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Why Is Milestone Consulting Pitching Factored Structured Settlement Payment Streams as Annuities When They're Not?

by Structured Settlement Watchdog

MIlestone Consulting states that it is boycotting the National Structured Settlements Trade Association "because of its ties with insurance companies" and because of its failure to protect plaintiff rights, while 

The secondary market "annuity" puzzle

 

upon information and belief, the Milestone CEO uses and benefits from the NSSTA CSSC designation on his LinkedIn (at time of publication) and  Milestone is contracted and appointed  with some but not all NSSTA member companies issuing structured settlement annuities, who are being "tarred and feathered" at the expense of the Factored Structured Settlement Payment Rights Milestone touts using the tertiary market's scam label "Secondary Market Annuities" while Milestone uses the names of the companies to market the alleged safety of the investment on its blog.

"If you are dead set on having a guarantee from a major insurance company for payments," they say "then consider a secondary market annuity, or structured settlement that is being transferred or sold by another. These annuities offer yields of four to six percent and are guaranteed by the same insurance companies that offer brand new ones through their brokerage distribution channels. By being a buyer of someone else’s structured settlement, you are giving yourself an actual competitive yield, and helping another family who for whatever reason is being forced to sell".   MIlestone blog 1/11/2020

" After all they are issued by the very same insurance companies that issue all structured settlements like Metropolitan, Prudential and Berkshire Hathaway"  Milestone Legal Examiner 1/17/2020 by Milestone CEO

" So how can tort victims with purchasing power fix the structured settlement industry? They can be buyers of structured contracts and structured settlement annuities that are bought and sold every day" Ibid.

Comments and Questions

1. What Milestone is pitching as an annuity is not an annuity. It's a Factored Structured Settlement Payment Stream.
2. A Factored Structured Settlement Payment Stream is an instrument created by the transfer of structured settlement payment rights in a structured settlement factoring transaction  (defined at IRC 5891(c)(3)(A). With specialist knowledge Milestone knows that neither the annuity itself, nor its ownership, transfers when the rights are transferred.
3. Insurance companies do not "issue" Factored Structured Settlement Payment Streams, do they?
4. So, if the annuity does not transfer in a structured settlement transfer and remains owned by the qualified assignment company, and Milestone is pitching an annuity, is Milestone creating an annuity? Is any factoring company creating an annuity in a structured settlement factoring transaction or when it assigns the rights to an investor via Court Order? Where is the support that in the secondary market there are "structured settlement annuities that are bought and sold every day?
5. You don't get a closing book when you buy a legitimate annuity and you don't have the transaction risk with legitimate structured settlement annuities that you have with Factored Structured Settlement Payment streams.  5 companies selling (or in the past have sold) factored structured settlement payment streams to investors, have paid hundreds of thousands in legal fees fighting for their clients over claims to their structured settlement investments by lead paint victims arising out of the Access Funding scam in Baltimore  Maryland. Somerset's CEO and one of its former employees paid off one of its secondary market "annuity" to settle a FINRA complaint against them in September 2019 and December 2019 respectively.
6. So a big question is why would Milestone, a company led by a licensed insurance agent, market, or allow for something to be marketed that is not an annuity, as an annuity?
7. The National Association of Insurance Commissioners' (NAIC) Statutory Issue Paper 160 p6, December 2018 Ref #2081-17, said that factored structured settlement payment streams (or acquired structured settlement income streams) are neither annuities nor insurance products. Insurers who acquire factored structured settlement payment streams cannot account for them as annuities or insurance products. "New Footnote 1: This guidance is specific to acquired structured settlement income streams (legal right to receive future payments from a structured settlement) and does not capture accounting and reporting guidance for the acquisition of any insurance product (e.g., life settlement, annuities, etc.)"   and New Footnote 2: Reporting entities that hold qualifying structured settlement payment rights shall report the security on Schedule BA either as an “any other class of asset” or as a “fixed or variable interest rate investment with underlying characteristics of other fixed income instruments” if the structured settlement payment right qualifies for reporting within that reporting line (e.g., NAIC designation)
8. On the same blog post, Milestone uses contributions to the AAJ endowment as part of its marketing sales pitch  "being the only non-law firm donor to the AAJ Endowment". On September 24, 2007, the Office of General Counsel of the NY State Insurance Department (now DFS) opined in response to a request regarding a similar pitch, that it was unlawful when it appeared in an advertisement for the Milestone CEO's former company and directed at New York Trial Lawyers and members of ATLA (the former acronym for former name of AAJ). 
9. That being said, should donors get a free pass for representing to a lawyer's clients that something is an annuity that is not an annuity, or give reason for lawyers to ignore a client of theirs being sold something that is being called an annuity which is not an annuity.
10.  If you are advising an investor as a fiduciary, don't you need to put their interests above the selling annuitant?  
11. The two largest donors to NYSTLA are members of the National Structured Settlements Trade Association. If you go around the country you will find that NSSTA members are well represented in other states.

A. Following is an excerpt of a published opinion of the Office of General Counsel New York State Insurance Department (now Department of Financial Services) dated September 24, 2007:

"Turning to the question about advertising donations to certain not-for-profit organizations like association of trial lawyers, note as an initial matter that in Opinion of General Counsel No. 07-03-07 (March 12, 2007), the Department stated that “nothing precludes the agent or broker from making charitable contributions so long as the advertising of a charitable contribution as an incentive for new insurance business does not constitute an improper inducement in violation of Insurance Law § 2324.” This statement applies with equal force to life, accident and health insurance policies for which such an inducement would be a violation of Insurance Law § 4224.

The inquiry references an “affinity program” of an association representing trial lawyers. To participate in the program, a business must sign an agreement that provides for certain advertising-related services by the not-for-profit in exchange for a contribution from the participating business. The member businesses are responsible for providing all advertising content. The association urges its members to make purchases from any business that has joined the affinity program.

If this form of arrangement were strictly an exchange of compensation by an agent or broker for advertising services, the Department would regard the contributions as fees paid for permissible advertising, and not donations to a not-for-profit. In that circumstance, the contributions would not constitute an inducement in violation of Insurance Law § 4224.

