TENTATIVE RULING

Calendar:    8

Date:               9/9/2022

Case No: 22 GDCP00107

Case Name: Odyssea-Abe83, LLC v. Certain Statutory Interested Parties

PETITION FOR APPROVAL FOR TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS

 

Moving Party:               Petitioner Odyssea-Abe83, LLC     

Responding Party:    No Opposition

RELIEF REQUESTED:

Approve transfer of structured settlement payment rights by and between Maya Okasisi, as transferor, and Odyssea-Abe83, LLC, as transferee. 

ANALYSIS:

Procedural

Copies of Documents

Under Insurance Code § 10139.5:

“ (f) 

 (1) A petition under this article for approval of a transfer of structured settlement payment rights shall be made by the transferee and brought in the county in which the payee resides at the time the transfer agreement is signed by the payee, or, if the payee is not domiciled in California, in the county in which the payee resides or in the county where the structured settlement obligor or annuity issuer is domiciled.

 (2) Not less than 20 days prior to the scheduled hearing on any petition for approval of a transfer of structured settlement payment rights under this article, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the petition for its authorization, and shall include the following with that notice:

    (A) A copy of the transferee's current petition and any other prior petition, whether approved or withdrawn, that was filed with the court in accordance with paragraph (6) of subdivision (c).

  (B) A copy of the proposed transfer agreement and disclosure form required by paragraph (3) of subdivision (a).

    (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, if available.

    (F) A copy of any qualified assignment agreement, if available.

    (G) A copy of the underlying structured settlement agreement, if available.

  (H) If a copy of a document described in subparagraph (E), (F), or (G) is unavailable or cannot be located, then the transferee is not required to attach a copy of that document to the petition or notice of the proposed transfer if the transferee satisfies the court that reasonable efforts to locate and secure a copy of the document have been made, including making inquiry with the payee. If the documents are available, but contain a confidentiality or nondisclosure provision, then the transferee shall summarize in the petition the payments due and owing to the payee, and, if requested by the court, shall provide copies of the documents to the court at a scheduled hearing.”

Here, the petition fails to include a copy of the underlying structured settlement agreement.  The transferor, Maya Najee Okasisi, has provided a Declaration in Lieu of Settlement Agreement confirming that Okasisi has searched for but been unable to locate a copy of the Settlement Agreement.   [Ex. B, Declaration in Lieu, para. 3].  The court finds that reasonable efforts have been made to locate and secure copies of the documents.  

There is also no copy of the records of seven previous attempts to transfer.     

Under Insurance Code § 10139.5

“(c) Every petition for approval of a transfer of structured settlement payment rights, except as inquiry with the payee, all of the following:

  “(6) Information regarding previous transfers or attempted transfers, as described in paragraph (11), (12), or (13) of subdivision (b). The transferee or payee may choose to provide this information by providing copies of pleadings, transaction documents, or orders involving any previous attempted or completed transfer or by providing the court a summary of available information regarding any previous transfer or attempted transfer, such as the date of the transfer or attempted transfer, the payments transferred or attempted to be transferred by the payee in the earlier transaction, the amount of money received by the payee in connection with the previous transaction, and generally the payee's reasons for pursuing or completing a previous transaction. The transferee's inability to provide the information required by this paragraph shall not preclude the court from approving the proposed transfer, if the court determines that the information is not available to the transferee after the transferee has made a reasonable effort to secure the information, including making an inquiry with the payee.”

The court finds that the descriptions of the previous transfers set forth in the Sanchez Declaration are sufficient, as they specify the payments transferred, and provide other details, or may inquire as to the documentation with respect to those transfers.  [See Sanchez Decl., para. 7]. 

Substantive

The petition seeks approval of a transfer of certain structured settlement payment rights held by transferor Maya Okasisi pursuant to a structured settlement entered into on behalf of Okasisi intended as compensation for a personal injury claim, arising from an incident when Okasisi was one year old, and fell from two stories, suffering injuries to her left side and head.  [Okasisi Decl., para. 3].   Okasisi indicates that outside of left-hand limitations and minor speech impairments, there are no longer any reoccurring medical problems related to the original injury and no continuing need to provide for future medical expenses.  [Decl., para. 3].  

Okasisi is 31 years old, single, and has five dependents. Two dependents are 13 years old, two are 12 years old, and one is 9 years old.   It appears from the declaration that the five dependents reside with Okasisi.  [Okasisi Decl. paras. 4, 7]. Okasisi currently does not work, as she is disabled, and receives $900 per month in social security disability benefits and $1,244 per month in Calwork benefits.  Her boyfriend of nine years owns an apparel business and makes $8,000 per month.  [Okasisi Decl., para. 4]. Okasisi does not rely on the structured settlement payments she is proposing to assign for day-to-day living expenses.  [Okasisi Decl., para. 4].   Okasisi has no court ordered child support or maintenance obligations. [Okasisi Decl., para. 5]. 

