Judge: Alison Mackenzie, Case: 24STCP02769, Date: 2024-11-19 Tentative Ruling
Case Number: 24STCP02769 Hearing Date: November 19, 2024 Dept: 55
NATURE OF PROCEEDINGS:
Hearing on Peachtree Settlement Funding, LLC’s Petition
for Approval for Transfer of Payment Rights
Peachtree Settlement Funding, LLC’s First Amended Petition (“FAP”) for Approval for Transfer of Payment
Rights is denied as filed.
BACKGROUND
By way of this petition, Petitioner Peachtree
Settlement Funding, LLC Originations, LLC (“Petitioner”) seeks a transfer of one
future payment of $53,645.00, to which Real Party-In-Interest/Transferor Amber
Laing (“Payee”) is entitled, in exchange for a one-time payment of $19,000,
where the discounted present value of the future payments is $35,993.76.
Petition Ex. A ¶ 11.
In 2000, Payee received a structured
settlement arising from a personal injury claim. The settlement agreed to by Payee
provides for periodic structured payments including, but not limited to periodic
structured payments including, but not limited to one payment of $53,645.00 on
July 6, 2032. Declaration of Amber Laing ¶¶ 4-5.
Petitioner now moves for approval of
the transfer of these structured settlement payment rights by Payee to
Petitioner and/or its assigns.
LEGAL STANDARD
A transfer of structured settlement payment rights is
void unless a court reviews and approves the transfer and finds that (a) the
transfer of the structured settlement payment rights is fair and reasonable and
in the best interest of the payee, taking into account the welfare and support
of his or her dependents, and (b) the transfer complies with the requirements
of Insurance Code Sections 10134 to 10139.5, will not contravene other
applicable law, and that the court has reviewed and approved the transfer as
provided in Section 10139.5. See § 10137, subds. a)-(b).[1]
The court must make express written findings that “(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,
in writing, the opportunity to receive the advice. [¶] (3) The transferee has
complied with the notification requirements pursuant to paragraph (2) of subdivision
(f), 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 understands
the terms of the transfer agreement, including the terms set forth in the
disclosure statement required by Section 10136. [¶] (6) The payee understands
and does not wish to exercise the payee's right to cancel the transfer
agreement.” §§ 10139.5(a)(1)-(6).
Notice of hearing on the petition for approval must be
filed and served at least 20 days before the hearing and include all of the
following materials: (1) Prior petitions for approval (whether approved or
denied); (2) Proposed transfer agreement and disclosure form; (3) Listing of
payee's dependents and their ages; (4) Insurance Code section 10136(b)
disclosures; (5) Annuity contract (if available); (6) Qualified assignment
agreement (if available); (7) Underlying structured settlement agreement (if
available); (8) Proof of service (complying with special notice requirements); (8)
Notice to all interested parties; and (9) Notification to counsel obtaining
structured settlement (if less than 5 years ago). §§ 10139.5(f)(2)(A)-(L).
ANALYSIS
Section 10139.5, subdivision (b)
In assessing whether a transfer is fair, reasonable,
and in the payee’s best interest, section 10139.5, subdivision (b), requires
courts to “consider the totality of the circumstances, including, but not
limited to,” an enumerated list of factors. § 10139.5, subd. (b), ¶ (1)-(15).
Applying the relevant factors, the Court concludes
that the transfer is fair, reasonable, and in Payee’s best interest.
Payee seeks to transfer one payment of $53,645.00 on July 6, 2032. In exchange, Payee will
receive $19,000.
The settlement was entirely monetary and was not
intended to pay for Payee’s future medical care, treatment, or necessary living
expenses. Laing Decl., ¶¶ 6,7. Payee does not have any court-ordered child
support obligations. Laing Decl., ¶ 8.
Within the past five years, Payee has not attempted
any transactions involving their structured settlement payment that were
denied, dismissed, or withdrawn prior to a decision on the merits. Laing Decl.,
¶ 10.
