Judge: Holly J. Fujie, Case: 23STCP02084, Date: 2023-07-20 Tentative Ruling

Case Number: 23STCP02084    Hearing Date: July 20, 2023    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

MOVING PARTY:  J.G. Wentworth Originations, LLC (“Petitioner”)

The Court has considered the moving papers.  No opposition papers were filed.  Any opposition papers were required to have been filed and served at least nine court days before the hearing under California Code of Civil Procedure section 1005, subdivision (b).

BACKGROUND

            On June 26, 2023, Petitioner filed a first amended petition (the “FAP”) for approval of transfer of structured payment rights on behalf of Jennifer Ruiz (“Ruiz”).  The FAP requests approval for Ruiz to transfer to Petitioner one future payment totaling $100,000 in exchange for $77,000.

DISCUSSION

Under Insurance Code section 10139.5, subdivision (a), the 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, 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; and

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

(Ins. Code § 10139.5, subd. (a).)

When determining whether the transfer is fair, reasonable, and in the payee’s best interests, the court must 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, when the settlement was completed, the future periodic payments that are the subject of the proposed transfer were intended to pay for the future medical care and treatment of the payee relating to injuries sustained by the payee in the incident that was the subject of the settlement and whether the payee still needs those future payments to pay for that future care and treatment; (6) whether, when the settlement was completed, the future periodic payments that are the subject of the proposed transfer were intended to provide for the necessary living expenses of the payee and whether the payee still needs the future structured settlement payments to pay for future necessary living expenses; (7) whether the payee is, at the time of the proposed transfer, likely to require future medical care and treatment for the injuries that the payee sustained in connection with the incident that was the subject of the settlement and whether the payee lacks other resources, including insurance, sufficient to cover those future medical expenses; (8) whether the payee has other means of income or support, aside from the structured settlement payments that are the subject of the proposed transfer, sufficient to meet the payee’s future financial obligations for maintenance and support of the payee’s dependents, specifically including, but not limited to, the payee’s child support obligations, if any; (9) whether the financial terms of the transaction, including the discount rate applied to determine the amount to be paid to the payee, the expenses and costs of the transaction for both the payee and the transferee, the size of the transaction, the available financial alternatives to the payee to achieve the payee’s stated objectives, are fair and reasonable; (10) whether the payee completed previous transactions involving the payee’s structured settlement payments and the timing and size of the previous transactions and whether the payee was satisfied with any previous transaction; (11) whether the transferee attempted previous transactions involving the payee’s structured settlement payments that were denied, or that were dismissed or withdrawn prior to a decision on the merits, within the past five years; (12) whether, to the best of the transferee’s knowledge after making inquiry with the payee, the payee has attempted structured settlement payment transfer transactions with another person or entity, other than the transferee, that were denied, or which were dismissed or withdrawn prior to a decision on the merits, within the past five years; (13) whether the payee, or his or her family or dependents, are in or are facing a hardship situation; (14) whether the payee received independent legal or financial advice regarding the transaction; and (15) any other factors or facts that the payee, the transferee, or any other interested party calls to the attention of the reviewing court or that the court determines should be considered in reviewing the transfer.  (Ins. Code. § 10139.5, subd. (b).)

The FAP includes a copy of the purchase agreement (the “Purchase Agreement”) for the sale of a one payment of $100,000 on September 7, 2024 in exchange for $70,000 entered into by Petitioner and Ruiz and the disclosure form required by Insurance Code section 10136.  (See Exhibits A-B.)[1]  The purchase price was calculated with a discount rate of 21.68 percent.  (See Exhibit A.)  The annuity contract is attached as Exhibit C.  The FAP provides evidence that a copy of the underlying settlement agreement could not be located.  (See Exhibit D.)  Exhibit C, however, provides a schedule of future payments that are owed to Ruiz.  The Proof of Service attached to the FAP indicates that Ruiz was served by mail and the Declaration of Jennifer Ruiz (“Ruiz Decl.”) lists her current address in Downey, California.  (See Ruiz Decl. ¶ 8.)

The underlying structured settlement agreement was entered into in 2016 to resolve a tort action.  (See Exhibit D ¶¶ 2-3.)  The future payment at issue in the Purchase Agreement was not intended to pay for future medical care and treatment.  (Ruiz Decl. ¶ 6.)    

Ruiz is 25 years old and lives with her two minor children, one of whom is two years old and one of whom is four months old.  (Ruiz Decl. ¶ 8.)  Ruiz works approximately 40 hours per week and earns $2,500 per month.  (Id.)  Ruiz additionally receives payments of $1,995.08 each month from her structured settlement.  (Id.)  Ruiz has not completed any transfers or attempted to transfer her interest in any future payments prior to the FAP.  (Ruiz Decl. ¶¶ 9-10.) 

Ruiz is currently experiencing financial hardship and plans to use the money she receives if the Purchase Agreement is approved to assist with the down payment and costs of purchasing a new home for her and her children.  (Ruiz Decl. ¶ 11.)  Ruiz has been looking at properties in the Riverside area with the assistance of a realtor and is aiming to purchase a property that costs around $400,000, with a plan to make monthly payments between $1,850 and $2,000 after using the proceeds from the transfer to cover the down payment.  (Id.)

 Ruiz declares that she understands the terms of the Purchase Agreement and that she did not receive independent legal or financial advice regarding the transaction.  (See Ruiz Decl. ¶¶ 12-13.)  The FAP includes a copy a document indicating that Ruiz was advised by Petitioner that she should obtain independent representation regarding the terms of the Purchase Agreement and that she waived this advice.  (See Ruiz Decl. ¶ 12, Exhibit E.) 

The Court finds that the proposed transfer detailed in the Purchase Agreement is fair, reasonable and in Ruiz’s best interest.  Pending Ruiz’s appearance at the hearing, the Court provisionally GRANTS the FAP.

Moving party is ordered to give notice of this ruling.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org.  If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar. 

          Dated this 20th day of July 2023