Opinion
No. 14315/12.
2013-02-21
In the Matter of the Petition of SENECA ONE, LLC, Petitioner, For Approval of the Sale and Transfer of Structured Settlement Payment Rights of Ilma Ramos In Accordance with Gen. Oblig. Law § 5–1701, et seq. v. Ilma Ramos, Aviva Life and Annuity Company of New York f/k/a Aviva Life Insurance Company of New York, and Aviva Assignment Corporation, Respondents.
Luigi Brandimarte, Esq., Sacco & Fillas, LLP, Astoria, NY, Attorneys for Petitioner. Ilma Ramos, Brooklyn, NY, Respondent Pro Se.
Luigi Brandimarte, Esq., Sacco & Fillas, LLP, Astoria, NY, Attorneys for Petitioner. Ilma Ramos, Brooklyn, NY, Respondent Pro Se.
JOHNNY L. BAYNES, J.
Petitioner herein, Seneca One, LLC (hereinafter “Petitioner”) moves by Order to Show Cause dated July16, 2012, and submitted to this Court for determination on December 20, 2012, for an Order declaring that the sale and transfer of structured settlement payment rights pursuant to a Transfer and Assignment Agreement by and between Ilma Ramos, as the Payee/Seller, and the Seneca One, LLC, as the Purchaser, complies with all requirements of the Structured Settlement Protection Act, General Obligations Law § 5–1701 et seq., 26 USC § 5891 et seq., and Pub.L. 107–134, Title 1 § 115(c)(3)(A).
Ilma Ramos, (hereinafter “seller”) became entitled to a structured settlement by virtue of an Infant's Compromise Order dated the 28th day of February, 2000, and signed by Michael Garson, JSC, when Seller was 12 years old. The settlement, was payable as follows: $193,590.12, was paid as attorneys' fees to Beth J. Schlossman, Esq.; $3,229.01, to Beth Schlossman, Esq., for costs and disbursements; $15,000.00 to Seller's mother and natural guardian, Priscilla Leon.
Pursuant to the terms of the Structured Settlement, Seller became entitled to receive the following guaranteed structured settlement payments commencing March 14, 2006, to wit: $1,625.00 per month, increasing at the annual rate of 3% for thirty years, guaranteed through and including February 14, 2036, and for the life of the Seller thereafter, plus lump sum payments of $25,000 on February 14, 2006; $30,000 on March 14, 2009; $35,000 on March 14, 2013; $50,000 on March 14, 2018; and $100,000 on March 14, 2023. Verified Petition, ¶ 11.
This Court is now asked to decide whether this proposed transfer withstands the scrutiny required by the Structured Settlement Protection Act (General Obligations Law § 1705, et seq.). The purpose of that Act is to discourage the transfer of structured settlements. See, Henderson Receivables Origination, LLC v. Nelson, 21 Misc.3d 1109(A) [S Ct Kings Co 2008] While the Court need not ascertain that the Seller is under a hardship and requires the funds being offered to her, General Obligations Law § 5–1706 requires that the transfer be in the best interests of the Seller. The proposed terms of the Transfer and Assignment Agreement are that Seller would transfer her interest in the March, 2018, payment in the sum of $11,866.66; and the March, 2023, payment in the sum of $72,163.97. In exchange, she would receive the sum of $16,021 from petitioner. Affidavit of Seller, ¶ 4.
It should be noted that petitioner submits a petition in support of its application which is verified by its attorney, Luigi Brandimarte, Esq. No supporting Affidavit is submitted by a person with knowledge and information on behalf of the petitioner. Nor is any affidavit submitted from a professional attesting to the fairness of the proposed transaction.
Seller submits a supporting Affidavit in which she states that she is 24 years old, single with no children. Seller's Affidavit ¶ 3. She further states that she has been advised to seek independent professional advice in connection with the transfer, but has waived that advice. Seller's Affidavit ¶ 8. Seller's intent is to use the funds she might obtain from this transfer to eliminate credit card debt, pay rent and purchase furniture for her expected child. Seller's Affidavit ¶ 6.
The Court, in Matter of Settlement Capital Corp (Ballos), 1 Misc.3d 446 [S Ct Queens Co 2003], noted that in being asked to review cases pursuant to the Structured Settlement Protection Act, the Court is not simply a rubber stamp for a proposed transaction. Rather, it must both ascertain that the procedural requirements of the petition have been met and that the transfer is in the best interests of the Seller. Moreover, the Statute is specifically intended to limit the ability of companies such as petitioner's to upset the financial security which a structured settlement was meant to provide. See, Settlement Capital Corp, 1 Misc.3d 446, fn 1.
Courts generally have found transfers not in the best interest of the payee where the payee intends to use the proceeds of the transfer to ease relatively minor financial burdens such as paying back loans, credit card debt, purchasing a new car or home improvements. Henderson Receivables Origination, LLC (Nelson), 21 Misc.3d 1109(A) [S Ct Kings Co 2008], citing, Matter of Barr v. Hartford Life Ins., 4 Misc.3d 1021(A) [S Ct Nassau Co 2004]; Matter of Settlement Funding of New York, LLC [Cunningham], 195 Misc.2d 721 [S Ct Rensselaer Co 2003]; Matter of 321 Henderson Receivables Limited Partnership (DeMallie), 2 Misc.3d 1021(A) [S Ct Monroe Co 2003]. These are exactly the types of uses to which seller intends to apply the proceeds of the transfer.
Based on the foregoing, this Court finds that the intended transaction is not in the best interests of the Seller. There is nothing to indicate that the discount rate is fair and Seller has not demonstrated that the transaction would be in her best interests.
WHEREFORE, the relief sought by petitioner is denied in all respects
The foregoing constitutes the Decision and Order of the Court