However, where, as here, an agent or broker advertises that the agent or broker makes contributions to a not-for-profit organization of concern and interest to potential purchasers of insurance or annuities, such conduct constitutes an illegal inducement to purchase insurance that runs afoul of Insurance Law § 4224. Nor may an agent or broker evade the prohibition set forth in the Insurance Law by enlisting the aid of the not-for-profit organization to do what the agent or broker cannot do lawfully"

Sadly that's not all.

The same January 11, 2020 blog posts claims that Milestone "has been at the forefront of advocacy for plaintiffs since our inception in 1999" . Really Milestone?  While the Milestone CEO has indeed been in the business since 1999 where he started with EPS Settlements Group  (now Arcadia), Milestone was only established in 2012 (not 1999), according to its LinkedIn profile.  Second, here is a fax cover sheet from March 5, 2002 sent on behalf of the MIlestone CEO (then with EPS Settlements Group) who was the defense structured settlement broker on a medical malpractice case.  Download FAX cover sheet EPS-John Bair 3-5-2002." Note that Milestone now uses the same FAX number. A December 15, 2003 article in Buffalo Business First promoting his former company Forge Consulting, states that the Milestone CEO "was with EPS Settlements Group for 3 years" and " Bair continues. "It's why I ultimately launched this company  (Forge). It's what drove me personally to seek out a new environment to allow us to represent plaintiffs.Why was it necessary to embellish by "moving the chains" to attempt to bury EPS?  It's not like it can't be found. Why not just say you've been a plaintiff advocate since 2003?

Milestone suggests "educating yourself about non-qualified assignments which allow for tax deferral on the earnings of your settlement, and tax-exemption on the principle. (26 U.S.C. § 130c)" 

1. The word non qualified assignment does not appear in (26 U.S.C. § 130c) or [(26 U.S.C. § 130(c)] or IRC §130(c)
2. All principles are tax exempt

• a fundamental truth or proposition that serves as the foundation for a system of belief or behavior or for a chain of reasoning.  Tax exempt 
• a rule or belief governing one's personal behavior.  Tax exempt a-rooney
• a general scientific theorem or law that has numerous special applications across a wide field. Tax exempt a-roni
• a fundamental source or basis of something.  Tax exempt verklempt

 

Structured Settlement Industry Production Was A Record Setting $6.4B in 2019!

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Structured settlement industry premium production increased for the second year in a row. 2019 was a record setting year for structured settlements, at $6.4 Billion after a decade hovering below $6B, ending in 2017. Forward momentum is an outstanding achievement in a period of low interest rates and record setting stock market performance.

Structured settlements remain a core personal injury settlement planning tool that enables parties to address the personal needs of plaintiffs with a level of precision. In addition to traditional uses of structured settlements in personal injury, wrongful death and workers compensation settlements, there are many applications in the non qualified structured settlement area such as employment and commercial settlements, structured installment sales, wrongful imprisonment  (the latter has tax exclusion but cannot be assigned under IRC 130).

A round of applause goes to my industry colleagues, their employees and to representatives of American General, Berkshire Hathaway,  Independent Life, MetLife, New York Life,  Pacific Life, The Prudential Insurance Company of America, United of Omaha and USAA , and our trade associations, with whom I share this success. A further round goes to legal counsel, insurers and adjusters who support structured settlements and take the time to stay current on the many applications of structured settlements and who choose to retain structured settlement experts.

4structures.com LLC recently introduced new advertising that focuses on one of the strengths of structured settlements,  " a custom fit for your life marathon".

 

Structured Settlements | The Year in Review 2019

by John Darer CLU ChFC MSSC CeFT RSP CLTC

When results for 2019 are released shortly,  indications are that U.S. structured settlement industry production ended the decade having topped $6 billion for the second year in a row after a decade surfing below that level, stemming from the 2008 financial crisis.  

January 2019

The Tennessee State legislature introduced bills to make various changes to the “Tennessee Life and Health Insurance Guaranty Association Act. The Tennessee House and Senate bills excludes from coverage under the Act "a person who acquires rights to receive payments through a structured settlement factoring transaction, as defined in federal law, regardless of whether the transaction occurred before or after the federal law took effect.

DRB Capital claimed that since the DRB bounty program's launch in August 2018, DRB Capital has awarded one payout and received numerous tips and credible information about unfair, deceptive and abusive activities in the structured settlement secondary market. DRB claims that many of these violations are criminal in nature, including the routine falsification of information submitted to state courts as part of structured settlement transfer petitions.

Sean McManus, principal of structured settlement factoring company Patriot Resources is sued by FINRA for selling "Snake Oil" without a license. Yes a snake oil salesman!

February 2019

Structured settlement industry production reports, compiled by Melissa Evola Price, confirm that 2018 production exceeded $6 billion which was the highest in a decade, an 8.45% increase over 2017.

Structured settlement annuity issuer Pacific Life Insurance Company  was named among the most ethical companies in the world for the second straight year.  USAA is named for the fourth straight year. Prudential Financial is also named.

Settlement checks are mailed in the Aviva/ Athene Class Action settlement.

A structured settlement transfer petition is submitted in Orange County Florida featuring a 19 Year old structured settlement annuitant trading $6,351,156.88 for $1,252,430.91.

New York’s attorney general has declared it’s illegal to sell fake social media engagement in order to inflate one’s online influence, ruling against one “fake like” merchant in a landmark decision in the battle against bots. Bots and other fake accounts have been running rampant on social media platforms, often stealing real people’s identities to carry out fraud,” Letitia James said in a statement accompanying the decision. “As people and companies like Devumi continue to make a quick buck by lying to honest Americans, my office will continue to find and stop anyone who sells online deception. With this settlement, we are sending a clear message that anyone profiting off of deception and impersonation is breaking the law and will be held accountable.”

A review of the deposition excerpts from deposed parties in Court filed documents in in Wall v Altium Group LLC show that there was a misrepresentation of the nature of What Retirees Were Buying Multiple Times. The Walls lost their entire investment in an origination fraud.

