The following papers numbered 1 to 10 read on this motion for an order: a) declaring that the sale and transfer of structured settlement payment rights, pursuant to a Sale and Assignment Agreement (the "Purchase Agreement") by and between Michael Jones, as the Payee/Seller, and Pinnacle Capital, LLC, as the Purchaser, complies with all requirements of New York's The Structured Settlement Protection Act; b) declaring that the sale and transfer of structured settlement payment rights is in the best interest of the Payee/Seller, Michael Jones, taking into account the welfare and support of said Payee/Seller's dependents (if applicable), and that the transaction, including the discount rate used to determine the gross advance amount, are fair and reasonable; c) declaring that the Payee/Seller, Michael Jones, has been advised in writing of the right to seek independent professional advice regarding the transfer of structured settlement payment rights and has either received such advice or knowingly waived such advice and opportunity in writing; d) declaring that the sale and transfer of structured settlement payment rights does not contravene any federal or state statute or order of any court, governmental authority or other responsible administrative authority; e) declaring that the Purchase Agreement and all disclosure and related documents are written in plain language and in compliance with Gen. Oblig. Law § 5-1702; f) authorizing and approving the sale and transfer of structured settlement payment rights by and [*2]between Michael Jones, as the Payee/Seller, and Pinnacle Capital, LLC, as the Purchaser, pursuant to the Purchase Agreement; g) directing American Home Assurance Company, as the Structured Settlement Obligor, and American International Life Assurance Company of New York, as the Annuity Issuer, to recognize and honor the terms of the Purchase Agreement and the assignment by the Payee/Seller, Michael Jones, to the Purchaser, Pinnacle Capital, LLC, its successors and assigns; h) directing American Home Assurance Company, as the Structured Settlement Obligor, and American International Life Assurance Company of New York, as the Annuity Issuer, to make payments, in accordance with a certain annuity contract/policy, bearing Annuity Policy No.: 417767, as follows: one (1) lump sum payment of $85,795.75, due and payable on January 15, 2025.

PAPERS

NUMBERED

Order to Show Cause-Petition-Affidavits-Exhibits........................1 - 10

Upon the foregoing papers, it is ordered that the petition for an order approving the transfer of structured settlement payment rights is determined as follows:

Petitioner Pinnacle Capital, LLC ("Pinnacle") makes the instant application, pursuant to General Obligations Law, Title 17, known as the Structured Settlement Protection Act ("SSPA"), for an order approving the transfer of payment rights vested in Michael Jones ("Jones") under a structured settlement obligated and funded by American Home Assurance Company and American International Life Assurance Company of New York ("American"), respectively. By hearing dated September 28, 2011, for this Court's determination of the propriety of the application for the transfer of those rights to Pinnacle, Jones testified that he is an unemployed 36 year old single person with two dependents, who lives with his girlfriend, and receives monthly periodic payments of $2000.00 separate and apart from the lump sum payment he wishes to sell. Jones stated, in support of the application for judicial approval of the proposed transfer, and his affidavit in support reiterated, that he needs the money to register for classes to become a medical transcriptionist, complete repairs to his car and pay outstanding bills.

Pursuant to a Structured Settlement Annuity Sale and Assignment Agreement executed on January 4, 2011, Jones transferred to Pinnacle his annuity rights totaling $85,795.75, and in consideration, he agreed to receive a gross and net advance amount of $21,880.24, based upon an annual discount rate of 9.71%. General Obligations Law § 5-1706, entitled, "Approval of transfers of structured settlement payment rights," states the following:

No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured settlement payment rights unless the transfer has been authorized in advance in a final order of a court of competent jurisdiction based upon express findings by such court that: [*3]

(a) the transfer complies with the requirements of this title;

(b) 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. Provided the court makes the findings as outlined in this subdivision, there is no requirement for the court to find that an applicant is suffering from a hardship to approve the transfer of structured settlement payments under this subdivision;

(c)the payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received such advice or knowingly waived such advice in writing;

(d) the transfer does not contravene any applicable statute or the order of any court or other government authority; and

(e) is written in plain language and in compliance with section 5-702 of this article.

The SSPA was adopted by the State Legislature to give greater protection to individuals either entering into a structured settlement agreement or negotiating to sell or transfer a periodic payment thereunder to a third party. At issue is whether approval of the proposed transfer would be consistent with the letter and spirit of the SSPA.

