OPINION MEMORANDUM AND ORDER
ELMO B. HUNTER, Senior District Judge.
This is an appeal from the Bankruptcy Court's Order and Judgment sustaining the Trustee's objection to appellant Scarlett's claim of exemption to a cause of action for legal malpractice. Scarlett filed a petition under Chapter 7 of the Bankruptcy Code, 11 U.S.C. § 301, on November 19, 1984. The Bankruptcy Court filed a Discharge of Debtor on February 28, 1985, and a Final Decree on June 6, 1985. More than four years later, on November 15, 1989, Scarlett filed a motion to reopen the case for the purpose of disclosing a cause of action for legal malpractice which had already accrued at the time of her discharge.
The Bankruptcy Court reopened the case and Scarlett filed amended schedules disclosing the existence of the cause of action and claiming it as exempt property. The Trustee objected to the claim of exempt property, and the Bankruptcy Court held a hearing on February 12, 1990. The court concluded that the cause of action for legal malpractice is not a purely personal one, is assignable under Missouri law and is, therefore, not exempt from attachment and execution.
The parties agree that the cause of action is property of the bankruptcy estate because it accrued prior to the issuance of the Final Decree discharging Scarlett.
The court below, in this case and in at least one previous decision, has concluded that a cause of action, if assignable, is subject to attachment and execution under Missouri law. In re Scarlett, No. 84-003605-W-7-FWK (Bankr.W.D.Mo. Feb. 16, 1990) (order denying claim of exemption); see also In re Jones, 102 B.R. 730, 732 (Bankr.W.D.Mo.1989) ("the lender liability cause of action held by Debtors is assignable, and thus, not exempt under Missouri law"); but cf. In re Gaines, 106 B.R. 1008, 1019 (Bankr.W.D.Mo.1989) ("the
Most states, relying on the theory that unliquidated damages are contingent, do not permit creditors to reach claims for unliquidated damages by attachment or garnishment. 6 Am.Jur.2d Attachment and Garnishment § 127. No Missouri court has squarely addressed the subject, but Missouri courts have followed, for more than a century, a similar rule that a "debt for which an attachment may issue must possess an actual character and not be merely possible, and dependent upon a contingency which may never happen." Hearne v. Keath, 63 Mo. 84, 89 (1876); see also State ex rel. Government Employees Ins. Company v. Lasky, 454 S.W.2d 942, 950 (Mo.Ct.App.1970) (an insurer's contractual obligation to defend insured was not a "debt" owing to the insured and was not subject to attachment). Thus, it appears certain that Missouri would join those jurisdictions which have held that a claim or cause of action for unliquidated damages is not subject to traditional attachment and execution.
Despite the fact that a debtor's claim for unliquidated damages is beyond usual means of attachment and execution, such a claim is not necessarily beyond all reach of legal process. Missouri courts have long recognized the equitable remedy of the creditor's bill. Shockley v. Harry Sander Realty Co., 771 S.W.2d 922, 924-25 (Mo.Ct.App.1989). A creditor's bill is a remedy which is available when "neither execution nor garnishment is effective to reach intangible or equitable assets of the debtor, even when those assets are not subject to exemption." Dobbs, Remedies § 1.3 at p. 11. It is clear, therefore, that a claim for unliquidated damages is not ipso facto exempt simply because it is not subject to the traditional means of attachment and execution. There is no reason to believe that by enacting § 513.427 the Missouri legislature intended to create an exemption for intangible and equitable assets that cannot be reached by ordinary legal process even though those assets may be within reach of a creditor's bill.
While Missouri courts have not had occasion to address the scope of the § 513.427 phrase "attachment and execution," this Court construes § 513.427 to provide an exemption for property that is not only not subject to attachment and execution (in the technical, narrow sense of the phrase), but that is also not subject to a creditor's bill. A strict interpretation of § 513.427 — that "attachment and execution" means "attachment and execution" and no more or less — would be unnecessarily hypertechnical and would serve no legitimate purpose. Such an interpretation of § 513.427 would frustrate the clear intention of the legislature to permit an exemption for property which is beyond the reach of legal process. Thus, while Scarlett's malpractice claim is not subject to attachment and execution because it, like all tort claims, is unliquidated, whether it is exempt depends on whether it is subject to a creditor's bill.
Again the Court is faced with a question of first impression under Missouri law. Other jurisdictions have held that personal tort claims may not be reached by a creditor's bill, but that tort claims arising for injury to property are subject to a creditor's bill. Hudson v. Plets, 11 Paige 180, 183-84 (N.Y.Ch.1844). See also 21 Am.Jur.2d Creditor's Bills § 57; 21 C.J.S. Creditor's Suits § 29. The distinction rests on the assignability of the claim. Assignable claims are subject to a creditor's bill, but nonassignable claims — claims which are personal in nature — cannot be reached by a creditors bill.
In the present case, whether or not Scarlett's legal malpractice claim is an assignable claim subject to a creditor's bill and thus not exempt, depends on whether the claim is characterized as a personal tort claim. If so, it may be exempted from the bankruptcy estate. See In re Mitchell, 73 B.R. 93 (Bankr.E.D.Mo.1987) aff'd mem. 855 F.2d 859 (8th Cir.1988) (holding that personal injury claims are not subject to attachment and execution and are therefore exempt property).
