Owen v. CNA Insurance/Continental Casualty Company
Supreme Court of New Jersey
771 A.2d 1208 (2001)
Owen (plaintiff) received a structured settlement from Continental (defendant) providing deferred lump-sum payments through 2006, subject to a clause stating the payments "shall not be subject to assignment, transfer, commutation, or encumbrance" except as the agreement provided; in 1997, to cover medical bills, Owen assigned her 2001 and 2006 payments to Metropolitan Mortgage and Securities. After Owen later asked Continental to redirect payments to a new address and refused to confirm her residency there, Continental withheld the payments, and Owen sued for a declaratory judgment that the non-assignment clause was unenforceable; the trial court agreed, but an intermediate appellate court reversed, finding the clause enforceable, and Owen appealed.
Whether a settlement agreement's non-assignment clause, prohibiting assignment of payment rights without specifying that non-conforming assignments are void or invalid, prevents the payee from validly assigning those payment rights to a third party.