Judge: Joseph Lipner, Case: 24STCP00629, Date: 2024-04-09 Tentative Ruling
Case Number: 24STCP00629 Hearing Date: April 9, 2024 Dept: 72
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
DEPARTMENT 72
TENTATIVE
RULING
|
IN RE Petition of: J.G. WENTWORTH ORIGINATIONS, LLC, Petitioner, and J. Runia, Transferor
and Real Party-In-Interest. |
Case No:
24STCP00629 Hearing Date: April 9, 2024 Calendar Number: 6 |
Petitioner J.G. Wentworth Originations, LLC (“Petitioner”)
requests approval of the transfer of certain structured settlement payment
rights from payee and transferor J. Runia (“Payee”).
The Court GRANTS the petition, subject to Petitioner or
Payee disclosing at the hearing (a) the full name of the Payee; (b) the address
of the Payee; and (c) either filing a proof of service with the Payee’s
address, or having the Payee attest at the hearing that he received the
documents.
The Court has concerns that Petitioner does not provide the
full name of the Payee but identifies the Payee as only “J. Runia.” Payee is
not a minor. (Runia Decl. ¶ 1.) No protective order has been issued in this
case as to Payee’s identity or address. The Payee is a real party in interest
in this action. Thus, the Payee’s full name and address should be
provided. The Court asks Petitioner to
provide the full name and address of the payee at the hearing and admonishes
Petitioner to provide full names of payees in the future. Moreover, Petitioner will need to file an
amended proof of service with the Payee’s address or have the Payee present at
the hearing to attest that he received all relevant documents.
Moreover, there are redactions in the original petition that
do not appear to be justified and certain documents submitted in support of the
petition were not formally authenticated.
Based on the totality of the circumstances and the fact that no party
served with the papers has objected, the Court draws the conclusion that all
documents are authentic and agreed upon.
The Court admonishes Petitioner to make sure in the future that all
documents are presented to the Court in unredacted form and that all documents
submitted be properly identified.
Payee entered into a structured settlement agreement in 2023
for a personal injury claim.
Payee seeks to transfer, and Petitioner seeks to obtain, the
rights to 120 payments of $4,233.91 each, beginning on January 19, 2035 and
ending on December 19, 2044. Payee will receive a lump sum of $150,000.00 from
Petitioner in exchange for the transfer.
The annuity issuer is New York Life Insurance Company. The
annuity obligor is New York Life Insurance Company and Annuity Corporation.
Petitioner filed this action on February 28, 2024.
Petitioner filed and served an Amended Petition on March 15, 2024. The Payee
has filed a declaration in support of the petition. No party has filed an opposition.
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).)
The Court has concerns that Petitioner does not provide the
full name of the payee but identifies the payee as only “J. Runia.” Payee is
not a minor. (Runia Decl. ¶ 1.) No protective order has been issued in this
case as to Payee’s identity or address. The Payee is a real party in interest
in this action. Thus, the payee’s full name and address should be
provided. The Court asks Petitioner to
provide the full name and address of the payee at the hearing and admonishes
Petitioner to provide full names of payees in the future. Moreover, Petitioner will need to file an
amended proof of service with the Payee’s address or have the Payee present at
the hearing to attest that he received all relevant documents.
Moreover, there are redactions in the original petition that
do not appear to be justified and certain documents submitted were not formally
authenticated. Based on the totality of
the circumstances and the fact that no party served with the papers has
objected, the Court draws the conclusion that this is all in order. The Court admonishes Petitioner to make sure
that all documents are presented to the Court in unredacted form and that all
documents submitted be properly identified.
A. A copy of the transferee’s current and any
prior petitions.
Petitioner
submits a copy of the current petition. No previous petitions have been filed
to approve a transfer of Payee’s payment rights.
B. A
copy of the transfer agreement.
Petitioner submits a copy of the transfer agreement as
Exhibit A to the Amended Petition. (Runia Decl. ¶ 3; Amended Petition, Ex. A.)
C. A
listing of each of the payee’s dependents, together with each dependent's
age.
Payee has no minor children, is not married, and does not
list any other dependents. (Runia Decl. ¶ 8.)
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. Exhibit
C contains a qualified assignment from AIG Property Casualty Company to New
York Life Insurance and Annuity Corporation.
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 both the
initial and amended petition.
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 both the
initial and 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 less than five years old. Payee has not
entered or attempted to enter into any previous transactions involving
structured settlement payments. (Runia Decl. ¶ 9.)
L. Proof
of service showing compliance with the notification requirements of this
section.
Petitioner has provided a proof of service for both the
initial and 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 34 years of age and is currently experiencing a
financial hardship. Payee is employed and earns a net pay of roughly $9,000 per
month. (Runia Decl. ¶¶ 9, 11.) Payee will use the proceeds from the transfer to
pay off a high interest car loan, pay down a portion of his student loans from
law school, refinance his home, and pay off a portion of his mortgage or other
high-interest-bearing financial obligations. (Runia Decl. ¶ 11.)
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.
The petition and supporting documents do not contain any
information on whether Payee is likely to need the transferred payments to
cover future medical care. Although the settlement was not originally intended
to cover medical costs, it does arise out of a personal injury action. The
Court thus has concerns about the absence of evidence on this question.
The terms of the transaction appear to be fair. There are no
expenses deducted from the transaction. If Payee were to take out a loan for
the purchase amount of $150,000.00 today at an interest rate of 9 percent per
annum, compounded annually and pay it back from 2035 to 2044, the monthly
payments would be slightly in excess of the transferred annuity payments. In
other words, the financial effect of this transaction is comparable to taking
out a loan at an interest rate of slightly less than 9 percent.
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 been advised to seek independent professional
advice and has waived his right to do so. A copy of the waiver is attached to
the Amended Petition as Exhibit E. (Runia Decl. ¶ 12; Amended Petition, Ex. E.)
Petitioner submits a copy of the disclosure as Exhibit B.
Petitioner does not provide authentication for Exhibit B.
Nothing in the record indicates that the transfer
contravenes an applicable statute or government order.
Payee’s declaration indicates that he reasonably understands
the terms of the transfer agreement. (Runia Decl. ¶¶ 4-5.)
Payee’s declaration indicates that he does not wish to
exercise his right to cancel the transfer agreement. (Runia Decl. ¶ 13.)