Petition for Approval of Transfer of Structured Settlement Payment Rights (Judge Marc Marmaro)


CASE NAME: In re Petition of Seneca One, LLC
CASE NO.: BS164081
HEARING DATE: 10/6/16
DEPARTMENT: 37
CALENDAR NO.: 12
TRIAL DATE: N/A
NOTICE: OK
SUBJECT: Petition for Approval of Transfer of Structured Settlement Payment Rights
PETITIONER: Seneca One, LLC
OPPOSING PARTY: None

COURT?S TENTATIVE RULING

The petition is granted. Counsel for Petitioner to give notice.

STATEMENT OF THE CASE

This is a petition for approval of a structured settlement payment from Troy Batson (Payee) to Petitioner Seneca One, LLC. The subject of the petition is Payee?s right to a structured settlement payment arising out of a 2008 settlement agreement resulting from a wrongful death lawsuit. The annuity provides for a lump sum payment on September 22, 2020, in the amount of $322,903.91. Of that lump sum, Payee has agreed to transfer to Petitioner the right to collect $197,903.91, in exchange for immediate payment of $116,262.89.

DISCUSSION

Service. Insurance Code section 10139.5, subdivision (f)(2), requires service of a petition not less than 20 days prior to the hearing. Petitioner timely served notice of the October 6, 2016 hearing date on September 8, 2016.

Standard. A direct or indirect transfer of structured settlement payment rights is not effective, and a structured settlement obligor is not required to make any payment, unless the transfer has been approved in advance in a final court order. (Ins. Code, ? 10139.5, subd. (a).) The court must make written findings in the order that:

(1) The transfer is in the best interests of the payee, taking into account the payee?s dependents.

(2) The payee has been advised in writing to seek independent professional advice and has either received that advice or knowingly waived it in writing.

(3) The transferee has provided the payee with a disclosure form that complies with other sections of the code on structured settlement transfers. (See Ins. Code, ?? 10136 and 10138).

(4) The transfer does not contravene any applicable statute or court order.

(5) The payee understands the terms of the transfer agreement.

(6) The payee understands and does not wish to exercise the payee?s right to cancel the transfer agreement.

(Ins. Code, ? 10139.5, subd. (a).)

Best interests of the payee. In determining whether to approve the proposed transaction, including whether the transfer is fair, reasonable and in the payee?s best interest, and taking into account the welfare and support of the payee?s dependents, the court considers the totality of the circumstances, including the following factors:

(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, when the settlement was completed, the future periodic payments that are the subject of the proposed transfer were intended to pay for the future medical care and treatment of the payee relating to injuries sustained by the payee in the incident that was the subject of the settlement and whether the payee still needs those future payments to pay for that future care and treatment.

(6) Whether, when the settlement was completed, the future periodic payments that are the subject of the proposed transfer were intended to provide for the necessary living expenses of the payee and whether the payee still needs the future structured settlement payments to pay for future necessary living expenses.

(7) Whether the payee is, at the time of the proposed transfer, likely to require future medical care and treatment for the injuries that the payee sustained in connection with the incident that was the subject of the settlement and whether the payee lacks other resources, including insurance, sufficient to cover those future medical expenses.

(8) Whether the payee has other means of income or support, aside from the structured settlement payments that are the subject of the proposed transfer, sufficient to meet the payee?s future financial obligations for maintenance and support of the payee?s dependents, specifically including, but not limited to, the payee?s child support obligations, if any. The payee shall disclose to the transferee and the court his or her court-ordered or child support or maintenance obligations for the court?s consideration.

(9) Whether the financial terms of the transaction?including the discount rate applied to determine the amount to be paid to the payee, the expenses and costs of the transaction for both the payee and the transferee, the size of the transaction, and the available financial alternatives to the payee to achieve the payee?s stated objectives?are fair and reasonable.

(10) Whether the payee completed previous transactions involving the payee?s structured settlement payments and the timing and size of the previous transactions and whether the payee was satisfied with any previous transaction.

