by John Darer® CLU ChFC MSSC RSP CLTC
Does "best interest" under state structured settlement protection statutes mean that a judge should be able to cut you off from your spending stupor, just like a bartender would if you have had one too many?
Matt Bracy, an attorney with Scheef & Stone, L.L.P., Dallas, Texas, former President of the National Association of Settlement Purchasers and fellow commentator at Legal Broadcast Network says that:
"The...requirement is that the transfer must be in the “best interest of the payee” per 26 USC § 5891(b)(2)(A)(ii). But “best interest” is not further defined, Bracy explains, so courts must struggle with what the term means. That is why some commentators have described the court’s role as being like that of a parent. In other words, should a court substitute its judgment for that of the person who wants to sell the benefits? Bracy says that the ambiguity in the “best interest” standard is purposeful. This permits a judge familiar with the circumstances in any given locale to “decide what is right.”
In Terrence Taylor's case, which has been cited by the Wall Street Journal and is the subject of another mainstream news investigation, Portsmouth Virginia Judge Dean Sword Jr., approved 8 transfers and 2 other judges approved 3 transfers in less than two years that individually and collectively demonstrate poor "bartending", in my opinion. These judges, the ultimate "proprietors" kept enabling the ongoing service of "financial alcohol" that left amputee-burn victim Terrence Taylor and his dependent child with nothing, when they could have cut him off at any time.
Dram shop laws penalize liquor establishments for serving one too many.
On March 17, 2011, Ms. McKenzie was walking through the parking lot at the Spearmint Rhino strip club on Composite Drive in Dallas when she was struck and killed by a "monster truck" driven by Eric Brent Crutchfield of Dallas, who was 27 years old at the time. Evidence at the trial, including security camera footage, showed that Mr. Crutchfield was served more than 10 mixed drinks and shots during a four-hour period immediately prior to the fatal accident.
Mr. Crutchfield was convicted of manslaughter, and currently is serving a 10-year sentence for Ms. McKenzie's death and an earlier drug-related charge at the Mineral Wells Unit. Jurors in Judge Lowy's courtroom assessed 70 percent responsibility against Spearmint Rhino and 30 percent against Mr. Crutchfield. According to the website of The Schmidt firm "jurors in Judge Martin Lowy's 101st District Court in Dallas deliberated for approximately three hours before reaching their unanimous verdict on Feb. 19, 2013. According to records maintained by VerdictSearch, the $10.5 million award represents (what was at the time) the largest dram shop verdict awarded in Dallas County since 1985".
Dram shop laws are there to protect people, not just people who may imbibe too much and get behind the wheel of a car, but the innocents that are harmed physically or killed as a result.
Arguably judges who are derelict in their duties as "bartenders" with respect to "best interest" in structured settlement transfer hearings cause harm to the structured settlement annuitants they have a duty to protect and ultimately cost taxpayers millions of dollars. It's quite the social dilemma.
Unfortunately the structured settlement protection laws and administrative judicial oversight in Virginia leave the judgment call to those who allot one or two minutes per transfer hearing, with no face time as a standard of sufficiency to determine best interest.
It's not a question of the Court being paternalistic, it's the question of following and enforcing the structured settlement protection statute.
Where the statutes do not adequately address "best interest" as Matt Bracy implies, they should be amended. Conduct in cases like Terrence Taylor, Michael Lafontant and others soon to come to light, should not have happened and should not be happening.
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