Motion to Approve or Confirm Settlement in In Re: Gabriel Martinez| Trellis.Law

On September 08, 2020 a Complaint,Petition was filed involving a dispute between Allstate Settlement Corporation, and for 43 Unlimited - Other Petition (not specified) in the District Court of Fresno County.

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Andrew M. Hutchison (SBN 289315)
COZEN O’ CONNOR E-FILED
So
101 ontgomeny St., Suite 1400 9/17/2020 11:05 AM
‘A 94104 Superior Court of California
Tel: (415) 593-9625 County of Fresno
Fax: (415) 644-0978 By: A. Ramos, Deputy
Email: ahutchison@cozen.com

Atto for Petitioner
ALLSTATE SETTLEMENT CORPORATION

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF FRESNO
10

11 IN RE GABRIEL MARTINEZ. Case No. 20CECG02625
APPROVAL FOR TRANSFER OF
12 STRUCTURED SETTLEMENT PAYMENT VERIFIED UNCONTESTED AMENDED
RIGHTS BY AND BETWEEN GABRIEL PETITION FOR APPROVAL OF
13 MARTINEZ, TRANSFEROR, AND TRANSFER OF STRUCTURED
ALLSTATE SETTLEMENT SETTLEMENT PAYMENT RIGHTS BY
14 CORPORATION, TRANSFEREE AND BETWEEN GABRIEL MARTINEZ,
TRANSFEROR, AND ALLSTATE
15 SETTLEMENT CORPORATION,
TRANSFEREE, PURSUANT TO
16 CALIFORNIA INSURANCE CODE
§ 101Aet seq.
17

28
1
‘VERIFIED UNCONTESTED PETITION FOR APPROVAL OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BY AND BETWEEN
GABRIEL MARTINEZ. TRANSFEROR, AND ALLSTATE SETTLEMENT CORPORATION, TRANSFEREE, PURSUANT'TO CAL. INS. CODE§ 10134 ET SEQ.
LEGAL\48338108\1
By and through its undersigned counsel, Allstate Settlement Corporation (“Allstate

Settlement”) hereby petitions this Court
for approval of a transfer of structured settlement payment

Tights between Gabriel Martinez a/k/a Gabriel Elias Martinez a/k/a Gabriel E. Martinez (“Payee”)

and Allstate Settlement, pursuant to the Califomia Structured Settlement Protection Act,

Califomia Insurance Code §§ 10134 et seq. (the “Act”), a copy of which is attached hereto as

Exhibit “A.” In support of this Petition, Allstate Settlement avers as follows:

BACKGROUND

1 On or about November 12, 2008, the guardian ad litem of Payee, then a minor,

entered into a confidential Settlement Agreement and Release (the “Settlement Agreement”) on
10 Payee's behalf with a liability insurer (“Liability Insurer”) in connection with the resolution of a
11 certain daim.!

12 2. The Settlement Agreement provided for the disbursal of certain periodic payments
13 (the “Periodic Payments”) to Payee, including one (1) lump sum payment of $27,500.00 due on

14 June 30, 2025.

15 3, On or about August 23, 2007, the Settlement Agreement was approved this Court.
16 See Order Approving Compromise of Disputed Claim, a true and correct redacted copy of which is
17 attached hereto as Exhibit “B.”
18 4. As contemplated
in the Settlement Agreement, pursuant
to a Uniform Qualified
19 Assignment, Liability Insurer assigned to Allstate Assignment Company (“Allstate Assignment”)
20 the obligation to provide the Periodic Payments to Payee. See Uniform Qualified Assignment, a
21 true and correct redacted copy of which is attached hereto as Exhibit “C.”

22 5, Allstate Assignment purchased annuity contract xxxxxx732A (the “Annuity”) from
23 Allstate Life Insurance Company (“Allstate Life”) to fund its obligation to make the Periodic
24 Payments
to Payee. See Annuity, a true and correct redacted copy of which is attached hereto as
25 Exhibit “D.”
26

27
1
The Settlement Agreement contains a confidentiality provision and therefore is not attached. At the Court’s
28 request, the Settlement Agreement can be provided for in camera review.

