Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews

John Darer Reviews Latest in 8 year old Annuitant v Factoring Company Case

by Structured Settlement Watchdog

A pre-trial hearing was held on May 1, 2023 in the Terrence Taylor case. 

Status of Interpleader

In August 2022, I reported that Judge Charles J. Maxfield granted the New York Life interpleader motion that had been pending for many years.  What this meant is that instead of New York Life Insurance Company making structured settlement payments to the structured settlement factoring companies;  their investors and/or assignees, the payments in dispute were to be paid into the Court until the lawsuit is adjudicated.  At that point the payments could go to the current payees, to Taylor, or some combination. In the May 1, 2023 hearing, Judge Maxfield ruled on the interpleader, the result of which is that the payments related to structured settlement transfer petitions of Jay Gee LLC and iSettlements LLC were removed from the interpleader and those parties and claims were non-suited.   § 8.01-380. Dismissal of action by nonsuit; fees and costs (virginia.gov)

The payments however, are not due to start for a number of years into the future. I understand that these parties have reached a confidential settlement. 

Interpleader Motion is GRANTED in Terrence Taylor Case in Portsmouth, Trial Set for June 2023 - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)  August 25, 2022

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SIDE BAR

The above settlement is not the first associated with the series of structured settlement factoring transactions between factoring companies and Taylor in an ungodly short period of time. The original action captioned in the April 20, 2015 amended Federal Complaint STRUCTURED ASSET FUNDING, LLC d/b/a 123 LUMP SUM a/k/a 123 LUMP SUM, LLC; BLAZINGSTAR FUNDING, LLC; JAY GEE, LLC; BEXHILL, LLC; iSETTLEMENTS LLC d/b/a 123 LUMPSUM; HPF CAPITAL d/b/a HIGHPOINT FUNDING and RHETT WADSWORTH. Bexhill, LLC, which was associated with now defunct Boca Raton structured settlement factoring company Client First Funding, settled early on in litigation filed in Federal Court in Alexandria Virginia, which was voluntarily withdrawn in 2015 before the state filing in Portsmouth

___________________________________________________________

Judge Maxfield Rules in Favor of Motion to Bifurcate Trial on Issue of Jurisdiction

With respect to the remaining parties, Taylor's attorneys sought to have the upcoming trial bifurcated to address the issue of jurisdiction.  In all of the Taylor structured settlement transfer petitions by Structured Asset Funidng and related companies were submitted in Virginia, specifically the Portsmouth Circuit. But as Terrence Taylor's camp has already pleaded and contended, Terrence Taylor was a resident of West Virginia.

1.Systematic raiding of structured settlement funds through acts of fraud, misrepresentation and negligence that has left a seriously injured amputee burn victim without any means of supporting himself or his dependent child.

2. Statutory violations of the Virginia Structured Settlement Protection Act, Title 59.1,
Chapter 41 (“Virginia Structured Settlement Protection Act”),

3. Statutory violations of Transfers of the Right to Receive
Future Payments, West Virginia Code Statute R. Section 46A-6H (“West Virginia Structured
Settlement Protection Act”),

4. Violations of the West Virginia Consumer Credit and Protection Act, W. Va. Code §§ 46A-6-104 and 102(7)(E) (the “West Virginia Consumer Protection Act”);

An “applicable State statute” is defined as a statute that provides for entry of an order, judgment or decree described in clause (A) above and has been enacted by (I) the state in which the payee of the structured settlement is domiciled, or (II) if there is no such statute in the state in which the payee is domiciled, then the State in which a party to the structured settlement (including an assignee under a qualified assignment under section 130) or the person issuing the funding asset for the structured settlement is domiciled or has its principal place of business. IRC section 5891(b)(3) Excise Tax on Structured Settlement Factoring Audit Technique Guide  (March 2019 revision)

Was Structured Asset Funding or any its affilates involved in Terrence Taylor Transfer Petitions Registered in West Virginia when Terrence Taylor was Solicited in West Virginia?

§46A-6H-8. Registration with the secretary of state  (West Virginia Law)
(a) A transferee or other person in the business of soliciting or purchasing future payments shall file a registration statement with the secretary of state before advertising or arranging transfers of consumer’s future payment rights in this state.

