rely on “judgment + covenant not to execute + assignment” as a pathway to prosecute legal malpractice claims in Idaho.
To fall within the Luciani exception, the creditor would need to actually acquire the debtor’s business (or a substantial operating unit), including:
- Assets (property, contracts, operations); and
- Liabilities and related obligations.
Structuring a transaction solely around the malpractice claim itself remains impermissible as an assignment of a “bare claim.”

Creditor-plaintiffs must therefore focus on more traditional methods:

Voidable transfer actions (e.g., under the UVTA);
Successor-liability and alter-ego claims, where supported by facts; and
Direct recovery of assets rather than rerouting claims through assignments of malpractice suits.

B. For Business Acquisitions and Corporate Counsel

For transactional lawyers and corporate counsel, Acorn Investments reinforces the utility—but also the limits—of the Luciani rule:

When a buyer acquires a business (or a significant portion of it), that buyer may, under Idaho law, acquire the seller’s legal malpractice claims against prior counsel as incident to the transfer, without violating the non‑assignability rule.
To maximize clarity, purchase agreements should:
- Explicitly state that all claims, including malpractice claims, are transferred to the buyer; and
- Identify the transferred assets and assumed liabilities comprehensively.
However, a business cannot simply “package” its malpractice claims in a sale where no real operating business or liabilities are transferred, as that risks being treated as a bare assignment.

C. For Attorneys and Malpractice Insurers

For attorneys, especially those practicing in Idaho:

The decision confirms that malpractice exposure remains primarily to clients or their legitimate successors-in-interest, not to adversaries or unrelated assignees.
Nevertheless, non‑assignability is not an absolute shield:
- Clients like AHR and Fetchingly Good remain free to sue directly; and
- Assignments in genuine business acquisitions remain viable under Luciani.
Lawyers should not view non‑assignability as a license to engage in risky restructuring or conflicted representation: the possibility of direct client suits and bar discipline remains very real.

For malpractice insurers:

The decision limits the pool of potential plaintiffs who may sue via assignment, reducing concerns about large, creditor-driven suits crafted via settlement structures.
Insurers should, however, consider that in corporate transactions involving asset transfers and assumption of liabilities, malpractice claims may validly follow the business to the acquiring entity, which may then bring claims against prior counsel.

D. For Future Appellate Litigation

The Court’s reasoning signals:

A strong reluctance to further erode the general rule of non‑assignability of legal malpractice claims beyond the specific commercial‑transaction context identified in Luciani.
A preference to treat Luciani as a narrow, fact‑specific carve‑out, not as a platform for broader equitable or policy‑based exceptions.

Going forward, litigants attempting to rely on Luciani will likely need to:

Show that the assignee has actually stepped into the role of a successor business operator, not merely a judgment creditor; and
Demonstrate that the acquisition includes a substantial portion of the business’s operations, assets, and liabilities, not just claims.

VIII. Unresolved Questions and Potential Future Developments

While Acorn Investments clarifies much, it leaves some edges for future litigation:

How much of a business must be transferred? The opinion does not specify how extensive the asset/liability transfer must be to qualify as a “commercial transaction” under Luciani. Partial asset sales, spin‑offs, or transfers of specific business lines may present harder questions.
Interplay with bankruptcy and receivership. Typically, bankruptcy trustees and court‑appointed receivers may pursue malpractice claims that belong to the estate. Those roles are not “assignees” in the traditional sense, and the Court does not address them here, but the logic of standing and succession is related.
Complex settlement structures. It remains open how Idaho courts will treat settlements that combine:
- Transfer of an ongoing business to a creditor or third party; and
- Assignment of malpractice claims.
If the business transfer is genuine and substantial, such arrangements may fall within Luciani; if the transfer is nominal or pretextual, courts may treat it as a disguised bare assignment.

IX. Conclusion

Acorn Investments, LLC v. Elsaesser is a significant clarification of Idaho law on the assignability of legal malpractice claims. It firmly reaffirms the general rule that such claims are non‑assignable, and it carefully confines the Luciani exception to circumstances where:

A malpractice claim is transferred as part of a larger commercial transaction that includes the transfer of business assets and liabilities; and
The assignee effectively becomes a successor in interest to the client’s business, not merely a buyer of claims.

By holding that a settlement agreement with a stipulated judgment, covenant not to execute, and a broad assignment of claims against former counsel does not qualify as such a commercial transaction, the Court sends a clear message:

Malpractice claims cannot be re‑packaged as settlement currency for creditors seeking deeper pockets; and
Policy concerns about attorney accountability and ethics are to be addressed either by the clients themselves, by legitimate business successors, or through bar disciplinary mechanisms, but not by expanding assignment doctrines in ad hoc fashion.

The decision thus preserves the integrity of the attorney‑client relationship, prevents commodification of malpractice claims, and provides transactional clarity for legitimate business transfers, while maintaining a path—albeit a narrow one—for successor entities to hold prior counsel accountable where appropriate.