Judge: Joseph Lipner, Case: 23STCP04506, Date: 2024-02-15 Tentative Ruling
Case Number: 23STCP04506 Hearing Date: February 15, 2024 Dept: 72
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
DEPARTMENT 72
TENTATIVE
RULING
|
IN RE Petition of: PEACHTREE SETTLEMENT FUNDING, LLC,
Petitioner, and SHEILA BURRIS, Transferor
and Real Party-In-Interest. |
Case No:
23STCP04506 Hearing Date: February 15, 2024 Calendar Number: 3 |
Petitioner Peachtree Settlement Funding, LLC (“Petitioner”)
requests approval of the transfer of certain structured settlement payment
rights from payee and transferor Sheila Burris (“Payee”).
The Court grants the petition, subject to Petitioner
providing proof that it served its January 19, 2024 Amended Petition on all
interested parties. There is a proof of
service dated January 4, 2024 for the original petition, but no proof of service
after January 19, 2024 for the amended petition. If Petitioner has not served the Amended
Petition on the payee. and Metropolitan Life Insurance Company, the Court will
continue this hearing to allow petitioner to do so.
On October 27, 1987, Payee, by and through their Guardian ad
Litem, C. T., became entitled to a series of structured settlement payments. The
settlement obligor and annuity issuer is Metropolitan Life Insurance Company.
Payee seeks to transfer, and Petitioner seeks to obtain, the
rights to 192 monthly payments of $13,416.26 each, increasing at 4% annually,
beginning on September 30, 2035 and ending on August 30, 2051. Payee will
receive a lump sum of $500,000.00 from Petitioner in exchange for the transfer.
The court approval process for a transfer of structured
settlement payment rights requires the transferee to file a petition in the
county in which the transferor resides for approval of the transfer. (Ins.
Code, § 10139.5, subd. (f)(1).) In addition, the following elements 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:
A. A copy of the transferee’s current and any
prior petitions.
B. A
copy of the transfer agreement.
C. A
listing of each of the payee’s dependents, together with each dependent's
age.
D. A
copy of the disclosure required in subdivision (b) of section 10136.
E. A
copy of the annuity contract.
F. A
copy of any qualified assignment agreement.
G. A
copy of the underlying structured settlement agreement.
H. 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.
I. 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, in order
to be considered by the court.
J. 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.
K. Proof
of service showing compliance with the notification requirements of this
section.
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.) Lastly, the court shall retain
continuing jurisdiction to interpret and monitor the implementation of the
transfer agreement as justice requires. (Id., § 10139.5(i).)
This Petition is governed by Insurance Code sections 10134
through 10139.5. (See 321 Henderson Receivables Origination LLC v. Sioteco (2009)
173 Cal.App.4th 1059, 1066.) Under Insurance Code (“Ins. Code”), section 10137,
a transfer of structured settlement payment rights is void unless a court
reviews and approves the transfer and finds the following conditions are
met:
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.
b. The
transfer complies with the requirements of this article and will not contravene
other applicable law, and the court has reviewed and approved the transfer as
provided in Section 10139.5.
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:
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 receipt of that advice in writing.
3. 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 understands and does not wish to exercise the payee's right to cancel the
transfer agreement.
The transfer agreement is effective only upon approval in a
final court order. (Ins. Code, § 10139.5(a).)
A. A copy of the transferee’s current and any
prior petitions.
Petitioner
submits a copy of the instant petition. Petitioner provides the information and
case numbers for prior petitions for transfers of payment right by Payee.
(Amended Petition at p. 8:20-28, fn. 1, 2; Burris Decl. ¶ 9.)
C. A
copy of the transfer agreement.
Petitioner submits a copy of the transfer agreement as
Amended Exhibit A to the Amended Petition.
D. A
listing of each of the payee’s dependents, together with each dependent's
age.
Payee has no minor children and does not list any other
dependents. (Burris Decl. ¶¶ 9-10.)
E. A
copy of the disclosure required in subdivision (b) of section 10136.
Petitioner submits a copy of the disclosure as Exhibit B.
F. A
copy of the annuity contract.
Petitioner submits
a copy of the annuity contract as Exhibit C.
G. A
copy of any qualified assignment agreement.
Petitioner refers to Exhibit C for this requirement, which
does not include any qualified assignments.
H. A
copy of the underlying structured settlement agreement.
Petitioner attaches as Exhibit D. a copy of the underlying
settlement agreement.
I. 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.
Petitioner has provided a proof of service for the initial
petition, but not the amended petition. The proof of service does include
notice of the hearing.
J. 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, in order
to be considered by the court.
Petitioner has provided a proof of service for the initial
petition, but not the amended petition.
K. 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.
The settlement is
more than five years old.
L. Proof
of service showing compliance with the notification requirements of this
section.
Petitioner has provided a proof of service for the initial
petition, but not the amended petition.
The Court analyzes each of the substantive requirements of Insurance
Code, section 10139.5, subdivision (a) below.
Insurance Code, section 10139.5(b) sets forth fifteen non-exclusive
factors to consider in determining whether the transfer is fair and reasonable
and in the best interest of the payee:
(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. The payee shall disclose to the
transferee and the court his or her court-ordered child support or maintenance
obligations for the court's consideration.
(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. The court may deny or defer ruling on the petition for approval of
a transfer of structured settlement payment rights if the court believes that
the payee does not fully understand the proposed transaction and that
independent legal or financial advice regarding the transaction should be
obtained by the payee.
(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.
(Insurance Code, § 10139.5, subd. (b).)
Payee is 43 years of age and is currently experiencing a
financial hardship as a result of unemployment. Payee will use the proceeds
from the transfer to purchase a home and start a food catering business. Payee
has stated that it is their preference to conduct the transfer for this
purpose.
Payee
has already transferred a substantial number of payments in previous
transactions and does not indicate any dissatisfaction with those transfers. In
the current transaction, Payee seeks to transfer the entirety of the payments
in the specified time range. Based on the previous transactions and Payee’s
stated intent with this transaction, Payee appears to understand the proposed
transaction.
The settlement payments were not intended to cover medical
expenses or living costs of Payee, and Payee does not have any dependents who
would rely on Payee’s receipt of the payments.
There are no expenses deducted from the transaction. The
purchase price to be paid to Payee for the transfer was calculated using a
10.52% discount rate – that is to say, if Payee took out a $500,000.00 loan and
paid that loan back in installments with each of the annuity payments, Payee
would be paying a This is not an unreasonable interest rate for a personal
loan.
Based on these facts, the Court finds that the transfer
agreement is fair, reasonable, and in the best interest of Payee.
Payee has waived her right to receive independent legal or
financial advice. (Burris Decl. ¶ 12.) A copy of the waiver is attached as
Exhibit E to the Amended Petition.
Petitioner attaches the disclosure form as Exhibit B.
Nothing in the record indicates that the transfer
contravenes an applicable statute or government order.
Payee’s declaration indicates that she reasonably
understands the terms of the transfer agreement. (Burris Decl. ¶¶ 3-5, 13.)
Payee’s declaration indicates that she does not wish to exercise
her right to cancel the transfer agreement. (Burris Decl. ¶ 13.)
Because the procedural and substantive requirements have
been met, the Court grants the petition, subject to petitioner demonstrating
that the amended petition has been served.