Judge: Robert B. Broadbelt, Case: 23STCP01181, Date: 2023-08-29 Tentative Ruling

Case Number: 23STCP01181    Hearing Date: August 29, 2023    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                Petitioner DRB Capital, LLC  

RESPONDING PARTY:       Unopposed

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

BACKGROUND

Claimant Skiler Gascon (“Gascon”) settled a personal injury claim in 1994.  (First Amended Verified Petition for Approval for Transfer of Structured Settlement Payments filed July 17, 2023 (“Pet.”), ¶ 6; Supplemental Exhibits filed July 28, 2023 (“Supp. Ex.”) Ex. G, Gascon Decl., ¶ 7.)  Gascon has agreed to sell, and petitioner DRB Capital, LLC (“Petitioner”) has agreed to purchase, 144 monthly payments of $220.00, commencing on or about March 30, 2023, and ending on or about February 28, 2035.  (Pet., ¶¶ 8-9; Supp. Ex. E, Absolute Sale and Security Agreement, ¶ 3.)  Gascon will receive $14,304.27 in exchange for the transfer of the payment rights described above.  (Supp. Ex. E, Absolute Sale and Security Agreement, ¶ 3.)

Petitioner now seeks court approval of the transfer 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 Petitioner’s motion, the First Amended Verified Petition, and the documents submitted in support of the motion, the court finds and orders as follows.

First, the court finds that the transfer is in the best interest of Gascon.  (Ins. Code, § 10139.5, subd. (a)(1).)  If approved, Gascon will use the funds received to purchase a food truck and begin their own business.  (Supp. Ex. G, Gascon Decl., ¶ 9.)  Gascon is 36 years old, single, and has no minor children or dependents.  (Supp. Ex. G, Gascon Decl., ¶¶ 1, 5.)

Second, the court finds that Gascon 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 has submitted a form entitled “Acknowledgement of Waiver [¶] of Independent Professional Advice,” which (1) states that (i) Petitioner has advised Gascon to seek independent professional advice from an attorney, certified public accountant, or other licensed professional, and (ii) Gascon has knowingly waived their right to receive independent professional advice regarding the legal, tax, and financial implications of the transfer of the assigned payment rights, and (2) was signed by Gascon on March 22, 2023.  (Pet., Ex. D.)

Third, the court finds that Petitioner has complied with the notification requirements pursuant to paragraph (2) of subdivision (f), that Petitioner has provided Gascon 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 July 17, 2023, Petitioner filed a Proof of Service of its First Amended Verified Petition, stating that Petitioner served the amended petition on Gascon, Symetra Life Insurance Company (the annuity issuer), and Symetra Assigned Benefits Service Company (the annuity obligor).  (Pet., Proof of Service; Pet., ¶¶ 3-4.)  The amended petition includes a copy of the proposed transfer agreement, the California Transfer Disclosure Notice, and an affidavit of due diligence stating that Petitioner has been unable to obtain copies of the annuity contract, any qualified assignment agreement, and the underlying settlement agreement.  Petitioner also served supplemental exhibits, consisting of  the proposed transfer agreement, disclosure notice, and amended declaration of Gascon on July 27, 2023.  (Supp. Ex, Proof of Service.)  Finally, on July 27, 2023, Petitioner served a Notice of Continued Hearing of Motion for Order Approving Transfer of Structured Settlement Payment Rights on Gascon, the annuity issuer, and the annuity obligor, informing those parties that the court continued the hearing on the pending motion to August 29, 2023.  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 has submitted a copy of the form entitled “California Transfer Disclosure [¶] Disclosure Notice Required by Law,” which was signed by Gascon.  (Supp. Ex. F, Disclosure.)  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.  (Supp. Ex. E, Absolute Sale and Security Agreement.)

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 Gascon 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); Supp. Ex. G, Gascon Decl., ¶¶ 1 [Gascon “understand[s] and accept[s] the consequences of [Gascon’s] actions], 10 [Gascon “understand[s] all terms of the Disclosure Statement”].)

Sixth, the court finds that Gascon understands and does not wish to exercise the right to cancel the transfer agreement.  (Ins. Code, § 10139.5, subd. (a)(6).)  The court notes that Petitioner has not submitted a declaration from Gascon expressly stating that Gascon does not wish to exercise the right to cancel the transfer agreement.  However, Petitioner has submitted (1) the signed disclosure form signed by Gascon, which states that Gascon “may cancel the contract before court approval” at any time, which does not require “any special form” and requires only that cancellation be sent in writing to the specified address, and (2) Gascon’s declaration, in which Gascon states that they fully and completely understand all terms of the disclosure statement.  (Supp. Ex. F, California Transfer Disclosure, ¶¶ 8-9; Supp. Ex. G, Gascon Decl., ¶ 10.)  Thus, the court finds that this evidence is sufficient to show that Gascon understands and does not wish to exercise their right to cancel the transfer agreement.

Based on the findings set forth above, and after considering the circumstances set forth in Insurance Code section 10139.5, subdivision (b)(1)-(b)(15), and Gascon’s declaration, the court determines 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 DRB Capital, LLC’s motion for order approving transfer of structured settlement payment rights.

The court orders that the transfer of the structured settlement payment rights set forth in the “Absolute Sale and Security Agreement,” attached as “Supplemental Exhibit E” to the “Supplemental Exhibits ‘E,’ ‘F,’ and ‘G’ to Petition for Approval for Transfer of Structured Settlement Payment Rights by and Between Skiler Gascon, Transferor, and DRB Capital, LLC, Transferee, Pursuant to California Insurance Code §10134 et. seq.,” filed on July 28, 2023, is approved.

This order shall constitute a final “Qualified Order” pursuant to 26 U.S.C. section 5891.

The court orders petitioner DRB Capital, LLC to give notice of this ruling.

IT IS SO ORDERED.

DATED:  August 29, 2023

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court