AMY LARA, ET AL. VS MARTIN LUTHER KING, JR. COMMUNITY HOSPITAL, ET AL.

Tentative Rulings

Case Number: *******0642    Hearing Date: April 9, 2021    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

The Court has considered the moving papers. J.G. Wentworth Originations of California, LLC (“JGW”) filed a response to the petition and requests to intervene in this matter.

BACKGROUND

On March 9, 2021, Petitioner Amrak.dab, LLC (“Petitioner”) filed an Amended Petition[1] (the “Petition”) for approval of transfer of structured settlement payment rights. Payee Kalin Scott-Wright (“K.S.”) will transfer to Petitioner future payments totaling $850,000.00 and, in exchange for the transfer, K.S. will receive a payment of $310,000.00. K.S. will transfer the rights to and interest in the following payments, which K.S. is due to receive as a result of the settlement of a personal injury claim—as follows: (1) a lump sum payment of $250,000.00 due on February 26, 2028; and (2) a lump sum payment of $600,000.00 due on February 26, 2043 (collectively, the “Assigned Payments”).

A review of the papers reveals that the Petition and notice of this hearing were served on all interested parties on March 9, 2021. JGW filed a response to the Petition and requests that the Court allow it to intervene in this matter. JGW asserts that on March 5, 2021, it also filed a petition for the Transfer of Structured Settlement Payments with K.S. in Los Angeles Superior Court Case No. 21BCP00084, and such matter is set for hearing on April 16, 2021. JGW asserts that it has agreed to purchase payments from K.S. totaling $500,000.00 as follows: (1) one payment of $250,000.00 due on February 26, 2028; (2) one payment of $400,000.00 due on February 26, 2033; (3) one payment of $300,000.00 due on February 26, 2043; and (4) one payment of $115,000.00 due on February 26, 2053. (Felton Decl. at ¶ 2.) Felton also declares that on March 2, 2021, JGW and K.S. executed a Cash Advance Agreement wherein it was outlined that JGW advanced funds to him and further stated that K.S. intended to finalize the sale of his payments to JGW. (Id. at ¶ 4 and Exhibit A.)

JGW asserts that since Petitioner has not disclosed the terms of its proposed purchase, JGW cannot determine whether Petitioner’s sale includes all, some, or none of the payments that K.S. has agreed to sell to JGW[2]. The Court finds that the Assigned Payments are some of the same payments that JGW has agreed to purchase from K.S. JGW contends that either: (1) this Court; or (2) the Court in which its matter is being heard should allow it and Petitioner to compete and provide the highest offer to K.S.

ANALYSIS

Procedural Requirements

Compliance with Insurance Code 10139.5(f)(1)

Under California Insurance Code, Section 10139.5(f)(1), all petitions for approval of transfer of structured settlement payment rights must be filed by the transferee in the county where the payee is residing at the time of the agreement, or if the payee is domiciled outside of California, in the county of the settlement obligor or annuity issuer.

Here, although the proof of service redacts the full address of K.S., the filed proof of service shows that the ZIP code of K.S.’s residence is 91773, and the Court takes judicial notice on its own motion that such ZIP code is located in Los Angeles County. Therefore, the Petition was filed in the correct county and venue is proper.

Compliance with Insurance Code 10139.5(f)(2)

The Petition includes the unredacted proposed transfer agreement (Notice of Filing Copy of Unredacted Exhibits to Amended Petition at Exhibit A) and the disclosure form required by California Insurance Code, Section 10136(b) (Id. at Exhibit B). K.S. has two dependents. (K.S. Decl. at ¶ 5.) The proof of service shows that all interested parties in this action were served on March 9, 2021.

Thus, the petition complies with California Insurance Code, Section 10139.5(f)(2). All procedural requirements have been satisfied.

California Insurance Code, Section 10139.5

Under California Insurance Code, Section 10139.5, a transfer of structured settlement payment rights is not effective unless the transfer has been approved in advance in a final court order. In order to approve the transfer, the Court must make the following findings pursuant to California Insurance Code, Section 10139.5:

1) The transfer is in the best interest of the payee, taking into account 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 that advice in writing.

3) The transferee has provided the payee with a disclosure form that complies with Insurance Code section 10136 and the transfer agreement complies with Insurance Code 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 reasonably understands the terms of the transfer agreement, including the terms set forth in the disclosure statement required by Insurance Code section 10136.

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

Petitioner provided a disclosure form that complies with California Insurance Code, Section 10136 and a transfer agreement that complies with California Insurance Code, Sections 10136 and 10138. K.S. declares that he seeks to use the proceeds from the sale to buy a home. He also declares that he has never assigned, sold or pledged any of the Assigned Payments that he is proposing to transfer to Petitioner; however, based on the response of JGW to the Petition, the Court finds that such factual assertion is incorrect. K.S. had pledged to sell the Assigned Payments to JGW as well and received a cash advance from JGW.

While the Petition does meet all procedural requirements—given the evidence presented by JGW—the Court finds it necessary to determine to whom Plaintiff wishes to transfer/sell his structured settlement payment rights. Given the unique procedural posture of this action, and the fact that JGW seeks to claim the Assigned Payments, the Court GRANTS the request of JGW to appear at the April 9, 2021 hearing on the Petition.

Moreover, given the evidence presented by JGW and Petitioner, the Court RESERVES ruling on the Petition until after hearing oral argument. K.S. is to appear at the hearing on the Petition[3] so that the Court can take the testimony of K.S. and inquire to which entity—Petitioner or JGW—K.S. wishes to sell the Assigned Payments. The Court will not rule on the Petition at this time because it is unclear to which entity K.S. seeks to sell his structured settlement payments. The Court will hear oral argument, take the matter under submission, and will issue a ruling thereafter.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative.  If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated this 9th day of April 2021

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