Judge: Alison Mackenzie, Case: 24STCP01045, Date: 2024-05-22 Tentative Ruling

Case Number: 24STCP01045    Hearing Date: May 22, 2024    Dept: 55

NATURE OF PROCEEDINGS: Amended Petition for Approval for Transfer of Payment Rights.

BACKGROUND

The petition is pursuant to amended California Insurance Code section 10134, et seq. Petitioner seeks Court approval of the transfer of structured settlement payments that SIANI RUIZ (payee) has a right to after a personal injury claim settlement. The payments are set forth in a Purchase Agreement.

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, subd. (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.

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, subd. (c)(2).

Additionally, pursuant to Insurance Code section 10139.5, subdivision (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, subd. (f).

Further, at the time of filing such a petition, the transferee shall file a copy of the petition with the California Attorney General. Ins. Code § 10139.

Finally, all court costs and filing fees shall be paid by the transferee. Ins. Code § 10139.5(d).

ANALYSIS

The Court finds that the papers comply with the procedural requirements.

The Court further finds that the proposed transfer is in the best interest of the payee, taking into account that the welfare and support of dependents of payee is not a consideration here.

The payee declares that she is single with no children, 21 years old, unemployed, and a college student.

The payee would be transferring one payment of $160,000.00 on 10/24/27 and would be receiving $94,500.00 from the transaction. The purchase price to be paid was calculated using a discount rate of 15.89 percent, which is analogous to paying the equivalent of an interest rate of 15.89 percent per year..

The payee plans to use the funds for college tuition, loan payments, starting a clothing business,  and other expenses.

CONCLUSION

The petition is granted. The Court will sign and file the proposed order that the payee already signed.