The Louisiana First Circuit recently upheld a contractual prohibition against assignment of claims without consent. In Lili Collections, LLC v. Terrebonne Parish Consolidated Government, 2014 CA 1541, the plaintiff, in response to an exception of no right of action, argued that the contract’s prohibition against assignment was not enforceable under Article 9 of the U.C.C. because the transaction was a “secured transaction.” However, in the petition, the Plaintiff had only sought damages for breach of contract, and not for nonpayment of a secured debt.
The court held that the assignment to the plaintiff was impermissible because the defendant had not consented. Therefore, there was no privity of contract. Additionally, the court found that the U.C.C. provisions were not applicable because the petition did not raise a cause of action under the U.C.C.