Payee is 32
years old, unmarried, and has one minor child, A. W., who is 8 years old and resides
with Payee in Azusa, CA 91702. Laing Decl., ¶ Payee is unemployed and experiencing financial hardship.
Laing Decl., ¶ 11. If approved, she intends to use the money she receives to pay for monthly expenses while she looks for
employment following her internship, which ended in mid-September. Laing
Decl., ¶ 11.
The value of the proposed transferred future payment
is $53,645.00. Adjusting for the
time-value of money, applying the IRS discount rate of 5.4, the future
payment's discounted present value is $35,993.76.
Petition Ex. B.
While the $19,000
Payee will receive is less than the discounted present value of the future
payment under the circumstances, the Court finds it fair, reasonable, and in
Payee’s best interest. Payee is currently experiencing financial distress and must
pay monthly expenses while looking for
employment. According to Petitioner, the purchase price reflects an
effective interest rate of 14.09 %.
Petition,
Ex. B. The Court finds the effective interest rate reasonable.
Section 10136 Requirements
No direct or indirect transfer of structured
settlement payment rights by a payee to which Section 10136 applies shall be
effective, and no structured settlement obligor or annuity issuer shall be
required to make any payment directly or indirectly to a transferee, unless all
the provisions of Section 10136 are satisfied. §10136, subd. (a)
First, the transfer agreement satisfies the disclosure
form requirements in section 10136, subdivision (b) because the transfer
agreement is accompanied by a disclosure addressed to Payee containing all the
statutorily required language of section 10136, subdivision (b). See Petition
Ex. A ¶ 11.
Second, the transfer agreement satisfies the
transfer-agreement requirements in section 10136, subdivision (c) because the
transfer agreement contains all the necessary language required from this
statutory subdivision. See Petition Ex. B.
Third, the transfer agreement does not violate section
10138 as none of the contents prohibited by this statutory section are
contained in the transfer agreement. See § 10136, subd. (d); see also
Petition Ex. A.
Fourth, Payee has not sought cancellation of the
transfer agreement as of the date of this hearing. See § 10136, subd. (e);
see also Laing Decl., ¶ 13.
Accordingly, the Court finds that Petitioner’s
proposed transfer of Payee’s settlement rights satisfies the requirements of
section 10136, subdivisions (a) through (e).
Section 10139.5, subdivision (c)
“Every petition for approval of a transfer of
structured settlement payment rights, except as provided in subdivision (d),
shall include, to the extent known after the transferee has made reasonable
inquiry with the payee, all of the following: [¶] (1) The payee’s name,
address, and age. [¶] (2) The payee’s marital status, and, if married or
separated, the name of the payee’s spouse. [¶] (3) The names, ages, and place
or places of residence of the payee’s minor children or other dependents, if
any. [¶] (4) The amounts and sources of the payee’s monthly income and
financial resources and, if presently married, the amounts and sources of the
monthly income and financial resources of the payee’s spouse. [¶] (5) Whether
the payee is currently obligated under any child support or spousal support
order…[¶] (6) Information regarding previous transfers or attempted transfers….
§ 10139.5, subd. (c).
“[I]nformation required to be included in every
petition for approval of a transfer of structured settlement payment rights
pursuant to paragraphs (2), (3), (4), (5), and (6) of subdivision (c), … shall
be deemed to be included in the petition if it is provided at the scheduled
hearing on the proposed transfer through oral testimony or documentary evidence
filed with the court and made a part of the record consistent with the rules of
evidence and procedure.” § 10139.5, subd. (d).
Petitioner provides Payee’s name, age, and that she
lives in Azusa, CA, in the declaration filed with the petition. Laing Decl., at
¶ 8. However, it does not provide her address. Likewise, her address is omitted
from the proof of service, which says, “Amber Laing [Payee address to be
provided at the hearing] Azusa, CA 91702.” Unlike the requirements in
paragraphs (2) – (6), Payees’ address is not automatically deemed to be
included in the petition if it is provided at the scheduled hearing. § 10139.5,
subd. (d). The Court reserves the issue of whether, at its discretion, Petitioner
should be allowed to provide Payee’s address at the hearing.
