Case Number: KS021140 Hearing Date: March 21, 2018 Dept: J

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

PETITION FOR APPROVAL OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS

Moving Party: Petitioner Structured Asset Funding, LLC

Respondent: No opposition filed

POS: Moving OK[1]

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[2], 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. It appears, although it is unclear, 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 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”). Transferor clarifies in ¶ 2 of his supplemental declaration filed 2/27/18 that his son resides with him at 4633 Norco Avenue in Baldwin Park.

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 now clarifies in ¶ 5 of his supplemental declaration filed 2/27/18 that he has made three previous transfers involving his structured settlement payments. In the first transaction (Case No. BS133808) he sold a $40,000.00 payment due on 4/15/14, in the second transaction (Case No. BS150534) he sold a $100,000.00 payment due on 4/15/19 and in the third transaction (Case No. BS139198) he sold a $60,000.00 payment due on 4/15/14. All of these transactions were with Stone Street Capital. Transferor attests that, in each case, the money was used to take care of his expenses at the time of the sale. He believes the bulk of the money he received at those times was contributed to his daughter’s school tuition. He has attached the 12/11/14 order in Case No. BS150534, an incomplete and non-conformed portion of the alleged order in Case No. BS133808, and an incomplete portion of the 11/7/12 order in Case No. BS139198. The 12/11/14 order in Case No. BS150534 reflects that he received $60,000.00 from that transaction. Court records reflect that the order in Case No. BS133808 was filed 11/16/11; he appears to have received $25,776.00 from this transaction. Court records further reflect that he received $44,685.00 via the 11/7/12 order in Case No. BS139198. Transferor also appears to have engaged in a fourth transaction, also in Case No. BS139198, wherein he sold a $125,000.00 payment due on 4/15/24 to Stone Street Capital, LLC in exchange for $67,500.00, per an order filed 10/26/16. Transferor does not mention this transaction.

Transferor further clarifies in ¶ 1 of his second supplemental declaration filed 3/6/18 that he has never filed a petition for approval of transfer of structured settlement payment rights which was denied or dismissed.

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 is granted.

[1] The petition was filed 1/4/18. The “Notice of Hearing on Petition for Approval of Transfer of Structured Settlement Payment Right” was filed 1/29/18 and served via mail. The “Notice of Hearing” was timely per Insurance Code § 10139.5(f)(2). On 2/16/18, petitioner filed a “Supplement” and mail-served same that day. On 2/27/18, petitioner filed a “Supplemental Declaration of Payee, Joe Curiel, to Respond to Inquiries in Tentative Ruling;” there appears to be an incomplete proof of service attached to same. On 3/6/18, petitioner filed a “Second Supplemental Declaration of Payee, Joe Curiel, to Respond to Inquiries in Tentative Ruling” and mail-served same that day.

[2] 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.”