Opinion
Index No. 532707/2022
04-14-2023
In the Matter of the Petition of Sapphire Valley Group, LLC For Approval of Transfer of Structured Settlement Payment Rights In Accordance with GOL §5-1701 et seq., Petitioner, v. Prudential Assigned Settlement Services Corporation, THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, and J.H., Respondents.
Law Offices of Elliot Glatstein, Brooklyn (Elliot Glatstein of counsel), for petitioner. J.H., respondent pro se.
Unpublished Opinion
Law Offices of Elliot Glatstein, Brooklyn (Elliot Glatstein of counsel), for petitioner.
J.H., respondent pro se.
Aaron D. Maslow, J.
The following papers were read on this petition:
NYSCEF Doc No. 1, Petition
NYSCEF Doc No. 2, Exhibit A - Affidavit of J.H. in Lieu of Settlement Agreement
NYSCEF Doc No. 3, Exhibit B - Purchase, Sale, and Transfer Agreement
NYSCEF Doc No. 4, Exhibit C - New York and New Jersey Disclosure Statements
NYSCEF Doc No. 5, Exhibit D - Affidavit of J.H. in Support of Transfer of Structured Settlement Payment Rights and Addendum
NYSCEF Doc No. 6, Exhibit E - Acknowledgment of Waiver of Independent Professional Advice
NYSCEF Doc No. 7, Exhibit F - Dependents Information Form and Certificate of Marital Status
NYSCEF Doc No. 8, Proposed Order to Show Cause
NYSCEF Doc No. 9, Request for Judicial Intervention
NYSCEF Doc No. 10, Order to Show Cause
NYSCEF Doc No. 11, Infant's Compromise Order, H. v Santoso, Kings County Index No. 9331/2011
NYSCEF Doc No. 12, Affidavit of Service on J.H.
NYSCEF Doc No. 13, Affidavit of Service on The Prudential Insurance Company of America
NYSCEF Doc No. 14, Proposed Order
NYSCEF Doc No. 15, Post-Hearing Letter to Court from Elliot Glatstein and Letter to Court from J.H.
NYSCEF Doc No. 16, May 5, 2022 Transcript of Proceedings, Matter of Palmetto Park Agency, LLC v Prudential Assigned Settlement Services Corp., Kings County Index No. 506895/2022
Since the previous proceeding to approve Respondent J.H.'s sale of $556,000.00 in future structured settlement proceeds is relevant to the proceeding at bar, this Court has uploaded the transcript of the May 5, 2022 hearing before Hon. Justice Francois Rivera to this proceeding's NYSCEF case folder.
NYSCEF Doc No. 17, February 15, 2023 Transcript of Proceedings in Instant Special Proceeding
This Court also took judicial notice of other documents on file with the Kings County Clerk in the NYSCEF case folder for Matter of Palmetto Park Agency, LLC v Prudential Assigned Settlement Services Corp. (Sup Ct, Kings County, Index No. 506895/2022) (see Ptasznik v Schultz, 247 A.D.2d 197 [2d Dept 1998] [courts may take judicial notice of undisputed portions of court files]), which was referenced in this proceeding's NYSCEF Doc No. 5, in the Addendum to the affidavit of J.H. in support of the transfer of a portion of his structured settlement. Said other special proceeding concerned Respondent J.H.'s sale of $556,000.00 in future payments from his structured settlement for $200,377.83, a detail not disclosed by either Petitioner Sapphire Valley Group, LLC or Respondent J.H. in the within proceeding.
References and citations to NYSCEF Document Numbers lacking an accompanying index number are to documents in the within proceeding.
Inasmuch as said prior proceeding is briefly mentioned in one of Respondent J.H.'s affirmations (NYSCEF Doc No. 5), this Court finds that no separate notice of the intention to review the County Clerk's file in said prior proceeding was required (cf. Caffrey v North Arrow Abstract & Settlement Servs., Inc., 160 A.D.3d 121 [2d Dept 2018]).
Further, this Court reviewed NYSCEF case folders in proceedings commenced in other counties by Petitioner herein or Palmetto Park Agency, LLC, for the limited purpose of making an observation about tort victims-payees' understanding of the financial implications of sales of structured settlement payments to these two factoring companies (see n 20, infra; Sangirardi v State, 205 A.D.2d 603 [2d Dept 1994]; Leather Development Corp. v Dun & Bradstreet, Inc., 15 A.D.2d 761 [1st Dept 1962]).
I. Factual Background
In the within special proceeding, Petitioner Sapphire Valley Group, LLC (hereinafter "Sapphire Valley") has applied, pursuant to the Structured Settlement Protection Act (hereinafter "SSPA"), General Obligations Law § 5-1701 et seq., for the approval of the transfer of certain periodic payments due Respondent J.H. (hereinafter "Mr. H.") in 2024 and 2025 under a structured settlement agreement. The special proceeding was commenced by Sapphire Valley, having been brought on by way of an order to show cause against Respondents Prudential Assigned Settlement Services Corporation, The Prudential Insurance Company of America, and Mr. H.
The structured settlement agreement emanated from a settlement of a medical malpractice action commenced in 2011 by Mr. H.'s mother and natural guardian, M.S., styled" [J.H.], an Infant, by His Mother and Natural Guardian, [M.S.], Plaintiffs v Paulus Santoso M.D., Defendant" (Sup Ct, Kings County Index No. 9331/2011). On October 23, 2014, Ms. S. entered into an infant's compromise settlement with Dr. Santoso, the defendant. (NYSCEF Doc No. 11, Infant's Compromise Order.) Mr. H. claimed at the hearing in this proceeding that the lawsuit brought by his mother involved a disability of cerebral palsy affecting his right arm. At the time of the settlement, Mr. H. was ten years old. (See generally NYSCEF Doc No. 11, Infant's Compromise Order; NYSCEF Doc No. 17, Feb. 15, 2023 Transcript at 7-8.)
The 2014 settlement was for $1,728,501.71, reduced to the then-present value of $1,025,000.00 to be paid by Dr. Santoso. Said sum of $1,025,000.00 was disbursed as follows:
• $335,017.12 to the attorneys for Mr. H. and his mother;
• $3,263.45 to pay off a lien of the New York City Department of Social Services;
• $136,719.43 to Hudson Valley Bank, N.A., as trustee of a trust to be set up, The J.H. Settlement Fund Management Trust; and
• $550,000.00 to Prudential Assigned Settlement Services Corp., to fund future periodic payments to Mr. H., his mother, and The J.H. Settlement Fund Management Trust (NYSCEF Doc No. 11, Infant's Compromise Order, Kings County Index No. 9331/2011).
