Judge Holly J. Fujie, Case Number: 24STCP2908, Date: 2024-11-22 Tentative Ruling

The Court has considered the moving papers. No opposition or reply papers were filed as of November 19, 2024. Any opposition was due on November 8, 2024 and any reply thereto would have been due November 15, 2024.

Petitioner J.G. Wentworth Originations, LLC seeks an order approving the transfer of structured settlement payment rights by and between Nicholas Brandon (“Payee”) and Petitioner J.G. Wentworth Originations, LLC (“Transferee”).

Pursuant to Insurance Code section 10139.5, subdivision (a), the Court must make the following express findings as to a transfer of structured settlement payment rights:

(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 that advice in writing.

(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 reasonably understands the terms of the transfer agreement, including the terms set forth in the disclosure statement required by Section 10136.

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

When determining whether the proposed transfer should be approved, including whether the transfer is fair, reasonable, and in the payee’s best interest, taking into account the welfare and support of the payee’s dependents, 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;

(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.

Any petition to transfer payments from a structured settlement must be supported by specific documentation and information as set forth in Insurance Code section 10139.5, subdivision (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.

If the petitioner fails to attach the information required under Insurance Code section 10139.5, subdivision (c)(2)-(6), the petitioner may submit the information at the hearing on the petition. If the information is admitted into the record in accordance with the rules of evidence, the requirement under Insurance Code section 10139.5, subdivision (c) is satisfied. (Ins. Code. §10139.5, subd. (d).)

Here, Payee is 27 years old and lives in Los Angeles County. (Declaration of Payee, ¶ 8.) Payee is not married and has two minor children, O.B., who is three, and P.B., who is two. (Id., ¶ 8.) Both minor children live with Payee. (Id..) Payee does not have child support obligations but apparently also does not receive child support from the other parent(s) of the children. (Id.) Payee is currently unemployed, and he does not receive payments from SSI. (Id.)

The original structured settlement was entered into by Payee, by and through his Guardian ad Litem, Valencia Brandon, on or around January 21, 1999. (Id., ¶ 4.) The settlement was intended as compensation for a wrongful death claim. (Id.) Payee declares that when the original settlement was completed, the future period payment(s) that are the subject of the proposed transfer were not intended to pay for the future medical care and treatment relating to the incident that was subject of the settlement. (Id., ¶ 6.) Further, when the original settlement was completed, the future periodic payments that are the subject of the proposed transfer were solely monetary in nature and were not intended to provide for necessary living expenses. (Id., ¶ 7.)

Payee has agreed to sell a portion of his interest in the structured settlement to Transferee as follows: 22 monthly payments of $1,442.38, commencing on 03/13/2025 through and including 12/13/2026 and 27 monthly payments of $1,442.38 commencing 11/13/2028 through and including 01/13/2031. (Id., ¶ 5; Ex. “A.”) If approved, Payee will receive $48,000 from the transaction. (Id.)

Payee believes it is in his best interest to enter into the transaction. (Id., ¶ 4.) Payee is currently experiencing financial hardship, and he intends to use the money from the proposed settlement to relocate. (Id., ¶ 11.) Payee is looking to put a down payment on a home (ranging from $180,000 to $2000,000) where he, his fiancé, and his two kids can live together. (Id.) This does not appear to the Court to be a reasonable use of these funds. A down payment requires that monthly payments be made on a mortgage, and Payee has no income other than the structured settlement funds with which to support himself, his children and, apparently, his fiancée.

Payee has completed a previous transaction on 09/01/2016, through the Los Angeles County Court (Case # MS012329), transferring annual payments of $20,000.00 beginning on 03/13/2018 through and including 03/13/2019, and monthly payments of $1,442.38 beginning 03/13/2020 through and including 08/13/2021 to J.G. Wentworth Originations, LLC. From the settlement, Payee received $48,000.00. (Id., ¶ 9.) Payee has also completed a previous transaction on 09/28/2017, through the Los Angeles County Court (Case # MS013266), transferring monthly payments of $1,442.38 beginning 01/13/2027 through and including 10/13/2028 to J.G. Wentworth Originations, LLC. From the settlement, Payee received $12,000.00. (Id.)

Payee has not attempted previous transactions involving his structured settlement payment that were denied, dismissed or withdrawn prior to a decision on the merits, within the past five years. (Id., ¶ 10.)

Payee did not receive independent legal or financial advice regarding the proposed transaction. (Id., ¶ 12; Ex. “E.”) Payee declares he understands the terms of the transfer agreement, including the terms set forth in the disclosure statement, and he does not wish to exercise his right to cancel the agreement. (Id., ¶ 13.)

Payee, Allstate Life Insurance Company (Annuity Issuer), and Allstate Settlement Corporation (Annuity Obligor), were served with Notice of Hearing on Petition for Approval for Transfer of Payment Rights; Verified Petition for Approval for Transfer of Payment Rights; ADR Information Packet; Notice of Case Assignment; Proof of Service of Verified Petition et al. on September 12, 2024 by regular and overnight mail. Further, the Amended Petition for Approval for Transfer of Payment Rights and Declaration of Payee were served on the above parties on October 28, 2024 and November 15, 2024, respectively, by regular and overnight mail.

The Amended Petition includes a copy of the proposed Purchase Agreement (Ex. “A”); separate written disclosure statement (California and Illinois (Ex. “B”)); annuity contract and any qualified assignment agreement (Ex. “C”); Order for Compromise of Disputed Claim of Minor (Ex. “D”); and Waiver (Ex. “E”).

