Florida Courts Deny Structured Settlement Payment Rights Transfer
According to various sources, the Circuit Court of Sumter County, Florida denied a payee’s transfer of structured settlement payments rights in re Robotham, 2013 WL 127134.
Derrick Robotham and Peachtree Settlement Funding, LLC entered into a purchase agreement to sell the rights to Robatham’s future periodic Longshore Act payments.
Florida, like most states, requires that the transfer of structured settlement payment be approved by the court system. The courts typically review the transaction to determine if the transaction complies with regulations and is in the best interest on the annuitant.
In this particular case, Circuit Court Judge Michelle Morley held that the proposed transfer was in violation of a Federal Law prohibiting the assignment of Longshore Act payments. Since Florida statutes require that they proposed transfer does not interfere with any Federal Law, the court denied the transfer of payments to Peachtree Settlement Funding.
Usually the transfer of structured settlement payments rights does not interfere with Federal Law and as with most case law it is open to interpretation. For example, in a similar case regarding the transfer of future periodic payments under the Federal Longshore and Harbor Workers Act (the “Act”) payments, the the 11th Circuit Court of Appeals (11th Circuit is comprised of Alabama, Florida and Georgia) the Court interpreted the Act quite differently.
In the case, re Lawrence William Sloma, Sloma assigned his Longshoreman’s payments to the Bank of Linden for the repayment of a loan. Sloma later filed bankruptcy seeking to discharge his obligation to the bank on the basis that Longshoreman’s payments could not be assigned or used as security due to anti-assignment provisions of the Longshore and Harbor Workers’ Act.
While the bankruptcy court and Federal District Court agreed that the assignment to the bank was invalid and Longshoreman’s annuity payments were exempt from claims of creditors, the 11th Circuit Federal Court of Appeals disagreed. The court overturned the lower court decision finding the assignments were valid and Longshoreman’s payments were not now benefits of Sloma; the payments were now the property of the bank.
Obviously every structured settlement payment transfer is different and every state has their own opinions as well as laws regarding them. If you’re interested in selling some of your future payments, but do not know if your payments qualify give us a call. The team of seasoned professionals at CBC Settlement Funding can help you determine if selling your future payments is the right decision for your unique financial situation.