Judge: Christopher K. Lui, Case: 24STCP00355, Date: 2024-04-10 Tentative Ruling
Case Number: 24STCP00355 Hearing Date: April 10, 2024 Dept: 76
Petitioner Stone Street 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, Daniel Rivera (“Transferor” or “Payee”) is entitled to
certain structured settlement payments.
Rivera, as Transferor, and
Petitioner J Stone Street Originations, LLC have entered into a Purchase
Agreement, whereby Transferor agrees to transfer future payments totaling $254,061.60,
consisting of 240 payment of $1,058.59 each, beginning on January 1, 2038 and
ending on December 1, 2057, in exchange for a purchase price of $10,000.
(Amended Petition, Exh. A.)
The discounted present value of the amount
being sold is $79,001.63, calculated by applying the 5.20% discount rate
utilized by the Internal Revenue Service to value annuities in probate
proceedings. The purchase price was calculated using a discount rate of 16.20%.
If Transferor did not sell the right to receive structured settlement payments
but instead borrowed the net amount of $10,000.00 and paid that loan back in
installments with each of the payments transferor is now selling, the
equivalent interest rate would be 16.20%. (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 (summary) was attached, as required by Ins. Code § 10139.5(f)(2)(E). (Amended
Petition, Exh. C.)
A copy of the qualified assignment agreement was
submitted as required by Ins. Code § 10139.5(f)(2)(F). (Amended Petition, Exh.
C.)
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 48 years old, single with one
minor child (2 months old). (Declaration of Daniel Rivera, ¶¶ 1, 8.)
The Transferor’s address is set forth, as
required by Ins. Code § 10139.5(c)(1). (Rivera Decl., ¶ 8.)
Transferor is experiencing a financial
hardship and will use the money to pay outstanding debt and for daily child
expenses. (Rivera Decl., ¶ 14.)
Transferor does not have any court-ordered
child support or maintenance obligations. (Rivera Decl., ¶ 8.)
Transferor has three completed previous
transactions involving the payee’s structured settlement payments in the past. (Rivera
Decl., ¶¶ 9 – 11; 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.
(Rivera 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).)
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. (Rivera Decl., ¶ 16;
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).
The
petition for approval of transfer of structured settlement payment rights is GRANTED.