Judge Holly J. Fujie, Case Number: 24STCP03063, Date: 2024-12-13 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

Petitioner has filed a petition for approval of transfer of certain structured settlement payment rights (the “Petition”) belonging to Real Party-in-Interest/Transferor Harvey Robertson (“Transferor”). Specifically, Petitioner seeks the transfer of $94,560.00 in future annuity payments belonging to Transferor which span payments to be paid between January 1, 2025 and July 1, 2035, the present discounted value of which is $74,356.25, to be transferred in exchange for a $50,000.00 lump sum payment to Transferor.

The Petition was filed on September 23, 2024. On September 24, 2024, Petitioner filed a notice of hearing for December 13, 2024.

The amended petition (the “Amended Petition”) was filed on November 19, 2024 along with the Declaration of Payee in Support of Petitioner’s Petition (the “Payee Decl.”) That same day, Petitioner filed a proof of service via mail and email. The filing shows service of the notice of hearing, verified Petition, notice of case assignment, declaration of payee and proof of service on Transferor, the annuity issuer and the annuity obligor.

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 (“Ins. 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).)

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).)

The petition satisfies the requirements of Section 10136 as follows (Ins. Code, § 10136, subds. (b)-(e)):

First, the transfer agreement satisfies the disclosure form requirements set out in Insurance Code section 10136, subdivision (b) because the transfer agreement is accompanied by a disclosure addressed to Transferor and the disclosure contains all the statutorily required language of section 10136, subdivision (b).) (Ins. Code, § 10136, subd. (b); Amended Petition, Ex. A, California Purchase Contract, § 10.)

Second, the transfer agreement satisfies the transfer-agreement requirements set out in Insurance Code section 10136, subdivision (c) because the transfer agreement contains all the necessary language required from this statutory subdivision. (Ins. Code, § 10136, subd. (c); Amended Petition, Ex. A, California Purchase Contract, §§ 2 [amount and due date of payment rights to be sold], 10 [remaining requirements].)

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. (Ins. Code, § 10136, subd. (d); Amended Petition, Ex. A, California Purchase Contract.)

Fourth, Transferor has not sought cancellation of the transfer agreement as of the date of this hearing. (Ins. Code, § 10136, subd. (e); Payee Decl., ¶ 13.)

Accordingly, the Court finds that Petitioner’s proposed transfer of Transferor’s settlement rights satisfies the requirements of Insurance Code section 10136, subdivisions (a) through (e).

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).)

The petition satisfies the entirety of the findings requirement set out in Insurance Code section 10139.5, subdivisions (a)(1) to (a)(6). These findings, which the Court expressly makes by the following language, are that:

(1) The transfer is fair and reasonable in the best interests of the payee, taking into account the welfare and support of the payee’s dependents. Transferor is collecting $50,000.00 for future payment of $94,560.00, the discounted present value of which is $74,356.25. Transferor is an unmarried, unemployed forty-three-year-old with no minor children, is experiencing financial hardship and would use the transfer funds to purchase a property. (Ins. Code, § 10139.5, subd. (a)(1) [framed by Ins. Code, § 10139.5, subds. (b)(1)-(15)]; see also Amended Petition, Ex. A, California Purchase Contract, ¶ 10; Payee Decl., ¶¶ 8, 11.)

(2) The payee has been advised in writing 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. (Ins. Code, § 10139.5, subd. (a)(2); Amended Petition, Ex. A, California Purchase Contract [Transferor was advised to obtain independent legal advice and professional tax advice about the sale of the Purchased Payments]; Payee Decl., ¶ 12 [“I did not receive independent legal or financial advice regarding the proposed transaction. A copy of the waiver is attached to Exhibit ‘E’ of the petition.”].)

(3) Petitioner has complied with the notification requirements pursuant to paragraph (2) of subdivision (f), has provided 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); Ins. Code, § 10136, subds. (b)-(e) discussion supra & Ins. Code, § 10139.5, subd. (f) discussion infra at “Second, …” & Amended Petition Ex. A, California Purchase Contract.)

