Judge: Robert B. Broadbelt, Case: 22STCP04391, Date: 2023-02-24 Tentative Ruling

Case Number: 22STCP04391    Hearing Date: February 24, 2023    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                 Petitioner Peachtree Settlement Funding, LLC         

RESPONDING PARTY:       Unopposed

Petition for Approval for Transfer of Payment Rights

The court considered the moving papers filed in connection with this petition.  No opposition papers were filed.

BACKGROUND

Claimant Carlton Gibbs (“Gibbs”) settled a wrongful death action in or about 1999.  (Second Amended Petition filed February 9, 2023 (“Pet.”) ¶ 3; Gibbs Decl., ¶ 4 [“The settlement was intended as compensation for a wrongful death claim”].)  Gibbs has agreed to sell, and petitioner Peachtree Settlement Funding, LLC (“Petitioner”) has agreed to purchase, future payment rights to (1) four monthly life contingent payments of $1,686.65 each, beginning on March 1, 2038 and ending on June 1, 2038, and (2) 216 monthly life contingent payments of $1,737.25 each, increasing at 3 percent annually, beginning on July 1, 2038, and ending on June 1, 2056.  (Pet., ¶ 7; Pet., Ex. A, Purchase Contract (California Life Contingent), ¶¶ 2, 11.)  Gibbs will receive $22,588.08 in exchange for the transfer of the payment rights described above.  (Pet., Ex. A, Purchase Contract (California Life Contingent) ¶ 11.)

Petitioner now seeks 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.  (Ins. Code, § 10139.5, subd. (a)(1).)  Gibbs submits that the transfer is in their best interest because Gibbs is experiencing a financial hardship.  (Gibbs Decl., ¶ 11.)  Gibbs is 40 years old, unmarried, and has no minor children.  (Gibbs Decl., ¶ 8.)  If approved, Gibbs will use the funds received to pay off credit card debt, personal bills, and make repairs to Gibbs’s vehicle.  (Gibbs Decl., ¶ 11.)  In light of these facts, the court finds that the transfer is in Gibbs’s best interest.

Second, the court finds that Gibbs has been advised in writing by Petitioner to seek independent professional advice regarding the transfer and has knowingly waived, in writing, the opportunity to receive the advice.  (Ins. Code, § 10139.5, subd. (a)(2).)  Petitioner submits a copy of the form entitled “California Statement of Professional Representation,” which (1) states that the signee (i) has been advised by Petitioner that they should obtain independent professional representation concerning the implications of this transaction, and (ii) understands the purchase agreement and does not wish to seek out such independent professional representation, and (2) was signed by Gibbs on December 14, 2022.  (Pet., Ex. E.)

Third, the court finds that Petitioner has complied with the notification requirements pursuant to paragraph (2) of subdivision (f), Petitioner has provided Gibbs 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).)

Insurance Code section 10139.5, subdivision (f)(2) requires Petitioner to file and serve, not less than 20 days before the hearing on a petition for approval of a transfer of payment rights, a notice of the proposed transfer and the petition for its authorization, a copy of the proposed transfer agreement, a listing of each of the payee’s dependents, disclosures as required by section 10136, and, if available, copies of the annuity contract, any qualified assignment agreement, and the underlying structured settlement agreement.   

First, on December 20, 2022, Petitioner filed a Proof of Service establishing that Petitioner served Gibbs, the annuity issuer, and the annuity obligor with copies of the original petition, notice of hearing, and other related documents.  Second, Petitioner filed Proofs of Service with its amended pleadings establishing that Gibbs, the annuity issuer, and the annuity obligor were served with the Second Amended Petition and Declaration of Payee in Support of the Petition on February 9, 2023.  The Second Amended Petition (1) includes copies of the disclosure, annuity contract certificate, and an affidavit regarding the underlying settlement, and (2) includes substantially similar information.  Further, the purchase contract reflects the same agreement (i.e., the sale of (1) four monthly life contingent payments of $1,686.65 each, beginning on March 1, 2038 and ending on June 1, 2038, and (2) 216 monthly life contingent payments of $1,737.25 each, increasing at 3 percent annually, beginning on July 1, 2038 and ending on June 1, 2056 in exchange for $22,588.08).  (Petition filed December 19, 2022 Ex. A, Purchase Contract (California Life Contingent), ¶¶ 2, 11; Pet., Ex. A, Purchase Contract (California Life Contingent) ¶¶ 2, 11; Pet., Exs. B-D.)  The court therefore finds that Petitioner has substantially compiled with the notification requirements. 

Section 10136 requires that the transfer agreement include certain information and have certain qualities, 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 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).)¿¿¿¿

Petitioner submits a copy of the California Disclosure Statement that is signed by Gibbs.  (Pet., Ex. B.)  The court finds that the California Disclosure Statement complies with Section 10136.  The court further finds that the purchase contract complies with Section 10138.

Fourth, the court finds that 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).)

Fifth, the court finds that Gibbs 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); Pet., Ex. A, Purchase Contract (California Life Contingent) p. 18 [payee has signed the contract and understands its terms and conditions]; Pet. Ex. E, California Statement of Professional Representation [signee “fully understand[s] the purchase agreement and the effects of the transaction”]; Gibbs Decl., ¶ 5 [explaining terms of purchase agreement].)

Sixth, the court finds that Gibbs understands and does not wish to exercise the right to cancel the transfer agreement, since Gibbs has not stated that they intend to exercise this right.   (Ins. Code, § 10139.5, subd. (a)(6); Pet., Ex. A, Purchase Contract (California Life Contingent), p. 18 [signee understands term of contract, which includes cancellation rights].)

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 Gibbs’s supporting declaration, the court finds that the proposed transfer of the 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 Peachtree Settlement Funding, LLC’s Second Amended Petition for Approval for Transfer of Payment Rights.

The court orders that the transfer of the structured settlement payment rights set forth in the Purchase Contract (California Life Contingent), attached as Exhibit “A” to the “Second Amended Petition for Approval for Transfer of Payment Rights” filed on February 9, 2023, is approved.

The court orders petitioner Peachtree Settlement Funding, LLC to give notice of this ruling.

IT IS SO ORDERED.

DATED:  February 24, 2023

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court