As described in this post, the Oregon Courts of Appeals in Johnson v. J.G. Wentworth Originations, LLC, 284 Ore. App. 47, 2017 Ore. App. LEXIS 280 (Ore. Ct. App. Mar. 1, 2017), earlier this year upheld the rights of a structured settlement obligor and annuity issuer to enforce a contractual anti-assignment provision and thereby preclude a proposed structured settlement factoring transaction.
The post pointed out that the decision, in a proceeding commenced pursuant to the Oregon Structured Settlement Protection Act, applied California law, and followed “earlier precedent giving effect to such contractual anti-assignment provisions in settlement agreements.”
The first appellate opinion in a structured settlement protection act (SSPA) matter to address anti-assignment provisions in structured settlement agreements under California law was Rapid Settlements, Ltd. v. Symetra Life Ins. Co., 2007 Cal. App. Unpub. LEXIS 4462, 2007 WL 1576437 (Cal. Ct. App. June 1, 2007), where the California appellate court reversed the trial court’s approval of a proposed transfer and upheld the rights of the annuity issuer and structured settlement obligor, under the settlement agreement’s anti-assignment clause, to preclude a transfer.
As described in the earlier post about the Johnson, that Oregon Court of Appeals opinion joins the “great weight” of authority, and Oregon can be added to the “number of states whereby courts of appeals, in cases arising from SSPA proceedings, have enforced contractual anti-assignment provisions where an insurer has elected to enforce its contractual rights to preclude a structured settlement factoring transaction.”
A partial list of such states would include the following:
- Florida (see Rapid Settlements, Ltd. v. Dickerson, 941 So. 2d 1275 (Fla. Ct. App. 2006) (under the Florida SSPA and Florida contract law));
- Illinois (see, e.g., In re Foreman, 850 N.E.2d 387 (Ill. App. Ct. 2006) (under the Illinois SSPA and Illinois contract law)); and
- Washington (see In re Application by Rapid Settlements, Ltd., 136 P.3d 765 (Wash. Ct. App. 2006) (under the Washington SSPA, and contract law of both Washington and North Carolina).
Again, this is a partial list, and other state appellate courts have followed suit in the past few years (such as in Kentucky and Texas). Indeed, notwithstanding the many misleading arguments made by factoring companies about anti-assignment provisions, there have been no state appellate court opinions that have held that an SSPA abrogates a contractual anti-assignment clause in a structured settlement agreements.
For more information, consider contacting any of the Reardon Scanlon Vodola Barnes, LLP, partners, each of whom have successfully represented insurers in SSPA matters where the issues included enforcement of contractual anti-assignment provisions.
(Transparency principles dictate disclosure of the fact that Reardon Scanlon Vodola Barnes, LLP, attorneys were involved in representing the annuity issuer and structured settlement obligors – whether at the trial court or appellate court levels, or at both levels – in the matters described above.)