Opinion
Index No. EF2021-69306
10-26-2021
In the MATTER OF the Petition of J.G. WENTWORTH ORIGINATIONS, LLC, Petitioner, and T.P., John Hancock Life Insurance Company n/k/a John Hancock Life Insurance Company (USA) and John Hancock Assignment Company, As interested Persons pursuant to GOL § 5-1701(c)
Napierski, VanDenburgh, Napierski & O'Connor, LLP, Albany (Shawn F. Brousseau of counsel), for petitioner. T.P., Glens Falls, respondent pro se.
Napierski, VanDenburgh, Napierski & O'Connor, LLP, Albany (Shawn F. Brousseau of counsel), for petitioner.
T.P., Glens Falls, respondent pro se.
Robert J. Muller, J.
Petitioner, J.G. Wentworth Originations, LLC, ("Wentworth") has made application for approval of the transfer of a periodic payment under General Obligations Law Title 17, entitled AStructured Settlement Protection Act (SSPA). The SSPA, which was enacted in 2002 (L 2002, ch 537), was intended, inter alia, to provide a level of protection to structured settlement payees negotiating to sell or transfer a periodic payment thereunder to third parties. The statute specifically provides for disclosure with respect to the terms and provisions of the proposed transfer together with prior judicial approval and this is the posture in which the parties now find themselves before this Court.
On October 29, 2009, Christopher P. — as Administrator of the Estate of Ernestine G.P. entered into a Settlement Agreement and Release (hereinafter Agreement) in a wrongful death action brought on behalf of the Estate. As relevant here, the Agreement provided for the following payments to T.P.:
"Payment continuing for the lifetime of [T.P.] with forty (40) years payments guaranteed in the event of a premature death, providing $1,000 per month, increasing by 3% compounding annually, with first payment commencing on 12/22/2008. The first increase will take effect on 12/22/2009....
"Guaranteed payment continuing for four (4) years only, providing $25,000 per year, level income, with first payment commencing on 12/22/2008.
"Guaranteed Lump Sum Payments of:
"$50,000 on 12/22/2015
"$100,0000 on 12/22/2020
"$150,000 on 12/22/2025
"$256,000 on 12/22/2030"
Mr. P. now wishes to transfer 156 monthly payments of $1,221.29 each, increasing at 3% annually, beginning on December 22, 2035 and ending on November 22, 2048 — for a total of $228,886.20 — to petitioner for $97,500.00. Mr. P. is 31 years old, single and has one minor dependent who is 14 months old. At the time of this petition he was "employed[ ] as a Merchandiser for Pepsi earning an annual income of $40,000.00" and planned to use the $56,000.00 as follows:
"$10,000.00 to pay off the ballance [sic] I owe on my current vehicle. I would like to eliminate as many monthly bills as possible to have a more comfortable lifestyle.
"$2,000.00 to pay off various bills. I owe my current landlord $1,000.00 in back rent as well as $500.000 [sic] to my credit card and $500.00 in medical bills.
"I will be using the remaining $44,000.00 to put a down payment on a home. I am looking for a home in the Glen falls [sic] area in the $150,000.00 price range.
"I am currently renting for $1,000.00 a month. I am tired of paying someone elses [sic] mortgage and am ready to start paying my own. This will cut my housing bill in half as my mortgage will be $500 a month. This will also allow me to start growing my equity over time."
He describes no specific contract terms for the purchase of a home.
Significantly, 14 prior applications to transfer Mr. P.’s structured settlement rights have been made, with 10 of those applications being approved, 1 being denied and the other 3 either being dismissed or withdrawn. The Court was not convinced, having questioned Mr. P. during a hearing on October 14, 2021, that he can keep track of what payment rights remain at this point. The following is a list of the Orders attached to the petition, in chronological order:
Order dated June 28, 2011 from the Superior Court of New Jersey, Essex County, approving the transfer of $30,000.00 of the $50,000.00 lump sum payment due on December 22, 2015, with the amount received in exchange unclear;
Order dated July 28, 2011 from the Superior Court of New Jersey, Essex County, dismissing proceeding without prejudice;
Order dated October 5, 2011 from the Superior Court of New Jersey, Essex County, approving the transfer of monthly payments of $300.00 beginning on January 22, 2012, increasing by 3% compounding annually, up through and including April 22, 2020 — for a total of $33,612.56 — in exchange for $15,530.73;
Order dated June 4, 2012 from the Superior Court of New Jersey, Essex County, approving the transfer of $50,000.00 of the $100,000.00 lump sum payment due on December 22, 2020 and $75,000.00 of the $150,000.00 lump sum payment due on December 22, 2025 — for a total of $125,000.00 — in exchange for $40,000.00;
Order dated April 11, 2013 from the Superior Court of New Jersey, Essex County, approving the transfer of monthly payments of $492.00 beginning on January 22, 2015 and continuing until November 22,2015, and monthly payments of $506.76 beginning on December 22, 2016, increasing by 3% compounding annually, and continuing until December 22, 2027 — for a total of $83,999.11— in exchange for $19,250.00;
Order dated September 23, 2013 from the Superior Court of New Jersey, Essex County, which vacated an earlier Order dated May 17, 2013 authorizing the transfer of certain payment rights;
