Judge William A. Crowfoot, Case Number: 24NNCP00644, Date: 2024-12-04 Tentative Ruling

Judge: William A. Crowfoot, Case: 24NNCP00644, Date: 2024-12-04 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 Elizabeth Gomez (“Payee”) became entitled to certain structured settlement payments. Payee and Petitioner have entered into a transfer agreement, under which Payee is to sell $42,500, consisting of two lump sum payments of $5,000 and $37,500, due on November 24, 2025 and November 24, 2029, respectively, in exchange for a purchase price of $18,620. (First Amended Petition, Ex. B ) The discounted present value of the amount being sold is $34,021.43, calculated by applying a 4.8 % discount rate used by the Internal Revenue Service to value annuities in probate proceedings. (Ibid.) If Payee did not sell the right to receive structured settlement payments but instead borrowed the net amount of $18,620 and paid that loan back in installments with each of the payments they are now selling, the equivalent interest rate would be 20.1% 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). (Ibid.) In this disclosure form, Payee was also 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); First Amended Petition, Ex. D; Gomez 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); Gomez Decl., ¶ 10(h).) 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 First Amended Petition. The Declaration of Lucia Sanchez, filed concurrently with the First Amended Petition, includes a copy of the annuity contract and the qualified assignment and release agreement. (Declaration of Lucia Sanchez, Exs. A-B.) A copy of the underlying settlement agreement could not be obtained. (Sanchez Decl., ¶ 1(b)(iv).)

Payee has provided all of the information required by Insurance Code § 10139.5(c). Payee is 24 years old. (Ins. Code, § 10139.5(c)(1); Gomez Decl. ¶ 4). Payee resides at 1216 W. 98th Street, Los Angeles, CA 90044. (Ibid.) Payee is single and does not have minor children. (Ins. Code, §§ 10139.5(c)(2)-(c)(3);Gomez Decl., ¶ 4.)¿ Payee has no child support obligations. (Ins. Code, § 10139.5(c)(5); Gomez Decl., ¶ 4.) Payee currently works part-time as a tattoo artist earning approximately $2,083 per month. (Ins. Code, § 10139.5(c)(4); Gomez Decl., ¶ 4.) She is actively looking for an additional full-time job in retail and does not rely on the money from her structured settlement payment rights for her day-to-day living expenses. (Gomez Decl., ¶ 4.) Payee has previously assigned a portion of her structured settlement rights in May 2024 and used the funds to purchase the home she lives in. (Ins. Code, § 10139.5(c)(6); Gomez Decl., ¶ 8.)

In addition, in compliance with Insurance Code § 1039.5(b), Payee indicates the purpose of the transfer and their financial and economic situation. (Gomez Decl., ¶ 6.) Payee states that the funds will be pooled with her partner’s funds to put a down payment on a rental property in Atlanta, Georgia, which will be a secondary source of income. (Gomez Decl., ¶ 6.) The expected income will be $2,500 to $3,000 per month. (Ibid.)

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.