March 2019

A creative Florida structured settlement factoring company submitted a New York structured settlement transfer petition in Queens County with the caption In the Matter of And vs None. Who's on First?

On March 13, 2019, the DC Structured Settlements Protection Act of 2018 (SSPA) went into effect, updating the District of Columbia’s statutes to provide better protections to personal injury victims who receive financial compensation for their damages in the form of structured settlements.(Mar. 13, 2019, D.C. Law 22-235, § 101, 66 DCR 580.) 

April 2019

Michelle Caine of Prudential Financial begins her term as President of the National Structured Settlements Trade Association. 

In  Wall v Altium Group, the Western District of Pennsylvania granted summary judgment in the favor of Altium Group on April 30, 2019 against Pennsylvania retired couple. Altium Group has advertised scam labelled "secondary market annuities" as having "Unparalleled Safety of Principal"  Instead the investors in secondary market annuities" ended up with $0 and big Legal Fees

Allstate Corp. enters into talks to sell its $2.5B annuity block (that includes structured settlements) to FGL Holdings.

Investors in Secondary Market "Annuities" are crushed as The Maryland Court of Special Appeals has reversed a trial judge's approval of a class action settlement with victims of the Access Funding exploitation of lead paint structured settlements,  finding the parties could not bargain away the Maryland Consumer Protection Division's right to seek restitution from the company

H.R. 2212, the Structured Settlement Claimant Rights Act of 2019 is introduced

CBC Settlement Funding, a Conshocken, PA structured settlement factoring company associated with Sutton Park Capital CEO Steve Pasko, is relentless in outrageous pursuit of deal , a year after structured settlement factoring Petition on 19 year old NJ resident was canceled due to mental Illness after his parents intervened.

Payment servicing in factored structured settlement deals. In one case a payment assignee's representative notified the annuity issuer that the payment assignee (not qualified assignee) died, but the annuity issuer inaccurately entered it into their system that the annuitant died. When the servicer contacted the beneficiary to express its condolences they learned that the alleged decedent was very much alive. A representative of the annuity issuer then asked for proof that the annuitant was alive, when the mistake was theirs in the first place.

May 2019

A Federal District Judge in Eastern Pennsylvania has denied motions to dismiss racketeering claims against Seneca One, JG Wentworth, 321 Henderson and Portsmouth Virginia lawyer and delegate Stephen Heretick in the matter of Larry G. Dockery et al. v Stephen E. Heretick et al. and New York Life Insurance Company, et al.Case 2:17-cv-04114-MMB.

June 2019

The end of the road for the so-called " AIG Structured Settlement Class Action" as the First Circuit Court of Appeals affirms the District Court ruling against Plaintiffs. Retired United States Supreme Court Justice David Souter wrote the decision stating in pertinent part,  "The annuity companies' payment of brokers' commissions from out of the money Lexington paid for the annuities does not belie the facts that Lexington paid the amounts it quoted and that appellants received exactly those specific annuity payments the agreements had promised, payments that the appellants have not alleged that they failed to receive". 

On June 11 Louisiana Governor John Bel Edwards signed Louisiana Senate Bill 193, now identified as 2019 Louisiana Act 260, which will replace Louisiana’s
flawed Structured Settlement Protection Act with a new statute largely conforming to the National Conference of Insurance Legislators (NCOIL) Model SSPA. The new statute, which will not take effect until July 1, 2020, also includes registration and bonding requirements for factoring companies seeking to acquire payment rights of Louisiana residents, plus prohibitions intended to curtail “poaching” of transactions by competing factoring companies

July 2019

The  State of Connecticut plans to increase its statutory protections for structured settlement annuitants in the event of insolvency of the annuity issuer. 
CT investors in structured settlement payment rights  do not have the same statutory protection as structured settlement annuitants effective October 1, 2019. To eliminate any confusion, changes to the CT statute contain an express exclusion from protection for investors in structured settlement payment rights acquired through a structured settlement transfer regardless of whether that structured settlement transfer occurred prior to the enactment of the new law. [ see C.G.S. 38a-860 (O) structured settlement annuity benefits to which a payee or beneficiary has transferred the payee’s or beneficiary’s rights in a structured settlement factoring transaction as defined in 26 USC 5891(c)(3)(A), regardless of whether the transaction occurred before or after said section became effective]. The new law is part of an Act Concerning Conforming Minor and Technical Changes To Statutes Concerning Insurance and Real Estate. 

A structured settlement factoring origination firm associated with a New York structured settlement primary market agency registers as a structured settlement transferee with the  Office of the Attorney General of the State of Maryland.

August 2019

Factoring company Novation Settlement Solutions attempts to scam consumers with a rising interest rate scam to induce them to sell their structured settlement payments to Novation for pennies on the dollar. The Novation scam was notable given that interest rates were actually falling the time of the advertisement.

Former head of factoring broker Sovereign Funding Group, David Springer, in more dubious self promotion, representing on LinkedIn that he has authority to sell life insurance when neither the dates of professional license that the Mt. Airy man claims, nor the line of authority Springer claims he has, can be corroborated in the most current Maryland Insurance Administration database. 

August 19, 2019  CT Judge Snuffs Bad Deal for 18 year old New York annuitant forum shopped by structured settlement factoring company to Connecticut. The bogus deal was signed days after the young Hispanic male graduated high school. The denied deal had between $406,000 and $530,000 in profit spread. The 18 year old  annuitant posted different selfies of himself while wearing the same Famouse Famiglia Pizzeria uniform in the bathroom at work 3 or 4 times in the days leading up to the New Haven transfer hearing and then again days after? If the young man really lived at the purported address in CT, then why would he commute 2 hours each way for an hourly "minimal wage" job on the West Side of Manhattan, when there were plenty of pizzerias and fast food joints in CT?

