Case Number: KS021140 Hearing Date: February 27, 2018 Dept: J

In Re Petition of: Structured Asset Funding, LLC (KS021140)

PETITION FOR APPROVAL OF TRANSFER OF SGTRUCTURED SETTLEMENT PAYMENT RIGHTS

Moving Party: Petitioner Structured Asset Funding, LLC

Respondent: No opposition filed

POS: Moving OK

Joe Curiel (“Transferor”) has agreed to sell, and Structured Asset Funding, LLC (“Transferee”) has agreed to purchase, Transferor’s rights of structured settlement payments arising in connection with a personal injury claim.

The petition, filed 1/4/18, seeks court approval for transfer of structured settlement payment rights by and between Transferor and Transferee.

At some point in time[1], Joe Curiel received an annuity for settlement of a claim for damages arising in connection with a personal injury claim, in which he became entitled to guaranteed monthly payments of $4,500.00 through 3/15/29 and continuing for life, as well as guaranteed lump sum payments of $125,000.00 due payable on 4/15/29 and $125,000.00 due payable on 4/15/34.[2] Transferor now seeks to sell one lump sum payment of $125,000.00 due on 4/15/29 and one lump payment of $125,000.00 due on 4/15/34 in exchange for $102,533.00.

The structured settlement obligor and annuity issuer is Brighthouse Life Insurance Company.

Under Insurance Code § 10136(b), 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. Exhibit “4” shows the disclosure. The disclosure itself complies with Ins. Code § 10136(b).

Under Insurance Code § 10137, a transfer of structured settlement payment rights is void unless a court reviews and approves the transfer and finds the following conditions are met: “(a) The transfer of the structured settlement payment rights is fair and reasonable and in the best interest of the payee, taking into account the welfare and support of his or her dependents. (b) The transfer complies with the requirements of this article, will not contravene other applicable law, and the court has reviewed and approved the transfer as provided in Section 10139.5.”

Insurance Code § 10139.5 sets forth 15 factors to consider when reviewing a petition for transfer of a structured settlement, including (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; and (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.

Transferor is 55 years old. He is not married and has one minor child, Joe Curiel III, who is 16 years old. Transferor clarifies in ¶ 6 of his 2/16/18 supplement that he has no child support obligations. Transferor previously attested that he was not legally obligated to provide support, including alimony, to any other family members and/or other persons. (See Notice of Hearing, Exhibit “3”). He does not list the place of his minor son’s residence, as required by Insurance Code § 10139.5(c)(3).

Transferor’s monthly income is $4,500.00, which he receives from his annuity. He has assigned his rights to one lump sum payment of $40,000 due on 4/15/14, one lump sum payment of $60,000.00 due on 4/15/14 and one lump sum payment of $100,000.00 due on 4/15/19 to Stone Street Capital, LLC. Transferor’s statement regarding previous transfers is insufficient. Among the 15 factors referenced above in Insurance Code § 10139.5 are “[w]hether 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” and “[w]hether, 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.” Subsection (c) requires that information regarding previous transfers or attempted transfers be provided: “The transferee or payee may choose to provide this information by providing copies of pleadings, transaction documents, or orders involving any previous attempted or completed transfer or by providing the court a summary of available information regarding any previous transfer or attempted transfer, such as the date of the transfer or attempted transfer, the payments transferred or attempted to be transferred by the payee in the earlier transaction, the amount of money received by the payee in connection with the previous transaction, and generally the payee’s reasons for pursuing or completing a previous transaction. The transferee’s inability to provide the information required by this paragraph shall not preclude the court from approving the proposed transfer, if the court determines that the information is not available to the transferee after the transferee has made a reasonable effort to secure the information, including making an inquiry with the payee.” Transferor has not made any indication to the court that he is unable to provide the foregoing information.

Transferor attests that he received the annuity pursuant to the terms of a settlement he received for personal injuries sustained in an automobile accident. Transferor attests that the original settlement was intended as compensation for those injuries. He attests that he is no longer being treated for those injuries and, as such, has no continuing need to provide for future medical expenses. Transferor intends to use the proceeds of this transaction to pay off past due bills, purchase a reliable, used vehicle, and pay for his son’s college tuition.

Insurance Code § 10138 prohibits certain provisions. The transfer agreement does not contain any of the prohibited provisions.

Insurance Code § 10139 requires that petitioner file the transfer agreement, disclosure, and other documents with the Office of the Attorney General. A proof of service filed indicates that the “Notice of Hearing” and petition were mail-served to the Office of the Attorney General on 1/29/18. A proof of service filed 2/16/18 reflects that the “Supplement to Notice of Hearing” was mail-served to the Office of the Attorney General on that date.

The transfer agreement complies with Ins. Code § 10139.3 as there are no related expenses or fees being charged for this transfer.

Under Ins. Code § 10139.5(a)(2), petitioner is required to advise Transferor in writing to seek independent professional advice regarding the transfer and has either obtained such advice or has waived, in writing, the opportunity to receive the advice. Paragraph 4(f) of the transfer agreement and ¶ C of the disclosure agreement both reflect that Transferor has been advised in writing to seek independent professional advice regarding the transfer. However, he has chosen not to consult with an independent professional advisor and waived the right to do so. Transferor states in ¶ 11 of his 2/16/18 supplement that he was advised by Transferee to seek independent professional advice regarding the transfer and has received or knowingly waived that advice.

Section 10139.5(f)(2) requires that a notice of the proposed transfer and the application for its authorization be filed with the court and served on all interested parties not less than 20 days prior to the scheduled hearing on any petition for approval of a transfer of structured settlement payment rights. Sufficient notice has been provided.

The transfer agreement complies with the required elements in Insurance Code § 10139.5. The petition, however, is denied without prejudice, due to the foregoing noted deficiencies.

[1] The annuity cover sheet from MetLife (i.e., Exhibit “5,” page 1) is of poor quality and difficult to read. It is unclear, then, when the underlying settlement occurred, as no other settlement documents have been attached. Paragraph 4 of the petition, moreover, indicates that the settlement occurred in 2005; however, Transferor attests, in ¶ 3 of his 2/16/18 supplement, that the settlement was reached in January 1996.”

[2] There is conflicting information regarding the annuity. For instance, the MetLife letter only references the $4,500.00 guaranteed monthly payments of $4,500.00 through 3/15/29 and continuing through life, as well as the $125,000.00 lump sum payments due 4/15/29 and 4/15/34. Page 3 of Exhibit “5,” however, references not only these aforesaid two lump sum payments, but indicates that Transferor also became entitled to $100,000.00 single payments, payable on 4/15/04, 4/15/09, 4/15/14 and 4/15/19, as well as another $125,000.00 single payment, payable on 4/15/24. Transferor attests that he is entitled to the $4,500.00 guaranteed monthly payments of $4,500.00 through 3/15/29 and continuing through life, the $125,000.00 lump sum payments due 4/15/29 and 4/15/34 and to the payments identified on Page 3 of Exhibit “5.”