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Plaintiff Files for Structured Settlement, New York Appellate Court Finds for Defendant


Petitioner, who is an investment company, filed for the transfer of a structured settlement in its favor pursuant to a personal injury suit filed against by a private victim. The victim suffered injuries due to a motor vehicle accident where his motorcycle hit a pothole on an expressway at Bronx. The victim filed the case against the developer of the expressway structure. After almost nine years since the incident, the case filed by the victim resulted to a settlement agreement and it contained an annuity to be funded with fixed monthly payments for 120 months, which was assigned to an insurance company. The court noted that the personal injuries sustained by the victim were of serious nature which requires serious and extensive medical treatments.

The victim proposed to sell his personal injury structured settlements with a proposed purchase price of $111,552 wherein the total amount of transfers was $174,000. The reasons behind the intention of the victim in selling his structure were due to his plans of converting his family home into two income properties, to pay his outstanding balance from his credit card and to avoid an impending foreclosure of his property.

The duty of the court is to protect the victim from abuses of the sale of his structure by finance companies, like the petitioner, which would purchase them at sharply discounted advances and the court must also determine whether the structured agreement conformed to the minimum requirements of the law. As decided in one Supreme Court case, “before the Court can approve an otherwise procedurally conforming transfer application, the Court must determine that: the transfer is in the best interest of the payee, taking into account the welfare and support of the payee’s dependents; and whether the transaction, including the discount rate used to determine the gross amount and the fees and expenses used to determine the net advance amount, are fair and reasonable.”

In the petition, the court failed to find a report from the petitioner an affirmation report of a financial consultant that could establish the fairness and reasonableness of the subject transfer. There was no analysis coming from an expert that could provide information as to how the finance company could arrive at the selected discount rate for the sale. There was no indication as to whether in arriving at the discount rate the expert considered it reasonable as compared with the prevailing rate or put into account the victim’s credit worthiness. Thus, the lack of such evidence failed to comply with the statutory finding as required by the statute.

The court looked into the several tax returns of the personal injury victim and found them extremely troubling. It showed that the latter was a high stake gambler and the court concluded that his gambling was already considered an addiction that caused his failure to pay his mortgage loans.

The court also considered the reasons of the victim why he wanted the proposed transfer and found them not viable to grant the selling of his structure since his mortgaged loans are protected by foreclosure prevention programs being handled by the government.

Upon full consideration of the several undergoing factors presented and taking into account the best interest of the personal injury victim, the court decided to go against the sale of the structured settlement. The petitioner failed to show any evidence as to the viability of the reasons presented by the victim and, accordingly, the court found that the petitioner was not able to meet the standards set forth by the statute to constitute the terms of the proposed transfer as fair and reasonable and that it was made for the best interest of the personal injury victim.

Personal injury victims have several viable options available to the as provided by laws and statutes, thus, legal opinion of injury lawyers are necessary in coming up with the best possible option one could avail in this case. Hire any of our personal injury attorneys at Stephen Bilkis and Associate who could provide you with information and orient you about the many options you could choose from given your situation as a personal injury victim.

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