New York’s Structured Settlement Protection Act (the “New York SSPA”, which is codified at New York General Obligations Law § 5-1701 through 5-1709), provides that a transfer of structured settlement payment rights is not effective without court approval, and without compliance with other statutory requirements.
Among those requirements are the following:
- The payee must have “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” (N.Y. Gen. Oblig. Law § 5-1706(c)); and
- The court must be provided with “proof of service” that the statutorily-required disclosure statement was timely provided to the payee “by first class mail and certified mail, return receipt requested or United States postal service priority mail” (N.Y. Gen. Oblig. Law § 5-1703 and N.Y. Gen. Oblig. Law § 5-1705(d)(ii))
Those two requirements were among those that were an issue in a recent opinion, In the Matter of the Petition of Settlement Resources of New York, Ltd., Index No.: 706700/14, Supreme Court, Queens County, N.Y. (N.Y. Sup. Ct. Jan. 2015) (Denis J. Butler, Justice), where the court rejected a request for court approval of a transfer. The other reason the court pointed to was the fact that the “hand written change made to the sworn statement” of the payee “raises questions as to it[s] accuracy”. Said the court:
Petitioner has failed to provide proof of service of the disclosure notice required by section 5-1703 of the General Obligations Law and the hand written change made to the sworn statement . . . raises questions as to it[s] accuracy. Additionally, [the payee] . . . must affirmatively state whether or not he received advice from an independent professional regarding the tax consequences of the proposed transfer.
In the Matter of the Petition of Settlement Resources of New York, Ltd., Index No.: 706700/14.