Structured Settlement Blog
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The United States remains obligated to make periodic payments even though it paid for annuities to make those structured settlement payments. This situation arose because the annuity issuer, Executive Life Insurance Company of New York, failed to make all of the future payments.
Since a structured settlement annuity is the only investment that can provide safe, secure, income-tax free, management-free, payments that cannot be outlived, it is an investment vehicle that should be carefully considered in personal physical injury and wrongful death actions.
San Francisco lawyer Jovan Johnson is billboarding structured settlement brokers such as Arcadia, Sage, Summit, Atlas Settlements, Logan and structured settlement consultants affiliated with those entities and appears to be using the names of these entities' and associated individuals' and their information, to generate leads for structured settlement factoring, for which Johnson appears to earn a fee.
The vessel on which Johnson executes this business model is Annuity Freedom (.Net) Each listing for a structured settlement broker or company is optimized for local search including a Google map. At time of posting of this blog, the caption under most of the Google maps using the names of the brokers and companies had purported links to both current as well as bankrupt structured settlement factoring companies (one of whose owner is serving a 25 year prison sentence). The links circle back to the Annuity Payment Freedom site.
Listing for a structured settlement broker includes a purported link to what any reasonable person would interpret to mean the broker's website. Instead, with few exceptions, the link just goes back to Annuity Payment Freedom. In the latter cases it's useless to the consumer.
Johnson cites the list of annuity brokers on the Department of Justice website as well as link to a specific page on the National Structured Settlemenst Trade Association referring to professional designations associated with NSSTA, however, it is clear that information was gleaned from the uncited structured settlement websites that Johnson is billboarding in his scheme to generate structured settlement factoring leads.
The dude likes chocolate chip cookies. Who doesn't? But rather than letting Annuity Payment Freedom or any other similar company's hand into your structured settlement "cookie jar" for a return of pennies on the dollar, for only $2.20 (Source: Instacart) you can buy your own Betty Crocker chocolate chip cookie mix and make your own batch, while keeping your guaranteed stable income tax-free structured settlement intact. Now that smells pretty good doesn't it?
McClatchy has followed up last Fall's award winning muti-part expose of the business of structured settlement factoring in South Carolina (that stimulated efforts to reform structured settlement factoring) with a new video released March 12, 2023, which asserts "commercials convince accident victims to give up their financial futures". Sellers explain why they regret those decisions years later. One South Carolina seller said selling his stuctured settlement was "the biggest regret of his life".
Journalists David Weissman, Gina Smith and Kata Stevens' new special report features commercials from Chesterbrook Pennsylvania's JG Wentworth and Peachtree (which is a brand of JG Wentworth), the largest and most well known structured settlement factoring company with most pervasive commercials, as well as Fort Lauderdale's 123 Lump Sum and a related brand **Cash (Star Star Cash), followed by impact statements from three South Carolina residents impacted by structured settlement factoring.
It is not clear whether the individuals who made the victim impact statements in the McClatchy video, did business with any of the companies whose commercials were displayed in the video, or why the specific videos were chosen. Nevertheless it's another piece of wood on the fire burning unavoidable awareness under the already toasty rumps of members of the South Carolina state legislature who were spurred into considering massive changes to better protect citizens of South Carolina with structured settlements after the first installment of the McClatchy expose appeared in September 2022.
The video is also a clarion call to potential sellers to get independent professional advice. One of the victims in the video said she couldn't afford to pay an advisor. Some state laws say that independent professional advice fees cannot be paid by the structured settlement factoring company while other states, like California, say that up to $1,500 of fees for independent professional advice may be paid by the structured settlement factoring company.
It's unwise to proceed without independent professional advice, even if its not mandatory in your state. Have a conversation with someone knowledegable, other than the structured settlement factoring company representative. And sellers, the lawyer that is hired by the structured settlement factoring company offering to buy your payments, IS NOT your lawyer.
