Judge: Mel Red Recana, Case: 24STCP03080, Date: 2024-10-23 Tentative Ruling

Case Number: 24STCP03080    Hearing Date: October 23, 2024    Dept: 45

Superior Court of California

County of Los Angeles

Hearing date:               October 23, 2024

Moving Party:             Petitioner Arrowhead Group

Responding Party:       None

Motion for Order Approving Transfer of Structured Settlement Payment Rights

The Court considered the moving papers. No opposition or reply papers were filed.

The First Amended Petition fails to provide 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)(3). Petitioner must submit a revised petition. Alternatively, 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).)

Background

Petitioner Arrowhead Group seeks an order approving the transfer of structured settlement payment rights by and between Transferor Marleina Salazar (“Payee”) and Petitioner Arrowhead Group (“Transferee”).

As of October 18, 2024, there is no opposition.

Legal Standard 

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. 

(Ins. Code, § 10139.5, subd. (a).) 

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;  

(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 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.

(Ins. Code, § 10139.5, subd. (b).) 

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: 

(1)   The payee's name, address, and age.

(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.

(6)   Information regarding previous transfers or attempted transfers.”

(Ins. Code. §10139.5, subd. (c).)

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).)

Discussion

Payee is 32 years old and lives at 4900 N Grand Ave, Apt 138, Covina, CA 91724. (Declaration of Marleina Salazar, ¶ 2.) She has been married to Manuel Amaya for the last five years, and she has two minor children. (Id., ¶ 3.) She does not have child support obligations. (Id., ¶ 7.) She is employed by A Change in Trajectory, and she makes $20 per hour. (Id., ¶ 5.) Her spouse makes $30.00 per hour. (Notice of Errata.) Average monthly expenses are about $5,000. (Salazar Decl., ¶ 5.)

In 1996, Monica Salazar settled a lawsuit for wrongful death. The settlement that was reached entitled Payee to future periodic payments. (Salazar Decl., ¶ 6.) Payee declares the original settlement was intended as compensation for her injuries; she is no longer being treated for those injuries and as such she has no continuing need to provide for future medical expenses. (Ibid.) To the best of her knowledge, the future payments were not intended to pay for my future living expenses. (Ibid.)

Payee has agreed to sell her interest in certain payments to Transferee as follows: One (1) lump sum payment on August 5, 2027 in the amount of One Hundred Thousand and 00/100 Dollars ($100,000.00); plus One Hundred (100) monthly payments, each in the amount of Three Thousand Thirty Eight and 02/100 Dollars ($3,038.02), beginning with the payment on August 5, 2030, compounding at (3.00%) every August 5th, through to and including November 5, 2038. (Id., ¶ 8; Ex. “2” Transfer Agreement.) In return, Payee will receive $175,000, which she intends to use to purchase a home (Id., ¶ 9); Transferee will provide a bonus of $5,000, making the purchase price $180,000 (Notice of Errata, Ex. J.) Payee believes it is in her best interest, and in the best interests of her family, to enter this transaction. (Salazar Decl., ¶ 9.)

Payee has not previously assigned a portion of her structured settlement payment rights on two occasions. (Notice of Errata.) After this transaction, she will retain the rights to the following payments under this annuity: Seventy (70) monthly payments, each in the amount of Two Thousand Five Hundred Forty Four and 30/100 Dollars ($2,544.30), beginning with the payment on October 5, 2024, compounding at (3.00%) every August 5th, through to and including July 5, 2030; plus Twenty (20) monthly payments, each in the amount of Three Thousand Eight Hundred Forty Eight and 49/100 Dollars ($3,848.49), beginning with the payment on December 5, 2038, compounding at (3.00%) every August 5th, through to and including July 5, 2040 and for life thereafter. (Salazar Decl., ¶ 11.) There are no additional beneficiaries under the annuity policy that would qualify as interested parties to this action entitled to receive notice under Cal. Ins. Code § 10134(g) et seq. (Id., ¶ 12.)

Payee received and read the separate written disclosure required by California Insurance Code section 10136(b), at least 10 days before she signed the Transfer Agreement. (Id., ¶ 13; Ex. “4” Notice of Hearing.) She has been advised by Transferee of her right to seek independent counsel and financial advice in connection with the petition for court approval of the transfer agreement; she waives that advice and does not wish to retain such an independent advisor. (Id., ¶ 14.) She has received and reviewed copies of (1) the Transfer Agreement offered by Arrowhead Group; (2) a copy of the Petition for Court Approval for this transfer; (3) a copy of the disclosures required by California Insurance Code section 10136(b); (4) a copy of the Notice regarding the hearing on this Petition for Approval of Transfer Structured Settlement Payment Rights as required by California Insurance Code section 10139(c)(2); and (5) a copy of the advisory statement as required by California Insurance Code section 10139.5(e). (Id., ¶ 15.) She understands the nature and terms of the transaction and is entering into the transaction with Transferee on her own free will and volition. (Id., ¶ 17.)

