By Order to Show Cause dated February 13, 2008, Petitioner 321 Henderson Receivables Origination, LLC, seeks judicial approval of an assignment of either the whole or a portion of Respondent Josette Williams's structured settlement annuity with co-respondents pursuant to General Obligations Law 5-1701, et seq., more commonly known as "The Structured Settlement Protection Act" (SSPA). Co-respondents have not opposed the relief requested, and respondent Josette Williams consents to the application.

The petitioner appeared in Part 6 of this Court for oral argument on March 19, 2008, and decision was reserved.

FACTS AND PROCEDURAL BACKGROUND

Respondent Josette Williams, residing in Brooklyn, New York, is the payee of a structured settlement annuity issued by co-respondents pursuant to a Settlement Agreement and Release dated May 24, 1984.^[FN1] Ms. Williams is presently 37 years of age and employed at Progress Daycare as assistant director earning an annual salary of $20,000.00. She is single and has one dependent child, Mazie, age 8. Ms. Williams further states that due to her situation, she requires immediate cash to use for the purchase of a new vehicle and to pay off approximately $1,500.00 in accumulated credit card debt.

In order to obtain an immediate cash infusion, Ms. Williams entered into an assignment agreement with petitioner 321 Henderson Receivables Origination, LLC. Ms. Williams desires to assign the total sum of $312,600.00 to the petitioner, payable as follows: 120 monthly Life Contingent payments of $2,450.00 each, beginning on July 7, 2024 and ending on June 7, 2034; and 186 monthly Life Contingent payments of $100.00 each, beginning on July 7, 2034 and ending December 7, 2049.^[FN2]

LAW AND APPLICATION

The primary purpose of the SSPA is to protect the recipients of long-term structured settlements from being victimized by companies aggressively seeking the acquisition of their rights to guaranteed structured settlement payments. See 321 Henderson v. Martinez, 11 Misc 3d 892, 816 N.Y.S.2d 298 (Sup Ct NY Cty 2006); In Re Settlement Capital Corp. (Ballos),1 Misc 3d 446, 769 N.Y.S.2d 817 (Sup Ct Qns Cty 2003). To effectuate this purpose, the Legislature created procedural requirements that potential structured settlement transferees must follow before courts review the substantive merits of the proposed assignment. See GOL§ 5-1703; In the matter of Settlement Capital Corp. ("Y"), 194 Misc 2d 711, 756 N.Y.S.2d 728 (Rensselaer Cty). Once the procedural requirements are met, the court must substantively review the application and make express findings in accordance with GOL § 5-1706. [*2]

A review of the application indicates that it has been timely served pursuant to GOL

§5-1705( c ), and that all "interested parties" as defined by GOL §5-1701( f ) appear to have been served. Further, it appears that all required disclosure pursuant to GOL §5-1703 has been provided to Ms. Williams at least ten days prior to the date she signed the transfer agreement. Copies of these documents have been annexed to the application in accordance with GOL §1705

( d ). Further and pursuant to GOL § 5-1706 ( c ), ( d ) and ( e ) the following has occurred: (1) Ms. Williams has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has availed herself of same,^[FN3] (2) the transfer does not contravene any applicable statute or order of any court or other government authority, and

(3) it is written in plain language and is in literal compliance with GOL § 5-702. Therefore, the application is procedurally correct under the statute. See GOL § 5-1706(a).

The court is required to make express findings that "the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's dependants; and whether the transaction, including the discount rate used to determine the gross advance amount and the fees and expenses used to determine the net advance amount, are fair and reasonable." GOL § 5-1706 ( b ). There is no requirement that the court find that an applicant is suffering from a hardship to approve the transfer of structured settlement payments. The test to be applied in evaluating the parties' agreement is two pronged. See In Re Settlement Corp. (Ballos), supra at 461.

The best interests determination involves a broad consideration of the facts and the circumstances of the payee, in light of the payee's age, mental capacity, maturity level, ability to show sufficient income that is independent of the payments sought for transfer, capacity to provide for the payee's dependants, and the stated purposes for the transfer request. See In Re Settlement Corp. (Ballos), supra at 454-55.

In this case, the payee is 37 years of age, with minimal income other than the eventual structured settlement payout. Ms. Williams lists no current assets in her petition other than the subject annuity. The petition does not indicate or reference payee's mental capacity or maturity level. The petition indicates that payee has one dependant, but the payee does not state her present living arrangements. Further, payee's request for $9,000.00 to purchase a new vehicle is unclear. While she expresses a desire to purchase a new vehicle, there is no indication whether that sum will be sufficient, given current new vehicle purchase costs. No information has been provided as to the purchase arrangement for this vehicle, including its total cost and if Ms. Williams plans to finance any part of the purchase price. Further, Ms. Williams will incur additional expenses such as insurance costs, routine maintenance and gasoline, which expenses may well be too much of a burden on her nominal income. Considering the "paternalistic" purpose of the statute, the court finds that it will not be in the best interests of payee to approve this transaction. See Mtr. of 321 Henderson, 13 Misc 3d 526, 531, 819 N.Y.S.2d 826 (Erie Coun. 2006). [*3]

Apart from the foregoing and turning to the "fair and reasonable" prong 321 Henderson Receivables Origination, LLC proposes to purchase a portion of payee's structured settlement that is presently worth $102,948.57 for the net payout of $10,500.00, or 10.2% of its present discounted value (and 3.36% of the aggregate amount of the payments of $312,600.00 to be transferred). The proposed arrangement is deemed less than fair and reasonable, given the guaranteed nature of the annuity payout with a higher interest rate than those offered by banking institutions, the current depressed value of the dollar, and the minimal risk involved for petitioner 321 Henderson Receivables Origination, LLC. See In Re Settlement Funding of NY (Cunningham), 195 Misc 2d 721, 761 N.Y.S.2d 816 (Rensselaer Coun. 2003).

CONCLUSION

In light of the above, the proposed transfer does not meet either the "best interests"

requirement or the "fair and reasonable" requirement under the statute. Therefore, the motion is denied and the petition dismissed. This constitutes the decision and order of the court.

Petitioner is directed to settle Order on notice.

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J. S. C.