Future periodic payments to Ms. S. were to be used for the maintenance, care, and incidental expenses of Mr. H. until he achieved the age of majority.
The funds in The J.H. Settlement Fund Management Trust were to be used for Mr. H.'s college education unless he did not attend college, in which case they were to be paid out incrementally in the years 2045, 2046, 2047, 2048, and 2049.
Future periodic payments were to be made by Prudential Assigned Settlement Services Corp. to Mr. H., based on the following schedule:
• $1,000.00 payable monthly for life, guaranteed for 32 years and 8 months, beginning on February 19, 2022;
• $1,500.00 payable monthly, guaranteed for 4 years, beginning at age 18 on January 21, 2022;
• $15,000.00 guaranteed lump sum payable at age 22 on January 21, 2026;
• $15,000.00 guaranteed lump sum payable at age 23 on January 21, 2027;
• $20,000.00 guaranteed lump sum payable at age 24 on January 21, 2028;
• $20,000.00 guaranteed lump sum payable at age 25 on January 21, 2029;
• $25,000.00 guaranteed lump sum payable at age 30 on January 21, 2034;
• $25,000.00 guaranteed lump sum payable at age 35 on January 21, 2039; and
• $48,000.00 guaranteed lump sum payable at age 40 on January 21, 2044 (id.).
Mr. H. turned 18 in early 2022 (see NYSCEF Doc No. 2, J.H. Affidavit in Lieu of Settlement Agreement, ¶ 2). Mr. H.'s mother passed away "recently" (NYSCEF Doc No. 17, Feb. 15, 2023 Transcript at 10).
On the February 15, 2023 return date of this special proceeding, Elliot Glatstein, Esq., appeared before this Court for Sapphire Valley. Mr. H. appeared pro se. There were no appearances by Respondents Prudential Assigned Settlement Services Corporation and The Prudential Insurance Company of America. This Court conducted a hearing on the record on the petition, and Mr. H. testified. Mr. Glatstein presented oral argument on behalf of Sapphire Valley, relying on its petition with exhibits and Mr. H.'s testimony. Mr. H. testified that he wanted to sell $36,000.00 of future guaranteed payments (monthly payments in 2024 and 2025) for $15,192.37, so he could purchase a vehicle to try to get to a school, Lincoln Tech, in Queens, which he was trying to attend (NYSCEF Doc No. 17, Feb. 15, 2023 Transcript at 8-9).
Prudential Assigned Settlement Services Corporation was the structured settlement obligor, as defined in General Obligations Law § 5-1701(n).
The Prudential Insurance Company of America was the annuity issuer, as defined in General Obligations Law § 5-1701(a).
A very brief Addendum to Mr. H.'s affidavit submitted in support of the petition herein stated that he previously filed an application for transfer of payment rights and listed the index number (Kings County Index No. 506895/22) and the date of filing of the order (May 12, 2022) (NYSCEF Doc No. 5, J.H. Affidavit in Support of Transfer, at 5). However, at the February 15, 2023 hearing before this Court, neither Mr. H. nor Sapphire Valley volunteered that there had been a previous application, much less related its particulars. Therefore, this Court was left with no alternative but to perform its own post-hearing research into the previous proceeding.
This Court does not know for certain who actually prepared this Addendum. It appears on a separate page after the one containing Mr. H.'s signature, and it is in a larger type size than the contents of the affidavit. (See NYSCEF Doc No. 5, J.H. Affidavit in Support of Transfer, at 5.) However, this Court believes that the person who prepared the transfer agreement (NYSCEF Doc No. 3) prepared the Addendum, as the type style is identical - in particular the numerals. The numerals on pages 12 and 13 of NYSCEF Doc No. 3 (Purchase, Sale, and Transfer Agreement) are in the exact same type style as those in the Index Number in the Addendum, on page 5 of NYSCEF Doc No. 5 (Affidavit of J.H. in Support of Transfer of Structured Settlement Payment Rights and Addendum). These facts alone warrant review of this transaction by the Attorney General (see p 17, infra), as it possible that the Addendum was inserted after Mr. H. executed the affidavit. The affidavit did not refer to the Addendum or incorporate it by reference.
After reviewing the electronic case folder for this previous special proceeding, which was captioned Matter of Palmetto Park Agency, LLC v Prudential Assigned Settlement Services Corporation, this Court was astonished to learn that in it application had been made by the petitioner therein to purchase $556,000.00 of Mr. H.'s future settlement proceeds for $200,377.83. Hon. Justice Francois Rivera conducted a hearing on May 9, 2022. Ostensibly, Mr. H.'s sale of $556,000.00 in future proceeds for $200,377.83 in present currency was designed to enable him to purchase a house in New Jersey, where he wanted to attend college. Justice Rivera approved the application in an order dated May 9, 2022. (NYSCEF Doc No. 16, May 5, 2022 Transcript; NYSCEF Doc No. 13, Kings County Index No. 506895/2022.)
The Addendum to Mr. H.'s affidavit did not even set forth the name of the proceeding.
At the February 15, 2023 hearing, Mr. Glatstein stated that he spoke with Respondent H. "for the first time regarding this case yesterday" (NYSCEF Doc No. 17, Feb. 15, 2023 Transcript at 4). The inference from Mr. Glatstein's statement to this Court was that this special proceeding was the first time he was involved with Mr. H. Based on this Court's research it is of course now known that such was not the case. Indeed, this is quite troubling to this Court, considering that in the proceeding determined by Justice Rivera, Mr. H. sold $556,000.00 in future settlement proceeds for $200,377.83. Aside from the money in The J.H. Settlement Fund Management Trust, which was intended to be used for college tuition, Mr. H. sold nearly all of his future guaranteed periodic settlement proceeds to a company represented by Mr. Glatstein, who never disclosed to this Court that he was involved in his client's purchase of it for $200,377.83 - despite price quotes from annuity issuers of $442,402.04 and $441,519.00. (See NYSCEF Case Folder, Matter of Palmetto Park Agency, LLC v Prudential Assigned Settlement Services Corporation [Sup Ct, Kings County, Index No. 506895/2022]).
Probably the reason for Mr. Glatstein including the phrase "regarding this case" was that both Mr. Glatstein and Mr. H. were reluctant to discuss that the instant petition came on the heels of the previous one, resulting in there being practically nothing left in guaranteed future payments to be made directly to Mr. H.
