Maslowski v. Prospect Funding Partners LLCAnnotate this Case
The Supreme Court reversed the decision of the court of appeals affirming the judgment of the district court that Appellant could not enforce the contract between Appellant and Respondent whereby Appellant purchased an interest in Respondent's personal injury suit because it violated Minnesota's common law prohibition against champerty, holding that Minnesota's common-law prohibition against champerty is abolished.
When Respondent settled her suit and did not abide by the terms of the contract, Appellant sued to enforce the contract. Both the district court and the court of Appeals held that Appellant could not enforce the agreement against Respondent because Minnesota law applied to the agreement and the agreement violated Minnesota's common-law prohibition against champerty. The Supreme Court reversed, holding (1) because the contract was champertous the lower courts did not err in determining that, under prior decisions, the contract was unenforceable; but (2) changes in the legal profession and in society show that the ancient prohibition against champerty is no longer necessary.