In 1984, James Grigg’s mother was killed in a car accident. Royal Insurance Co. of America agreed to pay Grigg a number of monthly payments and two lump-sum payments of $50,000 due May 1, 1995, and May 1, 2005. Royal contracted with Safeco Life Insurance Co. to make the payments. In 1997, Grigg assigned the 2005 payment of $50,000 to Howard Foley for $10,000. Neither Grigg nor Foley notified Safeco or Royal. Four years later, Grigg offered to sell Settlement Capital Corp. (SCC) his interest in the 2005 payment. On SCC’s request, an Idaho state court approved the transfer. Foley later notified Safeco of his interest in the payment, and in 2005, the court approved an arrangement by which Foley and SCC would share the $50,000. Shortly before the 2005 payment was made, however, it was revealed that Grigg had also tried to sell his interest to Canco Credit Union, whose manager, Timothy Johnson, paid Grigg for it. Later, Johnson assigned the interest to Robert Chris, who used it as collateral for a loan from Canco. Foley filed a suit in an Idaho state court against Grigg, asking the court to determine who, among these parties, was entitled to the 2005 payment.
(a) If the court applies the rule most often observed in the United States, who is likely to be awarded the $50,000? If the court applies the English rule, who will have priority to the payment?
(b) Regardless of the legal principles to be applied, is there a violation of ethics in these circumstances? Explain.