The California Fifth Appellate District Court of Appeal has reversed highly publicized decisions by two Superior Court judges in Fresno County, California involving 321 Henderson Receivables, an affiliate of J.G. Wentworth, and the California Structured Settlement Transfer Act (SSTA).
The California Appellate Court decided both cases (Henderson v. Tomahawk and Henderson v. Ramos) on narrow grounds.
This S2KM blog post summarizes the appellate decisions. A subsequent S2KM blog post will provide commentary.
Henderson v. Tomahawk
In Tomahawk, Fresno Superior Court Judge Donald Black had earlier:
- Rejected Henderson's request for a voluntary dismissal of its transfer petition;
- Denied Henderson's transfer petition;
- Concluded:
- The annuity contract barred transfers and assignments;
- UCC Article 9 did not apply;
- Henderson's transfer violated California's usury laws because the transfer was a loan and not a sale;
- Henderson failed to meet SSTA disclosure requirements;
- Henderson had referred the structured settlement transferor to a conflicted attorney for advice;
- California Insurance Code section 10137 bars approval of petitions without independent counsel and therefore rendered "void" Henderson's earlier purchase;
- Henderson could not recover the funds it had previously expended because of "unclean hands" based upon Henderson's hiring of conflicted counsel;
- Henderson's lack of candor and the Superior Court's affirmative duties supported Judge Black's independent investigations of other Henderson petitions in prior transfer cases.
- Ordered Henderson to:
- Attach a copy of the order to any future transfer petitions filed in Fresno County for the next 5 years; and
- Serve notice to other Fresno County transferors and their insurers;
- Sent a copy of his order to the California State Attorney General and State Bar Association.
On appeal, the California Appellate Court:
- Reversed Judge Black;
- Agreed with Henderson's argument that Judge Black erred when he concluded that Henderson could not voluntarily dismiss its petition;
- Declared Judge Black's prior order void in its entirety;
- Ordered Fresno County's Superior Court to post the appellate decision on its website;
- Declined to address Henderson's arguments addressing the merits of Judge Black's order stating:
- Any related decision would be advisory; and
- The Appellate Court had already established an expedited schedule to hear Henderson's other appeals.
- Remanded the case to the Fresno County Superior Court.
Henderson v. Ramos
In Ramos, Fresno County Superior Court Judge Adolfo Corona had earlier:
- Denied a request for dismissal of a structured settlement transfer petition filed by parties named Cerroblanco;
- Dismissed their petition with prejudice;
- Voided a prior approved transfer to Henderson based upon Henderson's purported breach of annuity anti-assignment provisions plus violations of California's SSTA and usury law.
On appeal, Henderson argued Judge Corona erred when he:
- Concluded the Cerroblancos could not voluntarily dismiss their SSTA petition without prejudice;
- Voided Henderson's earlier transfer.
The California Appellate Court agreed with Henderson's first argument without determining whether Judge Corona was correct in his findings and rulings about the petition.
The California Appellate Court also agreed with Henderson's second argument and concluded:
- No authority exists in California to permit one Superior Court Judge to overrule another Superior Court Judge;
- Transfers of structured settlement payment rights with court approval will be enforced by California courts and cannot be attacked as void absent a finding of fraud;
- Disagreement over prior judicial findings does not provide sufficient grounds for any judge to void a final order of another judge.
Similar to Tomahawk, the California Appellate Court remanded the Ramos case to the Fresno Superior Court and ordered the Court to post the appellate decision on its website.
Comments