Judge: Anne Richardson, Case: 23STCP00542, Date: 2023-03-27 Tentative Ruling

Case Number: 23STCP00542    Hearing Date: March 27, 2023    Dept: 40

Department 40

Background

Petitioner Peachtree Settlement Funding, LLC makes this unopposed verified petition for transfer of structured settlement rights belonging to Patricia Anderson, where the agreement would transfer to Petitioner 23 future monthly payments of $2,100 belonging to Anderson pursuant to a wrongful death claim secured in her favor in May 2003, for a total transfer of $48,300 to Petitioner, in return for Petitioner paying to Patricia Anderson a lump sum payment of $22,500 upon approval of this petition.

Petition for Transfer of Structured Settlement Rights: DENIED.

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 Ins. Code, § 10137, subds. (a)-(b).)

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 of the provisions of Section 10136 of the Insurance Code are satisfied. (Ins. Code, § 10136, subd. (a).)

First, the transfer agreement satisfies the disclosure form requirements set out in Insurance Code section 10136, subdivision (b) because the transfer agreement contains a disclosure addressed to Payee and containing all the statutorily required language of section 10136, subdivision (b). (See Ins. Code, § 10136, subd. (b); see also 2/23/23 Petition, Ex. B, California Disclosure Statement.)

Second, the transfer agreement satisfies the transfer-agreement requirements set out in Insurance Code section 10136, subdivision (c) because the transfer agreement contains all the necessary language required from this statutory subdivision. (See Ins. Code, § 10136, subd. (c); see also 2/23/23 Petition, Ex. A and 3/9/23 Amended Exhibit A, Ex. A, Purchase Contract (California), both at pp. 12-15, § 11.)

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 Ins. Code, § 10136, subd. (d); see also 2/23/23 Petition, Verification; 2/23/23 Petition, Ex. A and 3/9/23 Amended Exhibit A, Ex. A, Purchase Contract (California) generally.)

Fourth, the Patricia Anderson, the payee, has not sought cancellation of the transfer agreement as of the date of this hearing. (See Ins. Code, § 10136, subd. (e); see also 3/9/23 Payee Decl., ¶ 22.)

Accordingly, the Court finds that Peachtree Settlement Funding, LLC’s proposed transfer of Patricia Anderson’s settlement rights satisfies the requirements of Insurance Code section 10136, subdivisions (a) through (e).

Section 10139.5 Requirements

A direct or indirect transfer of structured settlement payment rights is not effective and a structured settlement obligor or annuity issuer is not required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order based on express written findings by the court subject to Section 10139.5. (See Ins. Code, § 10139.5, subd. (a).)

First, the transfer agreement satisfies the requirements of Section 10139.5, subdivision (f)(1), because Petitioner Peachtree Settlement Funding, LLC made the instant petition and the petition was brought in the county in which the payee, Patricia Anderson, resides. (See Ins. Code, § 10139.5, subd. (f)(1); see 2/23/23 Petition, 1:18-21 [showing Petitioner Peachtree Settlement Funding, LLC brings this Petition]; 3/9/23 Payee Decl., ¶ 8 [“I [Patricia Anderson] reside in Los Angeles County, California”].)

Second, the transfer agreement does not satisfy the requirements of Section 10139.5, subdivision (f)(2) because while formal notice of this transfer was made on March 1 and 2, 2023, the operative copy of the purchase agreement was filed by Peachtree was filed with the Court and served on all interested parties on March 9, 2023—i.e., less than 20 days before this hearing. (See Ins. Code, § 10139.5, subd. (f)(2) [notice of the proposed transfer and the petition for its authorization to be filed with the court and served on all interested parties within 20 days of hearing]; see also 3/1/23 Notice of Hearing, 3/2/23 Notice of Advanced Hearing, and 3/2/23 Proof of Service; compare see 2/23/23 Petition and 3/9/23 Amended Exhibit A [amended copy of purchase agreement], with 3/2/23 Notice of Advanced Hearing [noticing March 27, 2023 hearing for the petition, i.e., within twenty days of 3/9/23 filings].)

Further, the notice and petition have not attached all the necessary attachments required under this subdivision. (See Ins. Code, § 10139.5, subds. (f)(2)(A)-(L).) The notice and petition:

(A) Include a copy of the instant petition but failed to include a copy of Patricia Anderson’s prior petitions. (See Ins. Code, § 10139.5, subd. (f)(2)(A); see also 2/23/23 Petition, 3/9/23 Amended Exhibit A, and 3/9/23 Payee Decl. generally [no copies of prior petitions]; 3/9/23 Payee Decl., ¶¶ 9-18 [summary of terms of previously approved petitions involving Patricia Anderson and one paragraph, without sufficient detail, indicating that Patricia Anderson has applied for and been denied an undisclosed number of “previous transactions involving [her] structed settlement payment[s]”].)