‘VERIFIED UNCONTESTED PETITION FOR APPROVAL OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BY AND BETWEEN
GABRIEL MARTINEZ. TRANSFEROR, AND ALLSTATE SETTLEMENT CORPORATION, TRANSFEREE, PURSUANT'TO CAL. INS. CODE § 10134 ET SEQ.
LEGAL\48338108\1
6. On or about August 10, 2020, Payee entered into a Funding Exchange Agreement

(the “Agreement”) with Allstate Settlement, under which Payee is to receive certain funds from

Allstate Settlement in exchange for waiving and alienating the right to receive the following

Periodic Payment: one (1) lump sum payment of $27,500.00 due on June 30, 2025 (the

“Transferred Payment”). See Agreement, a redacted copy of which is attached hereto as Exhibit
oR

7, The transfer of structured settlement payment rights described in this Petition, and

as set forth in the Agreement (the “Proposed Transfer”), will not be opposed by Allstate

Assignment or Allstate Life.
10 DISCLOSURE REQUIREMENTS
11 8. Pursuant to Section 10136(b) of the Act, Allstate Settlement has provided to Payee,

12 at least ten days prior to Payee’s execution of the Agreement, a separate written disclosure
13 statement. See Disclosure Statement, a redacted copy of which is attached as Exhibit “F.” The

14 Disclosure Statement is in at least 12-point font, is in substantially the form provided by the Act,

15 and includes
all of the following
terms and statements, as required
by the Acct:
16 A The aggregate amount of the Transferred Payment ($27,500.00) and the gross
17 purchase price ($18,070.04).

18 B. The discounted present value of the Transferred Payment ($26,694.21) and the

19 discount rate of 0.60% utilized by the Intemal Revenue Service to value the Transferred Payment.

20 C. The discount rate utilized by Allstate Settlement to calculate the gross purchase
21 pice (8.5%).
22 D. The effective annual interest rate of the Proposed Transfer (8.5%).

23 E A statement advising Payee to seek independent legal or financial advice regarding
24 the Proposed Transfer and that Allstate Settlement will pay for such independent
legal or financial
25 advice, up to one thousand five hundred dollars ($1,500.00).

26 EF A statement advising Payee that Payee may cancel the Proposed Transfer, without
27 any cost or obligation, at any time before this Court approves the Agreement.
28
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‘VERIFIED UNCONTESTED PETITION FOR APPROVAL OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BY AND BETWEEN
GABRIEL MARTINEZ. TRANSFEROR, AND ALLSTATE SETTLEMENT CORPORATION, TRANSFEREE, PURSUANT'TO CAL. INS. CODE § 10134 ET SEQ.
LEGAL\48338108\1
THE AGREEMENT

9, Pursuant to Section 10136(c) of the Act, the Agreement is in at least 12-point type

and clearly and conspicuously sets forth all of the following:

A A statement that the Agreement is not effective until the date on which a court

enters a final order approving the Agreement and that payment to Payee pursuant to the

Agreement will be delayed up to 30 days or more after the date Payee signed the Agreement in

order for the courtto review and approve the Agreement.

B. The amount and due date of the Transferred Payment: one (1) lump
sum payment

of $27,500.00 due on June 30, 2025.

10 C. The aggregate amount of the Transferred Payment: $27,500.00.
11 D. The aggregate amount of all expenses, if any, to be deducted from the purchase
12 Price to be paid to Payee in exchange for the Transferred Payment, and an itemization
of all
13 expenses
by type and amount: No commissions, fees, costs, expenses, or charges will be paid by
14 Payee.
15 E The amount payable to Payee, net of all expenses, in exchange
for the Transferred
16 Payment: The estimated net payment amount will be no less than $18,070.04, and the final
net

17 Payment amount will be determined at the conclusion of the matter.

18 EF The discounted present value of all Transferred Payment ($26,694.21) and a

19 statement that “This is the value of your structured settlement in current dollars.”
20 G The federal rate used in determining the discounted present value: 0.60%.
21 H The effective equivalent interest rate, which shall be disclosed in the following
22 statement:
YOU WILL BE PAYING THE EQUIVALENT OF AN INTEREST RATE
23
OF 8.5% PER YEAR.
24
Based on the net amount that you will receive from us and the amounts and
25 timing of the structured settlement payments that you are transferring to us,
if the transferred structured settlement payments were installment payments
26 on a loan, with each payment applied first to accrued unpaid interest and
then to principal, it would be as if you were paying interest to us of 8.5%
27 per year, assuming funding on the effective date of transfer.
28
4
‘VERIFIED UNCONTESTED PETITION FOR APPROVAL OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BY AND BETWEEN
GABRIEL MARTINEZ. TRANSFEROR, AND ALLSTATE SETTLEMENT CORPORATION, TRANSFEREE, PURSUANT'TO CAL. INS. CODE § 10134 ET SEQ.
LEGAL\48338108\1
I The quotient (expressed
as a percentage) obtained by dividing
the net payment

amount by the discounted present value of the payments: 68%.

