From an assignor's position
I am making my comment from the assignor's point of view, since I do assign another sport (non-softball), for a HS league in my area.
The assignments had been accepted, and he heard no additional word from you stating an issue. The DAY OF THE GAME, you were called and then you notified them you were not doing the game.
While you may have a legit basis for not doing the game, the fact you accepted and declined the day of the game, without a reasonable reason does two things. One, if causes a problem for the assignor, who now has to scramble to get a replacement. Second, it may cause a problem for the teams if a) no replacement is found or b) they have already processed payment for you. When you piss off the assignor and the teams, things generally don't go well.
Now, from an assignors position. I have had officials fail to show up for agreed upon games previously. One of them is still working for me, while another is no longer on my list. The one who is still working for me has a long history of working well as an official. The other was removed after he missed a meet, which was added to turning back two assignments for the fall season, and missing a contest I was supposed to work with him.
I think filing a lawsuit over this would be wrong. You need to get the liability issues straightened out, get liability insurance to cover you for games outside this organization, and attempted to repair a fractured relationship with the assignor and teams.
Filing a lawsuit will only accomplish one thing. It will end any potential chance you have of working games for this assignor ever again. I know when officials complain about not getting assignments from me, they are moved farther down the list for available contests. If any filed lawsuits, they would be off my list in a heartbeat. AS the assignor it is my job to put the officials who I feel are best suited to work these contests on these contests. If you show you are unwilling to work with me, and choose to file a lawsuit, you have proven to me you are not willing to be a team player, and I only want team players working for me.
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