The reason that a 19-year-old California man gave for seeking to sell more than $900,000 in future structured settlement payments – in exchange for a present sum of about $186,000 – was that the proceeds of the sale would be used “for his best interest, such as Purchase Land.”
That was not sufficient for the court to give the go ahead and allow the man – who “is employed, earning $3,250 per month cultivating, growing, harvesting, analyzing and storing cannabis” – to sell those payments, according to a California judge who reviewed the proposed transaction.
Transactions such as the one involving the 19-year-old (see case captioned In Re Skains-Swain, Case No: 34-2017-00215114-CU-PT-GDS, Superior Court, Sacramento County, Calif (Calif. Super. Ct. Aug. 9, 2017) (online “preview” of tentative ruling available from the Sacramento Superior Court Public Case Access System, linked here)), become legally effective only if they receive court approval, as per the requirements of the California structured settlement protection act (SSPA).
In other words, California’s SSPA – like all 49 state SSPAs – says that, to sell the right to receive such payments, a court must review and approve the sale, or the sale cannot occur.
A company seeking to purchase the 19-year-old man’s payment rights filed a request for court approval of a sale.
The company’s papers informed the court that the man was married, employed in the cannabis business, and that the payee intended to use the proceeds from the sale “for his best interest, such as Purchase Land,” since he had been denied conventional financing.
After the filing of the company’s papers, the court received additional filings. First, the court received affidavits, purportedly from the payee, requesting that the sale be cancelled. Then the court received correspondence, again purportedly from the payee, “indicating that the prior affidavits were not filed personally by him, but by a third party against his will and without his permission” and that the payee would like the court to proceed with the company’s request for approval of the sale.
Judge Raymond Cadei issued a ruling stating that the “petition is denied because the Court cannot conclude on the current papers that the transfer” is in Payee and his spouse’s best interests because “[i]t is unclear whether Payee actually intends to purchase land or has some other use for the funds.”
Judge Cadei’s tentative ruling also continued the matter to a later date “to allow the Petitioner to submit a business plan to the Court . . . .”