Matter of J.G. Wentworth Originations, LLC v Maurello
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Matter of J.G. Wentworth Originations, LLC v
2012 NY Slip Op 30373(U)
January 24, 2012
Supreme Court, Nassau County
Docket Number: 17041/11
Judge: Thomas Feinman
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SHORT FORM ORDER
SUPREME COURT - STATE OF NEW YORK
COUNTY OF NASSAU
Hon. Thomas Feinman
In the Matter of the Petition of
G. WENTWORTH ORIGINATIONS, LLC,
f/a 321 HENDERSON RECEIVABLES
ORIGINATION , LLC
INDEX NO. 17041/11
x X X
- and -
USA MAURLLO and CONTThNT
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..........................................
The petitioner initiates ths
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).
as a result of concern that the stctued
victize and quickly dissipatg
The SSP A was enacted
espeially prone to being
settement payees are
(In re Petition of
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
(Id Genera Obligations Law
95- 1705 and 5- 1706). A propose trfer of
settlement for less th haf its present discounte value wa found not to be
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
General Obligations Law 95- 1703,
(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
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.
e be interest of
trfer must be. in
General Obligations Law 95- 1706 provides that the ha
ed m wntmg t seek
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
knowingly waived such advice in wrtig. '''
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
" (General Obligations Law
SSP A is to protect recipients oflong-term
purose of the
companes aggrssively seeking the acquisition of their Lugo
detene, in its discretion, wheter "the transfer
from being victiized by
gutee 508). The Cour must independently
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
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
1706(b )). "Ths
citing General Obligatons Law
the pares ' agment. " (321
the net advance amount, are
is a two
Hendrson Receivables Origination, LLC, supra).
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
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
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
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
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,
welfar and support
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
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
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).
trsfer was not
in a 21 yea
stdad under SSPA requires a case by case analysis toto preserve
strctu setlement payments, whch were designed without
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
explanation as to
taen into considertion.
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.,
fuds, or lump sum, is
194 Misc2d 711).
- --- -
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
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 re Petition of Settlement Funding of New Yor!; LLC, supra).
required by SSPA.
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
citing Genera Obligations Law
and costs to the payee as a trfer expens.
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
payee s " best interest" . Maurello, aver tht she is sine, ha no chidren, is unemploye and five
to pay two thousand one hundr and 00/100 dollars, ($2, 100. 00), condo fees,
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
, 2008 , wherby Maurllo tranferr monthy portons of six hundrd and
($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
two and 20/100 dollars, ($112, 192. 20), due on November 4, 2018. Ths Cour is
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
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.
Date: Janua 24 2012
cc: Lum, Draco & Posita LLC
Drier, Biddle & Reath, Esqs.
FEB 02 2012
COUNTY CLERK' S OFFICE