This subsequent, second application seeks relinquishment of $36,000.00 more of Mr. H.'s guaranteed future payables (monthly payments in 2024 and 2025) in return for $15,192.37, thus nearly depleting his remaining future settlement periodic payments. Were this Court to approve the sale of the $36,000.00 in monthly payments in 2024 and 2025, all that would be left are the remaining monthly payments for 2023. This is aside from the money in The J.H. Settlement Fund Management Trust, which is supposed to be used for Mr. H.'s college tuition.
This Court deems it significant that although the name of the entity which purchased $556,000.00 in future settlement proceeds for $200,377.83 in the case before Justice Rivera was Palmetto Park Agency, LLC, and the name of the entity seeking to purchase $36,000.00 of future settlement proceeds for $15,192.37 in the case at bar bears a different name, to wit, Sapphire Valley Group LLC, both entities use the identical business address: 1730 South Federal Highway, Suite 102, Delray Beach, Florida 33483. Both entities retained Mr. Glatstein. Affidavits signed by Mr. H. in the instant case are nearly identical to those he signed in the previous proceeding (compare NYSCEF Doc. Nos. 2, 5 with NYSCEF Doc Nos. 2, 5, Sup Ct, Kings County, Index No. 506895/2022). It is questionable who prepared the Addendum following Mr. H.'s signature on the affidavit in support of the transfer (see n 8, supra; n 20, infra).
It bears underscoring that it is extremely concerning that none of the details of the previous sale of nearly all of the future proceeds were set forth in Mr. Glatstein's petition, and neither he nor Mr. H. disclosed them to this Court at the February 15, 2023 hearing. Mr. H. did not relate to this Court what he did with the $200,377.83 received from the sale of the $556,000.00, and he assuredly did not include the information in his affidavit, probably because it was prepared by someone else whose identity was not disclosed to this Court (see NYSCEF Doc No. 5).
Notably, the petition was verified by Mr. Glatstein, not by an officer of Sapphire Valley.
Insofar as Mr. H. appeared pro se, someone had to have prepared the affidavits he signed.
Additional facts are set forth below insofar as they are relevant to a determination of the within petition.
II. Legal Background
Prior to approval or denial of an application to transfer future proceeds from a structured settlement, it is the duty of the court to analyze the details surrounding the request.
"Enacted in 2002, the purpose of the SSPA, as reflected in the legislative materials, was to establish 'procedural safeguards for those who sell settlements that are awarded as a result of litigation,' due to a recognition that '[m]any of the people who receive such settlements are being compensated for very serious, debilitating injuries, and have been unfairly taken advantage of in the past by the businesses that purchase their settlements...'" (Pinnacle Capital, LLC v O'Bleanis, - A.D.3d -, 2023 NY Slip Op 01540 [2d Dept 2023] [quoting Mem in Support, Bill Jacket, L 2002, ch 537 at 5].)
"Structured settlements serve strong public policy objectives in that they afford long-term financial protection for injury victims and their families. They protect against loss or premature dissipation of lump sum recoveries. They avoid the shift of responsibility for victims' care to public assistance programs. [¶] In the past several years there has been an explosion of efforts by unregulated entities, known as "factoring companies," to separate recipients of structured settlement payments from those payment streams. The subsequent factoring of structured settlement payments undermines the public policy objectives of structured settlements. They deprive injury victims and their families of the long-term financial security their settlements are designed to provide. The transfer can involve discounts corresponding to over 50% interest per year." (Letter from Life Ins. Council of NY, Inc., Bill Jacket, L 2002, ch 537.)
Yet, "The sale of structured settlements can serve the interest of a victim who has been awarded compensation for injuries or other damages, particularly if the victim has immediate needs that must be met. However, such persons may be particularly vulnerable to the overbearing sales tactics of structured settlement purchasers. The mandated judicial review of all such sales, coupled with the required disclosures of amounts that will be realized from the sale and the discount rate, should help ensure that the best interests of the payee[ ], and his or her family, are served." (NY Atty Gen Mem in Support, Bill Jacket, L 2002, ch 537.)
A "payee" is an individual receiving tax-free payments under a structured settlement and who proposes to make a transfer of payment rights thereunder (see General Obligations Law § 5-701 [h]).
"Any purported transfer entered into after July 1, 2002 without court approval is unenforceable, and payees may not waive their rights under the Act" (Matter of Law First Fin., LLC v Jamestown Life Ins. Co., 72 Misc.3d 1207 [A], 2021 NY Slip Op 50672[U] [Sup Ct, Erie County 2021], citing General Obligations Law §§ 5-1706, 5-1708 [a]).
"[L]egislative history makes clear that to avoid the victimization so prevalent in the industry, 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 892, 895 [Sup Ct, New York County 2006]; see also General Obligations Law § 5-1706 [b]).
"Clearly, the New York State Legislature in enacting SSPA and in empowering the courts with the discretion to determine whether the terms of a proposed transfer of future payments are fair and reasonable did not intend for the courts to be mere rubber stamps" (Matter of Settlement Capital Corp. (Ballos), 1 Misc.3d 446, 461 [Sup Ct, Queens County 2003]). When the original 2002 legislation enacting SSPA was amended in 2004 to clarify that hardship was not a prerequisite for approving a sale of structured settlement proceeds, the Attorney General wrote that "we do note that there has been a very positive trend among members of the Judiciary to be sparing in approval of such sales, as was intended where the original legislation was drafted. Therefore, while hardship may not be required as a specific finding should this bill be approved, there is in our view, no reason for judges to refrain from weighing that factor, along with any other consideration they deem relevant in determining the 'best interest' criterion." (NY Atty Gen Mem in Support, Bill Jacket, L 2004, ch 480.)
Accordingly, in the present decision, the Court looks first to the statutory requirements of the SSPA, followed by an analysis of Mr. H.'s best interest.
III. Procedural Defects under General Obligations Law § 5-1705
SSPA provides various statutory requirements for a transfer to become valid, of which Sapphire Valley has met several but simultaneously failed to comply with several. First, General Obligations Law § 5-1705 (c) states, in relevant part, "A copy of the order to show cause and petition shall be served upon all interested parties at least twenty days before the time at which the petition is noticed to be heard." General Obligations Law § 5-1701 (f) defines "interested party," as "the payee, any beneficiary irrevocably designated under the annuity contract to receive payments following the payee's death, the annuity issuer, the structured settlement obligor, and any other party that has continuing rights or obligations under such structured settlement."
