Judge: Lynne M. Hobbs, Case: 24STCP01081, Date: 2024-06-11 Tentative Ruling

Case Number: 24STCP01081    Hearing Date: June 11, 2024    Dept: 61

IN THE MATTER OF: PEACHTREE SETTLEMENT FUNDING, LLC

TENTATIVE

Payee Charles Badroos' petition is GRANTED.  Moving party to give notice.

DISCUSSION   

Insurance Code section 10136 states:

(a) No direct or indirect transfer of structured settlement payment rights by a payee to which this article 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 this section are satisfied.

(b) Ten or more days before the payee executes a transfer agreement, the transferee shall provide the payee with a separate written disclosure statement, accurately completed with the information that applies to the transfer agreement, in substantially the following form . . . .

In order for a court to approve such transfer, certain statutory provisions as set forth in Section 10139.5 must be met. These include findings of the following:

(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.

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

A court must also find that the transfer is “fair and reasonable” in light of the payee’s best interest and their dependents. (Ins. Code § 10137.)

Payee Charles Badroos (Payee) submits a declaration in support of this petition to transfer payment rights to Petitioner Peachtree Settlement Funding, LLC (Petitioner). Payee is 30 years old, unmarried, with no children. (Amended Badroos Decl. ¶ 8.) By the proposed transfer of rights to four payments of $30,000 each, due on August 31 in the years 2032–2035, and two payments of $49,905.58, due on August 31 in the years 2036 and 2037, Payee has agreed to receive a lump sum of $80,000.00. (Badroos Decl. ¶ 5.) Payee states that the payments were not intended to pay for future medical care or necessary living expenses. (Badroos Decl. ¶¶ 6–7.)

Payee states he is currently experiencing a financial hardship, and will use the funds received to pay off his vehicle, pay off credit card debt, and make a business investment, which entails renting out studio space to musical artists to record music. (Badroos Decl. ¶ 14.)

Payee previously obtained court approval for transfer of other payment rights from the same settlement. (Badroos Decl. ¶¶ 9–12.) These decisions were dated July 12, 2016, December 20, 20, 2016, May 5, 2017, and February 13, 2020. (Ibid.) Payee states he has not attempted other transactions involving his structured settlement payments that were denied, dismissed, or withdrawn prior to a decision on the merits, within the past five years. (Badroos Decl. ¶ 13.)

Payee has received and signed a disclosure form in compliance with Insurance Code § 10136 and states that they have read and understood the transfer agreement and do not wish to cancel it. (Badroos Decl. ¶ 16; Petition Exhs. A, B.) The disclosure form states that the discounted present value of the payment rights is $124,601.91, and if Payee instead obtained a loan in the amount of the lump sum and paid back the loan with the installments to be transferred, the interest on the loan would be 9.50% per year. (Petition Exh. B.)

Based on the above, the transfer is fair and reasonable in light of Payee’s best interest. The Payee has been advised to seek independent counsel and has waived that right. (Petition Exh. E; Badroos Decl. ¶ 15.) The required disclosure form has been provided, the transfer does not

contravene any statute or court order, and the Payee understands the terms of the transfer. Payee does not wish to cancel the transfer. (Badroos Decl. ¶ 16.) According the Payee’s testimony, the transfer is fair, reasonable, and in his best interest.

The petition is GRANTED.