Matter of J.G. Wentworth Originations LLC v Du Jour
Annotate this CaseDecided on April 27, 2012
Supreme Court, Queens County
In the Matter of J.G. Wentworth Originations, LLC, etc., Petitioner,
against
Christlyne Point Du Jour, et al., Interested Parties.
24149/2011
For the Petitioner: Lum, Drasco & Positan, LLC, by Michael F. Nestor, Esq., 325 Broadway, New York, NY 10007
Charles J. Markey, J.
The following papers numbered 1 to 9 read on this petition by petitioner for approval of the transfer of certain structured settlement payment rights to it from Christlyne B. Point Du Jour ("Point Du Jour").
Papers Numbered
Order to Show Cause - Affidavits - Exhibits ....................................... 1 - 9
Petitioner commenced this special proceeding pursuant to General Obligations Law, Title 17, known as the Structured Settlement Protection Act ("SSPA"), for approval of the transfer of certain structured settlement payment rights to it from Christlyne B. Point Du Jour ("Point Du Jour").
The SSPA requires that certain procedural and substantive safeguards be followed before a structured settlement payment may be transferred (General Obligations Law § 5-1705). Specifically, the procedure mandates that a copy of a disclosure statement, as required under General Obligations Law section 5-1703, be attached to the [*2]petition and that proof of service upon the payee be provided (id.). Additionally, pursuant to General Obligations Law section 5-1706:
"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:
(a) the transfer complies with the requirements of this title;
(b) the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's depend[e]nts; 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. Provided the court makes the findings as outlined in this subdivision, there is no requirement for the court to find that an applicant is suffering from a hardship to approve the transfer of structured settlement payments under this subdivision;
(c) the payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received such advice or knowingly waived such advice in writing;
(d) the transfer does not contravene any applicable statute or the order of any court of other government authority; and
(e) is written in plain language and in compliance with section 5-702 of this article."
In the case at bar, a careful review of the submissions accompanying the petition demonstrates that the application complies with the procedural mandates of General Obligations Law sections 5-1703 and 5-1706(a), (c), (d), and (e). Having satisfied the procedural requirements of the SSPA, the Court must determine, pursuant to General Obligations Law section 5-1706(b), whether the proposed transfer is in the best interests of the payee and whether the transaction is fair and reasonable.
Pursuant to the terms of the structured settlement agreement, Point Du Jour became the recipient of certain structured settlement payment rights which provided for a series of deferred cash payments as follows: 12 monthly payments of $394.09, beginning on September 2, 2011 and ending on August 2, 2012; 12 monthly payments of $405.92, beginning on September 2, 2012 and ending on August 2, 2013; 12 monthly payments of [*3]$418.10, beginning on September 2, 2013 and ending on August 2, 2014; 12 monthly payments of $430.64, beginning on September 2, 2014 and ending on August 2, 2015; 12 monthly payments of $443.56, beginning on September 2, 2015 and ending on August 2, 2016; 12 monthly payments of $456.86, beginning on September 2, 2016, and ending on August 2, 2017; 12 monthly payments of $470.57, beginning on September 2, 2017 and ending on August 2, 2018; 12 monthly payments of $484.68, beginning on September 2, 2018 and ending on August 2, 2019; 12 monthly payments of $499.22, beginning on September 2, 2019 and ending on August 2, 2020; 12 monthly payments of $514.20, beginning on September 2, 2020 and ending on August 2, 2021; 12 monthly payments of $529.63, beginning on September 2, 2021 and ending on August 2, 2022; 12 monthly payments of $545.52, beginning on September 2, 2022 and ending on August 2, 2023; 12 monthly payments of $561.88, beginning on September 2, 2023 and ending on August 2, 2024; and three monthly payments of $578.74, beginning on September 2, 2024 and ending on November 2, 2024.
In return for selling her right to receive these payments, Point Du Jour will receive immediate compensation in the gross amount of $31,000.00. In this proposed transfer, the aggregate amount of the structured settlement payments to be transferred is $75,594.66. The discounted present value of the payments to be transferred is $62,199.87 (using the applicable federal rate of 2.80%). The net advance amount is $31,000.00, which, according to the "New York Transfer Disclosure" submitted in support of the petition, represents an annual discount rate of 15.38% assuming monthly compounding.
