Judge: Alison Mackenzie, Case: 23STCP0445, Date: 2024-04-30 Tentative Ruling

Case Number: 23STCP0445    Hearing Date: April 30, 2024    Dept: 55

NATURE OF PROCEEDINGS: Petitioner’s First Amended Verified Petition For Approval For Transfer Of Payment Rights.

J.G. WENTWORTH ORIGINATIONS, LLC (“Petitioner”) requests approval of a transfer of settlement payment rights by TIFFANY SEYMOUR (Payee).

LEGAL STANDARD

“The California Legislature has adopted the Structured Settlement Protection Act (SSPA) (§ 10134 et seq.) to protect structured settlement payees from exploitation by factoring companies.” RSL Funding, LLC v. Alford (2015) 239 Cal.App.4th 741, 745. “The court-approval process requires the factoring company to file a petition in the county in which the transferor resides for approval of the transfer, attaching copies of the petition, the transfer agreement, the disclosure form, the annuity contract, any qualified assignment agreement and the structured settlement agreement, a list of the names and ages of the transferor's dependents, notice of the court hearing date, and notice of a right to respond.” 321 Henderson Receivables Origination LLC v. Sioteco (2009) 173 Cal.App.4th 1059, 1066 (citing Ins. Code §10139.5(c)).

“The California act…governing transfers of structured settlement payment rights defines a ‘ “[s]tructured settlement agreement” [as] an arrangement for periodic payment of damages established by settlement or judgment in resolution of a tort claim in which the payment of the judgment or award is paid in whole, or in part, in periodic tax-free payments rather than a lump-sum payment.’ ” Matthews v. Liberty Assignment Corp. (2016) 247 Cal.App.4th 71, 78. “Annuity issuers and structured settlement obligors are defined as ‘interested parties’ under the SSPA (§ 10134, subd. (g)), and as such, are entitled to notice of petitions to authorize transfer of payments under a structured settlement agreement.” RSL Funding, LLC v. Alford (2015) 239 Cal.App.4th 741, 745.

Procedurally, the following elements are required to be served and filed not less than 20 days prior to the scheduled hearing on any application for approval of a transfer of structured settlement payment rights:

(A) A copy of the transferee's application.

(B) A copy of the transfer agreement.

(C) A listing of each of the payee's dependents, together with each

dependent's age.

(D) A copy of the disclosure required in subdivision (b) of Section 10136.

(E) A copy of the annuity contract.

(F) A copy of any qualified assignment agreement.

(G) A copy of the underlying structured settlement agreement.

(H) Notification that any interested party is entitled to support, oppose, or

otherwise respond to the transferee's application, either in person or by

counsel, by submitting written comments to the court or by participating in the hearing.

(I) Notification of the time and place of the hearing and notification of the

manner in which and the time by which written responses to the application must be filed, which may not be less than 15 days after service of the transferee's notice, in order to be considered by the court.

Ins.  Code §10139.5(c)(2). See also 321 Henderson Receivables Origination LLC v. Red Tomahawk (2009) 172 Cal.App.4th 290, 294 (summarizing the statutory requirements).

Additionally, pursuant to Insurance Code Section 10139.5(a), the Court must make the following express findings as to a transfer of structured settlement payment rights:

(1) The transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents.

(2) The payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received that advice or knowingly waived that advice in writing.

(3) The transferee has provided the payee with a disclosure form that complies with Section 10136 and the transfer agreement complies with Sections 10136 and 10138.

(4) The transfer does not contravene any applicable statute or the order of any court or other government authority.

(5) The payee reasonably understands the terms of the transfer agreement, including the terms set forth in the disclosure statement required by Section 10136.

(6) The payee reasonably understands and does not wish to exercise the payee's right to cancel the transfer agreement.

Ins. Code § 10139.5(a).

Also, judges shall retain continuing jurisdiction to interpret and monitor the implementation of the transfer agreement as justice requires. Ins. Code §10139.5(f).

ANALYSIS

Reportedly, about 8/25/2000, Payee, became entitled to structured settlement payments in connection with a wrongful death claim. The settlement agreed provides for periodic structured  payments including 180 monthly Life Contingent payments of $3,098.94 each, increasing at 3% annually, beginning on 5/31/2053 and ending 4/30/2068.

Payee is 35 years old, and single with one minor child who is 8 years old. Payee is currently employed. Payee would receive $8,500.00. Payee feels it is in their best interest to sell a portion of their underlying annuity payments so that they can have the financial means to pay the child's school expenses, and to pay off debts such as credit cards. Payee already has done several similar transactions as to other years of structured settlement payments. If Payee did not sell these rights, and instead borrowed the net amount of $8,500.00 and paid that loan back in installments with each of the payments being sold, the equivalent interest rate Payee would be paying for that loan would be 12.91 percent per year.

The Court finds that the relatively small amount of $8,500.00 is nonetheless in the Payee’s and child’s interests, given that the sold payments would not become due for very many years into the future, and Payee already sold payment rights as to closer years. Further, Payee’s plans to use the money to support the child and to pay off debt are in their best interests.

CONCLUSION

The Court finds that the papers sufficiently comply with the procedural requirements. The Court further finds that the proposed transfer is in the best interest of the payee, taking into account the welfare and support of any dependents of Payee.

Thus, the Court grants the petition as prayed. The Court will sign and file a lodged order from Petitioner that is in statutory compliance and includes all required findings.