The above linked August 25, 2022 post provides more detail.

The Terrence Taylor Serial Structured Settlement Factoring Case

Systematic raiding of structured settlement funds through alleged acts of fraud, misrepresentation and negligence that has left a seriously injured amputee burn victim without any means of supporting himself or his dependent child. The shockingly short time frame that it took for judges in Portsmouth to approve 10 transactions in 2 years, multiple millions of dollars of structured settlement factoring transactions for pennies on the dollar as being in Terrence Taylor's best interest,brought national attention to the inadequacies of the first generation of structured settlement protection laws in Virginia and elsewhere. The Virginia structured settlment protection act wasamended shortly after national attention was brought to the case. Retired Portsmouth Judge Dean Sword approved 8 of the transactions. The system relies on judges as the last line of defense in what has been described as flawed system. 

The flawed system that allows companies to make millions off the injured - The Washington Post  December 28, 2015  

Opinion | Virginia’s weak laws allow structured settlements for pennies on the dollar - The Washington Post

Terrence Taylor Structured Settlement | Lawsuit v 123 Lump Sum | The Back Story - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)

 

Justice Delayed is Justice Denied | An Indictment of Virginia Structured Settlement Protections

by Structured Settlement Watchdog

It is quite apparent (and has been apparent for some time) that something very bad is going on in Virginia concerning an alleged victim of predation by

Their conduct in the Taylor case suggests that structured settlement factoring companies like SAF know how to game the judicial system in Portsmouth

several structured settlement factoring companies and the welfare of a black man is at stake. The alleged victim is an amputee burn victim for whom a structured settlement was established when he was a minor.

"Sword and Taylor"

Where is the justice when you balance how little time it took for Portsmouth judges to approve the petitions of Structured Asset Funding/123 Lump Sum, several related companies and others to consummate 10 structured settlement factoring transactions in Portsmouth Virginia, in less than 2 years) against a legal matter that has already stretched out more than 6 years and is likely to get deep into 7.  The case is only at the preliminary motion stage after all this time. Terrence Taylor's story was documented in a December 2015 Washington Post expose by Terrence McCoy, a follow up to his award-winning commentary concerning abuse of other black annuitants by another factoring company in Maryland.

White Lawyer Wielded "Legislative Privilege" Over and Over Resulting in Massive Delays in Black Man's Litigation For Years

If SAF et al had such a good case why would they employ such delay tactics?  The Taylor case is terrible for the public perception of the structured settlement secondary market, a perception that is already jaded. 

In October 2021 SAF/123 Lump Sum attorney Steve Heretick, who was disqualified as counsel for 123 Lump Sum Defendants, wielded his continuance privilege (while a member of the Virginia House of Delegates), indiscriminately to delay that litigation for years, according to a motion by Taylor to have 123's new counsel Bill Stanley disqualified. Bill Stanley is a Virginia state senator who "was invoking the same legislative privilege that Heretick had relied on heretofore to obtain an unconscionable sequence of continuances and delays, namely Va. Code §30-5". According to the Virginia Bar website, there are more than 29,000 lawyers admitted to practice in Virginia. There have been 40 lawmakers in the Virginia State Senate for over 120 years. 

Taylor's December 14, 2021 motion to disqualify, chronicles for readers just how often Steve Heretick exercised privilege that served to delay the Taylor case for a time frame replacement judge Charles Maxfield described as shameful. 25 motions remained pending. Some motions have been pending for 6 years!

2016 (once)

• Attorney Heretick sent a letter on January 11, 2016, stating that he would not be available
until mid-April of 2016 (Taylor Motion Ex. A)

2017 (thrice)

• Attorney Heretick sent an email on February 23, 2017, cancelling a hearing set for April
 2017 (Ex. B)
• On March 17, 2017, Attomey Heretick postponed a hearing date set for June 27, 2017
until June 29, 2017 (Ex. C)
• On November 21, 2017, Attomey Heretick emailed the parties stating that he would be
unavailable in 2018 until late March of that year (Ex. D)

2018 (twice)

