RE: Order Certifying Question - St. Lukes Magic Valley RMC v. Luciani, et al.Annotate this Case
The Idaho Supreme Court was asked in a certified question of law from the United States District Court for the District of Idaho whether a legal malpractice claim that is transferred to an assignee in a commercial transaction, along with other business assets and liabilities, is assignable. The question arose from a a wrongful termination and False Claims Act action brought by former hospital employees against their employer. Magic Valley Medical Center was the entity being sued. Twin Falls County owned Magic Valley. Twin Falls County (on behalf of itself and Magic Valley), Twin Falls Health Initiatives Trust, Ltd. (TFHIT), and St. Luke’s Health System, Ltd., St. Luke’s Regional Medical Center, Ltd., and St. Luke’s Magic Valley Regional Medical Center (St. Luke's) entered into a Sale and Lease Agreement for the Creation of a New Health System (Agreement). The sale closed, and St. Luke's carried the burden of the employee litigation, ultimately settling with the plaintiffs. After the transaction closed, Magic Valley no longer existed. Though technically not a merger, the operation and management of the center was taken over by St. Luke's. St. Luke's then sued Magic Valley's former legal counsel for legal malpractice in connection with the employee litigation. The firm moved for summary judgment, arguing that St. Luke's could not pursue a malpractice claim because the purported assignment of such a claim was invalid in Idaho as a matter of law. Upon review, the Idaho Supreme Court answered the district court's certified question in the affirmative: although legal malpractice claims are generally not assignable in Idaho, 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.