Notice

Payee, Payee’s spouse, GE Capital Assignment Corporation (Annuity Issuer), Genworth Life Insurance Company (Annuity Obligor), and Corporation Service Company (Registered Agent) were served with the Motion for Order Approving Transfer of Structured Settlement Payment Rights, the Petition and First Amended Petition, and Proof of Service of Petition by Federal Express mail on September 26, 2024. Further, the Notice of Errata and Supplemental Exhibit “J” were served on the above parties by Federal Express mail on October 12, 2024.

The First Amended Petition includes a copy of the California Transfer Disclosure and Disclosure Statement - Supplemental (First Amended Petition, Ex. A), the proposed Structured Settlement Payment Right Purchase and Assignment Agreement (Id. at Ex. B), Statement of Dependents (Id. at Ex. C), Declaration of Marleina Salazar (Id. at Ex. D), Statement of Independent Professional Advice (Id. at Ex. E), Affidavit of Same Name (Id. Ex. F), Sworn Affidavit in lieu of settlement agreement (Id. Ex. G), Affidavit of Due Diligence (Id. Ex. H), and Verification for Marliena Sanchez (Id. Ex. I.)

Requirements of Insurance Code section 10139.5, subdivision (a)

“(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 she is 32 years old and lives at 4900 N Grand Ave, Apt 138, Covina, CA 91724. (Declaration of Marleina Salazar, ¶ 2.) She has been married to Manuel Amaya for the last five years, and she has two minor children. (Id., ¶ 3.) She does not have child support obligations. (Id., ¶ 7.) She is employed by A Change in Trajectory, and she makes $20 per hour. (Id., ¶ 5.) Her spouse makes $30.00 per hour. (Notice of Errata.) Payee states that she will use the payment ($180,000) to purchase a home. (Salazar Decl., ¶ 9.)

“(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).)  Payee testifies that she has been advised by Transferee of her right to seek independent counsel and financial advice in connection with the petition for court approval of the transfer agreement; she waives that advice and does not wish to retain such an independent advisor. (Salazar Decl., ¶ 14.)

“(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).) Payee received and read the separate written disclosure required by California Insurance Code section 10136(b), at least 10 days before she signed the Transfer Agreement. (Salazar Decl., ¶ 13; Ex. “4” Notice of Hearing.) The transfer agreement complies with sections 10136, subdivision (c) and 10138 (First Amended Petition, ¶ 13.)

“(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 testifies that she understands the nature and terms of the transaction and is entering into the transaction with Transferee on her own free will and volition. (Salazar Decl., ¶ 17.)

“(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).) Payee testifies that she understands that she has a right to cancel the Transfer Agreement up until the time the Judge approves the sale, and she does not wish to exercise the right to cancel. (Salazar Decl., ¶ 18.)

Requirements of Insurance Code section 10139.5, subdivision (c)

“(1) The payee's name, address, and age.” (Ins. Code, § 10139.5, subd. (c)(1).) Payee’s name, age, and address are provided. (Salazar Decl., ¶ 2.)

“(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 married and provides the name of her spouse. (Salazar Decl., ¶ 3.)

“(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. (Salazar Decl., ¶ 3.) Marlie Rose Amaya is 7 years old; Manuel Amaya is 4 years old. (Motion, Ex. “C” Statement of Dependents.) Payee does not provide the place or places of residence of her minor children. The children presumably reside at the same address as Payee (4900 N Grand Ave, Apt 138, Covina, CA 91724), but it is not clear.

“(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 she is employed by A Change in Trajectory, and she makes $20 per hour. (Salazar Decl., ¶ 5.) Her spouse makes $30.00 per hour. (Notice of Errata.) Average monthly expenses are about $5,000. (Salazar Decl., ¶ 5.)

“(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 is not legally obligated to provide support, including spousal maintenance, to any other family member and/or other persons. (Motion, Ex. “C” Statement of Dependents.)

“(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 not previously assigned a portion of her structured settlement payment rights on two occasions. (Notice of Errata.)

Conclusion

The First Amended Petition fails to provide 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)(3). Petitioner must submit a revised petition. Alternatively, 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).)

It is so ordered.

Dated: October 23, 2024

_______________________

MEL RED RECANA

Judge of the Superior Court