The plain language of General Obligations Law § 5-1706 sets forth several procedural mandates that must be adhered to as a condition precedent to judicial approval of an application for transfer of a structured settlement to a third party. Equally significant, the statute mandates that the Court, in determining such an application, apply a two prong inquiry based upon considerations of prudence, equity and reason, and vests in the Court the authority to make an independent discretionary determination as to whether the "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." The instant record establishes that the petition and supporting papers are in compliance with the procedural mandates enumerated under the SSPA. Having satisfied the procedural requirements, this Court must scrutinize the proposed transfer, applying the two-pronged "best interest" and "fair and reasonable" test.

Although the "best interest" standard was previously defined as one that is analogous to the notion of a hardship that bespeaks of "desperate or dire straits" or a "life or death emergency,"as articulated in the Legislative Memorandum in Support of the SSPA, on September 21, 2004, the Legislature amended Subdivision (b) of section 5-1706, to add the following language: "Provided the court makes the findings as outlined in this subdivision, there is no requirement for the court to find that an applicant is suffering from a hardship to approve the transfer of structured settlement [*4]payments under this subdivision." Consequently, as the statute does not require courts to limit the best interest standard to indicia of hardship, this Court adopts a more global consideration, finding that the best interest standard requires an individualized analysis to determine whether the proposed transfer of structured settlement payments, which were designed to preserve the injured person's long-term financial security, will provide needed financial rescue without jeopardizing or irreparably impairing the financial security afforded to the payee and his or her dependents by the periodic payments. After an independent analysis, this Court determines that the best interest prong should be assessed on a case by case basis, giving specific consideration to such factors as the payee's age; mental and physical capacity; maturity level; ability to show sufficient income that is independent of the payments sought for transfer; capacity to provide for the welfare and support of the payee's dependants; the need for medical treatment; the stated purpose for the transfer; and the demonstrated ability of the payee to appreciate the financial terms and consequences of the proposed transfer based upon independent legal and financial advice.

Here, this Court expresses reticence in finding that the transfer of the remaining lump sum of Jones' periodic payments in the amount of $85,795.75 is economically sound, particularly in view of the fact that Jones seeks to sell that amount for a present value of $21,880.24. Although the Court is marginally satisfied that Jones understands the terms of the proposed transfer, that satisfaction is belied by the apparent lack of appreciation for the financial consequences of the proposed transfer, and the failure to demonstrate a maturity, sophistication and intelligence to make financial decisions that appear to be in his best interest. This lack of appreciation of financial consequences and sophomoric fiscal acumen is underscored by the fact that he did not seek independent professional counsel to advise him regarding this transaction, but relied exclusively upon the representations made by Pinnacle. Though he contends that he spoke to "friends" concerning the import of the transaction, the lack of professional consultation is tantamount to the failure to explore and exhaust other financial options. Moreover, although Jones intends to improve his current living condition by becoming current and paying off bills, his intentions would leave him in a position whereby he would be unemployed and incapable of financially handling the enormous responsibility of being a homeowner when all the ancillary responsibilities of home ownership is factored into his financial composite. Jones stated that his cooperative apartment is currently carrying an arrearage of more than a year's worth of mortgage payments in order to qualify for a loan modification. Nonetheless, he failed to establish that there is an application pending, and if so, whether the bank has agreed to a loan modification; nor did Jones establish that he saved the money that he would have expended each month in mortgage payments in order to avoid the imminency of foreclosure.

Further, although Jones indicated that he would also use a portion of the money to go to a school or certificate program to become a medical transcriptionist, there has been no demonstration that Jones has secured entry into an institution of higher learning. Although the Court can appreciate, and certainly encourages, a vision which is indicative of his desire to seek to procure a successful future, the Court is unwavering in its belief that approval of this settlement would serve to place Jones in an unfavorable financial position prospectively. It is clear that the common theme in the line of thinking expressed above is illustrative of Jones' need for independent professional financial advice and guidance, and further bolsters this Court's charge to carefully cull out an [*5]individualized analysis to balance the preservation of his long-term financial security with the expressed need for financial rescue, the hardship of which Jones assumes he is currently encountering. Consequently, application of these and other factors to the instant case compels the conclusion that the proposed transfer at issue is not in the best interest of Jones.

As previously set forth, the protections afforded by the SSPA vest this Court with the authority to determine whether the transfer is in the best interest of the payee, and whether the transaction, including the discount rate and the fees and expenses, are fair and reasonable. Therefore, as the best interest standard is an independent query from the fair and reasonable standard, and the two-prong standard must be met prior to approval of such transfer, a further inquiry by this Court would be academic as Jones has failed to demonstrate that the transfer would be in his best interest.

Accordingly, the application is denied and the petition is dismissed.

Dated: November 16, 2011____________________________

J.S.C.