(B) Included a copy of the proposed transfer agreement and disclosure form required by paragraph (3) of subdivision (a). (See Ins. Code, § 10139.5, subd. (f)(2)(B); see also 2/23/23 Petition, Ex. A, Purchase Contract (California) and Ex. B, California Disclosure Statement; 3/9/23 Amended Exhibit A, Ex. A, Purchase Contract (California).)

(C) Included information regarding Payee’s dependents where Patricia Anderson has a spouse but no children. (See Ins. Code, § 10139.5, subd. (f)(2)(C); see 3/9/23 Payee Decl., ¶ 8 [married with no children].)

(D) Included a copy of the disclosure required in subdivision (b) of Section 10136. (See Ins. Code, § 10139.5, subd. (f)(2)(D); see 2/23/23 Petition, Ex. B, California Disclosure Statement.)

(E) Included a copy of the annuity contract/structured settlement agreement, with no copy of any assignment agreement. (See Ins. Code, § 10139.5, subds. (f)(2)(E)-(H); see also 2/23/23 Petition, Ex. C [Description of Benefits Certificate summarizing Patricia Anderson’s rights and annuity payments].)

(F) Included copies of the Proofs of Service made for this petition. (See Ins. Code, § 10139.5, subd. (f)(2)(I); see also 3/2/23 Proof of Service [service for 2/23/23 Petition] and 3/9/23 Amended Exhibit A, Proof of Service [service of updated copy of Purchase Contract (California)].)

(G) Included a 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. (See Ins. Code, § 10139.5, subd. (f)(2)(J); see also 3/1/23 Notice of Hearing and 3/2/23 Notice of Advanced Hearing.)

(H) Included a 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. (See Ins. Code, § 10139.5, subd. (f)(2)(K); see also 3/1/23 Notice of Hearing and 3/2/23 Notice of Advanced Hearing.)

Additionally, the documents missing from the petition were not filed within 20 days of this hearing and therefore do not comply with Insurance Code section 10139.5, subdivision (f)(2). (See Ins. Code, § 10139.5, subd. (f)(2); see also 2/23/23 Petition and 3/9/23 Amended Exhibit A generally [no copies of prior transfer agreements, whether approved, denied, or withdrawn].)

Third, the petition does not include all the payee information required from Section 10139.5, subdivision (c) as follows (See Ins. Code, § 10139.5, subd. (c)):

(1) Included the payee’s name and age (3/9/23 Payee Decl., 1:19-22) but failed to include Patricia Anderson’s address. (See Ins. Code, § 10139.5, subd. (c)(1); see also 3/9/23 Payee Decl. and 3/9/23 Amended Exhibit A, Proof of Service, Service List [“Payee address to be provided at hearing, [¶] Palmdale, CA 93551”].)

(2) Included the payee’s marital status, and, if married or separated, the name of the payee’s spouse. (See Ins. Code, § 10139.5, subd. (c)(2); see also 3/9/23 Payee Decl., ¶ 8 [“I am 55 years old” and “am married and [her] spouse’s name is Terry Morrow”].)

(3) Included the names, ages, and place or places of residence of the payee’s minor children or other dependents, if any. (See Ins. Code, § 10139.5, subd. (c)(3); see also 3/9/23 Payee Decl., ¶ 8 [“I have no minor children”].)

(4) Failed to include 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. (See Ins. Code, § 10139.5, subd. (c)(4); see also 3/9/23 Payee Decl. generally [no information regarding payee’s or spouse’s monthly income and financial resources].)

(5) Included information permitting the determination of whether the payee is currently obligated under any child support or spousal support order, and, if so, the names, addresses, and telephone numbers of any individual, entity, or agency that is receiving child or spousal support from the payee under that order or that has jurisdiction over the order or the payments in question. (See Ins. Code, § 10139.5, subd. (c)(5); see also 3/9/23 Payee Decl., ¶ 8 [“I have no minor children”].)

(6) Included information regarding previous transfers or attempted transfers, as described in paragraph (11), (12), or (13) of subdivision (b). (See Ins. Code, § 10139.5, subd. (c)(6); see also 3/9/23 Payee Decl., ¶¶ 9-18 [summary of terms of previously approved petitions involving Patricia Anderson and one paragraph indicating that Patricia Anderson has applied for and been denied an undisclosed number of “previous transactions involving [her] structed settlement payment[s]”].)