In the present case, the caption lists Sapphire Valley Group, LLC as the lone petitioner and there are three parties listed as respondents: Prudential Assigned Settlement Services Corporation, The Prudential Insurance Company of America, and Mr. H. The order to show cause commencing this proceeding required service on all three Respondents. On February 15, 2023, the date this special proceeding was calendared for hearing and argument, Sapphire Valley filed affidavits of service on Mr. H. (NYSCEF Doc No. 12) and The Prudential Insurance Company of America (NYSCEF Doc No. 13). No affidavit of service was ever filed regarding service on Prudential Assigned Settlement Services Corporation, the structured settlement obligor. Due to the absence of an affidavit of service on Prudential Assigned Settlement Services Corporation, this Court can only infer that service was not completed. As such, this proceeding is jurisdictionally defective (see Matter of Settlement Capital Corp. for Approval of Transfer of Structured Settlement Payment Rights of "Y", 194 Misc.3d 711 [Sup Ct, Rensselaer County 2003]).
The Court also notes that Mr. Glatstein failed to provide various documents to the Court prior to the scheduled appearance date, including the original infant's compromise order. When asked why Mr. Glatstein had not filed these documents with the Court sooner, Mr. Glatstein responded, "Well, these were just provided to me" (NYSCEF Doc No. 17, Feb. 15, 2023 Transcript at 3). This Court is unconvinced by this response. As previously indicated, Mr. Glatstein was the attorney of record on the previous petition. Considering Mr. Glatstein's position in the previous proceeding he should have obtained them - especially the 2014 settlement - much sooner. Even more disquieting is Mr. Glatstein's failure to inform this Court that he represented the purchaser of nearly all of Mr. H.'s direct settlement proceeds in the previous special proceeding. This omission taints this entire special proceeding.
Sapphire Valley also failed to comply with the requirement of General Obligations Law § 5-1705 (d) (iv) that a petition for approval of a transfer of structured settlement payment rights include "a statement setting forth whether there have been any previous transfers or applications for transfer of the structured settlement payment rights and giving details of all such transfers or applications for transfer" (emphasis added). Notably, few decisions directly discuss what details must be included to meet this requirement. However, in Peachtree Settlement Funding, LLC v Pacific Life and Annuity Co. (Sup Ct, Kings County, Sept. 9, 2021, Wan, J., Index No. 505872/2021), the court noted that the petition included, at least, the disposition of the previous application. In the instant matter, a single-sentence statement ("Addendum") following Mr. H.'s signature on an affidavit (it is questionable whether he wrote it) stated that he "filed at least one (1) application(s) for approval of a transfer of payment rights: 1. The Supreme Court of the State of New York, County of Kings; Index No. 506895/2022; order filed on 5/12/22" (NYSCEF Doc No. 5, J.H. Affidavit in Support of Transfer, at 5). This Court finds that this is insufficient to comply with the requirement of General Obligations Law § 5-1705 (d) (iv).
The minimal reference to the previous proceeding's index number and order date was set forth in the Addendum to Mr. H.'s affidavit, yet ultimately the burden of having to provide details of previous transfers or applications for transfer lay with Sapphire Valley, as the petitioner.
A petitioner under SSPA must provide complete disclosure regarding all previous attempted transfers, be they court-approved or not, and this Court concludes as a matter of law that at a minimum the following details concerning them must be provided:
• Date of agreement
• Purchaser
• Amount of structured settlement proceeds transferred or attempted to be transferred
• Purchase price of transferred or attempted-to-be-transferred structured settlement proceeds
• Discount rate and other financial details, as set forth in General Obligations Law § 5-1703
• Reason for payee's sale of structured settlement proceeds
• Caption, court, county, and index number of special proceeding
• Justice's name
• Outcome of special proceeding and the court's reasoning
• If transfer was approved by the court, how the funds received by the payee were used
Providing this information would comport with the legislative purpose in enacting the SSPA initially in 2002, as well as in amending it in 2010 to require that details of previous transfers and applications be set forth. The sponsor of the 2010 amendatory provisions wrote: "These changes... will insure that the court... is properly informed about the history of the structured settlement and can make inquiries of the payee to ensure compliance with the statute (Letter from Hon. Helene E. Weinstein, June 25, 2010, Bill Jacket, L 2010, ch 511). Another proponent wrote: "The additional information... will provide the court with the tools necessary to properly protect the plaintiff and society, who may bear the costs of an insolvent injured plaintiff, as it renders its decisions (Mem NY Consumer Protection Board in Support, Bill Jacket, L 2010, ch 511).
As noted above, what was shielded from this Court prior to its hearing was that another petitioner, Palmetto Park Agency, LLC, represented by Mr. Glatstein had made a similar application in which it sought to receive $556,000.00 of Mr. H.'s future payment rights for the price of $200,377.83. The parties appeared before Hon. Justice Francois Rivera on May 5, 2022, for a hearing and oral argument. Mr. H. told Justice Rivera that he intended to use the $200,377.83 to purchase a house in New Jersey so that he could attend college nearby. Justice Rivera indicated that he would approve the transfer, and a few days later an order was uploaded memorializing said approval. Justice Rivera's order was issued approximately only six months prior to the filing of the present petition. (See NYSCEF Doc No. 16, May 5, 2022 Transcript; NYSCEF Doc No. 13, Order, Kings County Index No. 506895/2022.) It had to be fresh in Mr. Glatstein's memory as well as in Mr. H.'s memory. Nonetheless, the present petition is devoid of any mention of the amount previously transferred, the reason for the previous transfer, or the disposition of the previous application.
Besides Mr. Glatstein failing to disclose to this Court his representation of the previous purchaser of the bulk of Mr. H.'s structured settlement proceeds (see pp 4-5, supra), he led this Court astray by his remark, "Mr. [H.] is seeking to assign a small portion of his future settlement rights" (NYSCEF Doc No. 17, Feb. 15, 2023 Transcript at 4). This representation intimated that Mr. H. still retained much of the future proceeds payments, when in fact Mr. Glatstein had participated in denuding Mr. H. of them in the previous proceeding.
At the hearing, this Court asked Mr. H. how he knew to obtain an advance on future proceeds at an amount less than what he would be entitled to? He answered that he reached out to "them," that they work with Prudential, and that the lawyer working with the case gave him the information (NYSCEF Doc No. 17, Feb. 15, 2023 Transcript at 10-11).
Asked by this Court, "How many of these companies were you in touch with in terms of trying to get this sort of arrangement?" Mr. H. answered, "Just one" (id. at 11). This is not true, inasmuch as Mr. H. had previously sold most of his future direct payments to Palmetto Park Agency LLC.