This Court finds that the petitioner, upon the foregoing papers, has failed to meet its burden of establishing that the transaction is in Ms. Point Du Jour's best interests (see, Settlement Funding of New York, LLC v Hartford-Comprehensive Empl. Ben. Serv. Co., 25 Misc 3d 1220(A), 2009 WL 3630802, 2009 NY Slip Op 52201[U] [Sup Ct Queens County 2009] [decision by the undersigned]; Matter of 321 Henderson Receivables Origination LLC [Logan], 19 Misc 3d 504 [Sup Ct Queens County 2008] [decision by the undersigned]). The foregoing two cited decisions by the undersigned, were discussed in the undersigned's recent decision in In re Settlement Funding of New York, LLC [Point du Jour], 29 Misc 3d 1230(A), 2010 WL 4942828, 2010 NY Slip Op 52102(U) [Sup Ct Queens County 2010], an action also involving Point du Jour.
On or about April 5, 2010, Point Du Jour sold nine monthly payments of $400.00 commencing on December 2, 2009 through August 2, 2010, and 171 monthly payments of $412.00 commencing on September 2, 2010 through November 2, 2024, in exchange for $34,030.54. The reasons given by Point Du Jour for that transfer were to purchase a home in Freeport, New York, pay credit card debt and school expenses, and
purchase furniture. These plans may not have been accomplished because, later that year, [*4]Point Du Jour also sought to transfer, in exchange for $30,396.72, eight monthly payments in the amount of $382.61 each, commencing on January 2, 2011 through and including August 2, 2011, and 171 monthly payments in the amount of $394.09 each, commencing on September 2, 2011, and increasing 3% every 12 payments through and including November 2, 2025.
When that sale was brought before this Court for approval, which was denied (In re Settlement Funding of New York, LLC [Point du Jour], 29 Misc 3d 1230(A), 2010 WL 4942828, 2010 NY Slip Op 52102(U), supra), Point Du Jour claimed that she wanted to purchase a home in Lawrenceville, Georgia. Less than one year later, Point Du Jour is once again before this Court seeking approval of yet another transfer of her structured settlement payment rights for different reasons.
In her affidavit, Point Du Jour, who is 22 years old, single, has no dependents, and currently resides with her parents, averred that, from the lump sum payment she would receive, it is her intention to use $20,000.00 for tuition and expenses for graduate school and the remainder of the payment would be spent on rent, utilities, and living expenses while attending graduate school.
Point Du Jour, however, has not demonstrated that she has secured entry into graduate school or rented an apartment. Additionally, in her supplemental affidavit, Point Du Jour informed the Court that she is now looking to purchase a home in Far Rockaway, in Queens County, New York, which her real estate agent indicated will result in a down payment and closing costs exceeding $20,000.00. Point Du Jour, nevertheless, also stated that she is near default on her undergraduate loans as she has a past due amount of $13,673.00. Although Point Du Jour indicated that she is currently employed by South Nassau County Hospital as a medical receptionist, she did not explain why her yearly income of approximately $20,000.00 ($272.08 per week) and future annuity payments would be inadequate to help meet her stated goals or to make payments on her student loan debt.
Under these circumstances, the Court is concerned and troubled that Point Du Jour elected not to consult with an independent professional advisor regarding the transaction. Despite the fact that Point Du Jour intends to improve her current living conditions by paying off her debt, attending graduate school, and purchasing a home, her plans would leave her in a position whereby she would be incapable of financially handling the enormous responsibility of being a homeowner. Although the Court certainly encourages a vision of Point Du Jour's desire to procure a successful future, approval of this proposed transfer would compromise Point Du Jour's future financial security. Given the failure to demonstrate a maturity in making financial decisions, this court is not persuaded that [*5]Point Du Jour fully appreciates the financial consequences of the proposed transfer.
Petitioner, furthermore, has not demonstrated that the 15.38% discount rate applied against the funds sought to be transferred is fair and reasonable within the meaning of the SSPA (see, In re Settlement Funding of New York, LLC [Rahman], 31 Misc 3d 1229(A), 2011 WL 1901867, 2011 NY Slip Op 50896(U) [Sup Ct Queens County 2011] [decision by the undersigned]; Settlement Funding of New York, LLC, 25 Misc 3d 1220(A), 2009 WL 3630802, slip op. at 3, supra [14.99% discount rate not accepted as fair and reasonable]; Matter of Settlement Capital Corp. [Ballos], 1 Misc 3d 446 [Sup Ct Queens County 2003] [15.591% discount rate not accepted as fair and reasonable]; Matter of Settlement Funding of NY [Cunningham], 195 Misc 2d 721 [Sup Ct, Rensselaer County 2003] [15.46% discount rate not accepted as fair and reasonable]).
Accordingly, the petition for approval of the transfer of certain structured settlement rights is denied in its entirety.
Dated:April 27, 2012
J.S.C.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