Fourth, the petition meets the requirements of Section 10139.5, subdivision (g) requiring that transferees bear the costs of transfer petitions of structured settlement rights. (See Ins. Code, § 10139.5, subd. (g); see also 3/1/23 Notice of Hearing, Journal Technologies Court Portal, p. 1 [Reservation demonstrating Petitioner is the filing party and $61.65 in fees paid].)

Fifth, the petition meets the requirements of Section 10139.5(h) because, no later than February 23, 2023, when the petition was originally filed, Petitioner advised Patricia Anderson of his or her right to seek independent counsel and financial advice in connection with this transfer petition and advised Patricia Anderson of his or her right to a reimbursement of $1,500.00 for incurring such costs. (See Ins. Code, § 10139.5, subd. (h); see also 2/23/23 Petition, Ex. A, Purchase Contract (California) and 3/9/23 Amended Exhibit A, Ex. A, both at p. 14 [independent counsel and reimbursement language]; 2/23/23 Petition, Ex. D, California Statement of Professional Representation [statement from Patricia Anderson indicating she did not wish to seek out independent counsel]; 3/9/23 Payee Decl., ¶ 20 [same].)

Finally, the Court finds that the petition fails to satisfy the entirety of the findings requirement of Insurance Code section 10139.5, subdivisions (a)(1) to (a)(6). These findings, which the Court expressly makes by the following language, are that:

(1) The transfer is not fair and reasonable in the best interest of the payee, taking into account the welfare and support of the payee’s dependents, because Patricia Anderson is only collecting $22,500 and selling settlement payments of $48,300, particularly in light of all the previous transfers of structured settlement rights by Patricia Anderson, and where the Court has no information regarding Patricia Anderson’s and her spouse’s monthly income and financial resources other than Patricia Anderson declaring that she is “currently experiencing a financial hardship” and that “[i]f approved, [she] will use the money received from the proposed settlement to clear up [her] personal debt.” (See Ins. Code, § 10139.5, subd. (a)(1); see also 2/23/23 Petition, Ex. A, Purchase Contract (California) and 3/9/23 Amended Exhibit A, Ex. A, both at p. 12, § 11 [terms of contract]; 3/9/23 Payee Decl., ¶ 19.)

(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. (See Ins. Code, § 10139.5, subd. (a)(2); see also 2/23/23 Petition, Ex. A, Purchase Contract (California) and 3/9/23 Amended Exhibit A, Ex. A, both at p. 14 [independent counsel and reimbursement language] and Ex. D, California Statement of Professional Representation [statement from Patricia Anderson indicating she did not wish to seek out independent counsel]; 3/9/23 Payee Decl., ¶ 20 [declination of independent counsel].)

(3) The transferee has failed to comply with the notification requirements pursuant to paragraph (2) of subdivision (f) of section 10139.5, but 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. (See Ins. Code, § 10139.5, subd. (a)(3); see also Ins. Code, § 10139.5, subds. (f)(2)(A)-(L) discussion supra; see also 2/23/23 Petition, Ex. B, California Disclosure Statement; 2/23/23 Petition, Ex. A, Purchase Contract (California) and 3/9/23 Petition, Amended Exhibit A, Ex A.)

(4) The transfer does not contravene any applicable statute or the order of any court or other government authority. (See Ins. Code, § 10139.5, subd. (a)(4).)

(5) The payee understands the terms of the transfer agreement, including the terms set forth in the disclosure statement required by Section 10136. (See Ins. Code, § 10139.5, subd. (a)(5); see also 3/9/23 Payee Decl., ¶ 21 [Payee’s understanding of Petition’s terms]; 2/23/23 Petition, Ex. B, California Disclosure Statement.)

(6) The Payee understands and does not wish to exercise the payee’s right to cancel the transfer agreement as Patricia Anderson has not filed any papers requesting cancellation of this Petition. (See Ins. Code, § 10139.5, subd. (a)(6); see also 3/9/23 Payee Decl., ¶ 21 [understanding of terms] and ¶ 22 [lack of wish to cancel transfer].)

Conclusion: Having failed to meet all procedural and substantive requirements for this relief, the Petition for Approval of Transfer of Structured Settlement Payment Rights in this matter is DENIED.

Conclusion

Petitioner Peachtree Settlement Funding, LLC’s Petition for Approval of Transfer of Structured Settlement Payment Rights is DENIED because it failed to meet the requirements for the requested relief pursuant to Insurance Code sections 10134 to 10139.5.