Okasis has previously assigned a portion of her payment rights, with the last transfer completed in 2014. [Okasisi Decl., para.  6].  The Sanchez Declaration describes seven previous attempts at transfer of structured settlement payments, five of which were approved, one of which was denied, and one ultimately dismissed. [Sanchez Decl., para. 7].   The funds were previously used to move to a new apartment, purchase a reliable vehicle large enough for her family after the birth of her second set of twins, and to pay off high interest credit card debt and unexpected medical expenses. [Sanchez Decl., para. 7]. 

The current transaction is with Odyssea Abe83, LLC.  Okasisi is transferring 24 monthly life contingent payments of $6,409.61, beginning October 1, 2028 through September 1, 2030, and 264 monthly life-contingent payments of $8,412.62 beginning October 1, 2030 through and including September 1, 2052, each with 3% annual increases each October. 

The total dollar amount of payments being sold is $3,238,870.20 with a discounted present value of $1,643,619.78. The net amount to be paid to Okasisi is $405,258.25, with no deduction for expenses.  

Okasisi states that the funds from this transaction will be used toward a down payment on a home.  The family is looking for a home in Riverside or San Bernardino County in the $500,000 price range, and Okasisi plans to put approximately $300,000 down to keep monthly payments in the $1,500 per month range.  [Okasisi Decl., para. 7].  Okasisi indicates she is currently living in subsidized housing through a government program, but the home is too small to house her and her five dependents, and she would like to own an appreciating asset.  She also indicates that she thinks now is a good time to sell her payments as home prices are falling.  [Okasisi Decl., para. 7].  The remaining funds will be allocated between necessary home renovations and investing in her boyfriend’s apparel business.  [Okasisi Decl., para. 7].

Under Insurance Code section 10137(a):

“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, will not contravene other applicable law, and the court has reviewed and approved the transfer as provided in Section 10139.5.”

Insurance Code section 10139.5 provides the factors to be considered by the court in determining whether to approve the transfer of a structured settlement.  The highlighted factors are those which are of some concern in connection with this petition. 

(a) A direct or indirect transfer of structured settlement payment rights is not effective and a structured settlement obligor or annuity issuer is not required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order based on express written findings by the court that:

 (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.

(b) 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, all of the following:

 (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.”

The highlighted factors are of concern here.  The funds being transferred are life-contingent payments which extend into 2052, and these may be the last payments which would be realistically available for Okasisi to transfer to a willing transferee.  This issue will be discussed at the hearing. 

It will also be discussed whether there are any continuing effects from the original accident and injury, as the Okasisi Declaration indicates that Okasisi does continue to suffer from “left-hand limitations,” and Okasisi indicates she is currently disabled.  [Okasisi Decl., paras. 3, 4].  It is also not clear if Okasisi currently has medical insurance to provide for any future medical needs. 

This deal is, as usual, not a particularly favorable transaction for the transferor, but if Okasisi’s medical condition is stable, she is an adult, and it would appear that the purchase of a family home would be of benefit to Okasisi and her dependents going forward.  

The Settlement Annuity permits assignment, providing, in pertinent part:

“Change of Owner-- “An assignment of this policy will not be binding upon the Company until recorded at its home office.  The Company assumes no responsibility for the sufficiency or validity of any assignment.  However, when an assignment is filed with the Company and recorded at the home office, the owner’s rights will be subject to it.”

[Sanchez Decl., Ex. A, Settlement Annuity, p. 3]. 

RULING:

The Court has the following questions for the petitioner and transferor:

What is the current status of transferor’s injuries which were the subject of the settlement, which have been described as including continuing left-hand limitations?  Is transferor’s current disability related to the original injuries?

Does transferor have medical insurance?

Would this transfer realistically be the final opportunity for transferor to obtain funds from the settlement annuity payments? Is transferor aware of this?

First Amended Petition for Approval for Transfer of Structured Settlement Payment Rights is GRANTED. 

GIVEN THE CORONAVIRUS CRISIS, AND TO ADHERE TO HEALTH GUIDANCE THAT DICTATES SAFETY MEASURES, DEPARTMENT D IS ENCOURAGING AUDIO OR VIDEO APPEARANCES

Please make arrangement in advance if you wish to appear via LACourtConnect/Microsoft Teams by visiting www.lacourt.org to schedule a remote appearance.  Please note that LACourtConnect/Microsoft Teams offers free audio and video appearance. Counsel and parties (including self-represented litigants) are encouraged not to personally appear.  With respect to the wearing of face masks, Department D recognizes that currently, the Los Angeles Department of Public Health strongly recommends masks indoors, especially when interacting with individuals whose vaccination status is unknown; for individuals who have a health condition that puts them at higher risk for severe illness; individuals who live with someone who is at higher risk; and for individuals who are around children who are not yet eligible for vaccines.  In accordance with this guidance, it is strongly recommended that anyone personally appearing in Department D wear a face mask.  The Department D Judge and court staff will continue to wear face masks.  If no appearance is set up through LACourtConnect/Microsoft Teams, or otherwise, then the Court will assume the parties are submitting on the tentative.