CASE 7.1 ASSIGNING LEASES Accrued Fin. Serv., Inc. v. Prime Retail, Inc., 298 F.3d 291 (4th Cir. 2002). Facts Accrued Financial Services, Incorporated (AFS), is a corporation engaged in the business of conducting lease audits on behalf of tenants in commercial buildings and factory outlet malls. AFS is paid a percentageusually 40 to 50 percentof the discrepancy overcharges that it discovers and collects as a result of its audits. The tenant signs a letter of agreement with AFS and assigns all legal causes of action it may have against the landlord to AFS. The assignment grants AFS the authority to file lawsuits in its name against landlords at its discretion. After AFS conducted an audit of Prime Retail, Incorporated (a landlord), on behalf of tenants who had signed assignment agreements, AFS brought a lawsuit against Prime Retail, asserting various claims of overcharges. The U.S. District Court dismissed the case, finding that the assignment of the tenants' claims to AFS violated public policy and were therefore illegal. AFS appealed. Issue Does the assignment by a tenant of its legal claims against a landlord violate public policy and is it therefore illegal? Language of the Court These relationships between AFS and the tenants were essentially lawsuit mining arrangements under which AFS "mined for" and prosecuted lawsuits with no regard for the informed wishes of the real parties in interest. AFS thus became a promoter of litigation principally for the sake of the fees that it would earn for itself and not for the benefit that it might produce for the tenant, the real party in interest. Under these arrangements, even though the tenant might conclude, after reviewing the facts uncovered, that a lawsuit would imprudently damage the landlord-tenant relationshipor that pursuing aggressive allegations would do more harm than good the tenant lost the right to control its destiny. Because we see these broad assignments as nothing more than arrangements through which to intermeddle and stir up litigation for the purpose of making a profit, we conclude that they violate Maryland's strong public policy against stirring up litigation and are therefore void and unenforceable in Maryland. Decision The U.S. Court of Appeals held that the tenants' assignment of their legal causes of action against Prime Retail to AFS violated public policy and was therefore illegal and void. The Court of Appeals affirmed the decision of the district court.

• Highlight a topic such as counteroffers or Statute of Frauds that is a component of the case.
• Document whether the common law overrides the UCC based on the elements of the case.