Judge: Salvatore Sirna, Case: 23PSCP00155, Date: 2023-05-23 Tentative Ruling

Case Number: 23PSCP00155    Hearing Date: May 23, 2023    Dept: G

Petitioner Transamerica Life Insurance Company’s Verified Uncontested Petition for Approval of Transfer of Structured Settlement Payment Rights By and Between Nathalye Guzman, Transferor, and Petitioner, Transferee, Pursuant to California Insurance Code Section 10134 et seq.

Respondent: NO OPPOSITION

TENTATIVE RULING

Petitioner Transamerica Life Insurance Company’s Verified Uncontested Petition for Approval of Transfer of Structured Settlement Payment Rights By and Between Nathalye Guzman, Transferor, and Petitioner, Transferee, Pursuant to California Insurance Code Section 10134 et seq. is CONTINUED to a future date to be determined at the hearing.

ANALYSIS

Petitioner Transamerica Life Insurance Company moves the court for approval of a transfer of structured settlement payment rights from Respondent Nathalye Guzman, as trustee of Joseph Reyes. For the following reasons, the court CONTINUES the hearing on the Petition.

Legal Standard

The present petition is governed by Insurance Code sections 10134 to 10139.5. (See 321 Henderson Receivables Origination LLC v. Sioteco (2009) 173 Cal.App.4th 1059, 1066.) Pursuant to Insurance Code section 10137, “[a] transfer of structured settlement payment rights is void unless a court reviews and approves the transfer and finds the following conditions are met: (a) [t]he transfer of the structured settlement payment rights is fair and reasonable and in the best interest of the payee, taking into account the welfare and support of his or her dependents [; and] (b) [t]he transfer complies with the requirements of this article, will not contravene other applicable law, and the court has reviewed and approved the transfer as provided in Section 10139.5.” The transfer agreement is effective only upon approval in a final court order. (Ins. Code, § 10139.5, subd. (a).)

Insurance Code section 10139.5, subdivision (a) requires the court to make the following findings:

“(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.” 

In addition, pursuant to Insurance Code section 10139.5, subdivision (c), “[e]very petition for approval of a transfer of structured settlement payment rights, except as provided in subdivision (d), shall include, to the extent known after the transferee has made reasonable inquiry with the payee, all of the following:

(1)   The payee's name, address, and age. 

(2) The payee's marital status, and, if married or separated, the name of the payee's spouse. 

(3) The names, ages, and place or places of residence of the payee's minor children or other dependents, if any. 

(4) The amounts and sources of the payee's monthly income and financial resources and, if presently married, the amounts and sources of the monthly income and financial resources of the payee's spouse. 

(5) Whether the payee is currently obligated under any child support or spousal support order, and, if so, the names, addresses, and telephone numbers of any individual, entity, or agency that is receiving child or spousal support from the payee under that order or that has jurisdiction over the order or the payments in question. 

(6) Information regarding previous transfers or attempted transfers, as described in paragraph (11), (12), or (13) of subdivision (b). The transferee or payee may choose to provide this information by providing copies of pleadings, transaction documents, or orders involving any previous attempted or completed transfer or by providing the court a summary of available information regarding any previous transfer or attempted transfer, such as the date of the transfer or attempted transfer, the payments transferred or attempted to be transferred by the payee in the earlier transaction, the amount of money received by the payee in connection with the previous transaction, and generally the payee's reasons for pursuing or completing a previous transaction. The transferee's inability to provide the information required by this paragraph shall not preclude the court from approving the proposed transfer, if the court determines that the information is not available to the transferee after the transferee has made a reasonable effort to secure the information, including making an inquiry with the payee.” 

Discussion

In 2000, Respondent, as trustee for Joseph Reyes, entered into a release and settlement agreement with certain tort defendants and their liability insurer in connection with an injury claim in which Respondent became entitled to periodic settlement payments (Petition, ¶ 2-3.) On March 6, 2023, Respondent entered into a Purchase and Sale Agreement with Petitioner in which Respondent agreed to sell future payments totaling $1,681,146.49 in exchange for a purchase price of $95,000. (Petition, ¶ 6, Ex. E.)

The discounted present value of the amount being sold is $318,672, calculated by applying the 4.6% discount rate used by the Internal Revenue Service to value annuities in probate proceedings. If Respondent did not sell the right to receive structured settlement payments but instead borrowed the net amount and paid that loan back in installments with each of the payments they are now selling, the equivalent interest rate would be 9.15% annually.