In order to determine whether Missouri courts would classify legal malpractice as a non-assignable, personal tort claim, it is necessary to understand why personal tort claims are not assignable. Under early common law, almost no cause of action was assignable. Forsthove v. Hardware Dealers Mutual Fire Insurance Co., 416 S.W.2d 208, 214 (Mo.Ct.App.1967). The rule was that because a cause of action did not survive the death of the complaining party, it could not be assigned. Id. at 214-15. As the law of survivability evolved, so did the law of assignability. Nevertheless, Missouri, like other jurisdictions, retained its rule that personal tort claims are not assignable even if survivable. Id. The rationale for retaining this rule of non-assignability for personal tort claims is one of public policy prohibiting the "traffic[king] in law suits for pain and suffering." Id. at 217 (citing Rice v. Stone, 83 Mass. 566 (1861)). It is clear, however, that Missouri's public policy is broader than that stated by the Rice court,
Several jurisdictions have prohibited the assignment of legal malpractice claims, citing public policy as the reason for the prohibition. See, e.g., Schroeder v. Hudgins, 142 Ariz. 395, 690 P.2d 114 (Ct.App. 1984); Goodley v. Wank & Wank, Inc., 62 Cal.App.3d 389, 133 Cal.Rptr. 83 (Ct.App. 1976); Aaron v. Allstate Insurance Co., 559 So.2d 275 (Fla.Dist.Ct.App.1990); Brocato v. Prairie State Farmers Insurance Association, 166 Ill.App.3d 986, 117 Ill.Dec. 849, 520 N.E.2d 1200 (Ill.App.Ct.1988); Moorhouse v. Ambassador Insurance Co., 147 Mich.App. 412, 383 N.W.2d 219 (Ct. App.1985); Chaffee v. Smith, 98 Nev. 222, 645 P.2d 966 (1982). See also Gunn v. Mahoney, 95 Misc.2d 943, 408 N.Y.S.2d 896, 900 (Sup.Ct.1978) (cause of action against attorney was transferable insofar as it was based on breach of contract but not transferable insofar as it sounded in tort for malpractice). A few jurisdictions, however, have permitted the assigning of such claims, at least under some circumstances. Hedlund Mfg. Co. v. Weiser, Stapler & Spivak, 517 Pa. 522, 539 A.2d 357 (1988); Collins v. Fitzwater, 277 Or. 401, 560 P.2d 1074, 1078 (1977); Picadilly, Inc. v. Raikos, 555 N.E.2d 167 (Ind.Ct.App. 1990); Thurston v. Continental Casualty Company, 567 A.2d 922 (Me.1989).
If legal malpractice is to be an unassignable cause of action; it is not simply because it can be classified as a personal claim. As one Illinois court has recognized, legal malpractice cannot be neatly pigeonholed as either a "personal" or "nonpersonal" tort. Christison v. Jones, 83 Ill.App.3d 334, 39 Ill.Dec. 560, 405 N.E.2d 8 (App.Ct.1980). That court wrote:
39 Ill.Dec. at 563, 405 N.E.2d at 11. The best articulation of the public policy considerations forbidding the assignment of legal malpractice is found in Goodley v. Wank & Wank, Inc., 62 Cal.App.3d 389, 133 Cal.Rptr. 83 (Ct.App.1976), where the court wrote:
62 Cal.App.3d at 397, 133 Cal.Rptr. at 87.
In light of Missouri's prohibition of the assignment of causes of action "`for torts . . . for wrongs done to the person, the reputation, or the feelings of the injured party, and those based on contracts of a purely personal nature, such as promises of marriage,'" State ex rel. Park Nat. Bank v. Globe Indemnity Co., 332 Mo. 1089, 61 S.W.2d 733, 736 (1933), it would be anomalous to treat legal malpractice claims differently. If public policy forbids the assignment of personal tort claims, it could only be a disfigured and gnarled public policy which would nevertheless permit the assignment of legal malpractice claims. There can be little doubt that if faced with this question, the Missouri courts would also prohibit the assignment of legal malpractice claims for the reasons stated by the Goodley court.
Because appellant's cause of action for legal malpractice is a personal, unassignable claim, it is not subject to attachment and execution and may therefore be exempted from the bankruptcy estate. Accordingly it is hereby
ORDERED that the judgment of the Bankruptcy Court is REVERSED. It is further
ORDERED that the Trustee's objection to appellant Scarlett's claim of exemption to the cause of action is OVERRULED.
IT IS SO ORDERED.
While the court in Gaines correctly identified the disparate treatment that results from the fact that personal injury claims are not subject to attachment and execution, its refusal to follow Mitchell was itself dictum inasmuch as Gaines did not involve a claim of exemption for any kind of cause of action. Moreover, the ultimate reason for refusing to follow Mitchell was based on the erroneous assumption that causes of action for unliquidated sums are beyond attachment, not because they are exempted from attachment, but because it is simply impossible to attach such claims. As the Court has discussed, however, such claims for unliquidated damages are not necessarily exempt from attachment and execution because they are subject to a creditor's bill as long as they are not personal claims. Thus, while the Gaines court's observation of the disparity is accurate, the conclusion it draws — that Mitchell is wrong — is unsupportable.
Although the Gaines court may question the wisdom of the policy which exempts from the bankruptcy estate personal claims for unliquidated damages, neither that court nor this Court is free to disregard Missouri law which makes such claims exempt property. The Mitchell holding, which the Eighth Circuit affirmed per curiam without opinion, is a sound interpretation of Missouri law. The analysis in Mitchell however, was abbreviated insofar as it failed to recognize that non-personal, unliquidated claims are subject to the equitable equivalent of execution — the creditor's bill. Thus, to the extent that Mitchell indicates that any unliquidated claim is exempt property, this Court would disagree.