September 2019

Married man’s death during sex on business trip was ruled a ‘workplace accident’ which under French court ruling, means tbay any partners and children will receive a monthly benefit of up to 80 percent of his salary until what would have been his retirement age and then a share of his pension

Disgruntled former structured settlement broker turned lawyer Dick Risk's quest to take down AIG, has been nailed shut as the deadline to file Writ Certiorari has come and gone.  Three months earlier, the First Circuit Court of Appeals had already affirmed the Trial Court's September 2018 decision. Predictably no word from all the snipers in the settlement planning media who devoted excessive air time to the poorly pleaded litigation at the outset but not even a byline when the lawsuit met the fate it was due.

One or more unnamed structured settlement factoring companies are targeting United States consumers using an Egyptian company in an apparent effort to skirt US telemarketing laws. A representative of one Egyptian company, Proper Business Solutions, who claimed to be an American, claimed to me that because they have no presence in the United States they are not subject to its laws.

FINRA claim concerning " secondary market annuity" investment is settled, according to FINRA Broker check for Somerset CEO Thomas Hamlin.  The former merchant of factored structured settlement payments streams settled with Barry Cooper, a retired Navy worker who invested substantially all of his retirement money from years of back breaking work at a naval yard

NY Senate Bill S6688 sponsored by Afro-American state senator James Sanders, Jr. requires licensing for Commercial Loans but not structured settlement factoring companies or their representatives who for two decades without regulation,  have had free reign to harass and solicit vulnerable NY Individuals, many of whom are blacks and other minorities so they can buy up their assets for pennies on the dollar.

October 2019

A structured settlement factoring origination firm associated with a New York structured settlement primary market agency seem to suggest to investors, that factored structured settlement payment streams have the same risk profile as United States Treasury Bonds in its marketing.

Former Woodbridge Group of Companies Owner and CEO Robert H. Shapiro was sentenced to 25 years in prison by a Miami Federal District Court judge Cecilia Altonaga on October 15, 2019 for Shapiro's role in a $1.3 billion Ponzi scheme. Shapiro was handed the maximum possible under the charges of mail and wire fraud and tax evasion in the scheme, resulting in approximately $450 million in losses for more than 7,000 investors, many of them retirees who had invested retirement funds, between July 2012 and Dec. 2017. Shapiro pleaded guilty in August 2019.

October 21, 2019  "Seeking to redress Defendants’ unfair, deceptive and fraudulent conduct that has caused Missouri consumers to not receive the necessary legal advice of disinterested counsel when evaluating offers to purchase structured settlement payments, and subsequently obtain less than the fair value of their settlement to the benefit of"  Defendants, a Class Action lawsuit is filed against JG Wentworth entities alleging violations of the Missouri Structured Settlement Protection Act  RICHARD A. TARVIN III, individually and on behalf of all others similarly situated, Plaintiff, v. THE J.G. WENTWORTH COMPANY; 321 HENDERSON RECEIVABLES LIMITED PARTNERSHIP; 321 HENDERSON RECEIVABLES ORIGINATION, LLC; J.G. WENTWORTH STRUCTURED SETTLEMENT FUNDING CORPORATION; and J.G. WENTWORTH STRUCTURED SETTLEMENT FUNDING II, LLC, Defendants. Case Number: 4:19-cv-02860-SRC United States District Court for the Eastern District of Missouri.

A Willis Towers Watson blog published October 24, 2019 suggested that sellers and potential buyers of structured settlement annuity portfolio transfers could find themselves handicapped by outdated and inaccurate mortality projections. Their comments include that underwriting was only as good as the information available at the time of issue, and may have been influenced by pressure to produce winning bids in what, in past years, was a very competitive market. Insurers have not refreshed their approach to expected future mortality. Rated age methodology hasn’t accurately accounted for medical advances or even the seasoning of the business.

November 2019

United States Owned Structured Settlement Annuity saved the day in Texas for Estate over ex-husband of decedent. See Memorandum Decision and Order November 13, 2019 in John Hancock Life Insurance Co. Plaintiff, vs. The Estate of Jennifer Lauren Wheatley, et al,Defendants. US District Court Southern District of Texas 4:18-cv-02689 

The United States Court of Appeals for the Federal Circuit concluded November 27th, that the Court of Federal Claims in Langkamp v. United States, 131 Fed. Cl. 85 (2017) (“Court of Federal Claims Decision”), erred in holding that the United States had no continuing liability for the future monthly and periodic lump-sum payments specified in the (settlement) agreement, and reversed and remanded. It was the first decision requiring the US to make up shortfalls from the ELNY liquidation.  Attempts to get the US to pay in two prior cases had failed.

December 2019

Wilcac Structured Settlements, inc.,  d/b/a CNA Structured Settlements, Inc. and Wilcac Life Insurance Company sues Nassau County New York couple, individually and as guardians of for their deceased son, seeking recovery of $272,266.14 in overpaid life contingent structured settlement payments paid after the death of their son. Defendants have refused to repay the $272,266.14. The Infants Compromise Order from the settlement required the parents to provide annual proof that there son was alive and notice within 4 days of death.

Structured Settlement Watchdog starts an ethical discussion about the right way and the wrong to buy structured settlement payment rights by settlement planners and structured settlement brokers after accidentally discovering a Broward County deal assigned to a structured settlement broker and settlement planner originated at a less than competitive rate to the seller.

The Department of Justice published its 2019 list of Annuity Brokers. Possibly in response to the number of plaintiff only brokers on the list, of special note is that the nature of the list (and the ramifications concerning the under penalty of perjury declarations of "doing substantial defense work in each of the preceding 3 years)  are stated in more explicit detail than ever before in the current memorandum. " Any broker being considered for selection should be required to verify at the time of selection that he or she meets the minimum qualifications set forth in 28 C.F.R. § 50.24(a) and is otherwise competent to provide structured settlement brokerage services to the United States.

It was announced that SFA is folded into Arcadia Settlements effective January 1, 2020.

Former NSSTA President an industry legend Joseph M. O'Reilly passed December 20, 2019.

 

 

 

 

 

 

US Court of Appeals Rules that US Army Must Cover ELNY Annuity Shortfall

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Trevor Langkamp appealed the judgment of the United States Court of Federal Claims granting the government’s motion for summary judgment and rejecting his claim seeking damages for breach of a tort settlement agreement. See Langkamp v. United States, 131 Fed. Cl. 85 (2017) (“Court of Federal Claims Decision”). In its November 27, 2019 decision, United States Court of Appeals for the Federal Circuit concluded that the court erred in holding that the United States had no continuing liability for the future monthly and periodic lump-sum payments specified in the (settlement) agreement, and reversed and remanded.