(11) Whether the transferee attempted previous transactions involving the payee?s structured settlement payments that were denied, or that were dismissed or withdrawn prior to a decision on the merits, within the past five years.

(12) Whether, to the best of the transferee?s knowledge after making inquiry with the payee, the payee has attempted structured settlement payment transfer transactions with another person or entity, other than the transferee, that were denied, or which were dismissed or withdrawn prior to a decision on the merits, within the past five years.

(13) Whether the payee, or his or her family or dependents, are in or are facing a hardship situation.

(14) Whether the payee received independent legal or financial advice regarding the transaction. The court may deny or defer ruling on the petition for approval of a transfer of structured settlement payment rights if the court believes that the payee does not fully understand the proposed transaction and that independent legal or financial advice regarding the transaction should be obtained by the payee.

(15) Any other factors or facts that the payee, the transferee, or any other interested party calls to the attention of the reviewing court or that the court determines should be considered in reviewing the transfer.

(Ins. Code, ? 10139.5, subd. (b).)

Payee?s Declaration. In his declaration, Payee states that he is 25 years old, single, has no children, and resides in Los Angeles, California. He works as a personal trainer and server and has income of $1,500 per month. (Decl. ? 4.) He states that if the proposed transaction is approved, he will use the proceeds to relocated and start his own private security firm. He believes the transaction is in his best interest and the best interest of his family. (Decl. ? 6.)

Payee states that the original settlement did not involve physical injuries sustained by him. Instead, the settlement resulted from a wrongful death lawsuit that settled in Los Angeles. (Decl. ? 3.)

Payee has completed two previous similar transactions. First, in 2013 the superior court approved a transaction between Payee and JG Wentworth Originations, LLC, pursuant to which Payee assigned one lump sum payment in the amount of $75,000 due on September 22, 2015, and one lump sum payment in the amount of $100,000 due on September 22, 2020, in exchange for $80,000 (Case No. SS023940). Payee used the proceeds to pay down taxes, credit card debt, to relocate, and to pay for schooling to become a personal trainer. Second, in 2014 the superior court approved a transaction in which Payee assigned to JG Wentworth Originations, LLC one lump sum payment in the amount of $25,000 due on September 22, 2015, and one lump sum payment in the amount of $25,000 due on September 22, 2020, in exchange for $25,000 (Case No. YS026284). Payee used the proceeds to prepay rent, buy a car, and payoff a small amount of debt. (Decl. ? 7.)

Payee states that before entering into the proposed transaction with Petitioner, he requested that the beneficiary under the annuity be changed to his personal estate. As a result, there are no additional beneficiaries under the annuity policy that would qualify as interested parties to this proceeding entitled to receive notice under the Insurance Code. (Decl. ? 8.)

Professional advice. Petitioner advised Payee in writing to seek independent professional advice, and Payee has knowingly waived the advice in writing. (Notice, Exh. 2, ? G; Notice, Exh. 4, ? 10; Decl. ? 10.)

Disclosure form. The disclosure form signed by Payee complies with the Insurance Code sections on structured settlement transfers, including listing the amount of payments transferred, the amount to be received, and the effective interest rate (which in this case is 13.68 percent). The discounted present value of the future payment that is the subject of this transaction is $183,669.43. Payee has received and signed a copy of this form. (Notice, Exh. 4.)

Contravention of statute or court order. There does not appear to be any applicable statute or court order at stake in this transaction.

Reasonable understanding of terms of the transfer agreement. Payee states that he understands all of the terms of the transfer agreement and believes the transaction is in his best interest. (Decl. ?? 6, 12-13.)

Right to cancel. Payee acknowledges the right to cancel the transaction, and he states he does not wish to exercise the right. (Decl. ? 12.)

Payee?s best interest. Petitioner and Payee have complied with all the statutory requirements for the requested court order. Because the transaction appears to be in Payee?s best interest, the petition is granted.