(4) The transfer does not contravene any applicable statute or the order of any court or other government authority. (Ins. Code, § 10139.5, subd. (a)(4).)

(5) The payee understands the terms of the transfer agreement, including the terms set forth in the disclosure statement required by Section 10136. (Ins. Code, § 10139.5, subd. (a)(5); Payee Decl., ¶ 13 [“I understand the terms of the transfer agreement, including the terms set forth in the disclosure statement …”].)

(6) Payee understands and does not wish to exercise the right to cancel the transfer agreement. (Ins. Code, § 10139.5, subd. (a)(6); Payee Decl., ¶ 13 [“I … do not wish to exercise my right to cancel the agreement”].)

Except as noted below, the Amended Petition satisfies all the payee information required from Section 10139.5, subdivision (c) as follows ((Ins. Code, § 10139.5, subd. (c)):

(1) Included the payee’s name and age. (Ins. Code, § 10139.5, subd. (c)(1); Payee Decl., p. 1:19 [Harvey Robertson] & ¶ 8 [43 years old].)

(2) Included the payee’s marital status, and, if married or separated, the name of payee’s spouse. (Ins. Code, § 10139.5, subd. (c)(2); Payee Decl., ¶ 8 [“I am not married.”].)

(3) Included the names, ages, and place or places of residence of payee’s minor children or other dependents, if any. (Ins. Code, § 10139.5, subd. (c)(3); Payee Decl., ¶ 8 [“I have 0 minor children.”].)

(4) Included the amounts and sources of the payee’s monthly income and financial resources. (Ins. Code, § 10139.5, subd. (c)(4); Payee Decl., ¶ 8 [“I am currently unemployed due to my injury. I am currently receiving payments of $2,218.37 per month from my annuity”].)

(5) Included information permitting the determination of whether 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. (Ins. Code, § 10139.5, subd. (c)(5); Payee Decl., ¶ 8 [“I am not married.”; “I do not have any court-ordered child support obligations”].) The Court notes that there is nothing in the declaration specifying that Transferor has no obligation for spousal support. The Court would accept sworn testimony to that effect at the time of the hearing.

(6) Included information regarding previous transfers or attempted transfers, as described in paragraph (11), (12), or (13) of subdivision (b). (Ins. Code, § 10139.5, subd. (c)(6) [framed by Ins. Code, § 10139.5, subds. (b)(11)-(13), requiring information only for petitions in last five years]; Payee Decl., ¶¶ 9-10 [Transferor has not completed or attempted any previous transactions].)

The amended petition satisfies the requirements of Section 10139.5, subdivision (f) as follows (Ins. Code, § 10139.5, subd. (f)):

First, the transfer agreement satisfies the requirements of Section 10139.5, subdivision (f)(1), because Petitioner made the instant Petition and the Petition was brought in the county in which the Payee resides. (Ins. Code, § 10139.5, subd. (f)(1); Amended Petition, p. 1 [showing Petitioner J.G. Wentworth brings this Petition]; Payee Decl., ¶ 1 [“I reside in Los Angeles County, California”].)

Second, except as noted below, the Petition satisfies the requirements of Section 10139.5, subdivision (f)(2).

Formal notice of this transfer and a copy of the Amended Petition itself was filed by Petitioner with the Court and served on all interested parties no later than November 23, 2024—i.e., original Petition, notice, Amended Petition, declaration in support of Petitioner’s Petition, notice of case assignment, and proof of service were served on Transferor, the annuity issuer, and the annuity obligor. (See Ins. Code, § 10139.5, subd. (f)(2) [notice of the proposed transfer and the petition for its authorization to be filed with the court and served on all interested parties within 20 days of hearing]; see also 11/19/24 Proof of Service.)