In his closing statement, Mr. Glatstein told this Court, "Mr. [H.] had an opportunity to assign more payments because there are two lump sums of $40,000 that are due in 2024, 2025. There are life contingent payments that begin in 2054 for the duration of Mr. [H.]'s life which would total - 2054 until Mr. [H.] achieves the $352,000." (NYSCEF Doc No. 17, Feb. 15, 2023 Transcript at 13.) This is not completely accurate. The $40,000.00 payments Mr. Glatstein referred to are to be paid for college, but if Mr. H. did not attend college they would be payable in 2045, 2046, 2047, and 2048 (and the remainder in 2049 if there is more money), and these payments were to be made by The J.H. Settlement Fund Management Trust. This Court sees nowhere in the 2014 infant's compromise order that Mr. H. was to receive $40,000.00 payments in 2024 and 2025. As such, Mr. Glatstein was wrong and this Court feels misled. Mr. Glatstein assuredly knew that the $40,000.00 payments were for college, as evidenced by his statement to Justice Rivera, "[U]pon information and belief there is $40,000 a year that is set aside specifically for [J.]'s college education" (NYSCEF Doc No. 16, May 5, 2022 Transcript at 7). Mr. Glatstein's statement to this Court that there are life contingent payments that begin in 2054 for the duration of Mr. H.'s life obfuscated the fact that Mr. Glatstein's client, Palmetto Park Agency LLC, had already purchased all $1,000 guaranteed direct monthly payments for life until sometime in 2054.
Mr. Glatstein's failure to provide complete disclosure is underscored by his statement on page 13 of the transcript that "It's a portion. There is still more to come...." (NYSCEF Doc No. 17, Feb. 15, 2023 Transcript.) Mr. Glatstein participated in the previous special proceeding depleting $556,000.00 in future proceeds for an immediate $200,377.83. So the $556,000.00 was NOT still more to come. The payments from The J.H. Settlement Fund Management Trust are NOT still more to come if Mr. H. goes to college; and, if not, the "still more to come" doesn't come until 2045 at the earliest. And all that remains of direct payments (not those intended for college) if this application were granted would be $1,500.00 monthly payments due during the year 2023, and $1,000.00 monthly payments to pick up again in the year 2054, assuming Mr. H. lives that long.
Further, it certainly behooved Mr. H. to disclose and Mr. Glatstein, as attorney for Sapphire Valley, to ascertain what became of the $200,377.83 that Mr. H. received in exchange for selling $556,000.00 of future direct payments. Did Mr. H. purchase the house in New Jersey to be close to college there, as he informed Justice Rivera? Or was the money dissipated, resulting in Mr. H.'s returning to Court together with Mr. Glatstein to sell $36,000.00 more in future direct payments? Before this Court Mr. H. said he needed a vehicle to go to a trade school in Queens, so what happened to the college in New Jersey? And speaking of a house in New Jersey, which was the purpose of the previous sale of the $556,000.00, why is Mr. H. still living at the address in Brooklyn he testified to (NYSCEF Doc No. 16, Feb. 15, 2023 Transcript at 6)?
In failing to make candid, complete disclosure of the entire situation surrounding the sale of Mr. H.'s structured settlement future proceeds, in providing certain incorrect information, and in masking what transpired before the commencement of the instant special proceeding, Sapphire Valley has failed to meet the requirement of General Obligations Law § 5-1705 (d) (iv), thus giving rise to another procedural defect sufficient to dismiss the petition.
These procedural defects, alone, would suffice to reject the transfer of the structured settlement proceeds pursuant to General Obligations Law § 5-1705. However, this Court will now proceed to discuss the merit, or lack thereof, of the present petition and the best interest of Mr. H.
IV. Best Interest of the Payee under General Obligations Law § 5-1706
It is evident from Mr. H.'s testimony in court and his post-hearing correspondence sent via Mr. Glatstein (NYSCEF Doc No. 15) that he is willing and anxious to transfer the payments in question. However, "the structured settlement payee's willingness to transfer the settlement proceeds has no bearing on this Court's determination of whether the transfer is fair and reasonable" (Matter of J.G. Wentworth Originations, LLC (Allstate Life Ins. Co. of NY - Kwant) (61 Misc.3d 1224 [A], 2018 NY Slip Op 51730[U], *1 [Sup Ct, Dutchess County 2018]). Accordingly, this Court chooses to focus on the circumstances surrounding the transfer.
When determining the best interest of the payee, courts have held that there exist both numerical and personal elements that should be considered. "Two distinct substantive inquiries are required of the court before transfer of a structured settlement can be approved[,] one assessing whether the proposed transfer is in the best interest of the payee and the other assessing whether the transaction is fair and reasonable" (Matter of Barr v Hartford Life Ins. Co. (4 Misc.3d 1021 [A], 2004 NY Slip Op 50980, *1 [Sup Ct, Nassau County 2004] [emphasis added]). Furthermore, "[w]hile considering the best interest of the payee, the court must also determine whether the transaction, including the discount rate used to determine the gross advance amount and the fees and expenses used to determine the net advance amount are fair and reasonable (Matter of J.G. Wentworth Originations, LLC, *1).
A. Fairness and Reasonability of This Transaction
Looking first to the numerical elements of this agreement, Hon. Justice Debra Silber has noted that "there has been little agreement as to what constitutes a proper discount rate or what amount of fees and costs are allowable. Courts have also reached different conclusions with regard to the fairness and reasonableness of the fees and costs associated with the transaction [citations omitted]" (Matter of Am. Farms, LLC v John Hancock Assignment Co. (61 Misc.3d 1203 [A], 2018 NY Slip Op 51349[U] *3-4 [Sup Ct, Kings County 2018]). "Although what constitutes a fair and reasonable transaction is also left undefined in the statute, two factors are specifically identified for consideration: the fees and expenses and the discount rate" (Matter of Barr v Hartford Life Ins. Co., *1). The reasonableness of the fees is not in question here as Sapphire Valley has averred that they do not intend to seek any fees or expenses resulting from the instant transaction (NYSCEF Doc No. 17, Feb. 15, 2023 Transcript at 14; NYSCEF Doc No. 4, Disclosure Statements).
