Judge William A. Crowfoot, Case Number: 24NNCP00604, Date: 2024-11-05 Tentative Ruling

Judge: William A. Crowfoot, Case: 24NNCP00604, Date: 2024-11-05 Tentative Ruling

Petitioner Mic-Bry8, LLC (“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 the following:¿

(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.

As a result of a personal injury settlement, Payee Carlota Estrada (“Payee”) became entitled to certain structured settlement payments. Payee and Petitioner have entered into a transfer agreement, under which Payee is to sell 240 monthly life-contingent payments of $380 beginning January 15, 2025 through and including December 15, 2044, totaling $91,200 in exchange for a purchase price of $9,087.07 (Petition, Ex. B ) The discounted present value of the amount being sold is $55,656.33, calculated by applying the 5.2 % discount rate used by the Internal Revenue Service to value annuities in probate proceedings. The purchase price was calculated using a discount rate of 53.32 %. If Payee did not sell the right to receive structured settlement payments but instead borrowed the net amount of $ 9,086.51 and paid that loan back in installments with each of the payments they are now selling, the equivalent interest rate would be 53.32% per year. (Ibid.)

All of this information has been disclosed to Payee by way of the disclosure form in compliance with Insurance Code § 10136, as required by § 10139.5(a)(3). (Petition, Ex. B ) Payee was advised in writing to seek independent professional advice, both legal and financial. (Ins. Code, § 10139.5, subd. (a)(2).) Payee chose not to seek an independent professional’s advice and understands the terms of the transfer agreement. (Ins. Code, § 10139.5, subd. (a)(2), (a)(5); Amended Petition, Ex. D (“Estrada Decl.”), ¶ 11.) Payee also understands and does not wish to exercise their right to cancel the transfer agreement. (Ins. Code, § 10139.5, subd. (a)(6).) In addition, the transfer agreement does not contravene any applicable statute or order of any court or other governmental authority. (Ins. Code § 10139.5(a)(4).)

Not 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 the following with that notice:

(A) A copy of the transferee's current petition and any other prior petition, whether approved or withdrawn, that was filed with the court in accordance with paragraph (6) of subdivision (c).

(B) A copy of the proposed transfer agreement and disclosure form required by paragraph (3) of subdivision (a).

Copies of the proposed transfer agreement, disclosure form, and list of Payee’s dependents are attached to the Amended Petition. The Declaration of Lucia Sanchez, filed concurrently with the Amended Petition, includes a letter confirming Payee’s benefit schedule with monthly life-contingent payments of $650, beginning on July 15, 2001. (Declaration of Lucia Sanchez, Ex. A.) A copy of the underlying settlement agreement could not be obtained. (Sanchez Decl., ¶ 1(b)(iv).)

Payee is 63 years old. (Ins. Code, § 10139.5(c)(1); Estrada Decl. ¶ 4). Payee resides at 345 E. Badillo St., Unit B, Covina, CA 91723. (Ibid.) Payee is single and does not have minor children. (Ins. Code, §§ 10139.5(c)(2)-(c)(3); Estrada Decl., ¶ 4.)¿ Payee has no child support obligations. (Ins. Code, § 10139.5(c)(5); Estrada Decl., ¶ 4.) Payee receives $1,000 per month in disability benefits and $650 per month from her annuity. (Ins. Code, § 10139.5(c)(4); Estrada Decl., ¶ 4.) Payee has not previously assigned or attempted to assign a portion of her structured settlement rights in the last five years. (Ins. Code, § 10139.5(c)(6); Estrada Decl., ¶ 8.) In sum, Payee has provided all of the information required by Insurance Code § 10139.5(c).

In addition, in compliance with Insurance Code § 1039.5(b), Payee indicates the purpose of the transfer and their financial and economic situation. (Estrada Decl., ¶ 6.) Payee states that the funds will be used to purchase a used vehicle because their current vehicle needs a new transmission. (Estrada Decl., ¶ 6.) Payee states that it is difficult to save enough money to purchase a vehicle and that she has no better alternative than to assign a portion of her annuity payments. (Estrada Decl., ¶ 6.) If the transfer is approved, Payee will receive a lump sum from Petitioner and continue to receive $270 a month from her annuity. (Id., ¶ 7.) The periodic payments are not necessary for day-to-day living expenses or intended for past/future medical expenses. (Id., ¶ 3.)

Given the foregoing, the Court finds that the transfer is fair, reasonable and in the best interest of Payee. (Ins. Code § 10139.5(a)(1) & (b)(1)-(15).) Accordingly, the petition for approval of structured settlement payments is GRANTED.

William A. Crowfoot

Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the Court at ALHDEPT3@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.