Judge: Robert B. Broadbelt, Case: 22STCP02250, Date: 2022-07-29 Tentative Ruling

Tentative rulings are sometimes, but not always, posted. The purpose of posting a tentative ruling is to to help focus the argument. The posting of a tentative ruling is not an invitation for the filing of additional papers shortly before the hearing.

Case Number: 22STCP02250    Hearing Date: July 29, 2022    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                Petitioner J.G. Wentworth Originations, LLC

RESPONDING PARTY:       n/a

First Amended Petition for Approval of Transfer of Payment Rights

The court considered the first amended verified uncontested petition.  No response to the petition was filed.  

Background

Claimant Kalin Scott-Wright (“Wright”) settled a personal injury lawsuit on or about March 21, 2002.  (First Amended Petition filed July 5, 2022 (“Pet.”), ¶ 3.)  The settlement set forth a periodic structured payment schedule.  Wright has agreed to sell, and petitioner J.G. Wentworth Originations, LLC (“Petitioner”) has agreed to purchase, Wright’s interests in certain payments due under the settlement as follows: 156 monthly payments of $856.00 each, increasing at 3 percent annually, beginning on April 20, 2023, and ending on March 20, 2036. (Pet., ¶ 2; Pet. Ex. A, California Purchase Contract, §§ 2, subd. (B)(A), 10.)  In exchange for the above payments, Wright will receive from Petitioner $65,000.00.  (Pet., Ex. A, California Purchase Contract, § 10.)

Petitioner now petitions for court approval of the agreement pursuant to Insurance Code section 10134 et seq.  

Legal Standard

“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 court approves the transfer in advance.  (Ins. Code, § 10139.5, subd. (a).)  To approve the settlement, the court must make express written findings 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.

(Ins. Code, § 10139.5, subd. (a)(1)-(6).) 

“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 the 15 circumstances set forth in Insurance Code § 10139.5, subdivision (b)(1)-(15).

DISCUSSION

Based on the petition and the evidence presented in support of it, the court finds and orders as follows. 

             First, the court finds that there is insufficient evidence to support a finding that the transfer is in the best interest of the payee, Wright, taking into account the welfare and support of Wright’s dependents.  The Petition states that Wright is 28 years old and single with three minor children, and that Wright is facing a hardship situation, and would like to enter into this transaction for financial reasons.  Although the Petition states that Wright’s employment information and explanation of Wright’s interests will be set forth “in the declaration to be filed in this matter,” no declaration has been filed.  (See Pet., 4:21-5:2.)  Accordingly, Petitioner has failed to present to the court any evidence to support a finding that this purchase is in Wright’s best interests. 

            Second, the court finds that there is insufficient evidence to find that Wright understands the terms of the transfer agreement, including the terms set forth in the disclosure statement required by Section 10136.  Although Petitioner has submitted (1) the Disclosure Statement and (2) the Statement of Professional Representation, which includes a signed acknowledgement that Wright “fully understand[s] the purchase agreement,” there is no declaration establishing that Wright understands the terms set forth in the disclosure statement.  (Pet. Exs. B, E.)  The Disclosure Statement is signed by Wright, but only states that Wright read the disclosure and confirmed receipt thereof within ten days prior to signing.  (Pet. Ex. B, Disclosure Statement, p. 3.)

Third, the court finds that Petitioner has not complied with the notification requirements pursuant to section 10139.5, subdivision (f)(2) because Petitioner has not provided “[a] listing of each of the payee’s dependents, together with each dependent’s age.”  (Ins. Code § 10139.5, subd. (f)(2)(C).)  As to this information, Petitioner cites to the declaration, which has not been filed.  (Pet., 5:22-23.)

            Fourth, the court finds that there is insufficient evidence to find that Wright understands and does not wish to exercise the right to cancel the transfer agreement.  The court received no evidence establishing that Wright understands the right to cancel this agreement.

            For the reasons set forth above, the court finds that there is insufficient evidence to approve the proposed transfer of structured settlement payment rights, or to find that the transfer is fair, reasonable, and in Wright’s best interests.

            Petitioner has stated that a supporting declaration is to be filed in support of its Petition, which may include all facts necessary to enable the court to make all required findings.  The court therefore exercises its discretion to continue the hearing on J.G. Wentworth Originations, LLC’s First Amended Verified Petition for Approval for Transfer of Payment Rights to give Petitioner an opportunity to file the supporting declaration.

ORDER

            The court continues the hearing on petitioner J.G. Wentworth Originations, LLC’s First Amended Verified Petition for Approval for Transfer of Payment Rights to August 10, 2022, at 10:00 a.m., in Department 53.

            The court orders petitioner J.G. Wentworth Originations, LLC to file all supporting declarations and documents no later than August 5, 2022.

            The court orders petitioner J.G. Wentworth Originations, LLC to give notice of this order.

IT IS SO ORDERED.

DATED:  July 29, 2022

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court