There exist both quantitative and qualitative aspects to determining the fairness and reasonableness of the discount rate utilized. General Obligations Law § 5-1701(c) defines the "discounted present value" as the present value of future payments, as determined by discounting such payments to the present using the most recently published applicable federal rate for determining the present value of an annuity, as issued by the United States Internal Revenue Service." As to the discount rate, there is no case law clearly determining a method of calculation or outer limits (see Matter of Settlement Funding of NY, LLC (Platt), 2 Misc.3d 872 [Sup Ct, Lewis County 2003]). Courts have approved a discount rate as high as 20.586% but rejected a 15.46% rate (see Matter of Barr v Hartford Life Ins. Co., *1-2). Here, the noted discount rate by Sapphire Valley was 40.75% per its New York Disclosure Statement (NYSCEF Doc No. 4 at 2). Upon review of the published interest rate for the month of October 2022, the month in which this petition was formulated, the published discount rate by the IRS was 4.00% (see Applicable Federal Rates [AFRs] Rulings, https://www.irs.gov/applicable-federal-rates [last accessed Apr. 10, 2023]). A discount rate of 40.75% is grossly excessive.
"There have been reported cases in which it was held some rates used were not fair and reasonable, with rates of 18.621% (Matter of Settlement Capital Corp., 194 Misc.2d 711 [2003]); 15.591% (Matter of Settlement Capital Corp. [ Ballos ], 1 Misc.3d 446 [Sup Ct, Queens County 2003]); and 15.46% (Matter of Settlement Funding of NY, 195 Misc.2d 721 [2003]) being rejected" (Matter of Settlement Funding of NY, 2 Misc.3d at 877).
To be clear, and based on Sapphire Valley's own New York Disclosure Statement, Mr. H. would be selling $36,000.00 of future direct payments for $15,192.37, when the discounted amount applying the IRS's 4.00% would be $32,955.55. Sapphire Valley disclosed that comparable annuities of the $36,000.00 to be paid could be obtained for $35,136.12 or $35,403.00. All this demonstrates that it would have been eminently unfair in October 2022 to have paid someone $15,192.37 in exchange for 24 monthly payments of $1,500.00 payable in 2024 and 2025 (totaling $36,000.00).
The Court must now weigh the discount rate against the intended use of the funds received by Mr. H. Even when the discount rate utilized by the petitioner matches that published by the IRS - which it clearly does not here - the court must determine whether the intended use of the funds justifies the discount and "[t]he more pressing the need, the more reasonable it may be for a payee to obtain immediate cash at a steep discount rate" (Matter of 321 Henderson Receivables, L.P. v Martinez). When Mr. H. was asked to what effect prospective funds would be utilized, he indicated that he intended to purchase a new vehicle to get to and from classes at a school in Queens (NYSCEF Doc No. 17, Feb. 15, 2023 Transcript at 8-9).
Notwithstanding Mr. H. having been paid $200,377.83 (in exchange for selling $556,000.00 in future payment streams) to purchase a home in New Jersey, that he now needs $15,192.37 to buy a vehicle to attend a school in Queens from an address in Brooklyn does not bear the ring of verisimilitude. Assuming that Mr. H.'s testimony as to the Brooklyn address was truthful, he has options in terms of public transportation. Furthermore, Mr. H. could utilize the monthly payments remaining for 2023 to lease or purchase a vehicle.
Mr. H. did inform this Court in a supplemental letter that he was afraid of the violence occurring in the public transportation system in New York (NYSCEF Doc No. 15 at 2). While this statement is not without merit, the public transit system has not become so dangerous as to warrant the determination that Respondent H.'s ownership of a vehicle is a "pressing matter." In any event, this Court considers that since Mr. H. previously sold nearly all of his future direct payments ostensibly to buy the New Jersey house, he needs whatever remaining direct payments there are.
Accordingly, the sale by Mr. H. to Sapphire Valley of $36,000.00 in future direct payments due in 2024 and 2025 for $15,192.37 presently is neither fair nor reasonable. If this were a loan the transaction it would be usurious.
B. The Best Interest of Mr. H.
This Court now turns to the merit of the present petition to determine the best interest of Mr. H. General Obligations Law § 5-1706 (b) provides:
No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been authorized in advance in a final order of a court of competent jurisdiction based upon express findings by such court that:
...
(b) the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependents; and whether the transaction, including the discount rate used to determine the gross advance amount and the fees and expenses used to determine the net advance amount, are fair and reasonable [emphasis added].
The court in Matter of Settlement Capital Corp. (Ballos), 1 Misc.3d at 455, articulated the meaning of the phrase "best interest of the payee" in this context as follows:
After an independent analysis of decisional law in this and other jurisdictions, and consideration of the legislative history of SSPA, this court determines that the best interest prong should be assessed on a case-by-case basis, giving specific consideration to such factors as the payee's age; mental and physical capacity; maturity level; ability to show sufficient income that is independent of the payments sought for transfer; capacity to provide for the welfare and support of the payee's dependents; the need for medical treatment; the stated purpose for the transfer; and the demonstrated ability of the payee to appreciate the financial terms and consequences of the proposed transfer based upon truly independent legal and financial advice.
Additionally, courts must take into consideration "whether the proposed transfer of structured settlement payments, which were 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 and his or her dependents by the periodic payments" (id.).
Preliminarily, it should be noted that Mr. H., the payee here, does not currently have any dependents (NYSCEF Doc No. 5, Affidavit of J.H., Affidavit in Support of Transfer, ¶ 2). Additionally, it is not apparent to this Court that Mr. H. possesses a diminished mental capacity. In fact, Mr. H. testified that he understood what was happening when the parties appeared before this Court for oral argument (NYSCEF Doc No. 17, Feb. 15, 2023 Transcript at 6-7). Accordingly, these elements hold little bearing on the Court's decision regarding Mr. H.'s best interest. What does bear on the Court's decision is that Mr. H. was less than forthright, a finding being made due to his failure to mention any details about the previous sale of his proceeds in his affidavits or in court.
As discussed previously, this is the second time that Mr. H. has sought to sell his future payment interests to a party represented by Mr. Glatstein. According to the 2014 settlement of the 2011 malpractice action (NYSCEF Doc No. 11, Infant's Compromise Order), Mr. H. was originally to receive guaranteed future direct payments of $632,000.00, comprised of
• $1,000.00 payable monthly for life, guaranteed for 32 years and 8 months, beginning on February 19, 2022;
• $1,500.00 payable monthly, guaranteed for 4 years, beginning at age 18 on January 21, 2022;
• $15,000.00 guaranteed lump sum payable at age 22 on January 21, 2026;
• $15,000.00 guaranteed lump sum payable at age 23 on January 21, 2027;
• $20,000.00 guaranteed lump sum payable at age 24 on January 21, 2028;
• $20,000.00 guaranteed lump sum payable at age 25 on January 21, 2029;
• $25,000.00 guaranteed lump sum payable at age 30 on January 21, 2034;
• $25,000.00 guaranteed lump sum payable at age 35 on January 21, 2039; and
• $48,000.00 guaranteed lump sum payable at age 40 on January 21, 2044.
