Judge: Teresa A. Beaudet, Case: 23STCP04614, Date: 2024-02-28 Tentative Ruling

Case Number: 23STCP04614    Hearing Date: April 10, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Petitioner American Annuity Funding, LLC (“Petitioner”) filed a Petition for Approval of Transfer of Structured Settlement Payment Rights in this action on December 26, 2023.

On February 26, 2024, Petitioner filed a First Amended Petition for Approval of Transfer of Structured Settlement Payment Rights.

On March 8, 2024, the Court issued an Order in this action denying the First Amended Petition, without prejudice. In addition, on March 8, 2024, the Court issued a minute order providing, inter alia, that “[t]he Petition Petition [sic] for Approval of Transfer of Structured Settlement Payment Rights filed by American Annuity Funding, LLC on 12/26/2023 is Denied. The First Amended Petition is denied without prejudice. The Court continues the hearing so Petitioner can file and serve a Second Amended Petition that addresses all the issues raised in the Order adopted this date. On the Court’s own motion, the Hearing on Petition for Approval of Transfer of Structured Settlement Payment Rights scheduled for 03/08/2024 is continued to 04/10/24…”

On March 22, 2024, Petitioner filed a Second Amended Petition for Approval of Transfer of Structured Settlement Payment Rights. Petitioner seeks “approval of the transfer of certain structured settlement payment rights by its payee Robert Suarez, Jr. (‘Payee’) to Petitioner or its assignee.” (Notice of Motion at p. 2:5-7.)

Discussion

As discussed in further detail below, Petitioner has corrected most of the defects identified in the Court’s March 8, 2024 Order on Petitioner’s First Amended Petition. 

In the March 8, 2024 Order on the First Amended Petition, the Court noted that “Petitioner still does not appear to indicate ‘[w]hether 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previous transactions involving the payee’s structured settlement payments that were denied, or that were dismissed or withdrawn prior to a decision on the merits, within the past five years,’ or ‘[w]hether, to the best of the transferee’s knowledge after making inquiry with the payee,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transactions with another person or entity, other than the transferee, that were denied, or which were dismissed or withdrawn prior to a decision on the merits, within the past five years.’” (March 8, 2024 Order at p. 4:8-16, citing

Ins. Code, § 10139.5, subds. (b)(11)-(12).)

In his declaration in support of the instant Second Amended Petition, Robert Suarez, Jr. (“Payee”) now states that “I have assigned payments previously and those transfers were set forth in my prior Declaration. Other than those, there are no additional denials or dismissals in the past five years. I do have a concurrent petition with JG Wentworth and I cancelled that but for some reason that company will not honor the fact that I cancelled with them and it is my understanding that it is attempting to intervene in this case.” (Suarez, Jr. Decl., ¶ 3(b).) The Court notes that it does not appear that any party has yet attempted to intervene in the instant action.

            In the March 8, 2024 Order on the First Amended Petition, the Court also noted that “Petitioner also does not appear to indicate ‘[w]hether, 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.’” (March 8, 2024 Order at p. 4:17-21, citing Ins. Code, § 10139.5, subd. (b)(6).) In his declaration in support of the instant Second Amended Petition, Payee states that “[w]hen the original settlement was entered into, it was not intended to provide for necessary living expenses and I do not need the subject payments to pay for necessary living expenses.” (Suarez, Jr. Decl., ¶ 3(c).)

 The Court’s March 8, 2024 Order further provides that “[p]ursuant to Insurance Code section 10139.5, subdivision (c)(3), ‘[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:…(3) The names, ages, and place or places of residence of the payee’s minor children or other dependents, if any.’” (March 8, 2024 Order at p. 6:17-22.) Payee’s declaration in support of the instant Second Amended Petition now provides such information.

The Court’s March 8, 2024 Order further notes that “[p]ursuant to Insurance Code section 10139.5, subdivision (f)(2), ‘[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 this article, the transferee shall file with the court and serve on all interested parties a notice of the proposed transfer and the petition for its authorization,’ and shall include with that notice, inter alia, ‘[a] copy of the proposed transfer agreement and disclosure form required by paragraph (3) of subdivision (a),’ ‘[a] copy of the disclosure required in subdivision (b) of Section 10136,’ ‘[n]otification that any interested party is entitled to support, oppose, or otherwise respond to the transferee’s petition, either in person or by counsel, by submitting written comments to the court or by participating in the hearing,’ and ‘[n]otification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the petition must be filed, which may not be less than 15 days after service of the transferee’s notice, in order to be considered by the court.’” (March 8, 2024 Order at pp. 6:23-7:10, citing Ins. Code, § 10139.5, subds. (f)(2)(B), (D), (J), (K).)