• On April 25, 2018 Heretick responded to a request for his ability stating that he would
likely not be available until after July 1, 2018 (Ex. E)
• On December 7, 2018, Attorney Heretick continued a hearing set for December 17, 2018
(Ex. F)

2019)  (once)
• Attorney Heretick sent an email on December 18, 2019, in response to a request for dates
stating that he would not know his availability until early January (Ex. G)

2020  (once)
• On October 9, 2020, Attorney Heretick continued a hearing set for October 19, 2020 (Ex.
H)

Taylor argued Rule 3.4 (j) of the Virginia Rules of Professional Conduct, states:

A lawyer shall not... delay a trial, or take other such action on behalf of the client when the lawyer knows or when it is obvious
that such action would serve merely to harass or maliciously injure another. Id. That admonition is further explained in Comment 6:
Paragraph (j) deals with conduct that could harass or maliciously injure another. Dilatory practices bring the administration of
justice into disrepute. Delay should not be indulged merely for the convenience of the advocates, or solely for the purpose of
frustrating an opposing party's attempt to obtain rightful redress or repose. * * *Va. Rules of Professional Conduct R. 3.4, Cmt. 6 (emphasis added).

As then-Circuit Court Judge D. Arthur Kelsey observed two decades ago: Implicit in § 30-5 is the good-faith duty of a lawyer-legislator not
to accept representation 'where it is clear that a party may be seeking out a legislator to act as a lawyer simply to have the
opportunity to take advantage of the legislative continuance for purposes of delay.

In Commonwealth v. Foulks, 56 Va. Cir. 449,455 n.l (Suffolk Cir, Ct., Oct. 19, 2001) (quoting Guidelines on Legislative Continuances, House of Delegates Committee on Rules^ (April 21, 1998)). Judge Kelsey emphasized that, "[t]he lofty purposes behind § 30-5—as historically sound and jurisprudentially valid as they may be—are not furthered by defendants who deliberately seek out legislator-lawyers as a means of tapping their near-automatic delay
powers." Id. at 455 n. 1.

By retaining Stanley Taylor argues, SAF has done exactly what Judge Kelsey decried, when he also explained a common misconception concerning the ambit of Va. Code §30-5, noting that the granting of a right to a continuance is bestowed upon the party^ not the lawyer-legislator. "[T]he continuance right...
is not simply for [the attorney's] personal convenience," Id. at 465, n.6. It is up to the party to seek a continuance, not the attorney.

At the October 2021 hearing, Judge Maxfield (the 3rd judge on this case) admonished SAF, "I'm of the opinion that justice delayed is justice denied." Oct. Hr'g Tr. 56: 10-56:12. The Court expressed its intention to get the case moving, stating, "Let's act as if our job is to facilitate in getting a dispute into the courtroom fairly and honestly and do that in a professional manner.... Let's get it on track, and let's get it resolved within a year, okay?" Oct. Hr'g Tr. 66:4-66:7, 66:10-66:11. This Court also explicitly forewarned SAF to retain counsel prepared to participate in the December hearing: "/ expect [SAF] to be able to find counsel and be prepared,'' Oct. Hr'g Tr. 57:6-57:7 (emphasis added), and specifically instructed SAP, "you have to find counsel to be prepared on that day, Sir," Oct. Hr'g Tr. 60:2-60:3

SAF retained Stanley only a week before a long pending interpleader motion was to be heard on December 17, 2021. Taylor argued that SAF's conduct in knowingly retaining an unavailable legislator, practicing law 200 miles from the courthouse, the very day substantive responses to the pending motions were due, was obviously solely for the purposes of invoking Va. Code §30-5 in a direct and flagrant challenge to Judge Maxfield's authority to control the pace of this heretofore shamelessly delayed case. Justice delayed is justice denied.    Download Taylor Mot Ntc Memo is Supp to Disqualify Attorney Stanley

So what happens?  Judge Maxfield grants the continuance!

