Petition for Approval for Transfer of Payment Rights: CONTINUED

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).)

Section 10136 Requirements: 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).)

First, the transfer agreement satisfies the disclosure form requirements set out in Insurance Code section 10136, subdivision (b) because the transfer agreement contains a disclosure addressed to Payee and containing all the statutorily required language of Section 10136, subdivision (b). (See Ins. Code, § 10136, subd. (b); see also Amended Petition, Ex. “B”, California Disclosure Statement.)

Second, the transfer agreement DOES NOT SATISFY the transfer-agreement requirements set out in Insurance Code section 10136, subdivision (c) because the transfer agreement DOES NOT CONTAIN all the necessary language required from this statutory subdivision. (See Ins. Code, § 10136, subd. (c); see also Amended Petition, Ex. “A”, Purchase Contract (California)

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 Amended Petition, Ex. “A”, Purchase Contract (California), e.g., at § 11, pp. 12-13.)

Fourth, Payee J.V. has not sought cancellation of the transfer agreement as of the date of this hearing. (See Ins. Code, § 10136, subd. (e); see also Amended Petition, Payee Decl., ¶ 15 [Payee J.V. declaring that he “do[es] not wish to exercise [his] right to cancel the agreement”].)

Accordingly, the Court finds that Peachtree Settlement Funding, LLC’s proposed transfer of J.V.’s settlement rights DOES NOT YET SATISFY the requirements of Insurance Code section 10136, subdivisions (a) through (e).

Section 10139.5 Requirements: 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. (Ins. Code, § 10139.5, subd. (a).)

First, the transfer agreement satisfies the requirements of Section 10139.5, subdivision (f)(1), because Petitioner Peachtree Settlement Funding, LLC made the instant Amended Petition and the Amended Petition was brought in the county in which the payee, J.V., resides. (See Ins. Code, § 10139.5, subd. (f)(1); see also Amended Petition, 1:20-23 [showing Petitioner Peachtree Settlement Funding, LLC brings this Amended Petition]; Amended Petition, Payee Decl., ¶ 1 [Payee lives in Los Angeles County].)

Second, the transfer agreement DOES NOT SATISFY the requirements of Section 10139.5, subdivision (f)(2) because as of September 15, 2022—i.e., not less than 20 days before this hearing plus five calendar days for service by mail as prescribed by Code of Civil Procedure section 1005, subdivision (b), calculated to Friday, September 23, 2022—Petitioner filed with the court and served on all interested parties a notice of the proposed transfer and the petition for its authorization. (See Ins. Code, § 10139.5, subd. (f)(2); see also Amended Petition, Proof of Service; BUT NO NOTICE.)

Further, included with the notice of the Amended Petition are NOT all the necessary attachments under this subdivision. (See Ins. Code, § 10139.5, subds. (f)(2)(A)-(L).) The Amended Petition includes:

(A) A copy of the transferee’s current petition and any other prior petition. (See Ins. Code, § 10139.5, subd. (f)(2)(A); see also Amended Petition generally; Amended Petition, J.V. Decl., ¶¶ 9(a)-(g) [declaring instances Payee has transferred a portion of his or her settlement rights], ¶¶ 10(a)-(e) [declaring instances Payee has dismissed or been denied the ability to transfer a portion of his or her settlement rights], ¶¶ 11 [declaring instance Payee filed a request for dismissal in the Glendale Courthouse], Ex. “1” [copies of approved prior petitions], Ex. “2” [copies of dismissed or denied petitions], Ex. “3” [copy of dismissed Glendale petition].)

(B) 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 Amended Petition, Ex. “A”, Purchase Contract (California); Amended Petition, Ex. “B”, California Disclosure Statement.)

(C) Information regarding Payee’s dependents where J.V. has no spouse and one minor child. (See Ins. Code, § 10139.5, subd. (f)(2)(C); see also Amended Petition, J.V. Decl., ¶ 8 [not married, one sixteen-year-old child, and no child support].)

(D) A copy of the disclosure required in subdivision (b) of Section 10136. (See Ins. Code, § 10139.5, subd. (f)(2)(D); see also Amended Petition, Ex. “B”, California Disclosure Statement.)

(E) A copy of the annuity contract (if available). (See Ins. Code, § 10139.5, subd. (f)(2)(E); see also Amended Petition, Ex. “C”, Single Premium Annuity Contract.)

(F) A copy of any qualified assignment agreement, if available. (See Ins. Code, § 10139.5, subd. (f)(2)(F); see also ….)

(G) A copy of the underlying structured settlement agreement, if available. (See Ins. Code, § 10139.5, subd. (f)(2)(G); see also ….)

