Judge: Stephen P. Pfahler, Case: 24STCP02662, Date: 2024-09-30 Tentative Ruling

Case Number: 24STCP02662    Hearing Date: September 30, 2024    Dept: 68

Dept. 68

Date: 9-30-24

Case #24STCP02662

PETITION FOR APPROVAL

OF

TRANSFERRED STRUCURED SETTLMENT PAYMENT RIGHTS

MOVING PARTY: Petitioner, J.G. Wentworth Originations, LLC

RESPONDING PARTY: Jamestown Life Insurance Company

SUMMARY

Beginning in 1999, Payee Frederick Sanders Jr. became entitled to certain structed settlement payments. The payments are made by Jamestown Life Insurance Company.

Payee seeks to transfer payments in exchange for a lump sum purchase amount with Petitioner J.G. Wentworth Originations, LLC.

RULING: Denied.

Petitioner J.G. Wentworth Originations, LLC moves to transfer the rights of $50,000 due on November 10, 2032 ($100,000 total payment scheduled), present value discounted to $17,000 based on a rate of 13.99%.

Structured settlements require certain disclosures, service on all interested parties, and court approval. (Ins. Code, §§ 10136, et seq.)

In order to grant the petition for approval, the court must expressly find:

(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).)

The section continues:

b) 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, but not limited to, all of the following:

(1) The reasonable preference and desire of the payee to complete the proposed transaction, taking into account the payee's age, mental capacity, legal knowledge, and apparent maturity level.

(2) The stated purpose of the transfer.

(3) The payee's financial and economic situation.

(4) The terms of the transaction, including whether the payee is transferring monthly or lump sum payments or all or a portion of his or her future payments.

(5) Whether, when the settlement was completed, the future periodic payments that are the subject of the proposed transfer were intended to pay for the future medical care and treatment of the payee relating to injuries sustained by the payee in the incident that was the subject of the settlement and whether the payee still needs those future payments to pay for that future care and treatment.

(6) Whether, when the settlement was completed, the future periodic payments that are the subject of the proposed transfer were intended to provide for the necessary living expenses of the payee and whether the payee still needs the future structured settlement payments to pay for future necessary living expenses.

(7) Whether the payee is, at the time of the proposed transfer, likely to require future medical care and treatment for the injuries that the payee sustained in connection with the incident that was the subject of the settlement and whether the payee lacks other resources, including insurance, sufficient to cover those future medical expenses.

(8) Whether the payee has other means of income or support, aside from the structured settlement payments that are the subject of the proposed transfer, sufficient to meet the payee's future financial obligations for maintenance and support of the payee's dependents, specifically including, but not limited to, the payee's child support obligations, if any. The payee shall disclose to the transferee and the court his or her court-ordered child support or maintenance obligations for the court's consideration.

(9) Whether the financial terms of the transaction, including the discount rate applied to determine the amount to be paid to the payee, the expenses and costs of the transaction for both the payee and the transferee, the size of the transaction, the available financial alternatives to the payee to achieve the payee's stated objectives, are fair and reasonable.

(10) Whether the payee completed previous transactions involving the payee's structured settlement payments and the timing and size of the previous transactions and whether the payee was satisfied with any previous transaction.

(11) Whether the transferee attempted previous transactions involving the payee's structured settlement payments that were denied, or that were dismissed or withdrawn prior to a decision on the merits, within the past five years.

(12) Whether, to the best of the transferee's knowledge after making inquiry with the payee, the payee has attempted structured settlement payment transfer transactions with another person or entity, other than the transferee, that were denied, or which were dismissed or withdrawn prior to a decision on the merits, within the past five years.

(13) Whether the payee, or his or her family or dependents, are in or are facing a hardship situation.

(14) Whether the payee received independent legal or financial advice regarding the transaction. The court may deny or defer ruling on the petition for approval of a transfer of structured settlement payment rights if the court believes that the payee does not fully understand the proposed transaction and that independent legal or financial advice regarding the transaction should be obtained by the payee.

(15) Any other factors or facts that the payee, the transferee, or any other interested party calls to the attention of the reviewing court or that the court determines should be considered in reviewing the transfer.

(c) Every 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.

The petition recites the elements for a transfer. The exhibits, including signed documents demonstrate compliance with the disclosure requirements and explicit terms of the agreement.

While the petition contains an affidavit of Frederick Sands Jr., lacking is any reference to the purported reasons for the request. [First Amended Petition, Ex. D.] The declaration is therefore incomplete. (Ins. Code, § 10139.5, subd. (b-c).)

The court also seeks clarification that Petitioner in fact only seeks $50,000 of the $100,000 indicated amount due in November 10, 2032. [First Amended Petition, Ex. C.]

The First Amended Petition was filed on September 9, 2024, without any proof of service. Any service was due 16 court days before the September 30, 2024, hearing, so even if Petitioner submits a proof of service, any such service would precede the filing date. (Code Civ. Proc., 1005, subd. (b).)

In summary, the court finds the declaration insufficiently demonstrates the basis for the transfer and basis of the decision, the court seeks verification on the proposed payment, and finds service untimely. The petition is therefore denied without prejudice.

Petitioner to provide notice.