Instead of acting like a responsible "bartender" and cutting Taylor off after a couple of deals (rounds), structured settlement factoring companies kept "serving" more rounds and kept Taylor "drinking" from the "poisoned chalice" and eroding his structured settlement, aided by retired Judge Sword's figurative rubber stamp. The discounts at "Sword &Taylor" lasted two years and SAF & Co took full advantage.  It seems that the games of continuance are set to continue. In my opinion, the Taylor case is an indictment of structured settlement protections in Virginia which have been stacked against Taylor by wealthy well-funded white folk working in a system that has little of the controls of any other financial services industry segment. 

The fact that the case is still in a preliminary motion stage in after 76 months ( with 25 motions pending) speaks volumes. Is that supposed to inspire consumer confidence in doing business? I think not. 

"Sword and Taylor"

 

 

 

123 Lump Sum Retains ANOTHER VA Elected Official to Replace Heretick Against Black Amputee Burn Victim

by Structured Settlement Watchdog

The Terrence Taylor structured settlement "10 sales approved in 2 years", pending for more than 6 years factoring case has a new but familiar twist following the appointment of new counsel to replace Steve Heretick, a soon to be former member of the Virginia House of Delegates. “I don’t take cases that I have doubts about.” Heretick told the Washington Post in 2015, later clarifying had he known what he knows now there is a case he might have declined to take: “The Terrence Taylor case". [See The flawed system that allows companies to make millions off the injured Washington Post December 27, 2015]

"Stall tactic"?

123 Lump Sum "Dos-Si-Dos" in the "Virginia Reel"

New counsel, apparently retained by 123Lump Sum parties December 10, 2021, yet another elected official, a member of the Virginia Senate, who has requested a continuance on their behalf for a December 17, 2021 interpleader hearing, citing his legislative obligations in preparation for the 2022 Virginia General Assembly that begins January 12, 2021. Counsel cites Virginia Code Section 30-5, the Supreme Court of Virginia, which has "consistently ruled that this code provision effectively trumps other provisions of the code of Virginia". Convenient and brilliant if you're 123 Lump Sum, or any of its investors. But what does it say about the structured settlement secondary market and the Portsmouth Circuit in particular?

Two Months Ago

On October 6, 2021, Judge Charles Maxfield seemed ambitious about getting the Taylor case moving from its languished state with a stack of 25 motions pending; Maxfield referred to the long delays as "shameful" [a significant amount of time can be attributed to Heretick's legislative obligations]. But at the end of the hearing, Maxfield's only new ruling was on a long pending motion by Taylor to disqualify Steve Heretick from representing his client 123 Lump Sum. Taylor's camp filed the discovery motion more than 5 years ago because it intended to call Heretick as a witness.  At the time Heretick argued "that Taylor's motion to disqualify Plaintiffs' counsel is simply another dilatory, vexatious effort to district this Court from the essential nature of this case, to-wit, that Terrence Taylor lied deliberately and repeatedly to this Court under oath in seeking to sell his annuity rights in a significant number of transactions, and now, having squandered his assets on prostitutes, gambling, and drugs, seeks to blame everyone but himself for his conduct". If that truly was the position of 123 Lump Sum and they were confident in their position, then why didn't 123 Lump Sum simply let the chips fall where they may, instead of a bunch of white men dragging the case out against a black amputee burn victim for more than 6 years?

In the process of cleaning up the docket however, on October 6, 2021 Judge Maxfield also:

1. let stand a 2015 decision by recused Judge James Hawks to unseal the Taylor structured settlement transfer petitions in Portsmouth case records. Hawk's ruling was stymied by Heretick's not signing the order and it was never entered. Subsequently Hawks recused himself after he was mentioned in a Wall Street Journal article by journalist Leslie Scism.
2. let stand an October 27, 2017 ruling by recused Judge Johnny Morrison, which at the time was after two years of inexplicable delays, giving Terrence Taylor will get his day in court and also permitted New York Life to bring in investors as additional parties and to go forward with its interpleader action, while litigation over the legitimacy of his structured settlement transfers goes forward. The investors are assignees of certain factored structured settlement payment streams originated by 123 Lump Sum and Isettlements from Terrence Taylor's structured settlement

Taylor originally filed suit February 26, 2015 in Eastern Virginia Federal Court, seeking jurisdiction in Alexandria Virginia partly on the basis that the Order of the federal judge in the underlying 1989 personal injury settlement precluded transfers.  Defendants played the Rooker Feldman card and the matter was voluntarily dismissed. SAF immediately filed for a Declaratory Judgment action, to which Taylor counterclaimed in March 2015.  [ Structured Asset Funding, LLC et al v Terrence E. Taylor Portsmouth Circuit VA Case No. CL15-3022].

