Judge Robert B. Broadbelt, Case Number: 24STCP03511, Date: 2024-12-09 Tentative Ruling

Judge: Robert B. Broadbelt, Case: 24STCP03511, Date: 2024-12-09 Tentative Ruling

First Amended Petition for Approval of Transfer of Structured Settlement Payment Rights

The court considered the First Amended Petition. No opposition papers were filed.

Claimant Amy Lucier (“Lucier”) settled an action and received certain structured settlement payment rights. (First Amended Pet. filed Nov. 19, 2024 (“Pet.”), ¶ 3.) Lucier has agreed to sell, and petitioner Nobility Settlement Funding, LLC (“Petitioner”) has agreed to purchase, 339 monthly payments of $1,337.47, beginning on December 15, 2024 and continuing through February 15, 2053, totaling $453,402.33. (Pet., Ex. 2, Transfer Agreement, ¶ 9.) Lucier will receive $155,000 in exchange for the transfer of the payment rights described above. (Ibid.)

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 Petition and its attachments, the court finds and orders as follows.

First, the court finds that the transfer is in the best interest of Lucier. (Ins. Code, § 10139.5, subd. (a)(1).) If approved, Lucier will use the funds received to relocate out of California and purchase a home. (Lucier Decl., ¶ 11.) Lucier is 29 years old, married, is not employed, does not have any dependents, and has no court-ordered child support obligations. (Lucier Decl., ¶¶ 3-7.)

Second, the court finds that Lucier 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 that advice. (Ins. Code, § 10139.5, subd. (a)(2).) Petitioner has submitted the “Statement of Independent Professional Representation,” which (1) was signed by Lucier on October 22, 2024, and (2) states that Lucier (i) was advised by Petitioner that she should obtain or consult with independent professional representation concerning the implications of the transaction, and (ii) knowingly and voluntarily waived that right. (Pet., Ex. 7, p. 1.)

Third, the court finds that Petitioner has complied with the notification requirements pursuant to section 10139.5, subdivision (f)(2), Petitioner has provided Lucier with a disclosure form that complies with section 10136, and the transfer agreement complies with sections 10136 and 10138.

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.¿¿

Petitioner served Lucier, the payment obligor, and the payment issuer with the First Amended Petition on November 19, 2024, i.e., 20 days before the December 9, 2024 hearing on the petition. (Pet., p. 57 [Proof of Service].) The First Amended Petition includes a copy of the proposed transfer agreement (Pet., Ex. 2), a verified chart showing that Lucier has no dependents (Pet., Ex. 6), the disclosure statements for both California and Illinois (Pet., Ex. 3), and the underlying qualified assignment agreement and annuity contract (Pet., Ex. A to Ex. 1). The court therefore finds that Petitioner has complied with the notice requirements.

Section 10136 requires that the transfer agreement include certain information and meet 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 in claims brought by the seller or on the seller’s behalf contesting the sale, 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 “California Disclosure Statement,” which was signed by Lucier. (Pet., Ex. 3.) The court finds that this disclosure statement complies with section 10136. The court further finds that the proposed transfer agreement (the “California Structured Settlement Payment Rights Purchase and Sale Agreement”) substantially complies with Sections 10136 and 10138.[1] (Pet., Ex. 2; Pet., ¶ 10.)

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 Lucier 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); Lucier Decl., ¶ 15 [“I received and read the separate Disclosure Statement at least 10 days before I received the Transfer Agreement. I understand the terms of the Disclosure Statement and the terms of the Transfer Agreement”].)

Sixth, the court finds that Lucier understands that she has the right to cancel the transfer agreement and does not wish to exercise that right. (Ins. Code, § 10139.5, subd. (a)(6); Lucier Decl., ¶ 18.)

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 Lucier’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. The court therefore grants Petitioner’s First Amended Petition.

The court grants petitioner Nobility Settlement Funding, LLC’s First Amended Petition for Approval of Transfer of Structured Settlement Payment Rights.

The court orders that the transfer of the structured settlement payment rights set forth in the “California Structured Settlement Payment Rights Purchase and Sale Agreement,” as attached as Exhibit 2 to petitioner Nobility Settlement Funding, LLC’s First Amended Petition for Approval of Transfer of Structured Settlement Payment Rights, is approved.

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

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

[1] The court notes that the purchase agreement includes a provision in which Lucier agrees to “indemnify and hold [Petitioner] harmless against all claims, loss, damages or expenses, including reasonabl[e] attorney fees, which [Petitioner] may incur as a result of any breach or failure of any representation or warranty contained hereunder or as a result of any breach of any term or provision of the Agreement.” (Pet., Ex. 2, ¶ 5.4.) Section 10138 states that a transfer agreement shall not include the following: “Any provision that requires the seller to indemnify and hold harmless the buyer, or to pay the buyer’s cost of defense, in any claim or action brought by the seller or on the seller’s behalf contesting the sale for any reason.” (Ins. Code, § 10138, subd. (a)(2).) Thus, the prohibition on indemnification clauses is limited to those provisions that require the seller to indemnify the buyer in claims contesting the sale, such that the indemnification provision in the purchase agreement here (which requires indemnification as a result of a breach of the agreement) does not violate section 10138. (Ibid.)

in re: nobility settlement funding, llc ; Petitioner,	Case No.:	24STCP03511

	Hearing Date:	December 9, 2024

	Time:	10:00 a.m.

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