Judge Upinder S. Kalra, Case Number: 23STCP01577, Date: 2023-08-03 Tentative Ruling

Judge: Upinder S. Kalra, Case: 23STCP01577, Date: 2023-08-03 Tentative Ruling

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Case Number: 23STCP01577 Hearing Date: August 3, 2023 Dept: 51

Tentative Ruling

Judge Upinder S. Kalra, Department 51

HEARING DATE: August 3, 2023

CASE NAME: Sequoia Companies, LLC v. American General Life Insurance Company

CASE NO.: 23STCP01577

PETITION FOR APPROVAL FOR TRANSFER OF PAYMENT RIGHTS

MOVING PARTY: Petitioner Sequoia Companies, LLC

RESPONDING PARTY(S): None as of July 31, 2023.

REQUESTED RELIEF:

1. An order granting approving the petition for transfer of structured settlement payment rights.

TENTATIVE RULING:

1. Petition for Approval for Transfer of Payment Rights is GRANTED.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

On May 10, 2023, Petitioner Sequoia Companies, LLC, filed a Petition for Approval of Transfer of Structured Settlement Payment Rights. The Petition requests that Payee, Maria Diaz, receive $30,006.78 in exchange for the selling of the rights under the structured settlement from 2003.

On July 3, 2023, Petitioner filed a Motion for Order Approving Petition for Transfer of Structured Settlement Payment Rights. No opposition has been filed as of July 31, 2023.

LEGAL STANDARD

California Insurance Code section 10139.5 provides that a transfer of structured settlement payment rights is not effective unless the transfer has been approved in advance in a final court order based on the following express findings by the court that:

The transfer is in the best interest of the payee, taking into account the welfare and support of the payee’s dependents.

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 that advice in writing.

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.

The transfer does not contravene any applicable statute or the order of any court or other government authority.

The payee reasonably understands the terms of the transfer agreement, including the terms set forth in the disclosure statement required by Section 10136.

The payee understands and does not wish to exercise the payee’s right to cancel the transfer agreement.

(Ins. Code § 10139.5(a).)

When determining whether the proposed transfer should be approved, including whether the transfer is fair, reasonable, and in the payee’s best interest, the court shall consider the totality of the circumstances, including, but not limited to: (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 the future periodic payments were intended to pay for future medical care of the payee related to the incident that was the subject of the settlement; (6) whether the payee has other means of income or support sufficient to meet the payee’s future financial obligations for support of payee’s dependents, such as child support; (7) whether there were previous transactions involving payee’s structured settlement payments; and (8) whether the payee and his or her dependents are facing a hardship situation. (Ins. Code § 10139.5(b).)

Procedurally, Insurance Code section 10136 provides that ten or more days before the payee executes a transfer agreement, the transferee shall provide the payee with a separate written disclosure statement, accurately completed with the information that applies to the transfer agreement in at least 12-point type. (Ins. Code § 10136(b).)

The court-approval process requires the transferee to file a petition in the county in which the transferor resides for approval of the transfer. (Ins. Code § 10139.5(f)(1).) In addition, the following elements are required to be served and filed not less than 20 days prior to the scheduled hearing on any application for approval of a transfer of structured settlement payment rights:

A copy of the transferee’s current and any prior petitions.

A copy of the transfer agreement.

A listing of each of the payee’s dependents, together with each dependent’s age.

A copy of the disclosure required in subdivision (b) of Section 10136.

A copy of the annuity contract, if available.

A copy of any qualified assignment agreement, if available.

A copy of the underlying structured settlement agreement, if available.

If a copy of a document described in subparagraph (E), (F), or (G) is unavailable or cannot be located, then the transferee is not required to attach a copy of that document to the petition or notice of the proposed transfer if the transferee satisfies the court that reasonable efforts to locate and secure a copy of the document have been made, including making inquiry with the payee. If the documents are available, but contain a confidentiality or nondisclosure provision, then the transferee shall summarize in the petition the payments due and owing to the payee, and, if requested by the court, shall provide copies of the documents to the court at a scheduled hearing.

Proof of service showing compliance with the notification requirements of this section.

Notification that any interested party is entitled to support, oppose, or otherwise respond to the transferee’s application, either in person or by counsel, by submitting written comments to the court or by participating in the hearing.

Notification of the time and place of the hearing and notification of the manner in which and the time by which written responses to the application 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.

If the payee entered into the structured settlement at issue within five years prior to the date of the transfer agreement, then the transferee shall provide notice to the payee’s attorney of record at the time the structured settlement was created, if the attorney is licensed to practice in California, at the attorney’s address on file with the State Bar of California. The notice shall be delivered by regular mail.

(Ins. Code § 10139.5(f)(2))

Lastly, the court shall retain continuing jurisdiction to interpret and monitor the implementation of the transfer agreement as justice requires. (Ins. Code § 10139.5(i).)

ANALYSIS:

Petitioner seeks approval of the transfer of a structured settlement payment rights.

In 2003, the Payee, Maria Diaz, became entitled to a structured settlement in connection with a medical negligence matter. The original structured settlement provided Payee with 165 monthly payments of $692.20 starting on January 25, 2027 until September 25, 2040. Here, payee seeks a payment of $30,006.78 from this transaction.

Based on the information provided, although the discount rate is significant, the Court finds that the transfer of the settlement payment is in the best interest of the payee. Ms. Diaz is a 24-year-old single mother of one minor child. She currently works as a barista at the LAX Airport Coffee Bean. The requested amount of $30,006.78 would be used towards finding an apartment for her and her daughter, as the current living situation, with her daughter’s father, is “unhealthy.” (Ex. 5, Dec. Diaz, ¶ 6.) Moreover, after this current transaction, Payee will retain the rights to monthly payments of $692.20 until December 2026 and, thereafter, beginning in October 2040, until February 2055. When looking at the factors under California Insurance Code § 10139.5 as well as the Declaration of Payee, Maria Diaz, this transfer is appropriate.

CONCLUSION:

For the foregoing reasons, the Court decides the pending motion as follows:

Petition for Approval for Transfer of Payment Rights is GRANTED.

Moving party is to give notice.

IT IS SO ORDERED.

Dated: August 3, 2023 __________________________________ Upinder S. Kalra

Judge of the Superior Court