Matter of Fortress Funding NY LLC v Lanier-Montez
Annotate this CaseDecided on July 13, 2012
Supreme Court, Bronx County
In the Matter of the Petition of Fortress Funding NY, LLC, Petitioner
against
Marisol Lanier-Montez, Metropolitan Group Property and Casualty Insurance Company and Metropolitan Life Insurance Company, Respondent.
20635/2012E
Attorney for Petitioner: Matthew B. Kogan, Esq.
Alexander W. Hunter Jr., J.
The application by petitioner by order to show cause for an order seeking approval of the transfer of certain structured settlement payment rights of Marisol Lanier-Montez to petitioner, is denied.
Respondent Marisol Lanier-Montez is the recipient of certain structured settlement payment rights. The details of the underlying action which led to the structured settlement payment rights were not disclosed to this court in the petition nor were the terms of the structured settlement disclosed. Petitioner merely submits a document from Metropolitan Life Insurance Company, the annuity issuer, indicating that respondent is entitled to guaranteed monthly payments of $1,100.00 through and including August 11, 2034. (Exhibit A).
Respondent seeks to transfer to petitioner her right to receive eighty-five (85) monthly payments each in the amount of $1,100.00 commencing on December 11, 2017 through and including December 11, 2024. According to the disclosure statement annexed to the petition as Exhibit D, the aggregate amount of payments to be transferred to petitioner is $93,500.00. The discounted present value of the payments to be transferred is $82,234.13. The discount rate applied to this transaction is 1.40% and the annual discount rate, compounded monthly, used to determine the gross advance amount is 8.50%. The gross advance amount payable to respondent Lanier-Montez is $44,500.00. No fees, costs, expenses or charges are payable by respondent.
Pursuant to General Obligations Law §5-1706, the court must make the following findings before a transfer can be effectuated. These are that: "(a) the transfer complies with the [*2]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 dependants; 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 or other government authority; and (e) is written in plain language and in compliance with section 5-702 of this article."
The two most important components of the SSPA are whether or not the transaction, including the discount rate and the amount of fees and expenses, is fair and reasonable and whether the transaction is in the best interest of the payee. The trial courts have ruled on what is determined to be fair and reasonable and whether the transfer is in the best interest of the payee on a case by case basis viewing the totality of the circumstances. Matter of Settlement Capital Corp. v. Yates, 12 Misc 3d 1198(A) [2006].
Respondent submits an affidavit wherein she asserts that she is married and has one child that lives with her and her husband. She states that her oldest son has been attending college for the past two years and she would like to pay for his third year of college at a cost of $17,000.00. She also avers that she owes Con Edison utility bills in the amount of $1,500.00. Additionally, she and her husband "plan on starting a taxi cab service, we need to purchase a taxi cabs, [sic] register fees and a license for the vehicle." (Exhibit B). Respondent claims that she does not have the funds at this time for the foregoing and that is why she is pursuing the instant transaction.
Respondent appeared in court on the return date of the order to show cause which was June 26, 2012. The application was adjourned to July 3, 2012 for respondent to provide the court with documentation as to her Con Edison arrears, her son's tuition bill and information with respect to the taxi business. Moreover, respondent disclosed that a previous request to transfer structured settlement payment rights was made by her and petitioner was directed to provide this court with information as to that transfer. Petitioner subsequently provided this court with additional documentation which included a printout from "eCourts" indicating that respondent filed a previous application for the transfer of structured settlement payment rights on or about September 7, 2011 but same was withdrawn on February 10, 2012.
Respondent also submitted a copy of a Con Edison bill indicating that the outstanding amount owed as of May 15, 2012, was $313.17. Respondent further submitted a blank application from the New York City Taxi & Limousine Commission listing the fee for a license for one year of $84.00, a fingerprinting fee of $75.00 and a drug test fee (for yellow taxicab and FHV only) of $26.00. Respondent also submitted a document from Great Lakes Educational [*3]Loan Services, Inc., addressed to her husband, Freddie Lanier, dated January 27, 2011 indicating a balance on a Parent PLUS Loan to be $3,254.22. A document submitted from the Federal Direct Loan Program dated February 3, 2011 lists a summary of loans as $10,112.74. Finally, respondent submits a handwritten letter dated June 28, 2012 stating that she is past due on her rent and owes $3,227.00.
The application for the approval of the transfer of respondent's structured settlement payment rights is denied. First, the additional documentation submitted by respondent does not support her affidavit in that she did not provide this court with a Con Edison bill that shows she owes $1,500.00 and that her electricity will be shut off if she does not pay. Moreover, the documentation submitted to this court with respect to her son's tuition payments do not indicate the amount of the tuition nor do they indicate that he is enrolled in college for a third year. Her affidavit does not state that she is seeking to pay rental arrears with the money she receives from the transfer. However, she submits a handwritten letter stating that she owes rental arrears. Additionally, counsel for petitioner indicates that respondent has a 10 year-old dependent son and her affidavit does not indicate how she currently supports herself and her son and how she will continue to do so once she transfers her structured settlement payments.
More troubling to this court is the fact that, notwithstanding respondent's representation that she only made one previous application to transfer structured settlement payment rights and subsequently withdrew it, other requests for transfers were made. The document from Metropolitan Life Insurance Company attached to the petition as Exhibit A, states the amounts of the remaining payments to which respondent is entitled. Said document also discloses as follows: "It is important to note, payments have been assigned by court orders to Woodbridge Investments and Stone Street Capital. Please contact them if you have questions regarding the assigned payments. These amounts are not included in the above listed benefits currently available to you." (Exhibit A). After reading that statement, it became apparent to this court that other requests for transfers were previously made.
Importantly, a request to transfer monthly structured settlement payment rights was made by respondent in 2009 in a matter entitled "In the Matter of the application of RSL Funding, LLC, For approval of a transfer of a Structured Settlement Payment Right of Marisol Lanier to RSL Funding, LLC" Index number: 260133/09. In that application, respondent sought to transfer payments in the amount of $1,100.00 beginning on August 13, 2009 through and including January 13, 2018 for a total of $50,000.00. That application was denied in a decision and order of Hon. Kenneth L. Thompson dated June 26, 2009. In that order, the court explicitly stated that the transfer of said structured settlement payment rights was not in respondent's best interest as she will be receiving a lump sum payment of one million dollars ($1,000,000.00) on August 13, 2009 pursuant to the terms of the structured settlement. Respondent failed to disclose to this court that she made that application in 2009 for the transfer of structured settlement payment rights and she failed to disclose that she received a lump sum payment pursuant to the terms of her structured settlement in the amount of one million dollars. Respondent does not disclose what she did with that money and why she would need to transfer $44,500.00 to pay tuition and [*4]bills and commence a taxicab business a mere three (3) years after receiving a lump sum payment of one million dollars.
Accordingly, petitioner's request to transfer her structured settlement payment rights in exchange for $44,500.00 is denied.
A copy of this decision and order shall be attached to any future applications by Ms. Lanier-Montez to transfer her structured settlement funds.
This constitutes the decision and order of this court.
Dated: July 13, 2012
J.S.C.
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