Judge: Robert B. Broadbelt, Case: 23STCP01096, Date: 2023-05-24 Tentative Ruling

Case Number: 23STCP01096    Hearing Date: May 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

First Amended Verified 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 Sandra Bitz (“Bitz”) settled a wrongful death claim in 2013.  (First Amended Verified Petition filed April 28, 2023 (“Pet.”), ¶ 3.)  Bitz has agreed to sell, and petitioner Peachtree Settlement Funding, LLC (“Petitioner”) has agreed to purchase, future payment rights to 192 monthly life contingent payments of $1,500 each, beginning on November 1, 2033, and ending on October 1, 2049.  (Pet., ¶¶ 4, 7; Pet., Ex. A, Purchase Contract (California Life Contingent) ¶ 2, subd. (B).)  Bitz will receive $20,000 in exchange for the transfer of the payment rights described above.  (Pet., Ex. A, Purchase Contract, ¶ 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 Petitioner has not submitted evidence showing that 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).)  Although the Petition states that Bitz is 63 years old with no minor children and intends to use the funds received in this transfer to purchase a home, Petitioner has not submitted any evidence in support of those facts.  Instead, the Petition references a “declaration to be filed in this matter.”  (Pet., p. 4:14-15, 4:18.)  The two declarations of Bitz that have been attached to the Petition are duplicative and do not contain the information set forth above.  (Pet., Exs. C, D.)

Second, the court finds that Bitz 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 legal, tax, and/or financial implications of the transaction, and (ii) understands the purchase agreement and the effects of the transaction and does not wish to seek out such independent representation, and (2) was signed by Bitz on April 6, 2023.  (Pet., Ex. E.)

Third, the court finds that Petitioner has complied with the notification requirements pursuant to paragraph (2) of subdivision (f), that Petitioner has provided Bitz with a disclosure form that complies with Section 10136, and that 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. 

On April 20, 2023, Petitioner filed a Proof of Service stating that Petitioner served Bitz, the annuity issuer, and the annuity obligor with the original verified petition, the notice of hearing on the petition, and other case management documents.  On April 28, 2023, Petitioner filed its First Amended Verified Petition, and attached a Proof of Service stating that Petitioner served Bitz, the annuity issuer, and the annuity obligor with the amended petition.  The amended petition includes a copy of the proposed transfer agreement (i.e., the Purchase Contract) and Bitz’s declaration, in which Bitz states that attempts to locate the qualified assignment have been unsuccessful.  (Pet., Ex. A [Purchase Contract], Ex. C, Bitz Decl., ¶ 9.)  The court therefore finds that Petitioner has substantially complied 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 form entitled “California Disclosure Statement,” which was signed by Bitz.  (Pet., Ex. B, Disclosure Statement.)  The court finds that this disclosure statement complies with Section 10136.  The court further finds that the transfer agreement complies with Sections 10136 and 10138.  (Pet., Ex. A, 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.  (Ins. Code, § 10139.5, subd. (a)(4).)

Fifth, the court finds that Bitz 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. E, p. 1 [signing section stating that the signee “fully understand[s]” the purchase agreement].)

Sixth, the court finds that Petitioner has not submitted evidence showing that Bitz understands and does not wish to exercise their right to cancel the transfer agreement.  (Ins. Code, § 10139.5, subd. (a)(6).)  Petitioner has not submitted a declaration or other evidence establishing that Bitz knows of and does not wish to exercise their right to cancel the purchase agreement.  

The court exercises its discretion to continue the hearing on this petition, in order to give Petitioner an opportunity to present evidence showing that (1) the transfer is in the best interest of Bitz, and (2) Bitz understands and does not wish to exercise their right to cancel the purchase agreement.  (Ins. Code, § 10139.5, subds. (a)(1), (a)(6).)

ORDER

The court continues the hearing on petitioner Peachtree Settlement Funding, LLC’s First Amended Verified Petition for Approval for Transfer of Payment Rights to June 14, 2023, at 10:00 a.m., in Department 53.

The court orders petitioner Peachtree Settlement Funding, LLC to file with the court and serve supplemental papers in support of its petition no later than June 2, 2023. 

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

IT IS SO ORDERED.

DATED:  May 24, 2023

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court