This sum was intended to assist Mr. H. in paying future expenses as well as in compensating him for past and future pain and suffering. Mr. H. previously sold $556,000.00 of these future direct payments for $200,377.83 without confirming to the Court what he used the money for. He represented to Justice Rivera that the up-front payment was for a house in New Jersey but he did not inform this Court whether he actually purchased it. His testimony that he resided in Brooklyn belies any purchase of a New Jersey home. This begs the question as to the status of the $200,377.83 - was it spent and, if so, on what, and if not, who has it? If Mr. H. spent the $200,377.83 on something other than the New Jersey house, it would establish his lack of candor with the court. If he still possesses the $200,377.83, it assuredly is sufficient to pay for a vehicle, rendering a further sale of future proceeds unnecessary.
The $556,000.00 consisted of the following future payment streams:
• $1,000.00 payable monthly for life, guaranteed for 32 years and 8 months, beginning on June 19, 2022;
• $15,000.00 guaranteed lump sum payable at age 22 on January 21, 2026;
• $15,000.00 guaranteed lump sum payable at age 23 on January 21, 2027;
• $20,000.00 guaranteed lump sum payable at age 24 on January 21, 2028;
• $20,000.00 guaranteed lump sum payable at age 25 on January 21, 2029;
• $25,000.00 guaranteed lump sum payable at age 30 on January 21, 2034;
• $25,000.00 guaranteed lump sum payable at age 35 on January 21, 2039; and
• $48,000.00 guaranteed lump sum payable at age 40 on January 21, 2044. (NYSCEF Doc No. 2, Kings County Index No. 506895/2022, Affidavit of J.H. in Lieu of Settlement Agreement.)This constituted 88% of the future direct payments totaling $632,000.00 enumerated on page 14 supra.
This Court was unable to question Mr. H. or Petitioner about the whereabouts of the funds from the previous sale when they appeared for the hearing and oral argument because Sapphire Valley had not disclosed the previous application's details. Once again, while the Court is unable to make a conclusive determination into Sapphire Valley's reasons for failing to make complete disclosure, one can justifiably draw certain obvious inferences.
This Court also recognizes that Mr. H. may have actually purchased a home in New Jersey but continues to reside in New York. However, if that is the case, then this Court can only draw one of two inferences, either: (1) the home purchased by Mr. H. in New Jersey is currently vacant and prime for resale or lease, thus allowing him to regain the money spent; or (2) the home purchased by Mr. H. is being utilized by his friends or family, despite representations he made to Justice Rivera. Further, there remains the possibility that if the New Jersey home was purchased there remain some funds left over to purchase a vehicle. However, without the requisite disclosure, this Court is constrained to speculate as to whether such funds remain available.
Mr. H. now seeks to sell $36,000.00 in additional future direct payments ($1,500.00 per month) for 2024 and 2025, which, if approved, would leave him with practically nothing left, considering that he presumably received his $1,500.00 monthly payments in 2022 and for the months which have elapsed in 2023. It would be unconscionable for this Court to leave Mr. H. with the only remaining direct payments coming in the remainder of 2023. The payments from The J.H. Settlement Fund Management Trust are not for personal expenses. They are for college and, if he does not attend college, he would receive $40,000.00 for four years only starting in 2045 (plus any remainder in 2049).
Mr. H. is 19 years old. While this Court recognizes that age is not always a direct representation of one's maturity or financial intellect, it is nonetheless an indicator. In fact, it is this Court's view that Mr. H. is too young and naive to fully understand the repercussions of this and the previous sale. The settlement in question was created by his mother and the attorneys with the intention of supporting Mr. H. financially for many years as evinced by the long-term payment schedule, a concept which Mr. H. appears to ignore. Thus, Mr. H.'s youth weighs against allowing any further transfers of settlement funds.
In examining the previous transfer of guaranteed future payments, this Court notes that Mr. H. sold $556,000.00 for $200,377.83, when price quotes for annuities to purchase $556,000.00 were $442,402.04 and $441,519.00 (NYSCEF Doc No. 3, Kings County Index No. 506895/2022). This demonstrates poor financial acumen on Mr. H.'s part. His previous transfer of future payments weighs against this Court allowing another transfer. This Court cannot, in good faith, allow Mr. H. to squander the remainder of his settlement.
The questionability of whether tort victims-payees truly understand the financial implications of sales of future payments coming to them is evidenced by the fact that the affidavits Mr. H. signed in this proceeding (commenced by Sapphire Valley) and in the previous one (commenced by Palmetto Park Agency, LLC), and those signed by other tort victims-payees who sought to sell future structured payment settlement proceeds to Sapphire Valley or Palmetto Park Agency, LLC contained the same boilerplate language and were notarized by the same individual, Tamika Summers, who meandered from county to county obviously on behalf of the factoring company (see NYSCEF Doc No. 5, Matter of Palmetto Park Agency, LLC v Pacific Life & Annuity Servs., Inc., Sup Ct, Bronx County Index No. 809542/2022E (petitioner represented by Elliot Glatstein); NYSCEF Doc No. 5, Matter of Palmetto Park Agency, LLC v Pacific Life & Annuity Servs., Inc., Sup Ct, Bronx County Index No. 807389/2022E (petitioner represented by Elliot Glatstein); NYSCEF Doc No. 7, Palmetto Park Agency, LLC v Prudential Assigned Settlement Servs. Corp., Sup Ct, Bronx County Index No. 805981/2022E; NYSCEF Doc Nos. 10 , 11, Matter of Palmetto Park Agency, LLC v Everlake Settlement Corp., Sup Ct, Kings County Index No. 518861/2022; NYSCEF Doc No. 7, Palmetto Park Agency v American Home Assurance Co., Sup Ct, Orange County Index No. EF003281/2022);NYSCEF Doc No. 7, Palmetto Park Agency v American Home Assurance Co., Sup Ct, Orange County Index No. EF003203/2022); NYSCEF Doc No. 7, Matter of Sapphire Valley Group, LLC v Prudential Assigned Settlement Services Corporation, Sup Ct, Queens County Index No. 723593/2022; NYSCEF Doc No. 9, Palmetto Park Agency, LLC v National Union Fire Ins. Co. of Pittsburgh, PA, Sup Ct, Queens County Index No. 707359/2022). This leads this Court to conclude that the tort victims-payees are signing cookie-cutter documents prepared for them by the factoring companies without any individualization as to their particular situations or need for immediate cash.