Judge Hawks recused himself after he was mentioned in the aforementioned a WallStreet Journal article about the Taylor case authored by Leslie Scism and the wheels of justice were at a standstill until June 2017 hearings and Judge Johnny Morrison's ruling 4 months later. Then Morrison was recused.

Unless Judge Maxfield grants 123 Lump Sum's latest stall tactic, the next hearing is set for December 17, 2021 in which a single motion is to be decided, that of Income Stream Funding Partner's objection to New York Life's interpleader motion. Income Stream Funding Partners LLC was an assignee of some of the payment streams at issue in the case and filed a motion to dismiss the interpleader. Two of the other defendants have already unsuccessfully contested the New York Life interpleader action.  If the motion is granted the case could continue to drag on for years.

What is interpleader?

A way for a holder of property to initiate a suit between two or more claimants to the property. If, for example, A holds property that he knows he does not own, but that both B and C are claiming, A can sue both B and C in an interpleader action, where B and C could litigate who actually owns the property.  [Source: Legal Information Institute]

What is an assignee in a structured settlement factoring transaction?

Under Virginia Law, "Assignee" means a party acquiring or proposing to acquire structured settlement payment rights directly or indirectly from a transferee of such rights

How many motions STILL remain pending in the Terrence Taylor Structured Settlement Factoring Litigation AFTER 6 Years?

24 motions remain pending including a motion to compel discovery that have been pending for 6 years.

How is justice being served here?

• There is no licensing and very little regulation of the sales practices of structured settlement payment buyers like 123 Lump Sum.  While Virginia amended its Structured Settlement Protection Act following the blistering Washington Post expose, about the Taylor case, the Taylor case itself has been languishing due to legal maneuvering that does little to inspire confidence in the structured settlement secondary market or the ability of Virginia Courts to move such cases in a timely and fair manner.  At the time of commencement of litigation in 2015 Mr. Taylor was an adult living with his parents with a 4-year-old child. 
• The numerous opportunistic transactions undertaken by related entities and approved by Portsmouth courts in a short period of time on Taylor in the first place, was and still is a damning indictment of how little checks and balances there were from top to bottom.
• While the issues here transcend race, it's notable that so far it has been one black man against a bunch of white guys.  So I'm just asking the obvious question "Can a black man with a structured settlement get a fair shake in Virginia Courts?", because on this showing it doesn't seem so.

WTF Why can't the brother get a fair shake in Portsmouth Virginia?

 

 

 

 

 

 

Minneapolis Star Tribune Takes on the Structured Settlement Secondary Market in Blistering Expose

by John Darer CLU ChFC MSSC CeFT RSP CLTC

The Minneapolis Star Tribune has published an important and impactful expose of the structured settlement secondary market and bares its untreated festering sores

The second installment of four parts was published this week as the culmination of a two year effort by the Star Tribune team. The Star Tribune explores the data and presents it in a meaningful way. In four installments they focus on The Sellers, The Judges, The Buyers and The Guardians. 

A festering sore is the best way to describe structured settlement buyer business practices

Although 50 states and the District of Columbia have enacted Structured Settlement Protection Acts, the Star Tribune found that "judges are often hampered by doubts and vague laws. They say that the final, often reluctant arbiter in settlement buyout cases are given little information about sellers and few rules on companies seeking to buy".

Indeed, while a number of participants that I've spoken with would be willing to have a licensing standard, there is no licensing standard or regulator of sales practices in any state, unlike other financial services. Two states Maryland and Louisiana require transferees to be registered, but that isn't nearly enough. Unless there is a mechanism that could fine, suspend or revoke licenses the free for will likely continue to the detriment of consumers such as those profiled by the Star Tribune.

