True, but under Washington law, “an assignee in an executory contract is not liable on the underlying obligations absent an express assumption of those obligations.” Lewis v. Boehm, 89 Wash.App. 103, 947 P.2d 1265, 1270 (1997). Another case that Johnson relies on, Bain v. Metropolitan Mortgage Group, Inc., addresses only whether a contractually agreed-upon beneficiary of a mortgage can foreclose the mortgage without actually holding the note.

"The creation of a third-party beneficiary contract requires that the parties intend that the promisor assume a direct obligation to a third party at the outset of the contract." Lewis v. Boehm, 89 Wn.App. 103, 106, 947 P.2d 1265 (1997) (citing Burke & Thomas. Inc. v. Int'l Ora. of Masters. Mates & Pilots, 92 Wn.2d 762, 767, 600 P.2d 1282 (1979)). "To determine if a third-party beneficiary exists the court should consider the terms of contract and determine if performance of the contract necessarily and directly benefits a third party."

Under Washington law, an assignee in an executory contract, i.e., one in which an obligation relates to a future event, is not liable on the underlying obligations in the contract unless there has been an express assumption of those obligations. Lewis v. Boehm, 947 P.2d 1265, 1268 (Wash. Ct. App. 1997) (citing to Higgenboatham v. Topel, 511 P.2d 1365 (Wash. Ct. App. 1973)). Under Washington's adoption of Article 2 of the UCC, an assignment of "the contract" is an assignment of rights and "unless the language or the circumstances . . . indicate the contrary, it is a delegation of performance of the duties of the assignor and its acceptance by the assignee constitutes a promise by him or her to perform those duties."

After citing this "black letter law" from Paullus, the Ninth Circuit went on to state: "[t]rue, but under Washington law 'an assignee in an executory contract is not liable on the underlying obligations absent an express assumption of those obligations.'" Johnson v. Fed. Home Loan Mortgage Corp., 793 F.3d 1005, 1008 (9th Cir. 2015) (discussing Paullus v. Fowler and citing to Lewis v. Boehm, 947 P.2d 1265, 1270 (Wash. App. 1997)). Plaintiffs also invoke the decision in Fiberchem v. General Plastics Corp., 495 F.2d 737 (9th Cir. 1974), but that effort is clearly misplaced.

The Court concluded then, and remains satisfied, that the decision in Johnson is not in any way an "intervening change in controlling law" which would justify reconsideration. The pertinent language relied upon by Defendants pertains to a citation in Lewis to the decision of Lewis v. Boehm, 947 P.2d 1265 (Wash. App. 1997). The Circuit panel was drawing upon a Washington state decision decided several decades earlier, and the Circuit's decision is neither a statement of new law, nor an "intervening change in controlling law," or anything of the sort.

An executory contract is a contract that has not been fully completed or performed, or in which the obligation relates to some future event. Lewis v. Boehm, 947 P.2d 1265, 1268 (Wash. App. 1997). The Membership Agreement was assigned through the DIL, Bill of Sale and related documents as discussed supra.

An executory contract is a contract that has not been fully completed or performed, or in which the obligation relates to some future event. Lewis v. Boehm, 89 Wash.App. 103, 947 P.2d 1265, 1268 (1997). The Membership Agreement was assigned through the DIL, Bill of Sale and related documents as discussed supra.

Ordinarily, an assignee does not become vicariously liable for its predecessor's torts or breaches without an explicit contractual agreement to assume such liability. See Lewis v. Boehm, 89 Wash. App. 103, 107, 947 P.2d 1265, 1268 (1997) ("[T]he assignee of an executory contract is not liable on the contract in the absence of an express assumption of the obligations contained therein."); see also Kucheynik v. Mort. Elec. Registration Sys., Inc., No. C10-451Z, 2010 WL 5174540, at *4 (W.D. Wash. Dec. 15, 2010) (disagreeing that "the mere assignment of contract, without more, automatically exposes the assignee to liability . . . for allegedly fraudulent conduct of the assignor" because "[u]nder Washington contract law, an assignment of contract does not impose on the assignee the liabilities of the assignor unless the assignee assumes those liabilities."). Mr. Steadman identifies no such contractual agreement by Green Tree.

"To determine if a third-party beneficiary exists the court should consider the terms of contract and determine if performance of the contract necessarily and directly benefits a third party." Lewis v. Boehm, 89 Wn. App. 103, 106 (1997). Defendants argue that their agreement to monitor the construction activities in compliance with the January 1999 Memorandum of Agreement and treatment plan was designed to further the expansion of the wastewater treatment plan and that "any benefit running to the Lummi was incidental to the construction effort. . . ."

The creation of a third party beneficiary contract requires that the parties intend that the promisor assume a direct obligation to a third party at the outset of the contract. Lewis v. Boehm, 89 Wash.App. 103, 106, 947 P.2d 1265 (1997) (citing Burke & Thomas, Inc. v. Int'l Org. of Masters, Mates & Pilots, 92 Wash.2d 762, 767, 600 P.2d 1282 (1979)). To determine if a third party beneficiary exists, the court should consider the terms of the contract and determine if performance of the contract necessarily and directly benefits a third party.