“(1) The transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents.” (Ins. Code, § 10139.5, subd. (a)(1).) Payee testifies that he is 27 years old and lives in Los Angeles County. (Declaration of Payee, ¶ 8.) Payee is not married and has two minor children, O.B., who is three, and P.B., who is two. (Id., ¶ 8.) Both minor children live with Payee. (Id.) Payee does not have child support obligations. (Id.) Payee is currently unemployed, and he does not receive payments from SSI. (Id.) Payee states he will use the money from the proposed settlement to relocate; he intends to put a down payment on a home (ranging from $180,000 to $2000,000) where he, his fiancé, and his two kids can grow together. (Id., ¶ 11.)

“(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 that advice in writing.” (Ins. Code, § 10139.5, subd. (a)(2).) According to the Amended Petition, Payee has been advised in writing to seek independent professional advice regarding the transfer and has either received that advice or knowingly waived that advice in writing. (Amended Petition, p. 4; Ex. “E” (copy of waiver).) Payee testifies that he did not receive independent legal or financial advice regarding the proposed transaction. (Payee, ¶ 12; Ex. “E.”) Payee also testifies that he understands the terms of the transfer agreement, including the terms set forth in the disclosure statement, and he does not wish to exercise his right to cancel the agreement. (Id., ¶ 13.)

“(3) The transferee has complied with the notification requirements pursuant to paragraph (2) or 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).) A copy of the required separate written disclose statement is attached to the Amended Petition as Exhibit “B”. Upon review, Payee received and read the separate written disclosure required by California Insurance Code section 10136(b), at least 10 days before he signed the transfer agreement.

“(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).) No opposition has raised any statute or order contravened by the transfer.

“(5) The payee reasonably 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 declares he understands the terms of the transfer agreement, including the terms set forth in the disclosure statement, and he does not wish to exercise his right to cancel the agreement. (Payee Decl., ¶ 13.)

“(6) The payee reasonably understands and does not wish to exercise the payee's right to cancel the transfer agreement.” (Ins. Code, § 10139.5, subd. (a)(6).) As set forth above, Payee testifies that he does not wish to exercise his right to cancel the agreement. (Payee Decl., ¶ 13.)

“(1) The payee's name, address, and age.” (Ins. Code, § 10139.5, subd. (c)(1).) Payee’s name and age are provided. (Payee Decl., ¶ 8.) According to Proof of Service, Payee’s address will be provided at hearing.

“(2) The payee's marital status, and, if married or separated, the name of the payee's spouse.” (Ins. Code, § 10139.5, subd. (c)(2).) Payee is not married. (Payee Decl., ¶ 8.) Payee has a fiancé. (Id., ¶ 11.)

“(3) The names, ages, and place or places of residence of the payee's minor children or other dependents, if any.” (Ins. Code, § 10139.5, subd. (c)(3).) Payee has two minor children. (Payee Decl., ¶ 8.) O.B. is three years old; P.B. is two years old. (Id.) Payee does not provide the place or places of residence of his minor children. Payee testifies that both minor children live with him; however, Payee does not provide his address. (Id.) According to Proof of Service, Payee’s address will be provided at hearing.

“(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.” (Ins. Code, § 10139.5, subd. (c)(4).) Payee states that he is currently unemployed, and he does not receive payments from SSI. (Payee Decl., ¶ 8.) Payee is not married; however, he has a fiancé. (Id., ¶ 11.)

“(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.” (Ins. Code, § 10139.5, subd. (c)(5).)

Payee does not have child support obligations. (Payee Decl., ¶ 8.) Payee does not state whether he is legally obligated to provide any other support (i.e., to any other family member and or other persons).

“(6) 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).) Payee has completed a previous transaction on 09/01/2016, through the Los Angeles County Court (Case # MS012329), transferring annual payments of $20,000.00 beginning on 03/13/2018 through and including 03/13/2019, and monthly payments of $1,442.38 beginning 03/13/2020 through and including 08/13/2021 to J.G. Wentworth Originations, LLC. From the settlement, Payee received $48,000.00. (Payee Decl., ¶ 9.) Payee has also completed a previous transaction on 09/28/2017, through the Los Angeles County Court (Case # MS013266), transferring monthly payments of $1,442.38 beginning 01/13/2027 through and including 10/13/2028 to J.G. Wentworth Originations, LLC. From the settlement, Payee received $12,000.00. (Id.) Payee has not attempted previous transactions involving his structured settlement payment that were denied, dismissed or withdrawn prior to a decision on the merits, within the past five years. (Id., ¶ 10.)

The Amended Petition fails to provide the Payee’s address as well as the “place or places of residence of the payee's minor children or other dependents, if any” as required by Insurance Code §10139.5, subdivision (c)(1) and (3). Payee provides that he lives in Los Angele County and that his two minor children live with him. (Payee Decl., ¶ 8.) According to Proof of Service, Payee’s address will be provided at hearing. At the hearing, the Court expects to discuss the intended use of these funds and whether this is a reasonable transaction under the circumstances.

Payee should also clarify “[t]he 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” as required by Insurance Code §10139.5, subdivision (c)(4). Payee states that he is currently unemployed, and he does not receive payments from SSI. (Payee Decl., ¶ 8.) Payee also states that he intends to use the money from the proposed settlement to relocate by putting a down payment on a home (ranging from $180,000 to $2000,000) where he, his fiancé, and his two children can “grow together.” (Payee Decl., ¶ 11.) While the money from the proposed settlement may allow Payee to put a down payment on a home, it is unclear how Payee will cover other expenses.

If the information is admitted into the record in accordance with the rules of evidence and is found satisfactory by the Court, the requirement under Insurance Code section 10139.5, subdivision (c) would be satisfied. (Ins. Code. §10139.5, subd. (d).)

The Court will grant the motion provided that the missing information is provided at hearing and the Court is satisfied with the information. Otherwise, the motion will be continued to allow Petitioner to submit an amended petition with the missing information or any additional facts that would render this transaction reasonable to the Court.

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