Judge Christopher K. Lui, Case 22STCP04164 2023-01-06 Tentative Ruling

Judge: Christopher K. Lui, Case: 22STCP04164, Date: 2023-01-06 Tentative Ruling

Case Number: 22STCP04164 Hearing Date: January 6, 2023 Dept: 76

Petitioner seeks court approval of a proposed transfer of structured settlement payments.

TENTATIVE RULING

Conditioned upon Petitioner addressing the problems identified below at the hearing, Petitioner J.G. Wentworth Originations, LLC’s petition for approval of transfer of structured settlement payment rights is GRANTED.

ANALYSIS

Petition For Approval Of Transfer Of Structured Settlement Payments

A direct or indirect transfer of structured settlement payment rights is not effective unless the transfer has been approved by a court order finding:

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.

(Insurance Code, § 10139.5(a).)

Pursuant to a personal injury settlement, Sean Daniels (“Transferor” or “Payee”) is entitled to certain structured settlement payments.

Daniels, as Transferor, and Petitioner J.G. Wentworth Originations, LLC have entered into a Purchase Agreement, whereby Transferor agrees to transfer future payments totaling $246,148.20, consisting of 144 monthly payments of $500.00 each, beginning on January 29, 2023 and ending on December 29, 2049, in exchange for a purchase price of $47,537.18. (Amended Petition, Exh. A.)

The discounted present value of the amount being sold is $125,448.21, calculated by applying the 4.80% discount rate utilized by the Internal Revenue Service to value annuities in probate proceedings. The purchase price was calculated using a discount rate of 15.00%. If Transferor did not sell the right to receive structured settlement payments but instead borrowed the net amount of $47,537.18 and paid that loan back in installments with each of the payments transferor is now selling, the equivalent interest rate would be 15.00%. (Amended Petition, Exh. A.)

All of this information has been properly disclosed to the Transferor by way of the disclosure form in compliance with Insurance Code § 10136, as required by § 10139.5(a)(3). (Amended Petition, Exh. B.)Transferor was advised in writing to seek independent professional advice, both legal and financial. (Id.) Transferor chose not to seek such advice. (Amended Petition, Exh. E.) The Petitioner has complied with the disclosure requirements. (Ins. Code, § 10139.5(a)(2).)

The transfer agreement (Amended Petition, Exh. A) complies with Insurance Code §§ 10136 and 10138 [§ 10139.5(a)(3)]; the transfer does not contravene any applicable statute or order of any court or other governmental authority (Ins. Code, § 10139.5(a)(4)).

A copy of the relevant portion of the annuity contract was attached, as required by Ins. Code § 10139.5(f)(2)(E). (Amended Petition, Exh. C.)

Problem: A copy of the qualified assignment agreement was not submitted as required by Ins. Code § 10139.5(f)(2)(F), if it is available. The transferee may satisfy the Court that reasonable efforts to locate and secure a copy of the document have been made, including making inquiry with the payee. (Ins. Code § 10139.5(f)(2)(H).)

A copy of the underlying structured settlement agreement was attached as required by Ins. Code § 10139.5(f)(2)(G). (Amended Petition, Exh. D.)

Information About Transferor

Transferor is 33 years old, single with no dependents. (Declaration of Sean Daniels, ¶¶ 1, 8.)

Problem: The Transferor’s address is not set forth, as required by Ins. Code § 10139.5(c)(1). Counsel may provide this information at the hearing and recite it into the record.

Transferor intends to use the proceeds from the sale to move back to New York to be with family during this financial hardship, as Transferor is having trouble finding a place to live in Los Angeles. Transferor is also partially disabled and will be paying for continued therapy. He also needs funds for medical expenses, moving expenses, credit cards, and basic monthly expenses. (Daniels Dec., ¶ 11.)

Transferor does not have any court-ordered child support or maintenance obligations. (Daniels Decl., ¶ 8.)

Transferor has completed nine previous transactions involving the payee’s structured settlement payments in the past, and has attempted one such transfer which was denied, dismissed or withdrawn. (Daniels Decl., ¶ 9, 10; Ins. Code, § 10139.5(b)(10) – (12).)

Payments from the underlying settlement were not intended to pay for the future medical care and treatment relating to the incident, or for necessary living expenses. (Daniels Decl., ¶ 6; Ins. Code, § 10139.5(b)(5) & (6).)

It is unclear whether Transferor require any future medical care and treatment related to the personal injury. (Ins. Code, § 10139.5(b)(7).) However, Transferor has indicated that he would use the funds for current medical expenses. (Daniels Dec., ¶ 11.)

Given the foregoing, the Court finds that the transfer is fair, reasonable and in the best interest of the Payee/Transferor, taking into account the welfare and support of any dependents. (Ins. Code, § 10139.5(a)(1) & (b)(1) - (15).) The Payee/Transferor understands the terms of the transfer agreement, including those set forth in the § 10136 disclosure statement (Ins. Code, § 10139.5(a)(5)).) Payee/Transferor has evidenced his understanding of the right to cancel and election not to cancel the transfer agreement. (Daniels Decl., ¶ 14; Insurance Code § 10139.5(a)(6).)

The Petitioner has served a copy of the notice to all interested parties. (Ins. Code, § 10139.5(f)(2).

Conditioned upon Petitioner addressing the above-identified problem at the hearing, the petition for approval of transfer of structured settlement payment rights is GRANTED.