Judge: Theresa M. Traber, Case: 23STCP04156, Date: 2024-01-08 Tentative Ruling

Case Number: 23STCP04156    Hearing Date: January 8, 2024    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     January 8, 2024                                 TRIAL DATE: NOT SET

CASE:                         In the matter of Seasons 68, LLC.

CASE NO.:                 23STCP04156           

PETITION FOR APPROVAL OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS

MOVING PARTY:               Petitioner Seasons 68, LLC

RESPONDING PARTY(S): No response on eCourt as of January 4, 2024

CASE HISTORY:

·         11/13/23: Petition filed.

·         12/14/23: First 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, Payee Laelani Judie became entitled to certain structured settlement payments.

Laelani Judie, as Payee, and Petitioner Season 68 LLC, as Assignee, have entered into a Structured Settlement Payments Purchase Agreement, under which Payee is to sell future payments totaling $91,637 in exchange for a purchase price of $41,500. (Amended Petition Exh. 5.)  

The discounted present value of the amount being sold is $64,224.27, calculated by applying the 5.60% discount rate used by the Internal Revenue Service to value annuities in probate proceedings. The purchase price was calculated using a discount rate of 13.53%. If Payee did not sell the right to receive structured settlement payments but instead borrowed the net amount of $41,500 and paid that loan back in installments with each of the payments he is now selling, the equivalent interest rate would be 13.53%. (Ibid.) 

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. 5.) 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 8.) Thus, Petitioner has complied with the statutory disclosure requirements. (Ins. Code § 10139.5(a)(2).) 

The transfer agreement (Notice of Increased Purchase Price Re: Petition) 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 submitted as required by Ins. Code § 10139.5(f)(2)(E)-(G). (Amended Petition Exhs. 2-4.)

Information About Transferor 

The Amended Petition contains little information about the transferor. Although the Petition references a Declaration and Affidavit by the Payee, no such document was attached to either the original Petition or the Amended Petition. The only information that is available is a form signed by the Payee which indicates that she is unmarried and has no dependents or children. (Amended Petition Exh. 7.) The Petition does not set forth the Payee’s age, address, amount or source of income, or any previous transfers as required by Insurance Code section 10139.5(c). Moreover, the Amended Petition provides no information on how the Payee intends to use the proceeds, or whether the settlement funds were intended for necessary living expenses, as required by section 10139.5(b).

That said, the Court takes judicial notice of a Declaration from the Payee in support of the ex parte application to advance the hearing date on this petition, which contains some relevant information. (December 18, 2023 Declaration of Lealani Judie ISO ex parte App.) That Declaration states that the Payee intends to use the funds “to rent an apartment and go to school,” supplemented by her own existing income, which is not sufficient to permit her to do so on its own. (Id. ¶ 3.) Taking this statement as part of the record, the Payee has described the purpose of the transfer and has indicated that she is experiencing a financial hardship. (Ins. Code § 10139.5(b)(2), (3).) In a supplemental declaration filed on January 5, 2024, Payee provided additional information about herself, her knowledge of the details of the proposed transfer, and the underlying lawsuit and settlement, including by stating that the original payments that are being transferred were not intended, to her knowledge, for necessary living or medical expenses. (Ins. Code § 10139.5(b)(5), (7); see Declaration of Laelani Judie in Support of Transfer of Structured Settlement Payment Rights.)

Based on all the information provided in support of the petition, the Court concludes that the proposed transfer is fair and reasonable and should be approved in its entirety.  This approval is conditioned on the filing with the Court of a proof of service showing all documents have been provided to the Attorney General. (Insurance Code §§ 10136, et seq.; 321 Henderson Receivables Origination LLC v. Sioteco (2009) 173 Cal. App. 4th 1059, 1065.)

Moving party to give notice, unless waived. 

IT IS SO ORDERED.

Dated: January 8, 2024                                   ___________________________________

                                                                                    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.