Judge: Anne Richardson, Case: 24STCP00771, Date: 2024-05-07 Tentative Ruling

Case Number: 24STCP00771    Hearing Date: May 7, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

I. Background

On March 13, 2024, Petitioner Peachtree Settlement Funding, LLC (Peachtree) filed a petition for a transfer of structured settlement payment rights belonging to Amber Laing. The petition redacts the pertinent details relating to the payment right amounts to be transferred to Peachtree and the corresponding payment to be made to Amber Laing.

On March 14, 2024, Peachtree filed a notice of hearing on its petition for May 7, 2024.

On April 29, 2024, Peachtree filed an amended petition, which discloses the information redacted from the initial petition by Peachtree. Peachtree also filed a declaration from Amber Laing and a proof of service showing the April 12, 2024, regular mail and overnight mail service of the March 13 and April 19, 2024, documents on Amber Laing, on the annuity issuer for the underlying settlement, on the annuity obligor, and on various other third parties.

On May 1, 2024, Peachtree filed a proposed order.

Peachtree’s amended petition is now before the Court.

II. Petition to Transfer Structured Settlement Payment Rights

A. 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).)

B. Analysis

1. Section 10136 Requirements

a. Relevant Law

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).)

b. Determination

The amended petition satisfies the requirements of Section 10136 as follows (see Ins. Code, § 10136, subds. (b)-(e)):

First, the transfer agreement satisfies the disclosure form requirements set out in Insurance Code section 10136, subdivision (b) because the transfer agreement is accompanied by a disclosure addressed to Amber Laing, which contains all the statutorily required language of section 10136, subdivision (b). (See Ins. Code, § 10136, subd. (b); see also 4/29/24 Amended Petition, Ex. B, California Disclosure Statement, pp. 1-2.)

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 4/29/24 Amended Petition, Ex. A, Purchase Contract (California), pp. 12-14.)

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 4/29/24 Amended Petition, Ex. A, Purchase Contract (California).)

Fourth, Amber Laing has not sought cancellation of the transfer agreement as of the date of this hearing. (See Ins. Code, § 10136, subd. (e); see also 4/29/24 Laing Decl., ¶ 13 [does not wish to cancel proposed transfer].)

Accordingly, the Court finds that Peachtree’s proposed transfer of Amber Laing’s settlement rights satisfies the requirements of Insurance Code section 10136, subdivisions (a) through (e).

2. Section 10139.5 Requirements

a. Relevant Law

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).)

b. Determination

i. Ins. Code, § 10139.5, subd. (a)

The amended petition satisfies the entirety of the findings requirement set out in 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 fair and reasonable in the best interest of the payee, taking into account the welfare and support of the payee’s dependents. Amber Laing is collecting $17,000 for future payments of $50,000, the discounted present value of which is $33,297.89. Amber Laing is an unemployed but soon graduating student with one eight-year-old child, is experiencing financial hardship, and would use the transfer funds to pay for monthly expenses before finishing school in September 2024. (See Ins. Code, § 10139.5, subd. (a)(1) [framed by Ins. Code, § 10139.5, subds. (b)(1)-(15)]; see also 4/29/24 Amended Petition, Ex. A, Purchase Contract (California), p. 12; 4/29/24 Laing Decl., ¶¶ 8, 11.)

(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 4/29/24 Amended Petition, Ex. E, California Statement of Professional Representation [Amber Laing was advised to receive independent representation and elected not to seek out such independent professional representation]; 4/29/24 Laing Decl., ¶ 12 [“I did not receive independent legal or financial advice regarding the proposed transaction. A copy of the waiver is attached to Exhibit ‘E’ of the petition.”].)

(3) The transferee, i.e., Peachtree, has complied with the notification requirements pursuant to paragraph (2) of subdivision (f), 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, § 10136, subds. (b)-(e) discussion supra & Ins. Code, § 10139.5, subd. (f) discussion infra at “Second, …” & 4/29/24 Amended Petition, Ex. A, Purchase Contract (California) & 4/29/24 Amended Petition, Ex. B, California Disclosure Statement.)

(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, Amber Laing, 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 4/29/24 Laing Decl., ¶ 13 [“I understand the terms of the transfer agreement, including the terms set forth in the disclosure statement …”].)

(6) Amber Laing understands and does not wish to exercise the right to cancel the transfer agreement. (See Ins. Code, § 10139.5, subd. (a)(6); see also 4/29/24 Laing Decl., ¶ 13 [“I … do not wish to exercise my right to cancel the agreement”].)

ii. Ins. Code, § 10139.5, subd. (c)

The amended petition satisfies 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. (See Ins. Code, § 10139.5, subd. (c)(1); see also 4/29/24 Laing Decl., 1:19 [Amber Laing] & ¶ 8 [31 years old].)

(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 4/29/24 Laing Decl., ¶ 8 [“not married”].)

(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 4/29/24 Laing Decl., ¶ 8 [“1 minor child”; “A.W.”; “8 years old”].)

(4) Included 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 4/29/24 Laing Decl., ¶¶ 8 [“I am unemployed”], 11 [“should graduate” from school “in September”].)

(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 4/29/24 Laing Decl., ¶ 8 [“I am not married”; “I do not have any court-ordered child support obligations”].)

However, the Court notes that there is nothing in the declaration specifying that Ms. Laing was never married, or more to the point, that she has no obligation for spousal support. The Court would accept sworn testimony to that effect at the time of the hearing.