Further, except as noted below, the notice and Petition have attached all the necessary documents required from this subdivision. (Ins. Code, § 10139.5, subds. (f)(2)(A)-(L).) The notice and petition:

(A) Include a copy of the instant petition and need not attach prior petitions made outside of five years from the date of this petition. (Ins. Code, § 10139.5, subd. (f)(2)(A) [framed by Ins. Code, § 10139.5, subd. (c)(6), which in turn is framed by Ins. Code, § 10139.5, subds. (b)(11)-(13), requiring information about petitions in last five years]; Payee Decl., ¶¶ 9-10 [Transferor has not completed or attempted any previous transactions].)

(B) Include a copy of the proposed transfer agreement and disclosure form required by paragraph (3) of subdivision (a). (Ins. Code, § 10139.5, subd. (f)(2)(B); Amended Petition, Ex. A, California Purchase Contract &, Ex. B, California Disclosure Statement.)

(C) Include information regarding Transferor’s dependents and their ages. (See Ins. Code, § 10139.5, subd. (f)(2)(C); Payee Decl. ¶ 8 [not married; no minor children].)

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

(E) Include copies of the annuity contract, any qualified assignment agreement, and underlying structured settlement agreement, if available, and if not available, a showing of reasonable efforts to locate and secure a copy of the document have been made, including making inquiry with Payee. (See Ins. Code, § 10139.5, subds. (f)(2)(E)-(H); Amended Petition, Exs. C [Qualified Assignment and Release Agreement] & D, ¶ 9 [“have attempted to locate the Settlement Agreement and have been unsuccessful.”].)

(F) Include copies of the proofs of service made for notice of this petition. (Ins. Code, § 10139.5, subd. (f)(2)(I); 11/19/24 Proof of Service.)

(G) Include a 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. (Ins. Code, § 10139.5, subd. (f)(2)(J); see Notice of Hearing; 11/19/24 Proof of Service.)

(H) Include a 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 Notice of Hearing; 11/19/24 Proof of Service.)

(I) 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. (See Ins. Code, § 10139.5, subd. (f)(2)(L).) The Court notes that Transferor entered into “the original structured settlement agreement on or about 2023…” (Payee Decl., ¶ 4.) However, proofs of service on file with the Court do not indicate that notice has been provided to Transferor’s attorney of record at the time the structured settlement agreement was created.

The Amended Petition satisfies the requirements of Section 10139.5, subdivision (g) requiring that transferees bear the costs of transfer petitions of structured settlement rights. (Ins. Code, § 10139.5, subd. (g); Amended Petition, Ex. A, California Purchase Contract [“We have charged [Harvey Robertson] for the following expenses: [¶] … $0.00 [¶] for a total of $0.00 in expenses”] & Ex. B, California Disclosure Statement, p. 1 [same].)

The Amended Petition satisfies the requirements of Section 10139.5, subdivision (h) because, when it was filed, Petitioner advised Transferor of his right to seek independent counsel and financial advice in connection with this transfer petition and advised Transferor of his right to a reimbursement of $1,500 for incurring such costs. (See Ins. Code, § 10139.5, subd. (h); Amended Petition, Ex. A, California Purchase Contract [Harvey Robertson was advised to receive independent representation and elected not to seek out such independent professional representation]; Payee Decl., ¶ 12 [“I did not receive independent legal or financial advice regarding the proposed transaction. A copy of the waiver is attached to Exhibit ‘E’ of the petition.”].)

The Court requires the presence of Transferor at the hearing so that the Court can take sworn testimony from him to (1) confirm that there are no spousal support obligations, (2) discuss how he intends to pay his living expenses if he will use these funds for the purchase of property and he is unemployed. Further, counsel will be required to answer the Court’s concerns as to why notice to counsel pursuant to section 10139.5, subd. (f)(2)(L) was not provided or is not required. The Court will take sworn testimony from Transferor and will hear from counsel on these issues at the hearing, and based on that testimony will determine whether or not to grant this Amended Petition.

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.

Hon. Holly J. Fujie

Judge of the Superior Court