Opinion
52903/2018
12-04-2018
In the MATTER OF the Petition of J.G. WENTWORTH ORIGINATIONS, LLC, Petitioner, and Allstate Life Insurance Company of New York, Allstate Settlement Corporation, and Tina Kwant, as Interested Persons Pursuant to GOL § 5-1701(c).
SHAWN F. BROUSSEAU, ESQ., NAPIERSKI, VANDENBURGH, NAPIERSKI & O'CONNOR, LLP, Attorneys for Petitioner, 296 Washington Avenue Extension, Suite 3, Albany, New York 12203, sfb@nvnolaw.com
SHAWN F. BROUSSEAU, ESQ., NAPIERSKI, VANDENBURGH, NAPIERSKI & O'CONNOR, LLP, Attorneys for Petitioner, 296 Washington Avenue Extension, Suite 3, Albany, New York 12203, sfb@nvnolaw.com
Petitioner moves for an order, pursuant to General Obligations Law § 5-1701 et seq., approving the transfer of certain structured settlement proceeds.
It is hereby ORDERED that the petition is decided as follows:
Tina Kwant is the owner of payment rights to a structured settlement. Petitioner commenced this special proceeding, pursuant to New York General Obligations Law Article 5, Title 17, known as the Structured Settlement Protection Act (SSPA), seeking approval of the sale and transfer of certain structured settlement payment rights to it from Tina Kwant, the payee.
The SSPA was enacted to protect the recipients of long-term structured settlements from being victimized by companies aggressively seeking the acquisition of their rights (see Matter of Settlement Capital Corp. (Ballos) , 1 Misc 3d 446 [Sup Ct, Queens County 2003] ). Companies were using aggressive advertising, plus the allure of quick and easy cash, to induce settlement and cash out future payments, often at substantial discounts, depriving victims and their families of the long-term financial security their structured settlements were designed to provide (see In re J.G. Wentworth Originations, LLC , 33 Misc 3d 1234[A][Sup Ct, Queens County 2011] ).
The petitioner herein technically complies with General Obligations Law § 5-1705 by including a copy of the transfer agreement, a copy of the disclosure statement and by serving the petition upon all interested parties, including the party currently receiving the structured payments and the structured settlement obligors who are responsible for making the payments under the existing structured settlement (see Matter of 321 Henderson Receivables L.P. v. Martinez , 11 Misc 3d 892 [Sup Ct, New York County 2006] ). However, the Legislature in enacting the SSPA did not intend for the courts to be mere rubber stamps for the proposed sale; on the contrary, 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 (id. ). While 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 (see General Obligations Law § 5-1706[b] ; Matter of Settlement Funding of NY LLC v. Solivan , 8 Misc 3d 1006[A] [Sup Ct, Kings County 2005] ).
Here, the aggregate amount of the purchased payments is Four Hundred Seventy-Eight Thousand Five Hundred Ninety Dollars and Eighty-Two Cents ($478,590.82). The discounted present value of the aggregate purchased payments at the federal interest rate of 3.40% is One Hundred Eighty Thousand Three Hundred Fifty Dollars and Twenty-Seven Cents ($180,350.27). The payee would assign her rights in the aforementioned proceeds for the sum of Ten Thousand Dollars ($10,000.00). This Court concludes that the proposed sale of the payee's structured settlement payments to petitioner is not fair and reasonable and does not serve the best interest of the payee (see Matter of 321 Henderson Receivables L.P. v. Martinez , 11 Misc 3d 892 [Sup Ct, New York County 2006] ). Additionally, 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 (see generally Matter of Settlement Funding of NY , 195 Misc 2d 721 [Sup Ct, Rensselaer County 2003] ).
Based upon the foregoing, the petition is dismissed without prejudice. In the event petitioner renews its petition, this Court encourages a "fair and reasonable" transfer of the structured settlement payments. This decision and order has been filed electronically.