J A statement that the payee should obtain independent professional advice regarding

any federal and state income tax consequences arising from the proposed transfer, and that the

transferee may not refer
the payee to any specific adviser
for that purpose. See A ffirmation/Waiver

of Independent Professional Advice, a redacted copy of which is attached as Exhibit “G.”

K. A statement that the court approving the transfer agreement retains continuing

jutisdiction to interpret and monitor implementation of the agreement as justice may require.

L. The following statement printed in 14-point type, circumscribed
by a box with a
10 bold border, and set forth immediately above or adjacent to the space reserved for the payee's
11 signature: “You have the right to cancel this Agreement without any cost or obligation until the
12 date the court approves this Agreement. You will receive notice of the court hearing date when

13 approval may occur. You must cancel in writing and send your cancellation
to: Allstate Advanced
14 Funding Exchange Unit, Allstate Settlement Corporation, 3075 Sanders Road, Suite I1W,

15 Northbrook, IL 60062.”

16 REQUIREMENTS OF THIS PETITION
17 10. Pursuant to Section 10139.5(c) of the Act, every petition for approval of a transfer
18 of structured settlement payment rights shall include, to the extent known after the transferee has

19 made reasonable inquiry with the payee, all of the following:
20 A The payee’
s name, address, and age:

21 Gabriel Martinez, age 20
7030 N. Thome Avenue #102
22 Fresno, CA 93702?
23 See Declaration of Gabriel Martinez, a redacted copy of which is attached hereto as

24 Exhibit “7.”
25 B. Payee is single (never mamied). See id.
26

27 2 After signing the Transfer Agreement and Declaration, Payee obtained a new address. Payee's prior and
current address are both located in Fresno County, Califomia. Thus, pursuant to Ins. Code Sections 10136 and.
28 10139.5(f)(1), jurisdiction and venue are proper
in this Court because Payee resides in Fresno County, Califomia.

D. Payee will use any funds Payee receives in the event this transaction is approved to

rent an apartment, buy fumiture,
and purchase acar. Payee recently moved out of his parents’

home and will use a portion of these funds to pay for a security deposit on an apartment, as well as

buy fumiture
for this apartment. Payee will use any remaining funds to purchase a reliable used.

vehicle in order
to travel to and from work. The funds from this transaction will enable Payee to

find
a place to live and create
a more stable life for himself. See id.

E Payee is not obligated under any child support or spousal order. See id.

EF Payee has not previously filed a petition seeking the same relief sought with this
10 transaction. Payee has never filed a petition to transfer any of the Periodic Payments. See id.
11 NOTICE REQUIREMENTS
12 11. Section 10139.5(£)(2) of the Act requires that, not less than 20 days prior to the

13 scheduled hearing on this Petition, Allstate Settlement file with this Court and serve on all

14 interested parties a notice of the Proposed Transfer (the “Notice”) and the Petition for its
15 authorization. The Notice must include the following:
16 A A copy of the transferee's current petition (this Petition) and any other prior
17 petition, whether approved or withdrawn, that was filed with the court.
18 B. A copy of the proposed transfer agreement and disclosure form required by Section
19 10139.5(a) of the Act. See Exhibits “E” and “F.”
20 C. Alisting of each of Payee’s dependents, together with each dependent’s
age. See
21 Exhibit “H” and redacted List of Dependents attached hereto as Exhibit “1.”
22 D. A copy of the disclosure statement required by Section 10136(b) of the Act. See
23

24 E A copy of the annuity contract, if available. See Exhibit “D.”
25 EF A copy of any qualified assignment agreement, if available. See Exhibit “C.”
26 G A copy of the underlying structured settlement agreement, if available.
27 H Proof of service showing compliance with the notification requirements of Section
28 10139.5(£)(2) (to be filed prior to the hearing on this matter).
6
‘VERIFIED UNCONTESTED PETITION FOR APPROVAL OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BY AND BETWEEN
GABRIEL MARTINEZ. TRANSFEROR, AND ALLSTATE SETTLEMENT CORPORATION, TRANSFEREE, PURSUANT'TO CAL. INS. CODE § 10134 ET SEQ.
LEGAL\48338108\1
I Notification that any interested party is entitled to support, oppose, or otherwise

respond to the transferee's petition, either in person or by counsel, by submitting written comments

to the court or by participating
in the hearing.

J Notification of the time and place of the hearing and notification of the manner in

which and the time by which written responses to the petition must be filed, which
may not be less

than 15 days after service of the transferee's notice, in order to be considered
by the court.

