Judge: David Sotelo, Case: 22STCP02751, Date: 2022-09-26 Tentative Ruling


Case Number: 22STCP02751    Hearing Date: September 26, 2022    Dept: 40

MOVING PARTY: Petitioner Estate Fund, LLC.

 

Estate Fund, LLC, Petitions for this Un-Opposed Approval of Transfer of Structured Settlement Payment Rights as to payee Z.R. (“Payee”).    

 

The Court continues Petitioner’s Petition to provide Petitioner an opportunity to serve the Petition and Notice of hearing of the Petition on Payee and the Attorney General.

 

Analysis

 

California Insurance Code section 10139.5 provides that a transfer of structured settlement payment rights is not effective unless the transfer has been approved in advance in a final court order based on the following express 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. 
  1. 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. 
  1. 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. 
  1. The transfer does not contravene any applicable statute or the order of any court or other government authority. 
  1. The payee reasonably understands the terms of the transfer agreement, including the terms set forth in the disclosure statement required by Section 10136. 
  1. The payee understands and does not wish to exercise the payee’s right to cancel the transfer agreement. (Ins. Code § 10139.5(a).) 
  2.  

When determining whether the proposed transfer should be approved, including whether the transfer is fair, reasonable, and in the payee’s best interest, the court shall consider the totality of the circumstances, including, but not limited to: (1) the reasonable preference and desire of the payee to complete the proposed transaction, taking into account the payee’s age, mental capacity, legal knowledge, and apparent maturity level; (2) the stated purpose of the transfer; (3) the payee’s financial and economic situation; (4) the terms of the transaction, including whether the payee is transferring monthly or lump sum payments or all or a portion of his or her future payments; (5) whether the future periodic payments were intended to pay for future medical care of the payee related to the incident that was the subject of the settlement; (6) whether the payee has other means of income or support sufficient to meet the payee’s future financial obligations for support of payee’s dependents, such as child support; (7) whether there were previous transactions involving payee’s structured settlement payments; and (8) whether the payee and his or her dependents are facing a hardship situation. (Ins. Code § 10139.5(b).)  

 

Procedurally, Insurance Code section 10136 provides that ten or more days before the payee executes a transfer agreement, the transferee shall provide the payee with a separate written disclosure statement, accurately completed with the information that applies to the transfer agreement in at least 12-point type. (Ins. Code § 10136(b))  

 

The court-approval process requires the transferee to file a petition in the county in which the transferor resides for approval of the transfer. (Ins. Code § 10139.5(f)(1)) The following are required to be served and filed not less than 20 days prior to the scheduled hearing on any application for approval of a transfer of structured settlement payment rights: 

 

  1. A copy of the transferee’s current and any prior petitions. 
  1. A copy of the transfer agreement. 
  1. A listing of each of the payee’s dependents, together with each dependent’s age. 
  1. A copy of the disclosure required in subdivision (b) of Section 10136. 
  1. A copy of the annuity contract, if available. 
  1. A copy of any qualified assignment agreement, if available. 
  1. A copy of the underlying structured settlement agreement, if available. 
  1. 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. 
  1. Proof of service showing compliance with the notification requirements of this section.  
  1. Notification that any interested party is entitled to support, oppose, or otherwise respond to the transferee’s application, either in person or by counsel, by submitting written comments to the court or by participating in the hearing. 
  1. 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 application must be filed, which may not be less than 15 days after service of the transferee's notice, to be considered by the court. 
  1. 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 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. The notice shall be delivered by regular mail. Ins. Code § 10139.5(f)(2)) 

 

Further, at the time of filing such a petition, the transferee shall file a copy of the petition with the California Attorney General. Ins. Code § 10139. The Court, of course, retains continuing jurisdiction to interpret and monitor the implementation of the transfer agreement as justice requires. (Ins. Code § 10139.5(i))  

 

Here, Payee is the recipient of certain structured settlement payment (from the settlement of a wrongful death claim) under which the payment obligor (“PO”) purchased an annuity contract from payment issuer (“PI”) to fund the aforesaid obligation pursuant to a structured settlement agreement.  (Pet. ¶ 2.)  Payee has entered into a transfer agreement (“Transfer Agreement”) to transfer the remaining structured settlement payments to Petitioner or its assignee (“Transferred Payments”).  (Pet. ¶ 3, Exh. A; Exh. C, Z.R. Decl., ¶ 11 .)  Payee has agreed to sell his interest in the remaining payments to pay off his mortgage and complete needed home repairs and renovations.  Payee is over eighteen years of age.  (Pet. Exh. C., Z.R. Decl., ¶ 1.)  The original settlement was not intended for compensation for physical injuries, and Payee does not have a continuing need to provide for medical expenses.  (Id. at ¶ 6.)  Payee does not have child support obligations, and he has not previously assigned any portion of his structured settlement payment rights.  (Id. at ¶¶  7, 10.)  Prior to entering this transaction with Petitioner, Payee requested that his beneficiary under the annuity be changed to his personal estate.  (Id. at ¶ 12.)  Accordingly, there are no additional beneficiaries under the annuity that would be interested parties.  (Id.)

 

Payee was provided with a disclosure statement on July 8, 2022.  (Pet. Exh. B.)  Payee resides in the County of Los Angeles.  (Pet. ¶ 1.)  Petitioner did not provide copies of the underlying settlement, but states that it is continuing to use reasonable efforts to obtain the same and will provide them to the extent is it able to obtain it.  (Pet. ¶ 9.)    

 

Payee has waived his right to seek independent counsel or financial advice regarding the transfer.  (Pet. Exh. C., Z.R. Decl., ¶ 14.) 

 

The Court finds that while the Petition complies with most the statutory obligations required by Insurance Code sections 10134 - 10139.5, it fails to include a proof of service on the Payee and the Attorney General--the interested parties.  “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.” (Ins. Code, § 10139.5, subd. (a)(3).) “Not less than 20 days prior to the scheduled hearing on any¿petition¿for approval of a transfer of structured settlement payment rights under this article, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the¿petition¿for its authorization…” (Ins. Code, § 10139.5, subd. (f)(2).) “‘Interested parties’ means, with respect to a structured settlement agreement, the payee, the payee's attorney, any beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death, the annuity issuer, the structured settlement obligor, and any other party who has continuing rights or obligations under the structured settlement agreement.” (Ins. Code, § 10134, subd. (g).) 

 

Conclusion

 

The court therefore continues the petition to provide Petitioner an opportunity to serve the Petition and Notice of hearing of the Petition on Payee and the Attorney General.

 

The hearing is CONTINUED to December 2, 2022.