Petitioner 321 Henderson Receivables Origination, LLC is seeking approval of a transfer of structured settlement payment rights from respondent AW, payee of periodic payments to be made or guaranteed by Metropolitan Life Insurance Company and Metropolitan Tower Life Insurance Company a/k/a MetLife Tower Resource Group, Inc. Only Petitioner and AW have appeared on the Petition.
With an Infants Compromise Order For A Structured Settlement dated January 12, 2005, Hon. Paul A. Victor, Supreme Court, Bronx County, approved settlement of Mr. AW’s action for damages for personal injury, namely, lead paint poisoning, commenced on his behalf by his mother and natural guardian, SW, against the City of New York. Of the $650,000 to be paid by the City, $216,666.66 would be paid to the plaintiffs’ counsel for their fee, $13,333.34 would be deposited in a bank account, and the balance of $420,000 would be used for the purchase of the structured settlement annuity that is the subject of this proceeding. As described in the Order, the annuity would provide, future periodic payments; all of which total $2,478,349.50 based on Mr. AW’s normal life expectancy of 79.75 years; which said sum shall include guaranteed payments which total $689, 653.23 in the event that plaintiff does not survive to full life expectancy.
Petitioner proposes to acquire guaranteed periodic payments totaling $292,464.87, representing monthly payments of $1,281.57 each, increasing at 3% annually, beginning January 1, 2008 and ending December 1, 2022. After payment of a compliance and administrative fee of $750 and a filing and related expenses fee of $1,500, Mr. AW would receive $95,500. The amount to be paid would represent 48.40% of the discounted present value, i.e., $197,303.34, and an effective annual discount rate of 18.15%.
Mr. AW is now 20 years old, single, with no children. He does not hold regular, full-time employment, but earns $ 15,000 annually from miscellaneous jobs, such as landscaping and maintenance. He plans to use the proceeds of the transfer to purchase a building in which he will live and to open a pizza shop. No details are provided as to either of these intended purchases.
Mr. AW states that he has procured independent professional advice regarding the proposed transfer; evidenced by a letter to Petitioner from attorney SRC, Esq. Counsel states that he has met with Mr. AW, and is satisfied that Mr. AW understands the personal injury nature and terms of such transaction.
The Structured Settlement Protection Act requires judicial approval of a transfer of structured settlement payment rights. For present purposes, a transfer may be authorized only upon express findings, among other things, that: 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.
The statute assumes that the payee’s decision, even if freely entered into, is not always one a reasonable person might make, and the court is in effect asked to protect an individual from himself or herself.
There is, as yet, no appellate authority applying the Act. Lower courts are in agreement, however, that the best interest standard is to be applied on a case-by-case basis with attention to several factors: the payee’s physical age and level of maturity, and physical and mental capacity; the payee’s ability to earn a living and to provide for his or her dependants; the payee’s intended use of the proceeds of the transfer; the need for medical or other professional treatment; whether the payee is suffering from a hardship; whether the payee has obtained independent legal and financial advice about the consequences of the transfer, and whether he or she demonstrates an appreciation of them.
To Be Cont….
If you know someone in a similar situation above, contact Stephen Bilkis and Associates. Our Bronx County Personal Injury Lawyers are successful in handling cases involving claims arising from accidents and similar incidents. Also, for medical malpractice claims, our Bronx County Medical Malpractice Attorneys can assist you. Contact us at our legal offices located around New York for free legal consultation.