FINDINGS FOR APPROVAL

12. The Proposed Transfer (i) does not contravene
any federal or state statute or the

order of any court or responsible governmental or administrative authority, and (ii) is in the best
10 interest
of Payee, taking into account the welfare and support of Payee’s dependents, if any, and.
11 (iii) the net amount payable to Payee is not unfair, unjust, or unreasonable.
12 13. Payee has confirmed that Payee has been advised in writing by Allstate Settlement
13 to obtain independent professional advice regarding the legal, tax, and financial implications of the
14 Proposed Transfer and Payee has knowingly waived, in writing, the opportunity to receive such
15 advice. See Exhibit “G.”
16 14. Allstate Settlement has provided the Court with written notice of its name, address,

17 and taxpayer identification number. See Exhibit “J.”
18 15. Allstate Settlement has provided the Court with a list of Payee’ s dependents and.
19 theirages. See Exhibit “I.”
20 16. The Proposed Transfer complies with the requirements
of the Act, and Allstate
21 Settlement has complied with all notification and disclosure requirements of the Act.
22 Ml
23 Ml
24 Ml
25 Ml
26 Ml
27 Ml
28 Ml
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‘VERIFIED UNCONTESTED PETITION FOR APPROVAL OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BY AND BETWEEN
GABRIEL MARTINEZ. TRANSFEROR, AND ALLSTATE SETTLEMENT CORPORATION, TRANSFEREE, PURSUANT'TO CAL. INS. CODE § 10134 ET SEQ.
LEGAL\48338108\1
WHEREFORE, Allstate Settlement Corporation respectfully requests that this Court

approve this Petition and enter the attached Order.

DATED: September 17, 2020 Respectfully submitted,

COZEN O’ CONNOR

py Anole U TeZcoe
Andrew M. Hutchison
Attol for Petitioner
ALLSTATE SETTLEMENT CORPORATION

28
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‘VERIFIED UNCONTESTED PETITION FOR APPROVAL OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BY AND BETWEEN
GABRIEL MARTINEZ. TRANSFEROR, AND ALLSTATE SETTLEMENT CORPORATION, TRANSFEREE, PURSUANT'TO CAL. INS. CODE § 10134 ET SEQ.
LEGAL\48338108\1
L VERIFICATION
2 I, Rebecca Baldwin, a Director of Allstate Settlement Corporation, am familiar with the

3 | contracts utilized and the procedures adhered to in the course of transferring structured settlement
4 | payment rights, and I hereby verify that the proposed transaction between Allstate Settlement
5 | Corporation and Gabriel Martinez complies with all of the conditions of the California Structured

6 | Settlement Protection Act.
7
I declare under penalty of perjury pursuant to the laws of the State of California that the
8 | foregoing is true and correct. Executed this le day of Sept: » 2020.
9
10 (0
11 Rebecca Baldwitt

12
13
14
15
16
17

18
19}
20
21
22
23
24

26
27
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VERIFIED UNCONTESTED PETITION FOR APPROVAL OF TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS BY AND BETWEEN
GabRiEt, MARTINEZ. TRANSFEROR, AND ALLSTATE SETTLEMENT CORPORATION, TRANSFEREE, PURSUANTTO CAL. INS. CODE § 10134 ET SEQ.
LEGAL\48338108\1
Exhibit A
Cal Ins Code§ 10136
Deering's California Codes are current through Chapters 1-31, 33-44, 46, 47, 49-51, 54-57, 59-67, 69-91, 93-103,
105-108, 112-117, 119-124, 126-135, 137-141, 143- 149, and 151-157 of the 2018 Regular Session.

Deering’s California Codes Annotated > INSURANCE CODE > Division 2 Classes of Insurance
> Part2 Life And Disability Insurance > Chapter 1 The Contract > Article 2.3 Transfers of
Structured Settlement Payment Rights

§ 10136. Disclosure; Notice; Compliance with § 10138

(a)No direct or indirect transfer of structured settlement payment rights by a payee to which this article applies
shall be effective, and no structured settlement obligor or annuity issuer shall be required to make any payment
directly or indirectly to a transferee, unless all of the provisions of this section are satisfied.
(b)Ten or more days before the payee executes a transfer agreement, the transferee shall provide the payee
with a separate written disclosure statement, accurately completed with the information that applies to the
transfer agreement, in substantially the following form, in at least 12-point type unless otherwise indicated
(bracketed instructions shall not appear in the form):

