Matter of J.G. Wentworth Originations, LLC v Maurello

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Download PDF Matter of J.G. Wentworth Originations, LLC v Maurello 2012 NY Slip Op 30373(U) January 24, 2012 Supreme Court, Nassau County Docket Number: 17041/11 Judge: Thomas Feinman Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. -.. ft'v [* 1] SHORT FORM ORDER SUPREME COURT - STATE OF NEW YORK COUNTY OF NASSAU Present: Hon. Thomas Feinman Justice TRIS PART 9 NASSAU COUNTY In the Matter of the Petition of G. WENTWORTH ORIGINATIONS, LLC, f/a 321 HENDERSON RECEIVABLES ORIGINATION , LLC Petitioner, INDEX NO. 17041/11 x X X MOTION SUBMISSION DATE: 1/9/12 - and - MOTION SEQUENCE NO. USA MAURLLO and CONTThNT CASUALTY COMPANY As Interested Persons Pusuat to GOL 95- 1701(c). The following paprs re on this motion: Order to Show Cause and Affdavits......................... Affirmation in Opposition.......................................... Reply Afrmation............. N/A N/A Relief Requeste The petitioner initiates ths special proceeding, by way of Order to Show Cause , for an order approving the transfer of stctued settlement payment rights from Lisa Maurello, (hereinafter referred to as "Maurello ), to petitioner, lG. Wentwort Orginations, LLC, flka 321 Henderson Receivables Origination , LLC. , (hereinafer referrd to as " G. Wentworth" Maurello, under the terms of the Tranfered Assigment Agreement with J. G. Wentwort intends to trsfer and sell his rights to sixty-nine (69) monthy payments in the amount of four hundred and 0011 00 dollars, ($400. 00), beginng on or aboutFebru 4 , 2012 though on or about November 4, 2017. In consideration for sellng these payments, J . G. WentWort agees to pay Maurello the of nineteen thousand six hundred and 001100 dollar , ($19 600. 00). [* 2] Amlicable Law as a result of concern that the stctued victize and quickly dissipatg The SSP A was enacted espeially prone to being their awards. settement payees are (In re Petition of being Settlement Funding of New York, LLC 761 NYS2d 816). " The SSP A protects payees from to acquie the payee s strctued settlement payment taen advantae of by businesses rights" and discurages such trfers by reuing special proceedings seeking judicial approval of a porton (Id Genera Obligations Law 95- 1705 and 5- 1706). A propose trfer of the trsfer. settlement for less th haf its present discounte value wa found not to be of payee (Id, A). in the payee s "best interest" , as requied by the Strtued Settement Protetion Act (SSP 1706(b)). The payee s willigness to trsfer the McKinney s Genera Obligatons Law settement "has no beng on the cour' s determtion of whether the interest rate paid by the Settlement Protection Act, tranfere is ' fair and reasonable ' withn the meanng of (SSPA). (Id) seki strtu Strtu General Obligations Law 95- 1703, disclosure: (a) the amounts and due dates of the effective July 1 , 2002 , provides the following required strctu settement payments to be trsfered; (b) the agegate amount of such payments; (c) the discounted present value of the payments to be trsfered , which shal be identified as the "calculation of curent value of the trferr stctud settement payments under federal stadas for valuing anuities , and the amount of the applicable federa rate used in caculatig such discunte preent value; (d) the price quote from the origin anuity issur, or, if such price quote is not readily available from the origial anuity issue, then a price quite frm two other anuity issuers tht reflects the curnt cost of purchasing a comparble. anuity for the aggate amount of payments to be tranfered; (e) the gross advance amount and the anua discunt rate, compounded monthy, used to determe such figue; (f) an itemzed listg of all commissions , fees , costs , expenses and chages payable by the payee or deductble from the gross amount otherse payable to the payee and the tota amount of such fees; (g) the net advance amount includig the sttement: " The net cash payment you receive in ths traction from the buyer wa deteed by applyig the speified discount rate to the amount of futue payments reeived by the buyer, less the tota amount of commissions, fees, costs, expeses and charges payable by you daes payable by the payee in the (h) the amount of any penaties or liquidated event of any breach of the trsfer agreeent by the payee; and (i) a stteent tht the payee ha. the right to cancel the tranfer agement, without the thd business day afr the date the penaty or fuer obligation, no later agreement is signed by the payee. th [* 3] e be interest of trfer must be. in General Obligations Law 95- 1706 provides that the ha ed m wntmg t seek en adV1 and the payee the payee , the trantion is fai and reanable, trsfer and has either received such adVlce, or independent professiona advice regarding(D)iscunted present value ' mean the present value of the ost recently knowingly waived such advice in wrtig. ''' g the futu payments, as detened by discunting such payments to the present usi as issued by the the present value of an anUlty, published applicable federa rat for deterning 1701(c)). " (General Obligations Law Revenue Servce. United States stctued settements SSP A is to protect recipients oflong-term Inte The pri purose of the rights to companes aggrssively seeking the acquisition of their Lugo setlement payments. detene, in its discretion, wheter "the transfer from being victiized by gutee 508). The Cour must independently 889 NYS2d strctued " (321 v. Henderson Receivables Origination, LLC acunt the welfare and support of the payee is in the best interest of the payee , tang into rate used to determine the gross dependents, and whether the transaction, includig the discount fair and to advance amount