Judge: Robert B. Broadbelt, Case: 22STCP02250, Date: 2022-08-01 Tentative Ruling

Case Number: 22STCP02250    Hearing Date: August 1, 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.  The First Amended Petition states that 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.)  Wright was to receive $65,000.00 from this transaction.  (Pet., Ex. A, § 10.)

On July 28, 2022, Petitioner filed an amended California Purchase Contract that provides amended settlement terms.  The amended California Purchase Contract states that Petitioner has agreed to purchase, and Wright has agreed to sell, Wright’s interest in the following payments: 3 monthly payments of $856.00 each, beginning on January 20, 2024, and ending on March 20, 2024, and 144 monthly payments of $881.68 each, increasing at 3 percent annually, beginning on April 20, 2024, and ending on March 20, 2036.  (July 28, 2022 Amended Exhibit “A” and Amended Exhibit “B” to First Amended Verified Petition (“July 28 Amendments”), Ex. A, California Purchase Contract, § 2.)  Wright will receive $75,000.00 in exchange for the transfer of the above payments.  (July 28 Amendments, 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 the transfer is in the best interest of the payee, Wright, taking into account the welfare and support of Wright’s dependents.  Wright is 28 years old, single with two minor children, currently unemployed, and intends to use these funds to purchase an investment property and start a trucking business in order to support Wright’s family.  (July 29, 2022 Amended Declaration of Payee (“Wright Decl.”), ¶¶ 8, 11.)  In light of these facts, the court finds the amended Purchase Contract to be in the payee’s best interests.

            Second, the court finds 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.”  Petitioner has submitted the form entitled Statement of Professional Representation, which (1) states that the signee has been advised by Petitioner that independent professional representation should be obtained, and that the signee understands the purchase agreement and does not wish to seek out such independent professional representation, and (2) is signed by Wright.  (Pet., Ex. E, California Statement of Professional Representation; Wright Decl., ¶ 12.)

Third, the court finds that “[t]he 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.”  Insurance Code section 10139.5, subdivision (f)(2) requires the petitioner to file and serve, at least 20 days before the scheduled hearing, a notice of the proposed transfer, the petition, a copy of the proposed transfer agreement and disclosure form, a listing of the payee’s dependents, and certain other documents, if available.  Petitioner timely filed and served the First Amended Petition and the California Purchase Contract outlining the original settlement agreement on July 5, 2022.  The court notes that Petitioner has submitted an amended California Purchase Contract with amended settlement terms on July 28, 2022, which includes terms that are essentially the same as the original contract, except that Wright is transferring a lesser amount of payments in exchange for receiving, in return, payment of a greater value.  (Pet., Ex. A, § 10; July 28 Amendments, Ex. A., California Purchase Contract, § 10.)  Petitioner has also filed and served an amended Disclosure Statement, which is signed by Wright.  (July 28 Amendments, Ex. B, Disclosure Statement.)  The court therefore finds that Petitioner has substantially complied with the notification requirements.

Section 10136 requires that the transfer agreement include certain information, including that it be written in 12-point type, state it will not be effective until a court enters a final order approving it and that payment can be delayed, and that it set forth certain information, including the net amount to be paid to the payee. (Ins. Code, § 10136, subd. (c).) Section 10138 includes additional requirements, including that a transfer agreement cannot waive the seller/payee’s right to sue, require the seller/payee to indemnify the buyer, or require the seller/payee to pay the buyer’s attorneys’ fees and costs.   (Ins. Code, § 10138, subd. (a).)   The transfer agreement complies with these statutory requirements.  (July 28 Amendments, Ex. A, California Purchase Contract.)

            Fourth, the court finds that the transfer does not contravene any applicable statute or the order of any court or other government authority.

Fifth, the court finds that the payee understands the terms of the transfer agreement, including the terms set forth in the disclosure statement required by Section 10136.  (Wright Decl., ¶ 13.)

Sixth, the court finds that the payee understands and does not wish to exercise the payee’s right to cancel the transfer agreement.  (Wright Decl., ¶ 14.)

Based on the findings set forth above, and after considering the circumstances set forth in Insurance Code section 10139.5, subdivision (b)(1)-(15) and Wright’s supporting declaration, the court determines that the proposed transfer of structured settlement payment rights should be approved and that the transfer is fair, reasonable, and in the payee’s best interest.

ORDER

The court grants petitioner J.G. Wentworth Originations, LLC’s petition for approval of transfer of payment rights, and the court orders that the transfer of structured settlement payment rights set forth in the California Purchase Contract, attached as Exhibit A to Petitioner’s “Amended Exhibit ‘A’ and Amended Exhibit ‘B’ to First Amended Verified Petition for Approval for Transfer of Payment Rights” filed on July 28, 2022, is approved.

The court orders Petitioner to give notice of this order. 

IT IS SO ORDERED.

DATED:  August 1, 2022

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court