“Disclosure Notice Required By Law [14-point boldface type]
You are selling (technically called ‘transferring’) your right to receive your payments undera structured
settlement. You should get this disclosure notice at least 10 days before you sign any contract.
IMPORTANT TERMS: [14-point boldface type ]
You have agreed to sell to the transferee future payments totaling ------------' dollars
($ - ) in exchange fora purchase price of ------------ dollars ($. ye
Those future payments have a discounted present value equal to ------------ dollars
($ - ), calculated by applying the discount rate of ------------ percent utilized by the
Internal Revenue Service to value annuities in probate proceedings.
The purchase price to be paid to you was calculated using a discount rate of ------------ percent.
The purchase price payable to you is less than the present value of the future payments stated above
because the discount rate of your transaction is greater than the rate utilized by the Internal Revenue
Service.
For comparison purposes:
If you did not sell your right to receive structured settlement payments, but instead borrowed the net
amount of $. ye and paid that loan back in installments with each of the payments you
are now selling, the equivalent interest rate you would be paying for that loan would be
-----------+ % per year.
[The text and information set forth above under ‘IMPORTANT TERMS’ shall be in 14-point type and
circumscribed by a box with a bold border]

To figure the net amount we are paying, we have charged youfor the following expenses:
[itemize in a list by type and amount]

for
a total of $ + in expenses.
You should get independent professional advice about whether selling your structured settlement
payments is a good idea for you and for your dependents.
Page
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Cal Ins Code§ 10136

You are advised to seek independent legal or financial advice regarding the transaction and, under the
law, the cost of that advice, up to one thousand five hundred dollars ($1,500) will be paid by the
transferee, the person or entityto whom you have agreed to transfer and assign the payments in
question. The transferee or purchaser's accountant, counsel, or actuary may not advise you in this
transaction.
You also should get independent professional advice from an accountantor lawyer experienced in tax
matters about any income tax consequences from selling your structured settlement payments. We
cannot give you the name of anyone to advise you.
Court approval is needed [14-point boldface type]. A court must approve any agreement you sign to sell
your rights under a structured settlement. You will not receive any money until the court approves the
sale. Court approval could take more than 30 days following the day you sign an agreement selling
your rights under a structured settlement.
A sale of future structured settlement payments will mean that you will no longer receive the future
payments that are sold. You are advised to enter into this transaction only after you have carefully
considered the consequences of the transaction.
You may cancel the contract before court approval [14-point boldface type]. You may cancel the
agreement selling (or transferring) your rights under a structured settlement without any cost or
obligation. You may cancel at any time before the court approves the contract. You will get notice of the
date of the court hearing.
If you want to cancel, you do not need any special form. But, you must cancel in writing. Send your
cancellation to: [insert transferee’s name and address].

If you believe that you have been treated unfairly or have been misled, you should contact your local
district attorney or the state Attorney General.”
(c)The transfer agreement shall be written in at least 12-point type and shall be complete and without blank
spaces to be completed after the payee’s signature. The transfer agreement shall set forth clear and
conspicuously, and in no less than 12-point type, all of the following:
(1)A statement that the agreement is not effective until the date on which a court enters a final order
approving the transfer agreement and that payment to the payee pursuant to the transfer agreement
will be delayed up to 30 days or more after the date the payee signed the transfer agreement in order
for the court to review and approve the transfer agreement.
(2)The amounts and due dates of the structured settlement payments to be transferred.

(3)The aggregate amount
of the structured settlement payments to be transferred. This amount shall be
disclosed in the form prescribed in subdivision (b).

(4)The aggregate amount of all expenses, if any, to be deducted from the purchase price to be paid to
the payee in exchange for the payments to be transferred, and an itemization of all expenses by type
and amount.
(5)The amount payable to the payee, net of all expenses, in exchange for the payments to be
transferred. This amount shall be disclosed in the form prescribed in subdivision (b).

(6)The discounted present value of all structured settlement payments to be transferred and a
statement that ‘This is the value of your structured settlement in current dollars.” This amount shall be
disclosed in the form prescribed in subdivision (b).