Order dated December 16, 2013 from the Superior Court of New Jersey, Essex County, approving the transfer of monthly payments of $250.00 beginning on April 22, 2014 and continuing until November 22, 2014, and monthly payments of $259.00 beginning on December 22, 2014, increasing by 3% compounding annually, through November 22, 2020, and payments of $305.40, beginning on December 22, 2020, increasing by 3% compounding annually, through November 22, 2035 — for a total of $90,265.04— in exchange for $17,500.00;
Order dated April 13, 2015 from Supreme Court, Rensselaer County (McNally, J.) approving the transfer of $85,000 of the lump sum payment of $100,000 due on December 22, 2020 and $75,000 of the lump sum payment due on December 22, 2021 — for a total of $160,000.00 — in exchange for a payment of $15,524.90;
Amended Order dated June 27, 2016 from Supreme Court, Rensselaer County (McNally, J.) approving the transfer of monthly payments of $137.45 beginning on December 22, 2016, increasing by 3% compounding annually; monthly payments of $530.23 each, beginning on May 22, 2020 up through and including November 22, 2020; monthly payments of $546.13, beginning on December 22, 2020, increasing by 3% compounding annually, through December 22, 2027, monthly payments of $977.90, beginning on January 22, 2028 up through and including November 22, 2028, and monthly payments of $1,007.23 beginning on December 22, 2028 and increasing by 3% compounding annually, up through and including November 22, 2035 — for a total of $163,820.10 — in exchange for $52,000;
Order dated June 26, 2017 from Supreme Court, Rensselaer County (McNally, J.) approving the transfer of $75,000.00 of the lump sum payment of $150,000 due on December 22, 2205 in exchange for the sum of $34,000.00;
Decision and Order dated September 7, 2018 from Supreme Court, Rensselaer County (Zwack, J.) denying the transfer of $184,164.24 in exchange for $30,000;
Order dated November 16, 2018 from Supreme Court, Rensselaer County (McNally, J.) approving the transfer of monthly payments of $3.88 each, beginning on December 22, 2020 and ending on November 22, 2027, increasing by 3% compounding annually, one payment of $4.77 on December 22, 2027; monthly payments of $400.01 each beginning on January 22, 2028 and ending on November 22, 2035, increasing by 3% compounding annually, and monthly payments of $1,000 each, beginning on December 22, 2035 and ending on November 22, 2048, increasing by 3% compounding annually — for a total of $230,058.04 — in exchange for $33,000.00; and
Order dated October 13, 2020 from Supreme Court, Rensselaer County (McNally, J.) approving the transfer of $46,000 of the lump sum payment of $256,000 due on December 22, 2030 in exchange for $23,371.00;
It should be noted that this Order is unclear because on the first page it lists the transfer of $35,000.00 of the lump sum payment of $100,000.00, but then on pages 4-5 it lists the $85,000.00 payment and a $75,000.00 payment.
Thus far Mr. P. has transferred $1,082,754.85 and received only $250,176.63 in exchange — which is 23% of the amount transferred.
This calculation does not include the June 28, 2011 Order which failed to set forth the amount Mr. P. received in exchange.
This court has previously observed that in enacting the SSPA the Legislature " ‘did not intend for the courts to be mere rubber stamps’ for the proposed sale" ( Matter of 321 Henderson Receivables L.P. v. Martinez , 11 Misc 3d at 895, quoting Matter of Settlement Capital Corp. [Ballos] , 1 Misc 3d 446, 461 [Sup Ct, Queens County 2003] ; accord Matter of J.G. Wentworth Originations, LLC [Allstate Life Ins. Co. of N.Y.-Kwant] , 61 Misc 3d 1224[A] at *1 ; Peachtree Settlement Funding, LLC v. Allstate Insurance Company , 72 Misc 3d 1214(A) [Sup Ct., Washington County 2021] ). Rather, "the courts are intended to examine the various statutory criteria and determine whether the proposed sale will truly serve the ‘best interest’ of the payee" ( Matter of 321 Henderson Receivables L.P. v. Martinez , 11 Misc 3d at 895 ; accord Matter of J.G. Wentworth Originations, LLC [Allstate Life Ins. Co. of N.Y.-Kwant] , 61 Misc 3d 1224[A] at *1 ).
Application of this best interest standard " ‘requires a case-by-case analysis to determine whether the proposed transfer of structured settlement payments, ... designed to preserve the injured person's long-term financial security, will provide needed financial rescue without jeopardizing or irreparably impairing the financial security afforded to the payee ...’ " (Matter of Novation Funding LLC v Griffin , 39 Misc 3d 1207(A), 2013 NY Slip Op 50511[U], *4 [Sup Ct, Kings County 2013], quoting Matter of Settlement Capital Corp. [Ballos] , 1 Misc 3d at 455 ).(See also Matter of J.G. Wentworth Originations, LLC v. McDonald , 67 Misc 3d 1239(A), 2020 NY Slip Op 50790(U) [Sup Ct, Warren County 2020], *3.)
Considering the history of these numerous applications the Court finds that the proposed transfer is not in his best interests.
Therefore, having considered NYSCEF documents No. 1 – 21, 26 – 28 and 30 – 34 submitted in support of the petition and testimony having been taken on October 14, 2021 with Courtney L. Alpert, Esq. appearing on behalf of petitioner and T.P. appearing on his own behalf it is hereby
ORDERED that the relief requested is denied in its entirety and it is further
ORDERED that a copy of this Decision and Order must accompany any future applications for the approval of the transfer of a periodic payment under General Obligations Law Title 17.
The above constitutes the Decision and Order of the Court.
The original of this Decision and Order has been e-filed by the Court. Counsel for petitioner is hereby directed to promptly obtain a copy of the e-filed Decision and Order for service with notice of entry upon all interested persons pursuant to GOL§ 5-1701(c) and in accordance with CPLR 5513.