Judge Daniel M. Crowley, Case Number: 23STCP03551, Date: 2023-11-03 Tentative Ruling

Petitioner Stratcap Investments, Inc.’s first amended petition for approval of transfer of structured settlement payment rights by its Payee Cezar Estrellado to Petitioner Stratcap Investments, Inc. or its assignee is granted.

Petitioner Stratcap Investments, Inc. (“Stratcap”) (“Petitioner) petitions this Court to approve its First Amended Petition (“Amended Petition”) seeking approval of the transfer of certain structured settlement payment rights by its Payee Cezar Estrellado (“Estrellado”) (“Payee”) to Petitioner or its assignee. (Notice of Hearing, pg. 2; Ins. Code §10139.5.)

(c) Every petition for approval of a transfer of structured settlement payment rights, except as provided in subdivision (d), shall include, to the extent known after the transferee has made reasonable inquiry with the payee, all of the following:

(2) The payee’s marital status, and, if married or separated, the name of the payee’s spouse.

(3) The names, ages, and place or places of residence of the payee’s minor children or other dependents, if any.

(4) 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.

(5) 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.

(6) Information regarding previous transfers or attempted transfers, as described in paragraph (11), (12), or (13) of subdivision (b). The transferee or payee may choose to provide this information by providing copies of pleadings, transaction documents, or orders involving any previous attempted or completed transfer or by providing the court a summary of available information regarding any previous transfer or attempted transfer, such as the date of the transfer or attempted transfer, the payments transferred or attempted to be transferred by the payee in the earlier transaction, the amount of money received by the payee in connection with the previous transaction, and generally the payee’s reasons for pursuing or completing a previous transaction. The transferee’s inability to provide the information required by this paragraph shall not preclude the court from approving the proposed transfer, if the court determines that the information is not available to the transferee after the transferee has made a reasonable effort to secure the information, including making an inquiry with the payee.

(d) With respect to the information required to be included in every petition for approval of a transfer of structured settlement payment rights pursuant to paragraphs (2), (3), (4), (5), and (6) of subdivision (c), that information shall be deemed to be included in the petition if it is provided at the scheduled hearing on the proposed transfer through oral testimony or documentary evidence filed with the court and made a part of the record consistent with the rules of evidence and procedure.

The Amended Petition provides all information required in Insurance Code §10139.5(c). (See Decl. of Estrellado ¶¶8-9, 13; Amended Petition, Exh. 1.)

Specific Findings

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 that:

(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, in writing, the opportunity to receive the advice.

(3) The transferee has complied with the notification requirements pursuant to paragraph (2) of subdivision (f), 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 understands the terms of the transfer agreement, including the terms set forth in the disclosure statement required by Section 10136.

(6) The payee understands and does not wish to exercise the payee’s right to cancel the transfer agreement.

Insurance Code section 10139.5(b) lists 15 factors for the court to consider in determining whether the transfer would be fair, reasonable, and in the payee’s best interests.

The Payee declares he is the recipient of certain structured settlement payments under a structured settlement agreement under which Pacific Life & Annuity Services, Inc. (“Payment Obligor”) is the obligor and pursuant to which the Payment Obligor purchased an annuity contract from Pacific Life Insurance Company (“Payment Issuer”) to fund the aforesaid obligation. (Decl. of Estrellado ¶2.) The Payee declares Subject to this Court’s approval of the Amended Petition, he has entered into a transfer agreement (“Transfer Agreement”) to transfer the following structured settlement payments to Petitioner or its assignee: 30 monthly payments in the amount of $3,599.89 which will become due and payable commencing March 1, 2024, through and including August 1, 2026 (“Transferred Payments”). (Decl. of Estrellado ¶3; Amended Petition, Exh. 2.) The aggregate amount of payments to be transferred is $79,700.00 to the Payee in exchange for selling the transferee future payments totaling $107,996.70. (Amended Petition, Exh. 2 at §5.2.) The future payments have a discounted present value equal to $99,033.30. (Amended Petition, Exh. 2 at §5.6.) The original annuity contract provided Payee with $3,599.89 for life, payable monthly, guaranteed for five years, beginning on 9/1/2021, with the last guaranteed payment on 8/1/2026. (Amended Petition, Exh. 1 at Addendum No. 1.)

The Payee declares he intends to use the proceeds he receives from this transaction to cover the cost of his timeshare while in the process of trying to sell it, pay property taxes, and pay other financial obligations like homeowner association fees. (Decl. of Estrellado ¶11.) The Payee declares the Transferred Payments that he is assigning are the remainder of his guaranteed monthly payments under the policy, and beginning September 1, 2026, he will begin to receive life contingent payments. (Decl. of Estrellado ¶12.) The Payee declares the structured settlement was not designed to provide me with future payments for future medical care or loss of income as a result of the circumstances that gave rise to the settlement. (Decl. of Estrellado ¶14.) The Payee declares he does not believe that approval of this transfer will negatively affect his standard of living, and that he has determined this transfer is in his best interest and will improve his quality of life. (Decl. of Estrellado ¶15.)

In light of the original terms of the original annuity contract, the structured settlement before the Court appears substantially similar to the terms of the guaranteed payments, with the same ending date as the guaranteed payments under the annuity contract. (Compare Amended Petition, Exh. 2. §5.2 with Amended Petition, Exh. 1 at Addendum No. 1.) The Court considers Payee’s evaluation of his own life circumstances, as there is no documentation before the Court to believe the Payee does not have sufficient mental capacity or maturity to make such an evaluation.

On balance, the Court finds that the transfer is in the best interest of the Payee. (Ins. Code §10139.5(a)(1).)

(2) Advice to Seek Independent Professional Advice (Ins. Code §10139.5(a)(2)):

The Payee has been advised in writing by the Petitioner to seek independent professional advice regarding the transfer and has waived, in writing, the opportunity to receive the advice. (Decl. of Estrellado ¶7; Amended Petition, Exh. 3 at pg. 3 of 3; Ins. Code §10139.5(a)(2).)

The Transferee timely filed a notice of the proposed transfer and the petition for its authorization at least 20 days before hearing. (Ins. Code §10139.5(f)(2).)

The notice includes the petition, copies of the transfer agreement and disclosures, and a listing of dependents. (11/8/23 Proof of Service; Ins. Code §10139.5(f)(2)(A)-(D).)

The Transferee provided all disclosures to Payee at least 10 days before the Payee executed the transfer agreement. (Amended Petition, Exh. 3; Ins. Code §10136(b).)

The disclosures include all statements required under section 10136(b). (Amended Petition, Exh. 3.)

The Transfer Agreement sets forth all information required under §10136(c). (Amended Petition, Exh. 2 at §§5.1-5.13.)

For the reasons stated above, the transfer complies with Insurance Code §10139.5(a)(3).

There does not appear to be any applicable statute or court order contravened by this transaction.

(5) Payee Understands Terms Including Disclosures (Ins. Code §10139.5(a)(5)):

The Payee appears to understand the effect of this agreement. (Decl. of Estrellado ¶¶11-16.)

The Payee appears to understand the right to cancel. (Amended Petition, Exh. 2 at pgs. 12-13 of 13.)

For the reasons stated above, the Court finds that the transaction complies with all requirements set forth in Insurance Code §10139.5(a)(1)-(6).

Because the transaction complies with all requirements set forth in Insurance Code §10139.5(a)(1)-(6), the Court GRANTS the Petition for Approval of Transfer of Structured Settlement Payment Rights under Insurance Code §§10134, et seq.

Hon. Daniel M. Crowley

Judge of the Superior Court