(7)The federal rate, as described in subdivision (c) of Section 10134, used in determining the
discounted present value.
(8)The effective equivalent interest rate, which shall be disclosed in the following statement:
Page
3 of 7
Cal Ins Code§ 10136

“YOU WILL BE PAYING THE EQUIVALENT OF AN INTEREST RATE OF ------------ % PER
YEAR.
Based on the net amount that you will receive from us and the amounts and timing of the structured
settlement payments that you are transferring to us, if the transferred structured settlement
payments were installment payments on a loan, with each payment applied first to accrued unpaid
interest and then to principal, it would be as if you were paying interest to us of ------------ %
per year, assuming funding on the effective date of transfer.”
This percentage amount shall be disclosed in the form prescribed in subdivision (b) in the space for
“the equivalent interest rate you would be paying for this loan would be ------------ % per year.”
(9)The quotient (expressed as a percentage) obtained by dividing the net payment amount by the
discounted present value of the payments.
(10)A statement that the payee should obtain independent professional advice regarding any federal
and state income tax consequences arising from the proposed transfer, and that the transferee may not
refer the payee to any specific adviser
for that purpose.
(11)A statement that the court approving the transfer agreement retains continuing jurisdiction to
interpret and monitor implementation of the agreement as justice may require.
(12)The following statement: “If you believe you were treated unfairly or were misled as to the nature of
the obligations you assumed upon entering into this agreement, you should report those circumstances
to your local district attorney or the office of the Attorney General.”
(13)The following statement printed in 14-point type, circumscribed by a box with a bold border, and set
forth immediately above or adjacent to the space reserved for the payee’s signature: “You have the
right to cancel this agreement without any cost or obligation until the date the court approves this
agreement. You will receive notice of the court hearing date when approval may occur. You must
cancel in writing and send your cancellation to [insert transferee’s name and address].”

(d)The contract for transferring the structured settlement payment rights may not violate Section 10138.
(e)At any time before the date on which a court enters a final order approving the transfer agreement pursuant
to Section 10139.5, the payee may cancel the transfer agreement, without cost or further obligation, by
providing written notice of cancellation to the transferee.

History

Added Stats 1999 ch 742 § 1 (SB 491). Amended Stats 2001 ch 624 § 3 (AB 268); Stats 2004 ch 582 § 1 (AB
2161); Stats 2006 ch 538 § 465 (SB 1852), effectiveJ anuary 1, 2007; Stats 2009 ch 593§ 3 (SB 510), effective
January 1, 2010; Stats 2010 ch 328§ 144 (SB 1330), effectiveJ anuary 1, 2011.

Annotations

Notes

Amendments:

Note—

Amendments:
Page
4 of 7
Cal Ins Code§ 10136

2001 Amendment:

(1) Amended the introductory clause of subd (a) by adding (a) “separate”; and (b) “, in at least 14- point type,”; (2)
added subd (a)(1); (3) redesignated former subds (a)(1)-(a)(5) to be subds (a)(2)-(a)(6); (4) added subd (a)(7); (5)
redesignated former subds (a)(6) and (a)(7) to be subds (a)(8) and (a)(9); (6) substituted “obtain independent
professional advice” for “consult with their own counsel, accountant, or financial advisor” in subd (a)(9); (7) added
subd (a)(10); (8) substituted subd (a)(11) for former subd (a)(8) which read: “A statement that "THE PROVISIONS
OF THIS CONTRACT ARE GOVERNED BY CALIFORNIA’S UNFAIR PRACTICES ACT, BUSINESS AND
PROFESSIONS CODE SECTION 17200. IF YOU BELIEVE YOU WERE TREATED UNFAIRLY OR WERE
MISLED AS TO THE NATURE OF THE OBLIGATIONS YOU ASSUMED UPON ENTERING INTO THIS
AGREEMENT, YOU MAY CALL YOUR LOCAL DISTRICT ATTORNEY OR THE OFFICE OF THE ATTORNEY
GENERAL FOR ASSISTANCE.” (9) added subd (a)(12); (10) substituted “all of the disclosures” for “the language”
in the last paragraph of subd (a); (11) substituted subd (b) for former subd (b) which read: “(b) The transferee
provides written notice of the proposed transfer to all other interested parties 10 or more days prior to the date
specified in the transfer agreement as the date on which the transfer agreement first becomes binding upon the
payee and 60 or more days prior to the date on which the first payment is due under a schedule established by the
structured settlement agreement. At any time prior to the date on which the transfer agreement first becomes
binding upon the payee, the payee may cancel the transfer agreement without cost or further obligation, by
providing written notice of cancellation to the transferee.”

2004 Amendment:

Substituted this section for the former one which read:

“No transfer of structured settlement payment rights, either directly or indirectly, shall be effective by a payee
domiciled in this state, or by a payee entitled to receive payments under a structured settlement funded by an
insurance contract issued by an insurer domiciled in this state or owned by an insurer or corporation domiciled in
this state, and no structured settlement obligor or annuity issuer shall be required to make any payment directly or
indirectly to a transferee, unless all of the following subdivisions are satisfied:

“(a) Ten or more days prior to the effective date of a transfer agreement, the transferee provides the payee with a
separate written disclosure statement, in at least 14- point boldface type, disclosing all of the following:

“(1) The effective date of the transfer.

