Judge Theresa M. Traber, Case 23STCP00230 2023-04-03 Tentative Ruling

Judge: Theresa M. Traber, Case: 23STCP00230, Date: 2023-04-03 Tentative Ruling

Case Number: 23STCP00230 Hearing Date: April 3, 2023 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: April 3, 2023 TRIAL DATE: NOT SET

CASE: In Re Petition of J.G. Wentworth Originations, LLC (Payee: R.H.)

CASE NO.: 23STCP00230

MOTION FOR ORDER APPROVING TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS

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

RESPONDING PARTY(S): No response on eCourt as of 3/29/23

CASE HISTORY:

· 01/26/23: Petition for approval of transfer of structured settlement payment rights filed.

· 03/10/23: Amended Petition filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Petitioner seeks court approval of a proposed transfer of structured settlement payments.

TENTATIVE RULING:

Petitioner seeks court approval of a proposed transfer of structured settlement payments.

A direct or indirect transfer of structured settlement payment rights is not effective unless the transfer has been approved by a court order finding:

(1) The transfer is in the best interest of the payee, considering 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(a).)

As a result of a personal injury settlement entered into when he was a minor, Payee Robert Hufstader became entitled to certain structured settlement payments. (Amended Petition ¶ 3.)

Mr. Hufstader, as Payee, and Petitioner J.G. Wentworth Originations, LLC, as Assignee, have entered into a Structured Settlement Payments Purchase Agreement, under which Payee is to sell future payments totaling $419,580.00 in exchange for a purchase price of $168,000. (Amended Petition Exh. A.)

The discounted present value of the amount being sold is $282,754.82, calculated by applying the 4.6% discount rate used by the Internal Revenue Service to value annuities in probate proceedings. The purchase price was calculated using a discount rate of 12.45%. If Payee did not sell the right to receive structured settlement payments but instead borrowed the net amount of $168,000.00 and paid that loan back in installments with each of the payments he is now selling, the equivalent interest rate would be 12.45%. (Ibid.)

All this information has been properly disclosed to Payee by way of the disclosure form in compliance with Insurance Code § 10136, as required by § 10139.5(a)(3). (Amended Petition, Exh. B.) Payee was advised in writing to seek independent professional advice, both legal and financial. (Ibid.) Payee chose not to seek an independent professional’s advice. (Amended Petition, Exh. D.) Thus, Petitioner has complied with the statutory disclosure requirements. (Ins. Code § 10139.5(a)(2).)

The transfer agreement (Exh. A) also complies with Insurance Code §§ 10136 and 10138 as required by § 10139.5(a)(3). It does not contravene any applicable statute or order of any court or other governmental authority. (Ins. Code § 10139.5(a)(4).)

Copies of the relevant portions of the annuity contract, qualified assignment agreement, and underlying structured settlement agreement were not submitted. Instead, Payee provided a notarized affidavit stating that he has not been able to locate a copy of the annuity contract or qualified assignment agreement and has no record of those documents. (Amended Petition ¶ Exhs. C-D.) With respect to the annuity contract and the qualified assignment agreement, this showing is sufficient to establish that reasonable efforts were made to locate these documents, as required by Ins. Code §10139.5(f)(2)(E)-(F). As to the underlying structured settlement, Petitioner represents that a copy of the agreement is in its possession but has not been provided because there is a confidentiality clause. However, Petitioner states that it will provide a copy to the Court if requested. That request is made. The Court will condition its approval of the settlement on provision of that agreement to the Court.

Information About Transferor

Payee is 67 years old. (First Amended Declaration of Robert Hufstader ISO Petition. ¶ 8).

Payee has indicated that he resides in Los Angeles County, California, but has not disclosed his specific address. However, he states that he has purchased a home in Lancaster, California. (Hufstader Decl. ¶¶ 8, 11.)

Payee has stated he is unmarried as required by Insurance Code § 10139.5(c)(2). (¶ 8.)

Payee has stated that he has no minor children. (¶ 8.) The Court therefore finds that Payee has complied with section 10139.5(c)(3).

Payee has indicated that he is disabled and receives $800 monthly from social security, as required by Insurance Code § 10139.5(c)(4). (¶ 8.)

Payee has stated that he has no child support obligations, as required by Insurance Code § 10139.5(c)(5). (Id.)

Payee has provided information regarding previous transfers, as required by Insurance Code § 10139.5(c)(6). (¶¶ 9-10.)

In sum, Payee has provided all information required by Insurance Code §10139.5(c).

Payee indicates how the proceeds would be used as required by Insurance Code § 10139.5(b)(2): He intends to use the proceeds to purchase a smart mattress costing $7,299, a new king-size bed costing $4,199, a bariatric patient lift ($7,280), install new fencing at his property ($5,000), landscape the property ($15,000), to renovate the property to accommodate his disabilities ($25,000), and to purchase a vehicle with a built-in handicap ramp costing $102,000. (¶ 11.) He has indicated that he is currently experiencing a financial hardship, as required by Insurance Code § 10139.5(b)(3). (¶ 11.)

Payee indicates that the periodic payments were not intended for necessary living expenses nor medical expenses, as required by Insurance Code § 10139.5(b)(5)-(7). (¶¶ 6-7.)

Given the foregoing, the Court finds that the transfer is fair, reasonable and in the best interest of Payee. (Insurance Code § 10139.5(a)(1) & (b)(1)-(15).) The Payee understands the terms of the transfer agreement, including those set forth in the § 10136 disclosure statement, as required by Insurance Code § 10139.5(a)(5). In signing the California Disclosure Statement and in his declaration and affidavit in support of to the Petition, Payee has evidenced an understanding of the right to cancel and election not to cancel the transfer agreement, as required by Insurance Code § 10139.5(a)(6).

Thus, Petitioner has met all the procedural requirements under the Insurance Code. The Petitioner has also served a copy of the notice to all interested parties and the Attorney General.

Accordingly, the petition for approval of transfer of structured settlement payment rights is GRANTED. This ruling is conditioned on the provision of the underlying structured settlement agreement to the Court on the date of the hearing.

Moving party to give notice, unless waived.

IT IS SO ORDERED.

Dated: April 3, 2023 ___________________________________

Theresa M. Traber

Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.