## Facts

- The estates of Donald and Eileen Piasecki settled wrongful-death claims through a structured settlement providing the decedents’ three sons an initial lump-sum payment and future periodic payments.
- The settlement documents included an express anti-assignment clause barring the payees from assigning, selling, or encumbering their rights to periodic payments.
- To obtain favorable federal tax treatment, the settlement used a qualified assignment structure under which the obligors could assign periodic-payment liability to a designated assignee that would fund payments through an annuity.
- The obligors executed a qualified assignment transferring the duty to make periodic payments to an assignment/annuity entity affiliated with the insurer group.
- In 1998, two sons entered factoring agreements with Stone Street Capital, Inc., purporting to assign portions of their future periodic payments in exchange for immediate lump sums.
- Stone Street petitioned the circuit court for approval of the transfers; the trial court initially approved them, later vacated those approvals after insurer-related entities intervened, and then again approved the transfers on the merits after declaring the anti-assignment clauses unenforceable.
- The insurer-related entities appealed, asserting that the attempted transfers violated the settlement and annuity documents, increased administrative risk, and threatened the settlement’s tax structure.

## Issues

1. Whether clear anti-assignment provisions in a structured settlement and related qualified-assignment/annuity documents are enforceable to bar payees from transferring rights to future periodic payments.
2. Whether attempted assignments of structured-settlement payment rights are ineffective when they would materially change the obligors’ duties or materially increase their burden or risk.

## Decision

- The appellate court reversed the trial court’s approval of the assignments and remanded.
- The court held the anti-assignment clauses valid, clear, and enforceable.
- The court held the sons’ attempted assignments to Stone Street were prohibited and ineffective under the settlement structure.

## Legal Principles

- Contract rights are generally assignable, but an assignment is ineffective if it would materially change the obligor’s duty, materially increase the obligor’s burden or risk, or impair the obligor’s chance of obtaining return performance.
- Anti-assignment clauses are enforceable when expressed in clear, unambiguous terms and when part of the parties’ negotiated allocation of obligations and risks.
- Structured settlements using qualified assignments may include enforceable restrictions on payee transfers to preserve the agreed payment administration and tax-related structure.
- Courts will not invalidate bargained-for anti-assignment provisions absent a contrary, specific public policy requiring free transferability of the payment rights at issue.

## Conclusion

The appellate court enforced the structured settlement’s anti-assignment provisions, holding that the payees could not sell or transfer future periodic-payment rights to a factoring company because the restriction was clear, bargained for, and tied to preserving the obligors’ risk allocation and settlement structure.


Piasecki v. Liberty Life Assurance Co. of Bos., 728 N.E.2d 71 (Ill. App. Ct. 2000)