Judge: Robert B. Broadbelt, Case: 25STCP00822, Date: 2025-05-07 Tentative Ruling

Tentative rulings are sometimes, but not always, posted. The purpose of posting a tentative ruling is to to help focus the argument. The posting of a tentative ruling is not an invitation for the filing of additional papers shortly before the hearing.

Case Number: 25STCP00822    Hearing Date: May 7, 2025    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                 Petitioner Bentzen Financial, LLC    

RESPONDING PARTY:       Unopposed

Motion for Order Approving Transfer of Structured Settlement Payment Rights

The court considered the First Amended Verified Petition, and the moving papers filed in connection with this motion.  No opposition papers were filed.

DISCUSSION

Claimant Alejandro Lizarraga, a/k/a A.L. (“Lizarraga”) previously settled a tort claim for damages.  (First Amended Verified Pet. filed April 15, 2025 (“Pet.”), ¶¶ 2, 6.)  Lizarraga has agreed to sell, and petitioner Bentzen Financial, LLC (“Petitioner”) has agreed to purchase, 10 annual payments of $25,000 commencing on August 25, 2028 through and including August 25, 2037.  (Pet., ¶ 9 and Ex. A, Transfer Agreement, p. 1, ¶ 1.2.)  Lizarraga will receive $105,000 in exchange for the transfer of the payment rights described above.  (Pet., Ex. A, Transfer Agreement, p. 1, ¶ 1.3.)

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 and First Amended Verified Petition, and the documents attached to the Petition, the court finds and orders as follows.

First, the court finds that the transfer is in the best interest of Lizarraga, taking into account the welfare and support of his three dependents.  (Ins. Code, § 10139.5, subd. (a)(1); Pet. Ex. F, Lizarraga Decl., ¶¶ 3, 12 and Pet. Ex. C, Statement of Dependents.)  If approved, Lizarraga will use the funds received as startup capital for his business and will pay off approximately $600 to $700 in credit card debt.  (Pet. Ex. F, Lizarraga Decl., ¶ 12.)  Lizarraga has three minor children (ages 17, 15, and 7), who live primarily with their respective mothers, and is current with his child support obligations.  (Pet. Ex. F, Lizarraga Decl., ¶ 3.)

Second, the court finds that Lizarraga has been advised in writing by Petitioner to seek independent professional advice 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 “Independent Professional Advice,” which (1) advises the payee that they “have the right to seek independent counsel and financial advice in connection with the petition for court approval of the Transfer Agreement[,]” and (2) was electronically signed by Lizarraga on February 24, 2025 under the statement “I knowingly and voluntarily waive my right to independent professional advice.”  (Pet., Ex. D, Independent Professional Advice, p. 1.)  Further, the California Disclosure Statement, which is signed by Lizarraga, states that the payee “should get independent professional advice about whether selling your structured settlement payments is a good idea for [the payee] and for [the payee’s] dependents[,]” and Lizarraga has stated in his declaration that he understands that he has the right to seek independent counsel and financial advice.  (Pet. Ex. B, California Disclosure Statement, pp. 2, 3 [signature page]; Pet. Ex. F, Lizarraga Decl., ¶ 11.)

Third, the court finds that Petitioner has not shown that it has complied with the notification requirements pursuant to paragraph (2) of subdivision (f).

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.  It also requires that Petitioner provide notice to the payee’s attorney of record at the time the structured settlement was created, if the payee entered into the structured settlement within five years prior to the date of the transfer agreement.

On April 15, 2025, Petitioner filed the pending amended motion to approve the transfer of structured settlement payment rights, to which Petitioner attached (1) its First Amended Verified Petition, and (2) a proof of service of the amended motion and the First Amended Verified Petition on Lizarraga, the annuity issuer, the annuity obligor, and the settlement attorney.  (Mot., pp. 48 [proof of service of First Amended Verified Petition], 49 [proof of service of amended motion to approve the transfer of structured settlement payment rights].)  Thus, Petitioner has served the interested parties with the current petition, current transfer agreement, the annuity contract, the disclosure statements, and a listing of each of Lizarraga’s dependents, together with each dependent’s age.  (Pet. Exs. A-E.)

However, Petitioner did not provide the court with the date on which Lizarraga made the subject settlement agreement.  Thus, the court cannot determine whether the settlement agreement was entered into within five years prior to the date of the subject transfer agreement, and consequently, whether Petitioner was required to provide the notice required by Insurance Code section 10139.5, subdivision (f)(2)(L) to Lizarraga’s attorney of record at the time that the structured settlement was created.  (Ins. Code, § 10139.5, subd. (f)(2)(L); Pet., ¶¶ 6 [stating only that Lizarraga “entered into an agreement for the settlement of a claim for damages arising in connection with a tort claim”].)  Instead, it appears that Petitioner only served Lizarraga’s settlement attorney with the petition and supporting documents, but did not provide counsel with the required notice.  Petitioner also did not present evidence to show that notice is not to be required under the circumstances identified in section 10139.5, subdivision (f)(2)(L).  The court will continue the hearing on this motion to give Petitioner an opportunity to provide Lizarraga’s settlement attorney with the required notice, to the extent that (1) Lizarraga entered into the settlement at issue within five years prior to the transfer date, and (2) the exceptions to this requirement do not apply.

The court, however, finds that Petitioner has provided Lizarraga 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), 10136, 10138; Pet. Ex. A, Transfer Agreement; Pet. Ex. B, pp. 1-3, California Disclosure Statement.)

Fourth, the court finds that the transfer agreement does not contravene any applicable statute or the order of any court or other government authority.  (Ins. Code, § 10139.5, subd. (a)(3); Pet. Ex. A, Transfer Agreement.)

Fifth, the court finds that Lizarraga 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)(3); Pet. Ex. F, Lizarraga Decl., ¶¶ 8, 12.)

Sixth, the court finds that Lizarraga understands and does not wish to exercise his right to cancel the transfer agreement.  (Ins. Code, § 10139.5, subd. (a)(6); Pet. Ex. F, Lizarraga Decl., ¶ 10.)

Because the court has concluded that Petitioner has not shown that it complied with the notice requirements to Lizarraga’s former settlement attorney or that an exception to that requirement applies, the court finds that it is appropriate, and therefore exercises its discretion, to continue the hearing on this motion in order to give Petitioner an opportunity to comply with that requirement.

ORDER

            The court orders that the hearing on petitioner Bentzen Financial, LLC’s motion for order approving transfer of structured settlement payment rights is continued to June 25, 2025, at 10:00 a.m., in Department 53.

            The court orders petitioner Bentzen Financial, LLC to file with the court a supplemental declaration regarding its compliance with Insurance Code section 10139.5, subdivision (f)(2)(L) no later than May 23, 2025.

            The court orders petitioner Bentzen Financial, LLC (1) to give notice of this ruling to all interested parties, and (2) to file a proof of service of the notice of ruling with the court no later than May 23, 2025.

IT IS SO ORDERED.

DATED:  May 7, 2025

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court