Judge Christopher K. Lui, Case Number: 25STCP00394, Date: 2025-03-06 Tentative Ruling

Judge: Christopher K. Lui, Case: 25STCP00394, Date: 2025-03-06 Tentative Ruling

Case Number: 25STCP00394 Hearing Date: March 6, 2025 Dept: 76

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

TENTATIVE RULING

The hearing on Petitioner Stone Street Originations, LLC’s petition for approval of transfer of structured settlement payment rights is CONTINUED to April 30, 2025 at 8:30 a.m. Petitioner is to file a supplemental declaration addressing the above-identified problems by April 14, 2025.

ANALYSIS

Petition For Approval Of Transfer Of Structured Settlement Payments

Petitioner seeks court approval of a proposed 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, Sergio Pena aka Sergio Aquirre (“Transferor” or “Payee”) is entitled to certain structured settlement payments.

Pena, as Transferor, and Petitioner Stone Street Originations, LLC have entered into a Purchase Agreement, whereby Transferor agrees to transfer future payments totaling $504,000.00 consisting of 240 monthly Life Contingent Payments of $2,100.00 each, beginning on December 1, 2041 and ending on November 1, 2061 in exchange for a purchase price of $15,000.000. (Amended Petition, Exh. A.)

The discounted present value of the amount being sold is $135,161.98, 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 15.38%. If Transferor did not sell the right to receive structured settlement payments but instead borrowed the net amount of $15,000 and paid that loan back in installments with each of the payments transferor is now selling, the equivalent interest rate would be 15.38%. (Amended Petition, Exhs. A, B.)

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, Exhs A, B.) The Petitioner has complied with the disclosure requirements. (Ins. Code, § 10139.5(a)(2).)

The transfer agreement (Amended Petition, Exh. 2) 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 not attached, if it is available, as required by Ins. Code § 10139.5(f)(2)(E). 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 qualified assignment agreement was not attached, if it is available, as required by Ins. Code § 10139.5(f)(2)(F). 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

Problem: Transferor is 43 years old, single with one minor child. (Declaration of Sergio Pena, ¶ 8.) However, the name age, and residence of the minor child is not set forth as required by Ins. Code, § 10139.5(c)(3).

Problem: The Transferor’s address is not set forth, as required by Ins. Code § 10139.5(c)(1).

Transferor is currently unemployed and received payments of $2,100 per month from his annuity. (Ins. Code, § 10139.5(c)(4).)(Pena Decl, ¶ 8.)

Problem: Transferor does not have any court-ordered child support obligations. (Pena Decl., ¶ 8.) However, Transferor does not address spousal support obligations. (Ins. Code, § 10139.5(c)(5).)

Transferor is currently experiencing a financial hardship, and will use the money to pay off debt from trade school. (Insurance Code, § 10139.5(b)(2) & (13); Pena Decl., ¶ 11.)

Transferor has completed the following previous transactions involving the payee’s structured settlement payments in the past. (Pena Decl., ¶¶ 9, 10; Ins. Code, § 10139.5(b)(10) – (12); (c)(6).)

9. I have completed a previous transaction on 12/16/2024, through the Los Angeles County Court (Case # 24STCP03699), transferring 120 monthly life-contingent payments of $2,100.00 beginning on 12/01/2031 and ending on 11/01/2041 to Stone Street Originations, LLC. From the settlement, I received $58,403.01.

Problem: Payee must address whether he was satisfied with the previous transaction. (Ins. Code, § 10139.5(b)(10).)

10. I have attempted previous transactions involving my structured settlement payment that were denied, dismissed or withdrawn prior to a decision on the merits, within the past five years. Case # ES011828 was dismissed on February 13, 2008. Case # BS168430 was dismissed on June 23, 2017.

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. (Pena Decl., ¶¶ 6, 7; Ins. Code, § 10139.5(b)(5) & (6).)

Transferor does not require any future medical care and treatment related to the personal injury. (Pena Decl., ¶ 6; Ins. Code, § 10139.5(b)(7).)

Transferor did not receive independent legal or financial advice regarding the transaction. (Ins. Code, § 10139.5(b)(14); Pena Decl., ¶ 12.)

The hearing on the petition for approval of transfer of structured settlement payment rights is CONTINUED to April 30, 2025 at 8:30 a.m. Petitioner is to file a supplemental declaration addressing the above-identified problems by April 14, 2025.