Judge Robert B. Broadbelt, Case Number: 23STCP04539, Date: 2024-02-22 Tentative Ruling

Judge: Robert B. Broadbelt, Case: 23STCP04539, Date: 2024-02-22 Tentative Ruling

The court considered the moving and responding papers filed in connection with the First Amended Petition.

Claimant Robert Hufstader (“Hufstader”) settled a personal injury claim on or about July 15, 2021, which entitled Hufstader to certain structured settlement payments. (First Amended Pet. filed March 13, 2024 (“Pet.”), ¶ 3.) Hufstader has agreed to sell, and petitioner J.G. Wentworth Originations, LLC (“Petitioner”) has agreed to purchase, 211 monthly payments of $2,890 each, beginning on March 1, 2024 and ending on September 1, 2041. (Pet., Ex. A, California Purchase Contract, ¶ 2.) Hufstader will receive $285,000 in exchange for transfer of the payment rights set forth above. (Pet., Ex. A, California Purchase Contract, ¶ 10.)

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

“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:¿¿¿

“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).¿¿¿¿¿

Based on the First Amended Verified Petition, the documents submitted in support of the petition, and the response of Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire”), the court finds and orders as follows.

First, the court notes that Berkshire has asserted that the First Amended Petition does not confirm Hufstader’s address, as required by Insurance Code section 10139.5. (Ins. Code, § 10139.5, subd. (c)(1) [every petition shall include the payee’s name, address, and age].) While the petition itself does not set forth Hufstader’s address, the court finds that Petitioner has substantially complied with section 10139.5, subdivision (c) by (1) setting forth Hufstader’s address on the proof of service attached to the petition, and (2) submitting Hufstader’s declaration, in which Hufstader states his address. (Pet., p. 41; Second Supplemental Declaration of Payee (“Hufstader Decl.”), ¶ 1.)

Second, Berkshire has challenged the sufficiency of Petitioner’s notice to Hufstader’s settling attorney.

If a payee has entered into a structured settlement “within five years prior to the date of the transfer agreement, then the transferee shall provide [the notice set forth by statute] to the payee’s attorney of record at the time the structured settlement was created, if the attorney is licensed to practice in California, at the attorney’s address on file with the State Bar of California.” (Ins. Code, § 10139.5, subd. (f)(2)(L).)

Petitioner has filed proofs of service establishing that it served Hufstader’s settling attorney, Joseph Hekmat (“Hekmat”), with the First Amended Verified Petition, supporting documents, and the statutory notice at the address 9701 Wilshire Boulevard, Suite 1000, Beverly Hills, California, 90212. (Pet., pp. 40-41 [proof of service of Pet.], Hufstader Decl., pp. 3-4 [proof of service of Hufstader’s declaration], First Amended Notice to Settlement Attorney, pp. 5-6 [proof of service of notice].) In its responding papers, Berkshire asserts that Hekmat’s address with the State Bar of California is 2121 Avenue of the Stars, Suite 800, Los Angeles, California 90067. It does not appear that Berkshire submitted a copy of the State Bar’s website setting forth this address. However, the court (1) has conducted an attorney search on the State Bar of California’s website and has determined that Hekmat’s current address with the State Bar is 2121 Avenue of the Stars, Suite 800, Los Angeles, California, 90067, and (2) takes judicial notice of the California State Bar results showing Hekmat’s address. (People v. Vigil (2008) 169 Cal.App.4th 8, 12, n. 2 [taking judicial notice of State Bar records]; Evid. Code, § 452, subd. (h).) Petitioner has not filed a reply with the court addressing this issue with service.

Thus, the court finds that Petitioner has not complied with Insurance Code section 10139.5, subdivision (f)(2)(L), because Petitioner has not served the statutory notice on Hufstader’s settling attorney, Hekmat, “at the attorney’s address on file with the State Bar of California.”

Third, the court notes that, other than the service issue regarding Hekmat set forth above, Berkshire “does not dispute that the proofs of service related to the immediate Petition now appear facially adequate.” (Berkshire Response, p. 12:3-9.)