All of this information has been properly disclosed to Respondent by way of the disclosure form in compliance with Insurance Code section 10136, as required by Insurance Code section 10139.5, subdivision (a)(3). (Petition, ¶ 11, Ex. F.) Respondent was also advised in writing to seek independent legal and financial professional advice. (Petition, ¶ 11, Ex. F.) Respondent chose not to seek an independent professional’s advice. (Petition, Ex. G.) Thus, Petitioner has complied with the statutory disclosure requirements in Insurance Code section 10139.5, subdivision (a)(2).

The transfer agreement also complies with Insurance Code sections 10136 and 10138 as required by Insurance Code section 10139.5, subdivision (a)(3). It does not contravene any applicable statute or order of any court or other governmental authority. (Ins. Code, § 10139.5, subd. (a)(4).) Petitioner has also provided copies of the Release and Settlement Agreement; Qualified Assignment, Release, and Pledge; Statement of Irrevocable Guarantee; and the Purchase and Sale Agreement. (Petition, Ex. B, C, D, E.)

Information About Respondent

First, according to Petitioner, Respondent is 49 years old. (Petition, ¶ 10.) Petitioner has also provided Respondent’s physical address in Pomona. (Petitioner, ¶ 10.) Thus, the petition meets the requirements of Insurance Code section 10139.5, subdivision (c)(1).

Second, Petitioner has not provided Respondent’s marital status as required by Insurance Code section 10139.5, subdivision (c)(2) as Respondent’s declaration merely states “I am separated, from the state.” (Petition, Ex. G, ¶ 12.) And to the extent Respondent meant that Respondent is married or separated, Respondent does not provide the name of Respondent’s spouse as also required by Insurance Code section 10139.5, subdivision (c)(2).

Third, while the Petition states Respondent has no dependents and cites to Respondent’s declaration, Respondent’s declaration fails to reference if Respondent has any dependents. (Petition, ¶ 10(C), Ex. G.) Elsewhere however, the Petition mentions Respondent does have two dependents and provides their ages. (Petition, ¶ 11(C), Ex. H.) Thus, given the conflicting statements in the petition, the petition does not presently comply with Insurance Code section 10139.5, subdivision (c)(3).

Fourth, Respondent indicated Respondent receives $65,000 a year from the State of California for providing full-time in-home caregiver services to Respondent’s son. (Petition, Ex. G, ¶ 13.) However, the Petition and supporting declaration do not state if Respondent receives any monthly income or financial resources from a spouse. (See Ins. Code, § 10139.5, subd. (c)(4).)

Fifth, while Respondent stated “I am not delinquent . . . in any payments required to be made by me pursuant to a restitution order or child support order,” the Petition and supporting declaration fail to clearly indicate if Respondent has child support obligations pursuant Insurance Code section 10139.5, subdivision (c)(5). (Petition, Ex G., ¶ 19.)

Sixth, Respondent stated Respondent has not previously attempted to transfer payments, as required by Insurance Code section 10139.5, subdivision (c)(6). (Petition, Ex G., ¶ 18.) Accordingly, Petitioner has not provided all of the information required by Insurance Code section 10139.5, subdivision (c).¿

Analysis of Transfer

Pursuant to Insurance Code section 10139.5, subdivision (b)(2), Respondent states the proceeds would be used to purchase a new vehicle for Joseph Reyes. (Petition, Ex. G, ¶ 15.) Although Petitioner adds that the vehicle is a specialized handicap-accessible vehicle valued at $95,000, it is unclear where this additional information comes from as it was not included in the declaration. (Petition, ¶ 10(D).) Respondent also states that Respondent’s other sources of income are not sufficient to cover the expense of the vehicle.

However, as noted above, the Petition does not presently meet the requirements of Insurance Code section 10139.5, subdivisions (c)(2) (failure to provide Respondent’s marital status and name of spouse), subdivision (c)(3) (failure to state without contradiction if Respondent has dependents along with the names and ages of said dependents), subdivision (c)(4) (failure to state if Respondent receives monthly income or financial resources from a potential spouse), and subdivision (c)(5) (failure to state if Respondent is under any obligation to pay child support). The Petition and Respondent’s declaration also only address one of the fifteen relevant factors listed in Insurance Code section 10139.5, subdivision (b).

Accordingly, for these reasons, the court will CONTINUE the hearing on the Petition so that Petitioner can comply in full with Insurance Code section 10139.5 and provide sufficient evidence for the court to determine if the transfer is fair, reasonable, and in the best interest of the Respondent.

CONCLUSION

Based on the foregoing, the hearing on the Petition is CONTINUED to a future date to be determined at the hearing.