and fees and expenses YorA; LLC, supra, reasonable (emphais added. (In re Petition of Settlement Funding of New pronged test to be applied in evaluating us detee 1706(b )). "Ths citing General Obligatons Law the pares ' agment. " (321 the net advance amount, are is a two Hendrson Receivables Origination, LLC, supra). several deterination, at the Cour' s discreon, involves consideration of concern the payee, including the payee s age, menta caacity, matuty The best interest facts and circumstaces , and level abilty to show sufcient income tht is indepedent of the payments sought for trfer Henderson Receivables Origination, LLC, supra). abilty to provide for payee s dependents. (321 cae basis giving speific consideration to The best interest prong should be assessed on a case by level; abilty to show matty such factors as the payee s age; menta and physica capacity, trfer; capacity to provide for the th is independent of the payments sought for stted purse of the payee s depedents; the need for medica treatment; the financial terms and abilty of the payee to appriate the for the tranfer; and the (Whitny based upon indepndent legal and fiancial advice. consequences of the proposed Matter of Settlement Capital Corporation, 3375/2011 NYL June 24 , 2011; citig v. LM Property, sufcient income welfar and support (Ballos), deons trfer 1 Misc3d 446). The "best intest" consideration is separate and independent of the (In re Petition of Settlement Funding consideation of whether the transfer is "fai and reasnable medcal A Payee who despetely need cash to obtan " life of New YorA; LLC, supra). rasing money would treatment for a love one " in the fac of having no other altertive mea of (Id. The Cour found the life and death emergency susta serve a payee s best interest in the face of a " s best interest when the payee ha a depndent, without any vehicle were not inormaton concerng the putative father, and the request for fuds to purcha a Henderson Receivables Origination, LLC, supra). explaied. (321 trsfer was not in a 21 yea old payee determine stdad under SSPA requires a case by case analysis toto preserve strctu setlement payments, whch were designed without ficial rescue the injured person s long-term ficial securty, will provide neeed his or her The ' best interest' whether the proposed trfer of irbly impaing fiancial dependents by the jeoparzig or explanation as to taen into considertion. peodic payments. why the payee ba an securty aforded to the payee and 769 NYS2d 817). (In re Settlement Capital Corp., imedte need for the trfer (Whitney, supra, citing In re Settlement Capital Corp., of fuds, or lump sum, is 194 Misc2d 711). - --- - - -- - [* 4] unbias counsel in e manement A payee who had not " enjoyed the benefits of wise and indepedent prfessiOna, confrmed of her fiancial afais" and waived her right to consult with an the cour' s impression that the payee did not fully appriat (Whitney v. the consequences of her transfer. LM Property, supra). strctd setlement whch would result The proposed tranfer of the porton of the payee " was not fair and paying "less th haf of settement' prset discounte value in the (In re Petition of Settlement Funding of New Yor!; LLC, supra). required by SSPA. trfere sttud reasnable as settement of "no more As aleady provided, the interest rate paid for the trfer of does not chage counsel fees 8% would be fai and reaonable " under SSP A whereby the 1701(5)). citing Genera Obligations Law (Id, and costs to the payee as a trfer expens. trfer Discussion In the ca at bar, the proposed transfer involves the transfer of sixt- nie (69) monthy Febru 4, 2012 payments offour hundred and 00/100 dollars, ($400. 00), commencing on or about and ending on or about November 4 2017. The aggate amount of payments sold to Maurello is 200. 00), at a discunte present value th-seven thousd two hundred and 00/100 dollar, ($37, 289. 87), with a net payment of thrt-five thousand two hundrd th-nie and 87/100 dollar, ($35, dollar, ($19, 600. 00). to the payee, of nineteen thousand six hundred and 00/100 600. 00), with Here, the payment of nineten thousd six hundr and 00/100 dollar, ($19, an anua discount rate of 19. 87% per year, is excessive and not "fai and reanable trfer is in the The secnd prong of ths test requies ths Cour to determe whether the needs payee s " best interest" . Maurello, aver tht she is sine, ha no chidren, is unemploye and five nie thousand to pay two thousand one hundr and 00/100 dollars, ($2, 100. 00), condo fees, home improvement. hundr and 00/100 dollar, ($9,500. 00), for bils, and the reminder for submissions. However, Maurllo , does not provide any documentation to substtiate her Maurello ha previously trferd portons of her stctued settlement on or about Janua 00/100 dollar, , 2008 , wherby Maurllo tranferr monthy portons of six hundrd and includig ($600. 00), monthly payments commencing Novembe 4 , 2007 and contiuig thoug and nietOctober 4 , 2017, and one lump su payment of one hundred twelve thousand one hundred concerned with two and 20/100 dollars, ($112, 192. 20), due on November 4, 2018. Ths Cour is these Maurllo s decision to wave indepndent professiona advice regardig ths trsation under circumstces. This Cour is not satisfied that Maurllo fuly appreiates the consequences of the proposed trantion. -4- [* 5] Conclusion In light of the foregoing, as the proposed trfer of a porton of the payee s rights and settlement does not meet the "best reuirement, or the "fai and interests in his reasonable reuiment" under SSP A, the motion is denied and th petition is dismissed. stctu inte" lS. Date: Janua 24 2012 cc: Lum, Draco & Posita LLC Lisa Maurllo Drier, Biddle & Reath, Esqs. ENTERED FEB 02 2012 NASSAU COUNTY COUNTY CLERK' S OFFICE