Star Tribune talking points

• "Judges say they are routinely deprived of key information about the people selling their payments, including medical records and court filings that might provide insight about their cognitive ability or mental competency".
• "Based on its review of 1,400 Minnesota cases that have gone to a hearing since 2000, the Star Tribune says that (factoring) companies have successfully sought removal of some judges who have rejected sales or questioned the lopsided nature of deals in past cases.
• "A former Hennepin County judge cited by the Star Tribune, raised concerns at bench meetings but was met with apathy by other judges  "nobody wanted to get into it"
• "A guardian was appointed in just a single case" of the ones reviewed by the Star Tribune.
• "Some judges take a narrow view of responsibilities". Summons up an apparition of former Portsmouth Virginia Circuit Court Judge Dean Sword for his "best interest standard" exhibited in presiding over 9 of 10 transactions of systematic destruction of a black man's structured settlement in 2 years. Sword relied solely on affidavits, according to Washington Post commentary in 2015.

The Star Tribune profiled a number of sellers. One of them was Laura Dalluhn.  In November 2019, a Dakota County Minnesota judge rejected a structured settlement transfer petition, noting that Dalluhn testified that she "suffers from a mental health condition, has been civil committed four times and is under civil commitment now". The petition was essentially resubmitted in January 2020 and assigned to another judge (Joseph Carter),who approved the transfer as well as a day later  extending Dalluhn's commitment for another 6 months, finding her mental problems were still serious enough to require close supervision. The company that preyed on Laura Dalluhn was Greenwood Funding, which  after being rejected in November 4 2019, refiled under the affiliate name Sempra Finance. 

Sempra Finance is a real piece of work. It's certainly not the first time they've been encountered participating in transactions involving highly vulnerable persons.  For example, Sempra Finance was on the tail end of a daisy chain in what might best be described as "the serial financial rape of a minor's structured settlement" in Pennsylvania

See ZACHARY BARBER, JEFFREY BARBER, ADMINISTRATOR OF THE ESTATE OF LINDA LEE JENKINS A/K/A/ LINDA LEE BARBER, DECEASED
v. BRUCE STANKO, NORTH HILLS PHARMACY SERVICES, LLC; PACERCHECK, INC.; ET AL
APPEAL OF: SEMPRA FINANCE, LLC ("SEMPRA") : IN THE SUPERIOR COURT OF PENNSYLVANIA  No. 615 WDA 2020
Appeal from the Order Entered June 5, 2020 In the Court of Common Pleas of Allegheny County Orphans' Court at No(s): No. 4037 of 2005

and my blog of  May 14, 2021 Structured Settlement Investors' Bad Day in Barber Case as PA Superior Court Quashes Appeal

According to that decision  "It has been said that the SSPA places the common pleas court in “position of a guardian of a person who stands in the presumptive position of the defenseless recipient of a benefit. It is for the Court to determine, as a guardian would, on an independent basis, whether the transaction serves the best interests of an unsophisticated (if not incompetent) person” and “is to ensure that an otherwise financially defenseless and possibly injured individual would receive a regular, sustaining source of income.” In re Jacobs, 936 A.2d 1156, 1160 (Pa. Super. 2007).

Requiring a judge to serve as guardian to protect the interests places the judge in unfamiliar territory. Generally, the petition to transfer payment is unopposed with plaintiff-payee wanting to transfer payments so that it can receive payments for what he or she considers in its best interests, whether it is or not, and the factoring company wanting it approved so it can make the Requiring a judge to serve as guardian to protect the interests places the judge in unfamiliar territory. Generally, the petition to transfer payment is unopposed with plaintiff-payee wanting to transfer payments so that it can receive payments for what he or she considers in its best interests, whether it is or not, and the factoring company wanting it approved so it can make the most money. That requires the trial judge to make an independent determination of whether the sale is in the best interests of the plaintiff-payee based on economic factors that it is not within its ken and with parties who are not that forthcoming. Moreover, this determination is made even more difficult because the proceedings are non-adversarial, with no factual development and competing positions to inform its judgment as would be the usual. It depends on the forthrightness and good faith of counsel to provide all the information available for the judge to make an informed decision on what is in the best interests of the plaintiff-payee to avoid fraud on the court".