In 1980, Trevor Langkamp, then a toddler, suffered severe burn injuries at a property owned and operated by the United States Army. Langkamp’s parents, Joseph and Christina Langkamp, brought an action against the United States under the Federal Tort Claims Act (“FTCA”), 28 U.S.C. § 2674, in the U.S. District Court for the Western District of Michigan.  An annuity was purchased from Executive Life Insurance Company of New York (ELNY) as part of the settlement. ELNY was liquidated in August 2013. Following the ELNY liquidation and the folding of assets in to Guaranty Association Benefits Company. Guaranty Association Benefits Company (GABC), a not-for-profit captive insurance company domiciled in Washington, D.C., was created by the 40 state life and health insurance guaranty associations triggered by the liquidation of Executive Life Insurance Company of New York (ELNY) to pay out benefits to ELNY payees and certificate holders. A number of the payees suffered and continue to suffer from shortfalls.

Several payees have tried to sue the government over ELNY shortfalls and failed. In its March 31, 2017 decision in Karen L. Shaw et al v The United States (no. 14-783C), the Court concluded, that the plain language of the Settlement Agreement demonstrates that the government did not unequivocally guarantee that it would make annuity payments in the event of a default by the annuity company. The decision was affirmed on appeal August 20, 2018.

The United States Court of Appeals for the Federal Circuit in Langkamp case focuses on the settlement agreement. The government’s commitment was inherent in the language of the agreement, the opinion by Judge Haldane Robert Mayer said.

(“[T]he defendants . . . will pay to the plaintiffs . . . the sum of $239,425.45 as an upfront payment . . . and a structured settlement for the benefit of Trevor Langkamp, which sum shall be in full settlement and satisfaction of any and all claims said plaintiffs now have or may hereafter acquire against the defendants . . . on account of the incident or circumstances giving rise to this suit. providing a schedule of future monthly and periodic lump-sum payments and stating that “the plaintiffs hereby agree to accept said sum in full settlement and satisfaction of any and all claims and demands . . . which it or its agents or assigns may have against the defendants  The government additionally contends that if the Settlement Agreement is ambiguous it should be interpreted in a manner that preserves its enforceability. In its view, Langkamp’s reading of the agreement—which imposes continuing liability for future payments—would render it unenforceable because the Assistant U.S. Attorney who signed the agreement on the government’s behalf had no authority to settle Langkamp’s claim for more than $400,000, J.A. 136–40, 162. This argument falls flat. As a preliminary matter, we discern no ambiguity regarding the government’s payment obligations under the Settlement Agreement; it means what it says when it requires the United States to “pay . . . a structured settlement” to Langkamp.   Even if we were to assume arguendo, moreover, that there is some ambiguity in the contract language, there is no indication that in 1984 the present value of the government’s obligations under the Settlement Agreement—including the initial cash payment and the stream of scheduled future payments—exceeded the settlement authority delegated to the Assistant U.S. Attorney. In this regard, the “‘total present value’ of a payment stream plausibly refers to its cost, not to the amount a beneficiary receives.” Ezell v. Lexington Ins. Co., 926 F.3d 48, 50 (1st Cir. 2019); see also Old Republic Ins. Co. v. Ashley, 722 S.W.2d 55, 57 (Ky. Ct. App. 1986) (explaining that although certain annuities had “an estimated yield of $2,853,000,” they had a “present value of . . . $732,000”). Here, after disbursing the required “upfront payment” of $239,425.45, J.A. 133, the government spent $160,574.55 to purchase two single premium annuity policies from ELNY, policies which promised to make all the monthly and periodic lump-sumpayments" 

Read the Appellate decision in Langkamp v United States

Structured Settlement Annuitants from Lincoln Life Assurance Company of Boston Endure Atrocious Customer Service

by Structured Settlement Watchdog

After being in hold for an hour the on hold greeting from Protective Life said  " We treat you the way you want to be treated" .  Apparently that means like crap.

Protective Life is providing crap customer service to Lincoln Life Assurance Company of Boston structured settlement annuitants with insane on hold times.

The person on hold was a New York lawyer who had structured his attorney fees through Liberty Life Assurance Company of Boston. In 2018  Liberty Mutual Insurance Company completed the sale of Liberty Life Assurance company of Boston to Lincoln Life, which in turn farmed out administration to Protective Life Insurance Company in Birmingham Alabama.

Liberty Life Assurance Company of Boston was renamed Lincoln Life Assurance Company of Boston was renamed Lincoln Life Assurance Company of Boston effective September 1, 2019 and written notices were sent to annuitants

It should be emphasized that Liberty Mutual is completely divested Liberty Life for over a year and has no control over Protective Life, which is listed on a September 9, 2019 piece of correspondence as Administrator for Lincoln Life Assurance Company of Boston (formerly Liberty Life Assurance Company of Boston).

Here is what the New York attorney sent to structuredsettlements@protectivelife.com

"I received the attached letter and called to speak to someone As there are several issues with my above policy, including that you have a misspelling as to my street address which should be _______ROAD not _______Road. Please correct the spelling of my street name in your records.
Unfortunately, as I write this email I am now “ON HOLD” for over 40 minutes. About 10 minutes ago FINALLY someone picked up, whereupon I was advised that by the rep that she could not help me as my policy was handled at a different office, and she transferred me to that other office and I now remain ON HOLD once again for 10 more minutes and counting!"

One hopes that Protective Life will, in short time, iron out this horrible first impression of Protective Life customer service as adminstrators and that Lincoln Life Assurance Company of Boston and its parent pay attention. as well.

What To Do If You have an Urgent Need and Can't Wait on Line?

