Judge: Robert B. Broadbelt, Case: 24STCP01661, Date: 2024-07-02 Tentative Ruling

Case Number: 24STCP01661    Hearing Date: July 2, 2024    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                 Petitioner J.G. Wentworth Originations, 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

Rudy Soto (“Soto”) settled a claim for damages arising in connection with a house fire in 2021.  (Petition for Approval for Transfer of Payment Rights filed May 22, 2024 (“Pet.”), ¶ 3.)  Soto has agreed to sell, and petitioner J.G. Wentworth Originations, LLC (“Petitioner”) has agreed to purchase, six payments of $4,985.28, to be made on August 27, 2024, February 27, 2025, August 27, 2025, February 27, 2026, August 27, 2026, and February 27, 2027.  (Pet., Ex. A, California Purchase Contract, ¶ 2.)  Soto will receive $19,508.67 in exchange for the transfer of the payment rights set forth above.  (Pet., Ex. A, California Purchase Contract, ¶ 10.) 

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 documents submitted in support of it, the court finds and orders as follows.

The court finds that Petitioner has not complied with the notification requirements set forth in Section 10139.5, subdivision (f)(2).  (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 June 7, 2024, Petitioner filed a “Proof of Service of Verified Petition et al.,” establishing that Petitioner served Soto, the settling attorney, the annuity issuer, and the annuity obligor with notice of the hearing on the Petition, the Petition, and the notice of case assignment on June 6, 2024, by mail and overnight mail.  (June 7, 2024 Proof of Service.)  The Petition includes a copy of the original proposed transfer agreement (Pet., Ex. A.), the California Disclosure Statement (Pet., Ex. B), and a copy of the annuity certificate (Pet., Ex. C.). 

However, on June 28, 2024, Petitioner filed two additional documents in support of its Petition: (1) the “Declaration of Payee in Support of Petitioner’s Petition for Approval for Transfer of Payment Rights[Pursuant to Cal. Ins. Code § 10134 et seq.],” and (2) the “Amended Exhibit ‘A’ to the Petition for Approval for Transfer of Payment Rights[,]” which attaches an amended California Purchase Contract between Petitioner and Soto.[1]  These documents were served on Soto, the settling attorney, the annuity issuer, and the annuity obligor on June 28, 2024, by mail and overnight mail.  (Soto Decl., pp. 4-5 [proof of service]; June 28, 2024 Amended Ex. A, pp. 16-17 [proof of service].)  As set forth above, a petition and proposed transfer agreement must be served on all interested parties “[n]ot less than 20 days prior to the scheduled hearing on any petition for approval of a transfer of structured settlement payment rights under” section 10139.5.  (Ins. Code, § 10139.5, subds. (f)(2)(A), (f)(2)(B).)  Petitioner did not serve Soto’s supporting declaration or the amended (and therefore operative) California Purchase Agreement on all interested parties, including the attorney that represented Soto at the time the structured settlement was created, not less than 20 days before the July 2, 2024 hearing on the Petition.

            Thus, the court (1) finds that Petitioner has not complied with the notification requirements, and therefore (2) denies Petitioner’s Petition, without prejudice to Petitioner’s filing and serving, on all interested parties and with statutory notice, an amended Petition and supporting documents.  (Ins. Code, § 10139.5, subds. (a),(4) (f)(2).)

ORDER

            The court denies petitioner J.G. Wentworth Originations, LLC’s Petition for Approval for Transfer of Payment Rights, without prejudice.

            The court orders J.G. Wentworth Originations, LLC to give notice of this ruling.

IT IS SO ORDERED.

DATED:  July 2, 2024

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court