“(2) The amounts and due dates of the structured settlement payments to be transferred.

“(3) The aggregate amount of the structured settlement payments to be transferred.

“(4) The gross amount of all expenses, if any, to be deducted from the amount to be paid to the payee in exchange
for the payments to be transferred.

“(5) The amount payable to the payee, net of all expenses, in exchange for the payments to be transferred.

“(6) The discounted present value of all structured settlement payments to be transferred and the discount rate
used in determining that discounted present value.

“(7) The effective equivalent interest rate, which shall be disclosed in the following statement:

“YOU WILL BE PAYING THE EQUIVALENT TO AN INTEREST RATE OF ------------ % PER YEAR.

“Based on the net amount that you will receive from us and the amounts and timing of the structured settlement
payments that you are transferring to us, if the transferred structured settlement payments were installment
payments on a loan, with each payment applied first to accrued unpaid interest and then to principal, it would be as
if you were paying interest
to us of ------------ % per year, assuming funding on the effective date of transfer.’
Page
5 of 7
Cal Ins Code§ 10136

“(8) The quotient (expressed as a percentage) obtained by dividing the net payment amount by the discounted
present value of the payments.

“(9) A statement that the payee should obtain independent professional advice regarding any federal and state
income tax consequences arising from the proposed transfer, and that the transferee may not refer the payee to
any specific adviser for that purpose.

“(10) A statement of the payee’s irrevocable and nonwaivable right of rescission pursuant to paragraph (2) of
subdivision (b).

“(11) The following statement in capital letters: ‘IF YOU BELIEVE YOU WERE TREATED UNFAIRLY OR WERE
MISLED AS TO THE NATURE OF THE OBLIGATIONS YOU ASSUMED UPON ENTERING INTO THIS
AGREEMENT, YOU SHOULD REPORT THOSE CIRCUMSTANCES TO YOUR LOCAL DISTRICT ATTORNEY
OR THE OFFICE OF THE ATTORNEY GENERAL.’

“(12) If court approval of the transfer agreement
is required, all of the following shall apply:

“(A) The effective date of the transfer agreement shall be deemed to be the date that the agreement was signed by
the payee.

“(B) The payee shall be advised that payment to the payee pursuant to the transfer agreement is contingent upon
court approval of the transfer agreement.

“(C) The payee shall be advised that payment to the payee pursuant to the transfer agreement will be delayed up to
30 days or more in order for the court to review and approve the transfer agreement.

“No contract for the transfer of structured settlement payment rights shall be valid unless the seller has separately
acknowledged that he or she has read all of the disclosures required by this subdivision.

“(b)(1) The transferee provides written notice of the proposed transfer
to all other interested parties 10 or more days
prior to the date specified in the transfer agreement as the date on which the transfer agreement first becomes
binding upon the payee and 60 or more days prior to the date on which the first payment is due under a schedule
established by the structured settlement agreement.

“Notice shall not be required by this paragraph if court approval of the transfer is required and notice is given
pursuant
to paragraph (6) of subdivision (c) of Section 10139.5.

“(2) At any time prior to the date on which the transfer agreement first becomes binding upon the payee, the payee
may cancel the transfer agreement without cost or further obligation, by providing written notice of cancellation to
the transferee.

“(3) The notice to interested parties shall include the effective date of the transfer and identify the structured
settlement payment rights being transferred and the due dates of those payments.

“(4) Any notice required by this subdivision shall be deemed to have been given if addressed to the recipient's last
known address and deposited, first-class postage prepaid, in the United States mail not less than five calendar
days prior to the date on which the notice is required to be provided.

“(c) The contract for transferring the structured settlement payment rights does not violate the provisions of Section
10138.”

2006 Amendment:

(1) Substituted single quotes for double quotes around the words “transferring” and “IMPORTANT TERMS” in the
form under subd (b); and (2) deleted “the” after “Present value of” in the last sentence of subd (c)(6).
Page
6 of 7
Cal Ins Code§ 10136