Fourth, the court finds that the transfer is in the best interest of Hufstader, taking into account that he (1) is unmarried and has no children, and (2) plans to use the funds to cover his ongoing caregiving needs and to fund litigation against his former caregiver. (Ins. Code, § 10139.5, subd. (a)(1), Hufstader Decl., ¶ 3; Declaration of Hufstader filed February 1, 2024 (“Orig. Hufstader Decl.”), ¶ 11.)

Fifth, the court finds that Hufstader has been advised, in writing, by Petitioner to seek independent professional advice and has knowingly waived the opportunity to receive advice in writing. (Ins. Code, § 10139.5, subd. (a)(2); Pet., Ex. D, California Statement of Professional Representation, p. 1 [Dec. 5, 2023 signature of Hufstader waiving opportunity to receive independent professional representation].)

Sixth, the court finds that Petitioner has complied with the notification requirements pursuant to paragraph (2) of subdivision (f), that Petitioner has provided Hufstader with a disclosure form that complies with Insurance Code 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.¿¿

On March 13, 2024, Petitioner filed its operative First Amended Petition and a proof of service attached thereto establishing that Petitioner served the amended petition, by mail, on Hufstader, the annuity issuer (i.e., Berkshire), and the annuity obligor. (Pet., pp. 40-41 [proof of service].) The First Amended Petition includes a copy of the proposed California Purchase Contract (Pet., Ex. A), the California Disclosure Statement (Pet., Ex. B), and the California Statement of Professional Representation (Pet., Ex. D). Petitioner has also served those parties with Hufstader’s second supplemental declaration, the notice to the settlement attorney, and the second amended notice of the hearing on Petitioner’s pending petition. (Hufstader Decl., pp. 3-4; Notice to Settlement Attorney, pp. 5-6; Second Amended Notice filed Mar. 12, 2024, pp. 4-5.) The court therefore finds that Petitioner has substantially complied with the notification requirements.

Section 10136 requires that the transfer agreement include certain information and comply with certain requirements, 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 Disclosure Statement,” which was signed by Hufstader. (Pet., Ex. B, California Disclosure Statement.) The court finds that this disclosure complies with Section 10136. The court further finds that the transfer agreement complies with Sections 10136 and 10138. (Pet., Ex. A, California Purchase Contract.)

Seventh, 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).)

Eighth, the court finds that Hufstader 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); Hufstader Decl., ¶ 3; Orig. Hufstader Decl., ¶ 13.)

Ninth, the court finds that Hufstader understands and does not wish to exercise his right to cancel the transfer agreement. (Ins. Code, § 10139.5, subd. (a)(6); Hufstader Decl., ¶ 3; Orig. Hufstader Decl., ¶ 13.)

Thus, the court finds that Petitioner has satisfied the requirements set forth in Insurance Code section 10139.5, subdivision (a).

However, as set forth above, the court has found that Petitioner has not shown that it served Hufstader’s prior attorney with the notice set forth by statute “at the attorney’s address on file with the State Bar of California” as required. (Ins. Code, § 10139.5, subd. (f)(2)(L).) The court therefore exercises its discretion to continue the hearing on Petitioner’s First Amended Petition in order to afford Petitioner an opportunity to serve Hufstader’s prior attorney at the address on file with the State Bar of California.[1]

The court orders that the hearing on petitioner J.G. Wentworth Origination, LLC’s First Amended Verified Petition for Approval for Transfer of Payment Rights is continued to June 3, 2024, at 10:00 a.m., in Department 53.

The court orders petitioner J.G. Wentworth Originations, LLC (1) to file and serve a notice of the court’s ruling on all interested parties, and to file the notice of ruling and a proof of service establishing service of the notice of ruling on those parties no later than May 6, 2024, and (2) to serve Robert Hufstader’s prior attorney with the notice required by Insurance Code section

10139.5, subdivision (f), at the correct address, and to file a proof of service of that notice with the court no later than May 6, 2024.

[1] The court will consider, at the time of the continued hearing date, the circumstances set forth in Insurance Code section 10139.5, subdivision (b) in order to “determin[e] whether the proposed transfer should be approved[.]”

in re petition of: j.g. wentworth originations, llc ; Petitioner, and robert hufstader ; Real Party-in-Interest / Transferor.	Case No.:	23STCP04539

	Hearing Date:	April 12, 2024

	Time:	10:00 a.m.

	[tentative] Order RE: first amended verified petition for approval for transfer of payment rights