States where judges don't do their part to take "best interest" seriously hurt both the sellers, any applicable and investors who buy assigned rights to the payments from the transaction the judge has approved.

Stay tuned for the next installments from the Minneapolis Star Tribune's expose on the structured settlement secondary market on Structured Settlement Payment Buyers and Guardians

 

 

 

Dockery v Heretick et al. | Amended Motion for Class Action Certification Denied and Summary Judgment Granted

by Structured Settlement Watchdog

While structured settlement annuitant lawsuits against structured settlement factoring companies have increased in the last half decade or so, they've met with mixed success. 

In Dockery v Heretick, et al  US District Court E. PA  Case 2:17-cv-04114-CFK, a civil RICO case, plaintiff Larry G. Dockery alleged the existence of an unlawful scheme between companies who purchase future structured settlement annuity payments, an attorney who represented those companies in connection with such transactions, and other persons, to obtain annuities (actually structured settlement payment rights) from unsophisticated annuitants on unfair terms. Having survived a motion to dismiss on his RICO claims and after engaging in some discovery, Plaintiff sought certification of a class of annuitants who, like him, sold their structured settlement payment rights to companies in exchange for lump sum cash payments and allegedly received less than their worth.

In a 70 page Memorandum Decision dated September 1, 2021, Judge Chad F. Kenney ruled that "because Dockery cannot satisfy each applicable requirement of Rule 23, his Amended Motion for Class Certification will be denied.  Accordingly, the Court need not consider whether Dockery’s claim is typical of the class"

Federal Rules of Civil Procedure 23(a) states:

One or more members of a class may sue or be sued as representative parties on behalf of all only if

(1) The class is so numerous that joinder of all members is impracticable
[numerosity];
(2) There are questions of law or fact common to the class [commonality]
(3) The claims or defenses of the representative parties are typical of the
claims or defenses of the class, and
(4) The representative parties will fairly and adequately protect the
interests of the class.

The Purchaser Defendants argued "that Dockery is not an adequate class representative because his lack of credibility, as evidenced by his contradictory testimony during his two depositions and his admitted severe memory issues, will be a detriment to the class members’ claims. They also argue that Dockery is an inadequate representative because he is not subject to a release signed by putative class members in 2000 that would bar those class members’ claims and because he testified that he only blamed himself for his decision to sell his payments. Heretick further claims that Dockery’s memory issues and inability to read render him an inadequate representative because they preclude him from showing that he is willing to vigorously or fairly represent the class".

Dockery replied "that no memory issue impedes class certification. Reply Br. at 12. For example, the fact that Dockery does not understand himself to have been counseled by a lawyer is no surprise given that the lack of real legal advice is the point of the case. Id. And in any event, the questions to be answered on the issue of adequacy are the qualifications of counsel and whether the class representative has conflicts with the class he seeks to represent.
The Court concludes that Dockery is an inadequate class representative for a slightly different reason. The Third Circuit has noted that “[s]tatute-of-limitations issues also touch on the adequacy requirement.” In re Cmty. Bank, 622 F.3d at 294. Such an issue facing a named plaintiff “may be relevant to evaluating their adequacy as class representatives in the same way any type of defense may be relevant to that inquiry, i.e., named plaintiffs may be inadequate representatives if their claims are extremely weak as compared to the rest of the class.” Id. Therefore, “to the extent the claims of the named plaintiffs–as compared with the rest of the class–are subject to fatal statute-of-limitations defenses, that inquiry may be relevant to whether
they can adequately represent absent class members whose claims do not suffer from timeliness problems.” Id"

Sourced from: Dockery v Heretick, et al  US District Court E. PA  Case 2:17-cv-04114-CFK Document 305 Filed 09/01/21 pp 62-63 and 68-69 of 70

The decision was seen as a "fantastic outcome" by Genex Capital CEO Roger Proctor who emailed me this afternoon (shortly after the decision was published) with some good natured hectoring along with a copy of the decision. 

No word yet on whether or not there will be an appeal of the Court's decision by Dockery.

Peter Vieth of the Virginia Lawyers Weekly covered the story September 20, 2021, citing this author. See Suit vs. settlement buyers, delegate dismissed.