Petitioner provides Payee’s marital status as single. Laing
Decl., ¶ 8. Petitioner only provides the initials of Payee’s eight-year-old
child but does not provide the name or place of residence. Ibid. It may
do so at the hearing. § 10139.5, subd. (d). Petitioner provides that Payee is
unemployed but does not otherwise provide any information on her current
sources of income, if any. At the hearing, Petitioners should clarify what sources
of income Payee currently has, if any. Petitioner provides that Payee does not
have any court-ordered child support obligations. Laing Decl., ¶ 8. Finally,
Petitioner provides adequate information summarizing Payees' previous transfers
of payment rights. FAP at p. 8 fn.1; Laing Decl., ¶ 9-10.
Insurance Code section 10139.5,
subdivision (f)(2)
A petitioner is required to file with the court and
serve on all interested parties notice of the proposed transfer at least twenty
days before the scheduled hearing. § 10139.5, subdivision (f)(2). Such notice
must include the documents and information specified in 10139.5, subdivision
(f)(2). The requirements and Petitioner's compliance or lack of compliance with
them are listed below:
(A) A copy of the transferee's current and any prior
petitions. Petitioner has complied. See Proof of Service.
(B) A copy of the transfer agreement. Petitioner has
complied. Proof of Service; Petition Ex. A.
(C) A listing of each of the Payee's dependents,
together with each dependent's age. Petitioner has complied See Proof of
Service; Laing Decl., ¶ 8.
(D) A copy of the disclosure required in subdivision
(b) of section 10136. Petitioner has complied. See Proof
of Service; Petition Ex. B.
(E) A copy of the annuity contract, if available.
Petitioner has complied. Petition Ex. C,
(F) A copy of any qualified assignment agreement, if
available. Petition Ex. C
(G) A copy of the underlying structured settlement
agreement, if available. Petitioner has complied. See § 10139.5,
subdivision (f)(2)(H) (providing in relevant part “If the documents are
available, but contain a confidentiality or nondisclosure provision, then the
transferee shall summarize in the petition the payments due and owing to the
payee, and, if requested by the court, shall provide copies of the documents to
the court at a scheduled hearing.”); Petition at p. 5 fn. 1 (noting the
settlement agreement contains a confidentiality clause, but a copy will be
provided to the Court if requested); Ex. C at p. 44 (summarizing the payments
due and owing to the payee).
(I) Proof of service showing compliance with the
notification requirements of this section. See Proof of Service.
(J) Notification that any interested party is entitled
to support, oppose, or otherwise respond to the transferee's petition, either
in person or by counsel, by submitting written comments to the court or by
participating in the hearing. Petitioner has complied. See Petition at
p. 5 ¶ 8.
(K) 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 petition 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. Petitioner
has complied. See Petition at p. 1.
Section 10139.5(a)(1)-(6)
As required by section 10139.5(a)(1)-(6), the Court
makes the following express findings:
(1) The transfer is in the best interest of Payee,
taking into account the welfare and support of Payee’s dependents.
(2) Payee has been advised in writing by Petitioner to
seek independent professional advice regarding the transfer and has knowingly
waived, in writing, the opportunity to receive the advice. Laing Decl., ¶ 12;
Petition Ex. E.
(3) Petitioner has complied with the notification
requirements pursuant to paragraph (2) of subdivision (f).
(4) The transfer does not contravene any applicable
statute or the order of any court or other government authority.
(5) Payee understands the terms of the transfer
agreement, including the terms set forth in the disclosure statement required
by Section 10136. Laing Decl., ¶ 13.
(6) Payee understands and does not wish to exercise Payee’s
right to cancel the transfer agreement. Laing Decl., ¶ 13.
CONCLUSION
As filed, the Petition is denied. At the hearing,
Petitioner will have an opportunity to provide the Payee’s address, her child’s
name, and place of residence and to clarify what income, if any, Payee
currently has. The Court may deem the Payee’s address part of the petition at
its discretion. The Court will also hear from Petitioner about whether it took
reasonable steps to find the qualified assignment agreement.