Assignment of Accident Settlement – Binding or Not?

After being injured in a motorcycle accident, Gary retained the law firm of High & Low to represent him in suing the other driver. Later, in an unrelated incident, Gary dislocated his shoulder and required surgery. Having no money to pay the surgeon, Gary signed a letter addressed to High & Low requesting that any money from the motorcycle accident settlement be assigned to the surgeon for treatment of Gary’s shoulder. Gary personally delivered the letter to the receptionist at High & Low. Eventually, High & Low were successful in negotiating a settlement in Gary’s favor. But, when the firm received the settlement check, Gary instructed his attorney to pay the money directly to Gary. The attorney did as Gary asked. As a result the surgeon was never paid.

If the surgeon sues High & Low, can the surgeon recover if the law firm argues in defense that the law firm, as Gary’s agent, had no choice but to obey Gary when he changed his mind and demanded that payment be made directly to him?

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