(H) If a copy of a document described in subparagraph (E), (F), or (G) is unavailable or cannot be located, then the transferee is not required to attach a copy of that document to the petition or notice of the proposed transfer if the transferee satisfies the court that reasonable efforts to locate and secure a copy of the document have been made, including making inquiry with the payee. If the documents are available, but contain a confidentiality or nondisclosure provision, then the transferee shall summarize in the petition the payments due and owing to the payee, and, if requested by the court, shall provide copies of the documents to the court at a scheduled hearing. (See Ins. Code, § 10139.5, subd. (f)(2)(H); see also ….)

(I) A copy of the Proof of Service made for this Amended Petition in compliance with this statutory section. (See Ins. Code, § 10139.5, subd. (f)(2)(I); Amended Petition, September 15, 2022 Proof of Service.)

(J) 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 ….)

(K) 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 ….)

(L) If the payee entered into the structured settlement at issue within five years prior to the date of the transfer agreement, then the transferee shall provide the following notice to the payee’s attorney of record at the time the structured settlement was created, if the attorney is licensed to practice in California, at the attorney’s address on file with the State Bar of California. See Ins. Code, § 10139.5, subd. (f)(2)(L); see also Amended Petition, Payee Decl., Ex. “1” [showing at least seven transfer petitions approved since 2018]; ….)

Third, payee information required from Section 10139.5, subdivision (c), is NOT contained in the Petition as follows. (See Ins. Code, § 10139.5, subd. (c)(1)-(6).)

(1) The payee’s name, address, and age. (See Ins. Code, § 10139.5, subd. (c)(1); see also Amended Petition, Payee Decl., ¶¶ 1-2 [name, county of address, and age]);

(2) 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 Amended Petition, Payee Decl., ¶¶ 1, 8 [marital status: single]);

(3) 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 Amended Petition, Payee Decl., ¶ 8 [abbreviation of name, age, and location for child].)

(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. (See Ins. Code, § 10139.5, subd. (c)(4); see also Amended Petition, Payee Decl., ¶ 8 [employed, earning $2,000 per month, and single].)

(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. (See Ins. Code, § 10139.5, subd. (c)(5); see also Amended Petition, Payee Decl., ¶ 8 [no child support obligations; marital status single—rather than divorced or separated—and thus no spousal support inferable].)

(6) Information regarding previous transfers or attempted transfers, as described in paragraph (11), (12), or (13) of subdivision (b) of section 10139 where: (1) 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; and (2) 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. (See Ins. Code, § 10139.5, subd. (c)(6); see also Amended Petition generally; Amended Petition, J.V. Decl., ¶¶ 9(a)-(g) [declaring instances Payee has transferred a portion of his or her settlement rights], ¶¶ 10(a)-(e) [declaring instances Payee has dismissed or been denied the ability to transfer a portion of his or her settlement rights], ¶¶ 11 [declaring instance Payee filed a request for dismissal in the Glendale Courthouse], Ex. “1” [copies of approved prior petitions], Ex. “2” [copies of dismissed or denied petitions], Ex. “3” [copy of dismissed Glendale petition].)

Fourth, the transferee—Peachtree Settlement Funding—bore the costs for the transfer petition of structured settlement rights. (See Ins. Code, § 10139.5, subd. (g); see also Amended Petition, § VIII at p. 13:1-6; Jul. 5, 2022 Notice of Hearing, Journal Technologies Court Portal, p. 1 [Reservation demonstrating Petitioner is the filing party and fees paid].)

Fifth, no later than September 16, 2022, when this Amended Petition was filed, Petitioner Peachtree Settlement Funding advised J.V. of his or her right to seek independent counsel and financial advice in connection with this transfer and advised J.V. of his or her right to a reimbursement of $1,500.00 for incurring such costs. (See Amended Petition, 6:13-7:3; Amended Petition, Ex. “A”, Purchase Contract (California), p. 14 [independent counsel and reimbursement language]; Amended Petition, Ex. “B”, CA Transfer Disclosure, p. 2 [disclosure regarding right to seek independent counsel]; Amended Petition, Ex. “D”, California Statement of Professional Representation [Payee’s declination of independent professional representation]; Amended Petition, Payee Decl., ¶ 13 [Payee declaring lack of wish for independent financial or legal advice regarding this transaction and reference to Exhibit “D” of Amended Petition].)

Having NOT met all procedural and substantive requirements for this relief, this Amended Petition for Approval of Transfer of Structured Settlement Payment Rights in this matter will be CONTINUED.

Conclusion

Petitioner Peachtree Settlement Funding, LLC’s Amended Petition for Approval of Transfer of Structured Settlement Payment Rights is CONTINUED to March 3, 2023 at 8:30 a.m.