In the mean time if you are receiving, or scheduled to receive structured settlement payments from Lincoln Life Assurance Company of Boston (formerly Liberty Life Assurance Company of Boston), I suggest you take the following steps:

1. Visit the Protective Life Structured Settlement Administration Page
2. Dowmload and complete the forms for the service you need
3. FAX in the paperwork and save the fax confirmation.
4. If you have not received written confirmation within 48 hours, repeat the process.

 

 

 

 

Structured Settlement Industry Continues to Thrive on Providing Core Safety and Security

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Structured Settlement Industry at "Half Time" 2019.

After returning to $6 billion in production in 2018,  structured settlement industry production for the first six months of 2019 was $3,062,569,865 in premium

Stable income is sexy

for structured settlement annuities  Leading at half time were MetLife (Metropolitan Tower Life Insurance Company and Metropolitan Life insurance Company), Pacific Life Insurance Company (including Pacific Life and Annuity Company for New York structured settlement quotes) and Berkshire Hathaway (which includes Berkshire Hathaway Life Insurance Company of Nebraska, First Berkshire Hathaway Life Insurance Company and National Indemnity Company for reinsurance structured settlements.  Prudential Insurance Company of America and USAA Life Insurance Company round out the top 5 at half time.

Some of the ways structured settlements can be used.

• Provide guaranteed safe and secure income streams
• Provide a strong and stable foundation for plaintiff's settlement planning.
• Can match up with known needs and provide a stable foundation for young adults, young families, optimistic people who want to delay the start of social security and get higher payments. 
• Multiple payments streams can be customized and issued in a single contract, or in multiple contracts across multiple companies for diversification.
• Save significant money on the cost of funding an MSA.
• Attorney fee deferrals  without limitations and the administrative costs of qualified pension plans.

There many other applications. I've been told I'm a good sounding board. Contact me anytime to discuss your personal situation.

Ding Dong The Risk (Lawsuit) Is Dead

by Structured Settlement Watchdog

A disgruntled former structured settlement broker's quest to take down AIG, has been nailed shut as the deadline to file Writ Certiorari has come and gone.

"Writs Thirtanly Over"

So a quest that started January 3, 2017 with Richard B. Risk, Jr, hitched up with a stud attorney, whose track record was promoted as if he was Seattle Slew, and failed like a wilted asparagus. They failed again on Appeal and finally collapsed entirely. The problem with promoting a stud is that the stud still has to perform and in this case, Risk just had no case, no room for the stud to gallop. It was more like a scene from "The Galloping Blase".

The law suit, formerly the " AiG structured settlement class action",  was so poorly pleaded in my opinion, for reasons that I've articulated here over the past two years. Even a layperson could figure that it wouldn't succeed.  The Appeal saw the lower court's dismissal affirmed in AIG's favor, with an opinion written by former Supreme Court Justice David Souter. Appellants did not ask for an en banc review of  the First Circuit's decision and now, according to  Supreme Court Docket September 13, 2019, they have not pursued the last remedy, writ of certiorari to see if the United Supreme Court would review the case. 

What is Writ of Certiorari?   

A Writ of Certiorari orders a lower court to forward all documents in a case it has heard to the higher court for review. While this is most commonly used by the U.S. Supreme Court, other courts, such as the U.S. Court of Appeals, state supreme courts, and state courts of appeal, may issue such a writ. The U.S. Supreme Court is very selective about which cases it will hear, accepting cases only when at least four of the justices believe the case raises a significant federal question that is in the public’s interest.

Supreme Court Rule 13.1 states that the deadline to file a petition for a writ of certiorari is 90 days from the date of entry of judgment by the the Court of Appeals.  The deadline was September 9, 2019.

Risk Law Firm website has attempted to drum up business with the misrepresentation about a class action lawsuit against The Hartford that "His class action lawsuit was followed by the insurer’s exit from the structured settlement annuity marketplace. The insinuation is  (and continues to be as it is still posted) that it was the reason for he insurer's withdrawal.  In " Credit Check for Attorney Dick Risk", I pointed out that the reason they withdrew was for reasons other than Risk and "his class action lawsuit". Unlike the Spencer case, the  Risk's lawsuit against AIG was never certified as a class action.

Risk won't get the chance to gloat about AIG. Au revoir Monsieur Risk!

"Worker's Bonk" Equals Worker's Comp as Adulterous Affair Leads to Fatal "On the Job" Heart Attack

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Married man’s death during sex on business trip ruled a ‘workplace accident’ reads the New York Post headline, reporting a story from the Times of London.

Can You Believe This?

Engineer Xavier X was found dead in his hotel room in Meung-sur-Loire shortly after having sex with a local woman he’d just met, according to the Times of London. Lawyers for his bosses at the Parisian railroad construction company TSO insisted he was not performing duties when he had the heart attack — blaming the “adulterous sex act that he had had with a complete stranger,” according to the report. But appeals court judges in France ruled that an employee on assignment “is entitled to their employer’s protection for the duration of their mission … whether or not the accident takes place as part of a professional activity or as an act of normal life,” the report said. They held up a 2016 lower court ruling in the case that stated, “A sexual encounter is an act of normal life like taking a shower or eating a meal,” according to the Times. That means the February 2013 death of Xavier X, whose surname was not released, is officially an “accident du travail,” which entitles the victim’s family to benefits from both the state and employer. I guess that's the benefits of getting paid the "big francs"

Under French law, any partners and children will receive a monthly benefit of up to 80 percent of his salary until what would have been his retirement age and then a share of his pension. C'est la vie!

If such a ruling were to occur in the United States, could the claim under the worker's death conceivably be resolved through a structured settlement? Pursuant to IRC 104(a)(1)  which exempts payments received under workers compensation acts as compensation for personal injuries or sickness.  Structured settlements are very popular way to settle workers compensation cases and to fund Medicare Set Asides arrangements.

 

 

Synergy Settlement Services v Dave Place et al. v Synergy Settlement Services et al.

by Structured Settlement Watchdog

In the Middle District of Florida, it's already going "below the belt"

After promoting David Place as the guy "who wrote the book on lien resolution", Synergy Settlement Services is "throwing the book" at lawyer Dave Place for breach of

Between a Rock and a Hard Place

contract and seeks injunctive relief and to enforce restrictive covenants. Place named Synergy and its officers, individually,  in counterclaims alleging a hostile work environment including salacious allegations concerning the CEO of Synergy Settlement Services. 