(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) [framed by Ins. Code, § 10139.5, subds. (b)(11)-(13), requiring information only for petitions in last five years]; see also 4/29/24 Laing Decl., ¶ 9 [four prior petitions since 2015, all four approved, with case numbers and transfer information provided].)

iii. Ins. Code, § 10139.5, subd. (f)

The amended petition satisfies the requirements of Section 10139.5, subdivision (f) as follows (see Ins. Code, § 10139.5, subd. (f)):

First, the transfer agreement satisfies the requirements of Section 10139.5, subdivision (f)(1), because Petitioner Peachtree made the instant petition and the petition was brought in the county in which the payee, Amber Laing, resides. (See Ins. Code, § 10139.5, subd. (f)(1); see 4/29/24 Amended Petition, p. 1 [showing Petitioner Peachtree brings this Petition]; 4/29/24 Laing Decl., ¶ 8 [“My address is located in Azusa, CA 91702”].)

Second, the petition satisfies the requirements of Section 10139.5, subdivision (f)(2).

Formal notice of this transfer and a copy of the petition itself was filed by Peachtree with the Court and served on all interested parties no later than April 12, 2024—i.e., original petition, notice, first amended petition, payee declaration, notice of case assignment, and proof of service were served on Amber Laing, the annuity issuer, the annuity obligor, and various third parties. (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 4/29/24 Proof of Service.) While the amended petition, payee declaration, proposed order, and proof of service were not filed with the Court until April 29, 2024—i.e., eight days prior to this hearing—The amended petition appears to merely unredact information redacted from the original petition. No opposition appears in the record. Based on these circumstances, the Court proceeds with a determination on the merits.

Further, the notice and petition have attached all the necessary documents required from this subdivision. (See Ins. Code, § 10139.5, subds. (f)(2)(A)-(L).) The notice and petition:

(A) Include a copy of the instant petition and need not attach prior petitions made outside of five years from the date of this petition. (See Ins. Code, § 10139.5, subd. (f)(2)(A) [framed by Ins. Code, § 10139.5, subd. (c)(6), which in turn is framed by Ins. Code, § 10139.5, subds. (b)(11)-(13), requiring information only for petitions in last five years]; see also 4/29/24 Laing Decl., ¶ 9 [four prior petitions since 2015, all four approved, with case numbers and transfer information provided].)

(B) Include 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 4/29/24 Amended Petition, Ex. A, Purchase Contract (California) & Ex. B, California Disclosure Statement.)

(C) Include information regarding Amber Laing’s dependents and their ages. (See Ins. Code, § 10139.5, subd. (f)(2)(C); see also 4/29/24 Laing Decl., ¶ 8 [not married; one minor child, age eight].)

(D) Include a copy of the disclosure required in subdivision (b) of Section 10136. (See Ins. Code, § 10139.5, subd. (f)(2)(D); see also 4/29/24 Amended Petition, Ex. B, California Disclosure Statement.)

(E) Include copies of the annuity contract, any qualified assignment agreement, and underlying structured settlement agreement, if available, and if not available, a showing of reasonable efforts to locate and secure a copy of the document have been made, including making inquiry with the payee. (See Ins. Code, § 10139.5, subds. (f)(2)(E)-(H); see also 4/29/24 Amended Petition, Ex. C, Uniform Qualified Assignment and Release [1996] & Ex. D, Order Approving Compromise of Minor’s Claim [2001].)

(F) Include copies of the proofs of service made for notice of this petition. (See Ins. Code, § 10139.5, subd. (f)(2)(I); see also 4/29/24 Proof of Service.)

(G) Include 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 3/14/24, p. 2; 4/29/24 Proof of Service [service on 4/12/24].)

(H) Include 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 3/14/24, p. 2; 4/29/24 Proof of Service [service on 4/12/24].)

(I) [Not applicable] If the payee entered into the structured settlement at issue within five years prior to the date of the transfer agreement, …. (See Ins. Code, § 10139.5, subd. (f)(2)(L); see also 4/29/24 Amended Petition, Ex. C, Uniform Qualified Assignment and Release [1996] & Ex. D, Order Approving Compromise of Minor’s Claim [2001].)

iv. Ins. Code, § 10139.5, subd. (g)

The amended petition satisfies 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 4/29/24 Amended Petition, Ex. A, Purchase Contract (California), pp. 12-13 [“We have charged [Amber Laing] for the following expenses: [¶] … $0.00 [¶] for a total of $0.00 in expenses”] & Ex. B, California Disclosure Statement, p. 1 [same].)

v. Ins. Code, § 10139.5, subd. (h)

The amended petition satisfies the requirements of Section 10139.5, subdivision (h) because, when the petition was filed, Petitioner advised Amber Laing of his or her right to seek independent counsel and financial advice in connection with this transfer petition and advised Amber Laing of his or her right to a reimbursement of $1,500 for incurring such costs. (See Ins. Code, § 10139.5, subd. (h); see also 4/29/24 Amended Petition, Ex. E, California Statement of Professional Representation [Amber Laing was advised to receive independent representation and elected not to seek out such independent professional representation]; 4/29/24 Laing Decl., ¶ 12 [“I did not receive independent legal or financial advice regarding the proposed transaction. A copy of the waiver is attached to Exhibit ‘E’ of the petition.”].)

C. Requirements Conclusion

Having otherwise satisfied the pertinent Insurance Code requirements, the Court seeks confirmation that there are no spousal support obligations. Assuming there are none, the Court finds no reason not to grant Peachtree’s Amended Petition. The Court would accept sworn testimony to that effect at the hearing. 

III. Conclusion

Subject to confirmation that there are no spousal support obligations, Petitioner Peachtree Settlement Funding, LLC’s First Amended Verified Petition for Transfer of Payment Rights is GRANTED.