2009 Amendment:

(1) Amended subd (a) for the former subd (a) which read: “(a) No transfer of structured settlement payment rights,
either directly or indirectly, shall be effective by a payee domiciled in this state, or by a payee entitled to receive
payments undera structured settlement funded by an insurance contract issued by an insurer domiciled in this state
or owned by an insurer or corporation domiciled in this state, and no structured settlement obligor or annuity issuer
shall be required to make any payment directly or indirectly to a transferee, unless all of the provisions of this
section are satisfied.”; (2) amended subd (b) by (a) substituting the four paragraphs following the Important Terms
for ‘Total dollar amount of $ = payments you are selling: Present value of amount you
-- are selling: Net amount paid to you: $. i " (b) adding “You are advised to seek
independent legal or financial advice regarding the transaction and, under the law, the cost of that advice, up to one
thousand five hundred dollars ($1,500) will be paid by the transferee, the person or entity to whom you have agreed
to transfer and assign the payments in question. The transferee or purchaser's accountant, counsel, or actuary may
not advise you in this transaction.”; and (c) adding “A sale of future structured settlement payments will mean that
you will no longer receive the future payments that are sold. You are advised to enter into this transaction only after
you have carefully considered the consequences of the transaction.”; (3) deleted “in the space for ‘Total dollar
amount of payments you are selling’ ” at the end of subd (c)(3); (4) deleted “in the spaces for ‘Net amount paid to
you’ and ‘net amount’ ” at the end of subd (c)(5); and (5) deleted “in the space for ‘Present value of amount you are
selling’ ” at the end of subd (c)(6).

2010 Amendment:

Amended subd (a) by (1) deleting “shall be effective” after “payment rights”, and (2) adding “shall be effective,”.

Note—

Stats 2004 ch 582 provides:
SEC. 6. This act shall apply only to agreements for the transfer of structured settlement payment rights that
are executed on or afterJ anuary 1, 2005.

Notes to Decisions

1. Practice and Procedure

In denying petitioners’ motion to dismiss their SSTA (Structured Settlement Transfer Act) petition without prejudice
pursuant to CCP § 581, subd. (b), the trial court erred in concluding that petitioners could not voluntarily dismiss
their SSTA petition because a factoring company was a party to the proceeding and the company had not timely
consented to the dismissal. The company’s consent was not required because it was not a party to petitioners’
action. 321 Henderson Receivables Origination LLC v. Ramos (Cal. App. 5th Dist. Mar. 18, 2009), 172 Cal. App.
4th 305, 91 Cal. Rptr. 3d 222, 2009 Cal. App. LEXIS 376.

Research References & Practice Aids

Law Review Articles:

Insurance: Chapter 593: A Structure for the Transfer of Structured Settlements. 41 McGeorge L. Rev. 667.

Treatises:
Page
7 of 7
Cal Ins Code§ 10136

Cal. Torts (Matthew Bender)§ 75.11A.

Annotations:

Construction and Application of Uniform Rule of Evidence 106, Applying Doctrine of Completeness to Writings and
Recorded Statements. 27 ALR6th 183.

Hierarchy Notes:

Cal Ins Code Div. 2, Pt. 2

Cal Ins Code Div. 2, Pt. 2, Ch. 1

End of Document
Cal Ins Code Div. 2, Pt. 2, Ch. 1, Art. 2.3 Note

Deering's California Codes are current through Chapters 1-31, 33-44, 46, 47, 49-51, 54-57, 59-67, 69-91, 93-103,
105-108, 112-117, 119-124, 126-135, 137-141, 143- 149, and 151-157 of the 2018 Regular Session.

Article 2.3. Transfers of Structured Settlement Payment Rights

History

Added Stats 1999 ch 742§ 1.

Annotations

Research References & Practice Aids

Hierarchy Notes:

Cal Ins Code Div. 2, Pt. 2

Cal Ins Code Div. 2, Pt.2, Ch. 1

End of Document
Cal Ins Code§ 10134
Deering's California Codes are current through Chapters 1-31, 33-44, 46, 47, 49-51, 54-57, 59-67, 69-91, 93-103,
105-108, 112-117, 119-124, 126-135, 137-141, 143- 149, and 151-157 of the 2018 Regular Session.

§ 10134. Definitions

For the purposes of this article, the following terms have the following meanings:
(a)"Buyer’s first right of refusal” means any provision in the transfer agreement or related documents
that obligate the payee to give to the buyer the first choice or option to purchase any remaining
structured settlement rights belonging to the payee.
(b)“Dependents” include the payee’s spouse and minor children and all other family members and
other persons for whom the payee is legally obligated to provide support, including alimony.
(c)"Discounted present value” means the fair present value of future payments, as determined by
discounting those payments to the present using the most recently published applicable federal rate for
determining the present value of an annuity, as issued by the United States Internal Revenue Service.
(d)‘E ffective equivalent interest rate,” with respect
to a transfer of structured settlement payment rights,
means the annualized rate of interest on the ne

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