Case Caption    

Synergy Settlement Services, Inc., a Florida Corporation and

Jason D, Lazarus, an Individual,

Omar Quddus, an Individual,

Anthony Prieto , Jr., an Individual, jointly and severally, 

and the Florida Bar Association

Venue: United States District Court Middle District of Florida Case 6:19-cv-1411. The matter was commenced by Synergy in the 9th Judicial District of Florida (Orange County) and removed o the Federal District Court Middle District of Florida at Orlando  

Synergy Alleges in Its Complaint

From July 2012 to April 2019, Place was employed as Synergy's VP and Director of Lien Resolution. Place was responsible for managing Synergy's Lien Resolution Services and team in almost all states in the USA, including contacting and servicing Synergy's customers and expanding its services. Synergy alleges that for the most part Place satisfactorily perform his duties,  but in 2017 Synergy claims that Place violated its policies and Synergy commenced progressive discipline against Place. On April 22, 2019 Synergy terminated Place's employment for cause effective immediately,

Synergy alleges that Place:

• Failed to comply with 2018 Personal Improvement Plan
• Faield to integrate the lien resolution team as directed by Synergy
• Violated Synergy's Pride policy and allege inconsistent, combative, insubordinate behavior
• Fraudulently used the corporate credit card for personal  expenses and association dues not authorized by Synergy and made sexually inappropriate comments to female co-workers  (see Place allegations below)
• On April 30, 2019  (8 days after his employment  with Synergy was terminated), Place formed The Place Firm PLLC and began competing with Synergy
• Accuses Place of spoliation of evidence.

Synergy seeks a 2 year injunction, the imposition of a constructive trust and  an award of liquidated damages.

Place alleged in his counter-claims (and sought millions in damages from Synergy, its CEO and other officers):

• Synergy is engaged in the unauthorized  practice of law  (response page 2)
• Synergy has a history of violating restrictive covenants in existing employment contracts, citing as an example his predecessor Tevra Francis, and another Synergy employee who were employed with knowledge of an existing non-compete with the Garretson Resolution Group, Inc.  (response p 3). Further that Synergy did obtain client, pricing, marketing, sales and other internal information from Paul MacEvoy with the express purpose of using same to directly compete with the Garretson Resolution Group  (Ibid p 8)
• Synergy, by and through its CEO, did create a hostile work environment. Place alleges Synergy's CEO regularly sent pornographic material via Synergy computer equipment to Place's work email, often during working hours. Places alleges that another Synergy officer informed Place on multiple occasions that these materials from the Synergy CEO were a result of his information in a central Florida trial lawyers listserv called "badger"  (Ibid)
• Synergy promoted a sexualized work environment often interfering with Place's ability to perform as VP and Director of Lien Resolution Services. He alleges that the environment included adulterous affairs between Synergy owners and employees and the overt discussion of Synergy's female employee's sexual appeal. (Ibid)
• Synergy CEO would share his sexual exploits via social media application Tinder as "shooting fish in a barrel"  (Ibid p 3-4)
• Synergy owners and executives engaged in overt discussion and encouragement of sexual activity generally, and demonstrated a dismissive attitude to serious complaints of aggressive sexual behavior by Synergy's agents.  (Ibid p 4)
• Synergy's presentation of its corporate " dress code" policy was and is graphic, crude, and overtly sexualizes women. (Ibid p 4)
• Synergy through its agent Omar Quddus, created a hostile work environment by threatening to (be) "lined up and shot" the next Synergy employee who did not have a positive attitude.  (Ibid p4)
• Fraud.  That Synergy intentionally and negligently defrauded Place concerning the strategic plans for the sale of Synergy  (Ibid pgs 4 and 25). That Synergy CEO defrauded Place of his intellectual property  and  as a result, place " ghost wrote" virtually all lien resolution correspondence, list serv posts, emails and presentations for the Synergy CEO who took sole credit.  (Ibid p 29 )
• That Synergy did not comply with its own policies and procedures  (Ibid pgs 
• Defamation Per Se

Synergy advertised on its blog that "Synergy's Dave Place Wrote the book on Lien Resolution", saying Liens in Personal Injury Actions  "was the only book of its kind in Virginia that is intended to help simplify the complexity that characterizes liens and to provide assistance to Virginia’s trial lawyers in securing the maximum net recovery for clients".  The actual list of authors includes Dave Place among at least ten authors and contributors.
ISBN: 9780820580371. Download Synergy David Place wrote the book - Google Search 8-25-2019

Update

Synergy's counsel Gary S. Salzman, Esq. of Orlando's Garganese, Weiss, D'Agresta & Salzman, P.A., pointed out in a letter dated August 27, 2019, that the Florida Circuit Court entered an order on July 23, 2019, which dismissed the counterclaim of Dave Place and The Place Law Firm , PLLC. In the dismissal it states that Place had until August 19, 2019 to amend. Subsequent to the dismissal, on July 29, 2019, Place, signed and he and The Place Law Firm, PLLC filed for removal to the Middle District of Florida where it was entered on August 2, 2019. The caption in the 4 page  Document 1 on the Pacer record for the removal includes Place and The Place Law Firm as Third Party Plaintiffs and Synergy Settlement Services and the officers named above as Third Party Defendant. Download Pacer Doc 1 Synergy v Place Middle District of Florida.  However none of the attachments filed by Place and associated with document 1 referred to the dismissal. It appears that Place's counter claims will be refiled.

The litigation against Place and The Place law Firm is one of a pair lawsuits against individuals formerly associated with its heralded lien resolution team.  In the other lawsuit, filed April 2, 2019 in Orange county Circuit Court, is against William Nathan Parkey and Panoptic Insurance Group, LLC  d/b/a Panoptic Settlement Solutionss and Zipliens, LLC, Synergy seeks injunctive relief, compensatory damages, exemplary damages, and attorney ’s fees under the Florida Deceptive and Unfair Trade Practices Act and the Uniform Trade Secrets Act. According to his website, Parkey is Managing Partner and Chief Compliance Officer for Panoptic Financial Group, a Registered Investment Advisor, offering financial planning and investment services. Nathan consults attorneys and their clients across the state of Kentucky and select areas outside of the state.

