Are There Valid Reasons to Uphold Antiassignment Provisions In the Context of Structured Settlement Agreements ?
In Henderson v. Roadway Express, 308 Ill. App. 3d 546, 720 N.E.2d 1108, 242 Ill. Dec. 153 (1999), the court found that although antiassignment provisions are narrowly construed, there are valid reasons to uphold them in the context of structured settlement agreements.
The language in the contract mirrored section 130 of the Internal Revenue Code of 1986 (Code) (26 U.S.C. 130 (1994)), which grants favorable tax treatment to assignees of liability under certain prescribed circumstances. Henderson, 308 Ill. App. 3d at 550-51, 720 N.E.2d at 1112.
The inclusion of this language in the settlement indicated that the parties had bargained for the antiassignment provision and intended to benefit from the favorable tax treatment it provided.
The court added that the likelihood of adverse tax consequences resulting from the assignment of the future payments was less important than "the fact that the parties implemented the antiassignment provisions with these concerns in mind." Henderson, 308 Ill. App. 3d at 550, 720 N.E.2d at 1113.
Under those circumstances, the court refused to discard or waive the bargained-for provisions in the settlement agreement.
Grieve v. General American Life Insurance Co., 58 F. Supp. 2d 319, 323-24 (D. Vt. 1999);
Johnson v. First Colony Life Insurance co., 26 F. Supp. 2d 1227, 1229-30 (C.D. Cal. 1998).