On March 22, 2024, Petitioner filed a Notice of Hearing on Second Amended Petition for Approval of Transfer of Structured Settlement Payment Rights. This notice correctly indicates that the hearing is set for April 10, 2024 at 10:00 a.m. in Dept. 50. The notice further provides that “[a]ny interested party may support, oppose, or otherwise respond to the Petitioner’s application for approval of the transfer of structured settlement payment rights either in person, or by counsel, by submitting written comments to the Court or by participating in the hearing. If you desire to submit written comments to the Court, any such response must be filed with the Court within 15 days of service of this Notice of Hearing in order to be considered by the Court.” (Petitioner’s March 22, 2024 Notice of Hearing at p. 2:8-12.) In addition, on April 3, 2024, Petitioner filed a proof of service indicating that the Second Amended Petition, the notice of hearing on the Second Amended Petition, and the Declaration of Robert Suarez, Jr. in support of the Second Amended Petition were served on March 16, 2024.

In the March 8, 2024 Order on the First Amended Petition, the Court also noted that “the transfer agreement does not appear to clearly show that it was signed by Payee. Portions of the last page of Exhibit 2 to the First Amended Petition are illegible.” (March 8, 2024 Order at pp. 2:26-3:2.) In his declaration in support of the Second Amended Petition, Payee states that “I signed the Transfer Agreement that was attached to the First Amended Petition. In any case I am signing a new Transfer Agreement that removes Paragraph F (the forum selection/choice of law clause) so that signature should be clear.” (Suarez, Jr. Decl., ¶ 3(a).)

In the March 8, 2024 Order on the First Amended Petition, the Court also noted as follows:

“Insurance Code section 10138 prohibits certain provisions. Insurance Code section 10138, subdivisions (a)(9) and (a)(10) provide that ‘[a] transfer agreement, as defined in subdivision (o) of Section 10134, shall not include any provision described in the paragraphs below. Any inclusion of a prohibited provision, with respect to a seller who is a California resident, shall make the provision void and unenforceable…(9) If the payee is domiciled in California at the time that the transfer agreement is signed by the payee, any forum selection provision providing for jurisdiction to be in a court outside of California for any action arising under the contract. (10) If the payee is domiciled in California at the time that the transfer agreement is signed by the payee, any choice-of-law provision that provides for controlling law to be other than California law in any action arising under the contract.’

Here, Payee states that he lives in California. (Suarez Jr. Decl., ¶ 4.) However, the transfer agreement provides that ‘[a]ny disputes between the parties will be governed, interpreted, construed, and enforced in accordance with the laws of the state of domicile of the Purchaser, which state is the proper venue to bring any cause of action arising out of a breach of the Agreement. The parties agree to the jurisdiction of any court of competent jurisdiction located in the state of domicile of the Purchaser.’ (First Amended Petition, Ex. 2, ¶ F.) The ‘Purchaser’ in the transfer agreement is American Annuity Funding, LLC, and the transfer agreement provides that ‘[y]ou must cancel in writing and send your cancellation to 20423 State Rd 7 STE F6-159, Boca Raton, Fl 33498.’ (First Amended Petition, Ex. 2, emphasis added.) In addition, the disclosure statement provides, “[s]end your cancellation to: American Annuity Funding, LLC, 20423 State Rd 7 STE F6-159, Boca Raton, FL 33498.” (First Amended Petition, Ex. 3.) Thus, it appears that the transfer agreement contains a forum selection provision providing for jurisdiction to be in a court outside of California, as well as a choice-of-law provision that provides for controlling law to be other than California law. (Ins. Code, § 10138, subds. (a)(9)-(a)(10).).” (March 8, 2024 Order at pp. 4:22-5:21.)

In his declaration in support of the instant Second Amended Petition, Payee states that “[w]ith respect to Paragraph K of the Transfer Agreement (forum selection/choice of law clause), I am signing a new agreement that does not include that.” (Suarez, Jr. Decl., ¶ 3(d).)[1] An amended transfer agreement removing the subject forum selection/choice of law clause appears to be attached to the Second Amended Petition as Exhibit “2,” but the space for the signature above Payee’s name appears to contain text that is obscured or crossed out. (See Second Amended Petition, Ex. 2.) Also, the amended transfer agreement is undated. Thus, the Court will require further evidence demonstrating that Payee signed the subject amended transfer agreement and the date of his signature.

Conclusion

If the foregoing defect is corrected before the hearing, the Court will grant the Second Amended Petition.

Petitioner is ordered to provide notice of this order.

DATED:  April 10, 2024                                ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court