by Structured Settlement Watchdog
A Texas structured factoring company has tried to overcome the United States sovereign immunity status and failed. This time it's the "Thompson Twins" Bobby and Bob. Bobby, the surviving recipient of an annuity purchased by the United States from National Home Life Assurance Company* on March 5, 1993 to resolve a 1989 claim brought by her step brother Melvin Ladell Smith, and Bob Thompson, the President of Annuity Transfers, Ltd (collectively "Bobby Bob").
"Bobby Bob" entered into a formal Transfer and Assignment Agreement on January 22, 2008, conditioned on "the approval by a court of competent jurisdiction in accordance with an applicable state transfer statute of a state of the United States of America and must be structured, consummated, closed and approved in accordance with certain applicable laws of the United States of America".
Bobby represented that she had "all the requisite power and authority and had taken action necessary to execute and enter into" the transfer agreement.
"Bobby Bob" tried to aver that the structured settlement settlement protection laws of Louisiana applied (based on Bobby's residence) or Iowa (based on the domicile of the annuity issuer). "Bobby Bob" then sought a declaratory judgment from the United States Court of Federal Claims seeking to be able to consummate the structured settlement factoring transaction. The United States sought dismissal under Rule 12(B)(1) of the rules of the Court of Federal claims or summary judgment as a matter of law. The Court granted the United States motion to dismiss.
Plaintiffs "Bobby Bob":
- Failed to prove subject matter jurisdiction
- Annuity Transfers, Ltd has no standing to pursue a claim based on the Settlement Agreement, only Bobby does. Bobby Bob failed to prove up a privty theory.
- Failed to prove breach of contract. The Court reasoned that a payee's desire to unilaterally change a contract's terms does not constitute a breach of contract. Bobby's desire to factor some annuity payments constitutes a change to the terms of the settlement agreement, but not a breach by the United States.
IRC 5891 is not a money mandating statute that creates a substantive right enforceable against the United States for money damages, 424 U.S. at 398.
As an aside Annuity Transfers Ltd deserves a trip to the wall of shame for referring to a structured settlement factoring transaction as "structured settlement liquidation" on its website. In the interests of filling the financial literacy gap the main purpose of a liquidation is where a company is insolvent and is a process to collect in the company's assets, determine the outstanding claims against the company, and satisfy those claims in the manner and order prescribed by law. The use of such term by Annuity Transfer's simply promotes financial illiteracy and is deserving of the advertising wall of shame. While Annuity Transfers Ltd. may provide liquidity (as the result of purchasing all or a portion a structured settlement recipient's stuctured settlement payments rights) a structured settlement factoring transaction T'SNOT a structured settlement liquidation. It is highly doubtful that a company such as Annuity Transfers, Ltd would purchase the rights to an insolvent company.
- "By the rude bridge that arched the flood,
- Their flag to March breezes unfurled;
- Here the embattled factors stood,
- And heard the T'SNOT heard 'round the world."
- (my humble apologies to Waldo)
* now People's Benefit Life Insurance Company Home Office: Cedar Rapids, IA, a subsidiary of the AEGON Group