That's Not All Folks!   There's another lawsuit pending

David L. Place v Synergy Settlement Services, Inc.,a  Florida Corporation In the Culpeper General District Court Virgina

Case No. V19-891

Dave Place sued Synergy Settlement Services Inc. Culpeper County Virginia back in the Spring for breach of contract.  According to the Bill of Particulars for the lawsuitagainst Synergy and filed exhibits:

1. Synergy owed Dave Place the balance of his $116,504.64  2018 bonus, which the parties agreed would be paid in installments. An offer was alleged to be offered by Synergy and accepted by Place on March 11, 2019. This was covered in multiple emails to and from Synergy and Place as shown in Bill of Particulars Exhibit A to the complaint filed in Culpeper County General DistrictCourt.
2. On April 5, 2019, Synergy's bookeeper, Troy Heinemann, confirmed per the contract the remaining balance due Place was $31,334.88 ( Bill of Particulars Exhibit A)
3. Place alleges in the Bill of Partculars that he has not received  the funds due per the March 11, 2019 contract  (Bill of Particulars )
4. On May 8, 2019 Place gave Synergy the opportunity to cure the breach of the March 11, 2019 contract by email  (Bill of Particulars Exhibit C). The next day Jason Lazarus responded that "Synergy outside counsel was reviewing everything and one of us will  respond to you by next week  (Ibid). The alleged balance remains unresolved as does the lawsuit.

 

 

 

 

Appeal of AIG Class Action Dismissal Fails | Ezell v Lexington Insurance et al Ends in Resounding Failure for Plaintiffs

by Structured Settlement Watchdog

Plaintiffs Made Failed Argument Structured Settlement Broker Commission Paid by Annuity Issuer Shortchanged Plaintiffs

Efforts by a disgruntled former structured settlement broker Richard B Risk Jr., to get another big payday off the backs of an insurance company have ended

Appeal of Ezell Lawsuit against AIG

in resounding failure.  The 1st Circuit Court of Appeals dismissed the Appeal from the United States District Court for the District of Massachusetts in NORMA EZELL, LEONARD WHITLEY, and ERICA BIDDINGS, on behalf of themselves and others similarly situated, Plaintiffs, Appellants, v. LEXINGTON INSURANCE COMPANY; AMERICAN INTERNATIONAL GROUP, INC.; AIG ASSURANCE COMPANY; AIG INSURANCE COMPANY; AIG PROPERTY CASUAL TY COMPANY; AIG SPECIAL TY INSURANCE COMPANY; AMERICAN GENERAL LIFE INSURANCE COMPANY; NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURG, PA.; AGC LIFE INSURANCE COMPANY; AMERICAN GENERAL ANNUITY SERVICE CORPORATION; AIG CLAIMS, INC., f/k/a AIG Domestic Claims, Inc., Defendants, Appellees.  The analysis and decision was written by Retired United States Supreme Court Justice David Souter appears below. Disgruntled Dick bringing in "The Big Stick, Steven Berman of Hagens Berman, who had a string of 9 figure recoveries didn't do the trick. The lawsuit was poorly pleaded to begin with and the class representative cases were poorly chosen, in my opinion, for reasons I have explained in prior posts.

Souter wrote "Appellants conceded in their complaint that it is "[i]ndustrywide" practice for brokers to be paid "a standard sales commission of four percent (4%) of the annuity's cost," Amended Complaint ,Paragraph 31, and that the commission would be paid by the annuity issuer, id. , Paragraphs 35, 99(b), 100(b), 120(b), 121(b). Assuming that these allegations are true, as we must at the motion-to-dismiss stage, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) , the four­ percent commission payment would have been paid by the life insurance companies that sold the annuities, and would have been accounted for as a standard element of the cost of doing business by the life insurance companies and reflected in the market prices that Lexington paid. The commission, in other words, was included in the price of a given annuity in the marketplace, and the appellants have provided no basis to infer that liability insurers in Lexington's position were under any obligation to inform a settlement party of the items of overhead that it was the annuity industry's continuing practice to account for in pricing their products. Because the words "annuitized" and "total present value" simply committed Lexington to pay the amounts stated as necessary to produce the periodic payments specified in the agreements, the annuity companies' payment of brokers' commissions from out of the money Lexington paid for the annuities does not belie the facts that Lexington paid the amounts it quoted and that appellants received exactly those specific annuity payments the agreements had promised, payments that the appellants have not alleged that they failed to receive". 

"Because there is no dispute that appellants did receive the periodic payment amounts they were promised in agreements containing no uncorrected misrepresentations, there is no allegation in the pleadings that appellants suffered the kind of harm necessary to make out a case of the statutory or common-law violations claimed".

"The basic problem with appellants' complaint is not that they failed to state some facts "with particularity." Fed. R. Civ. P. 9(b). Rather, it is that the facts they have pleaded "with particularity" on the matters discussed here demonstrate the absence of any "circumstances constituting fraud." !Q,_ Accordingly, we affirm the District Court's decision dismissing the amended complaint with prejudice."

Dick Risk's Resounding Failure to Bag the Big One Is Proof of Waning Relevance

Plaintiffs' Appeal in AIG Structured Settlement Class Action Cracks Me Up | Co-Counsel's 2005 and Prior Writing Undermines Advocacy  12/28/2018

AIG Structured Settlement Class Action Dismissed With Prejudice | Ezell v Lexington Insurance et al. September 28, 2018

Structured Settlement Reform | "The Hill Is Alive With The Sound of Musing" 5/23/2017

AIG Structured Settlement Class Action | To Gun Jumpers' Dismay Plaintiff HAD Own Broker | Two Factored Payments  4/13/2017

Structured Settlement Reform | It's Not His Party But He Can Cry If He Wants To 4/21/2015

AIG Structured Settlement Class Action | Old Dick Attempts To Swing "Big Stick"