"The interest of public policy is preserved by [structured settlements to resolve tort claims] because it ensures a compensation stream to pay for future care or needs. It serves to prevent settlement funds from being dissipated, and such injuries becoming the responsibility of the public health care system" (Mem NY Consumer Protection Board in Support, Bill Jacket, L 2010, ch 511). "Consumers of one-time structured settlement payment services must be accountable to the court and provide a justifiable reason for amending the court[ ] order and seeking to liquidate their structured settlement into a lump sum payment" (id.).
As acknowledged above, the legislative purposes underpinning the SSPA were both societal and personal in nature. Both the public at large needed to be protected as did compensated tort victims. To approve the transfer at bar in this special proceeding, this Court would undermine the legislative priorities of avoiding tort victims from becoming public charges, preventing resourceful factoring companies from preying on them, enabling individuals who have serious needs for immediate cash to obtain it, requiring complete disclosure of transfer situations, and facilitating courts' informed consideration of transfers. (See pp 6-7, supra.)
The SSPA was created to allow courts to act as a shield preventing vulnerable individuals from being exploited by those more privileged in their knowledge of the intricacies of the financial system. The discretionary nature of the SSPA grants the courts the right to analyze applications substantively while simultaneously scrutinizing parties' adherence to procedural rules. Those manifold goals this Court has endeavored to fulfill.
This Court is constrained to reject the proposed transfer. It will not become an accessory to the continued unaccounted for dissipation of Mr. H.'s settlement which his mother and the attorneys thoughtfully constructed to enable him to take care of himself while living with his disability.
This Court concludes first that Petitioner Sapphire Valley Group, LLC failed to comply with the procedural requirements set forth in the SSPA by (1) failing to serve all interested parties on the matter; and (2) failing to disclose any details as to Petitioner's previous application for the sale of future payment rights. Second, said Petitioner has failed to establish the substantive merits of the proposed transfer agreement. Said Petitioner has failed to establish that it is in the best interest of Respondent H. and, in arriving at said determination, this Court took into account the failure to set forth the previous sale's details. On the contrary, this Court finds that this proposal is counterproductive and would cause Respondent J.H. greater harm than the Petitioner cares to admit.
On Friday morning,, Mr. Glatstein called this Court's chambers and spoke to one of this Court's law clerks. In the conversation, Mr. Glatstein sought to ascertain the outcome of the decision before it was issued. After being informed that the outcome of this decision could not be disclosed in advance, Mr. Glatstein asked the law clerk for a "hint" as to the outcome. The law clerk told him that he could not provide a "hint." Mr. Glatstein then stated that if approval was not granted, he intended to file another application. This Court considers Mr. Glatstein's pre-decision issuance ex parte inquiry for a "hint" to be inappropriate. It also considers the statement that if the petition was not approved he would file another application to constitute an attempt to pressure this Court into granting approval. This overzealous attempt to pursue purchase of Mr. H.'s future direct settlement proceeds payments concerns this Court and underscores the necessity for scrutiny of these transactions, which was the underlying consideration of the Legislative when it adopted the SSPA in 2002 and the amendatory provisions in 2010 regarding disclosure of prior transfers and attempted ones. In light of Mr. Glatstein's actions in the entire saga concerning the procurement of Mr. H.'s settlement proceeds, including the April 14th telephone call to chambers and the lack of complete disclosure as detailed herein, this Court imposes conditions, related below, concerning any further applications to approve transfers of Mr. H.'s structured settlement proceeds. Any further applications shall be made returnable before this Court.
Finally, this Court notes that the Attorney General of this state is empowered to apply to a court of competent jurisdiction for an injunction against continuation of violations of the SSPA; said court may also impose a civil penalty (General Obligations Law § 5-1709). As discussed herein, a petition for approval of a transfer of structured settlement payment rights shall include a statement setting forth details of any previous transfers or applications for transfer (id. § 5-1705[d] [iv]). The details of Mr. H.'s previous transfer were not disclosed to the Court in the petition commencing this proceeding. Despite having represented a previous purchaser of most of Mr. H.'s future direct payments, Mr. Glatstein did not disclose this material fact to this Court. There is a serious issue as to who prepared the affidavits and other documents which Mr. H. signed, and who inserted the Addendum after the page bearing Mr. H.'s signature in one of the affidavits. This proceeding was commenced without inclusion of a copy of the infant's compromise order; it was provided by said Petitioner's attorney, Mr. Glatstein, only on the scheduled date of the hearing. No proof of service upon The Prudential Assigned Settlement Services Corporation, the structured settlement obligor, was ever filed. This Court fears that Petitioner Sapphire Valley herein may continue to make applications for transfers without providing the required details and without complying with all the procedural conditions. Notification of the Attorney General concerning the instant situation is deemed appropriate.
V. Conclusion
For the foregoing reasons, it is hereby ADJUDGED, ORDERED, and DECREED as follows:
(1) The findings necessary for a court to approve a transfer of structured settlement payment rights pursuant to General Obligations Law § 5-1706 have not been proved.
(2) The application by Petitioner Sapphire Valley Group, LLC to approve a transfer of $36,000.00 of Respondent J.H.'s future structured settlement proceeds for 2024 and 2025 for $15,192.37 is denied.
(3) The within petition is dismissed with prejudice.
(4) Within ten days of the entry of this decision, decision, and judgment, Petitioner shall serve a copy of it upon all Respondents herein by first-class mail (with a certificate of mailing being obtained) to all known residence and business addresses, (b) by certified mail, return receipt requested, to all known residence and business addresses, and (c) to all known email addresses for them; proof of said service shall be filed on NYSCEF within ten days after service is effectuated.
(5) Any future application by any company seeking to purchase the structured settlement payments due to J.H. shall be made returnable to the undersigned and not to any other justice.
(6) A copy of this decision, order, and judgment shall be annexed to any future petitions commencing proceedings in this or any other county under the Structured Settlement Protection Act seeking approval of transfers of any and all remaining payments due pursuant to the infant's compromise order in H. v. Santoso, Kings County Index No. 9331/11.
(7) A copy of this decision, order, and judgment shall be sent to Hon Leticia James, Attorney General of New York.