Service Corporation et al. The United States Court of Appeals for the 11th Circuit asked the New York Court of Appeals for guidance on whether implied contractual duties of the annuity issuer/qualified assignee exist with respect to Cordero's structured settlement factoring transactions.
All six of the structured settlement factoring transactions were concluded in Florida courts, four of them in Sumter County, the notorious county courthouse where there is a long history of structured settlements "going to die". Factoring companies feasting for years on the manna delivered in Judge Michelle Morley's courtroom. [ For background on the notoriety of Sumter County and factoring see my March 3, 2014 post The Sumter County Florida Structured Settlements Three Ring Circus - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)]
While a decision from the New York Court of Appeals is not due for another 30 to 60 days, oral arguments didn't appear to go so well for plaintiff Lujerio Cordero whose lawyers elected NOT to sue the structured settlement factoring companies that profited from 6 structured settlement factoring deals and unconvincingly, went after structured settlement annuity issuers and their qualified assignment companies on the theory that structured settlement annuity issuers and qualified assignment companies had a implied duty to interevene in structured settlement factoring transactions.
4. Independent Life is the only company that has an official "Payee Protection Program. But how can plaintiff counsel use Independent Life as a standard in the Cordero case when Independent Life has only been in operation for 5 years. When did the six Cordero structured settlement factoring tranactions occur? Oh...
Time and time again New York judges have shown themselves to be among the most astute on the subject of structured settlement factoring. Were it not for New York judges doing their job in New York over the last 15 -20 years, structured settlement factoring companies might not have decided to make judicious use of Judge Michelle Morley's courtroom in Sumter County Florida and other Florida counties inveigling unsophisticated annuitants in "fraud for cash now" forum shopping schemes.
Transfers or assignments of other people's structured settlement payment rights, have been deceptfully marketed to investors as secondary market annuities by certain members of the structured settlement secondary market and
market, in addition to certain settlement planners and structured settlement brokers who incorporated them in settlement plans and (as the evidence showed last year), some have even used them in purported qualified assignment documents with a related factoring company.
Then came the 2017 Revisions to the Life & Health Guaranty Associations Model Act(#520), which is has been approved by the majority, but not all US states, which expressly excludes structured settlement annuity benefits where a payee or beneficiary has transferred rights in a structured settlement factoring transaction regardless of whether the transaction occurred before or after the adoption of the 2017 Revisions became effective.
(11) structured settlement annuity benefits to which a payee (or beneficiary) has transferred rights in a structured settlement factoring transaction as defined pursuant to section 5891 of the federal Internal Revenue Code, 26 U.S.C. s.5891(c)(3)(A), regardless of whether the transaction occurred before or after that section became effective.
With oral arguments in Cordero v Transamerica in the New York Court of Appeals on March 14, Independent Life's Patrick Hindert has made a valuable contribution to the discussion about Cordero v Transamerica, a lawsuit which seeks to get Transamerica's qualfied assignment company and structured settlement annuity issuer to foot the bill for improvident structured settlement factoring transactions approved by Sumter and Broward County judges in the State of Florida. Cordero did not sue the factoring companies and instead went after the annuity issuer and qualified assignment company.
The New York Court of Appeals was certified from the 11th Federal Circuit to address the focal point of plaintiff's allegation, whether or not there is an implied covenant in the anti-assignment provisions in the settlement agreement and qualified assignment. Hindert, who is co-author of the seminal structured settlement text, addresses some basic contract law.
An effort was made by SSP members and other settlement planners to advocate for the insertion of language into settlement agreements and qualified assignment agreements that plaintiffs and their counsel signed (when QAR or QARP used) signed, that on the plain reading seems to be a waiver of anti-assignment provisions. This "Except as" language was initially approved on an exception basis by annuity issuers and their qualfied assignment companies and eventually incorporated into the standard adminstrative package embedded in the software supplied to appointed agents and brokers. 781b155fdc