Structured Settlement Cash Now Forum Shopping Investigation-1

by  John Darer CLU ChFC CSSC RSP CLTC

An structured settlement annuitant from the Syracuse New York area has engaged in 5 structured settlement transfers with the SAME settlement purchaser since  August 2011, with another currently pending.  Again, ALL transactions, according to our research, appear to have been with a single factoring company from South Florida that is a member of NASP.  That there were so many transfers (with their associated costs) consummated in such a short period of time is only one concern.

What is of more concern is that this appears to be a case of rampant forum shopping.  The 2011 transaction was approved in August 2011  in Madison County Supreme Court (New York).  The pending case as well as 4 prior transactions occurred in 2012 and 2013 in Sumter County Florida, with the 4 Florida transfers approved by Judge Michelle Morley.

 Here's where it gets interesting...

• The annuitant shows an address  in Morrisville, NY
• The annuitant owns property on Morrisville, NY according to public records
• The annuitant unfortunately suffered the loss of his father in August 2013 and the obituary which appeared in a Syracuse New York area newspaper refers to the decedent's son as being " from Morrisville"
• The annuitant's owns two Jeep Cherokees,  both registered with an address in Morrisville, New York
• The annuitant was sued in Madison County New York by a credit union in August 2012.
• The annuitant shows two addresses in Florida, the first from  January 2012 to March 2013. thesecond from January 2012 to May 2012.  Property records also show another individual associated wth the same two addresses. The annuitant however has no real estate property in the State of Florida, according to our source.

• A Florida drivers license was obtained January 25, 2012 and lo and behold, the first structured settlement transfer application in front of Judge Morley in Sumter County appears shortly after that February 4, 2012.

Excerpts from the Florida Structured Settlement Protection Act [ see  Fla. Stat. § 626.99296 (2005)  Definitions at (2) ]

(p) "Structured settlement payment rights" means rights to receive periodic
payments, including lump-sum payments under a structured settlement,
whether from the structured settlement obligor or the annuity issuer,
if:
                      

1. The payee or any other interested party is domiciled in this state;
               
2. The structured settlement agreement was approved by a court of this state; or
               
3. The settled claim was pending before the courts of this state when the parties entered into the structured settlement agreement.
             

(i) "Interested parties" means:
                          

1. The payee;
               
2. Any beneficiary irrevocably designated under the
   annuity contract to receive payments following the payee's death or, if
   such designated beneficiary is a minor, the designated beneficiary's
   parent or guardian;
               
3. The annuity issuer;
4. The structured settlement obligor; or
5. Any other party who has continuing rights or obligations under the structured settlement.

(3)  CONDITIONS TO TRANSFERS OF STRUCTURED SETTLEMENT PAYMENT RIGHTS AND STRUCTURED SETTLEMENT AGREEMENTS.             

 

6. The transfer agreement provides that if the payee is domiciled in this state, any disputes between the parties will be governed in accordance with the laws of this state and that the domicile state of the payee is the proper venue to bring any cause of action arising out of a breach of  the agreement; and

5)  WAIVER PROHIBITED; NO PENALTIES INCURRED.

                 

1. The provisions of this section may not be waived.
           
2. If a transfer of structured settlement payment rights
   fails to satisfy the conditions of subsection (3), the payee who
   proposed the transfer does not incur any penalty, forfeit any
   application fee or other payment, or otherwise incur any liability to
   the proposed transferee.

With all due respect to Sumter County Judge Michelle Morley, I have questions about how the same Florida judge approved so many transfers and their attendant costs to the same individual annuitant, within such a short time frame?       

The Destin, FL  law firm of Havens & Miller LLC provides a helpful summary checklist entitled Becoming a Floridian for Legal Purposes.  At the time the first transfer was filed in 2012, how much of this checkist could be checked off?  What level of scrutiny is placed by the judge on domicilliary issue?

I wonder if a review of public records would show that this is the case in other counties in Florida. 

To be continued...