Matter of Michael Reardon

Case Number

25CV01005

Case Type

Hearing Date / Time

Fri, 05/02/2025 - 10:00

Nature of Proceedings

Petition

Tentative Ruling

The petition is denied without prejudice.

Background:

This matter commenced on February 18, 2025, by the filing of the petition, by Peachtree Settlement Funding, LLC (‘petitioner”). Michael Reardon (“payee”) is the real party in interest.

As alleged in the petition:

On February 1, 1994, payee became entitled to structured settlement payments resulting from a claim for damages arising from a personal injury claim. (Pet., ¶ 3.) The structured settlement provides for payee to receive 180 monthly life-contingent payments of $1,000.00 each, beginning on February 27, 2034, and ending on January 27, 2049. (Pet., ¶ 4.)

Payee has agreed to sell, to petitioner, the monthly payments. (Pet., ¶ 7 & Exh. A.)

“Payee is 53 years old, divorced with no minor children as will be set forth in the Declaration to be filed in this matter.” (Pet., p. 4, ll. 12-13.) Payee is currently employed and, if approved, will receive $15,000.00 from this transaction. (Pet., p. 4, ll. 13-14.)

The petition is verified by the Vice President of petitioner.

On April 7, 2025, petitioner filed an amended Exhibit A to the petition.

Analysis:

The transfer of structured settlement payments is authorized in California provided the transfer is first approved by the court.  Insurance Code Section 10139.5, subdivision (a) provides:

“A direct or indirect transfer of structured settlement payment rights is not effective and a structured settlement obligor or annuity issuer is not required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been approved in advance in a final court order based on express written findings by the court that:

“(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, in writing, the opportunity to receive that 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.”

Insurance Code Section 10139.5, subdivision (b) provides:

“When determining whether the proposed transfer should be approved, including whether the transfer is fair, reasonable, and in the payee’s best interest, taking into account the welfare and support of the payee’s dependents, the court shall consider the totality of the circumstances, including, but not limited to, all of the following:

“(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 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, 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.”

Despite claims that a declaration would be filed (Petition, p. 4, ll. 12-13, 16 & p. 5, ll. 7-8), there is no declaration from the payee addressing any of the circumstances the court must consider as set forth in Section 10139.5, subdivisions (a) and (b). Nor does the petition itself provide all the required information set forth in subdivision (c).

The failure to present evidence of facts related to the circumstances that the court must consider in ruling on the petition leaves the court with no alternative than to deny the petition without prejudice for lack of evidence.