Metropolitan Insurance and Annuity Company and Metropolitan Life Insurance Company v. Peachtree Settlement Funding, LLC ( 2015 )

ACCEPTED
01-15-00147-CV
FIRST COURT OF APPEALS
HOUSTON, TEXAS
10/26/2015 11:35:19 PM
ORAL ARGUMENT REQUESTED CHRISTOPHER PRINE
CLERK
No. 01-15-00147-CV
FILED IN
1st COURT OF APPEALS
IN THE COURT OF APPEALS HOUSTON, TEXAS
FOR THE FIRST DISTRICT OF TEXAS AT HOUSTON
10/26/2015 11:35:19 PM
CHRISTOPHER A. PRINE
Clerk
Metropolitan Life Insurance Company and Metropolitan Insurance & Annuity
Company,
Appellants,
Peachtree Settlement Funding, LLC and Sara Swain,
Appellees.
Appeal from Cause No. 201474548
In the 234th Judicial District Court, Harris County, Texas
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC
NESBITT, VASSAR & McCOWN, L.L.P.
Earl S. Nesbitt
State Bar No. 14916900
enesbitt@nvmlaw.com
David S. Vassar
State Bar No. 20503175
dvassar@nvmlaw.com
Patrick P. Sicotte
State Bar. No. 24079330
psicotte@nvmlaw.com
15851 Dallas Parkway, Suite 800
Addison, Texas 75001
Telephone: (972) 371-2411
Telecopier: (972) 371-2410
IDENTITY OF PARTIES AND COUNSEL
Pursuant to TEX. R. APP. P. 38.1(a), the following is a complete list of all
parties to the trial court’s judgment or order appealed from, and the names and
addresses of all trial and appellate counsel:
APPELLANTS: Metropolitan Life Insurance Company and Metropolitan
Insurance & Annuity Company
Represented by:
Stephen R. Harris
Drinker Biddle & Reath LLP
One Logan Square, Suite 2000
Philadelphia, Pennsylvania 19103
T: (215) 988-2700
F: (215) 988-2757
Patrick B. Larkin
State Bar No. 24013004
Larkin Law Firm
11200 Broadway Street, Suite 2705
Pearland, Texas 77584
T: (281) 412-7502
F: (281) 412-7502
APPELLEES:
Peachtree Settlement Funding, LLC
Represented by:
Laryssa Korduba
State Bar No. 24043763
The Korduba Law Firm
211 Florence Street
Tomball, Texas 77375
Trial Court Counsel
Earl S. Nesbitt
State Bar No. 14916900
David S. Vassar
State Bar No. 20503175
Patrick P. Sicotte
State Bar No. 24079330
Nesbitt, Vassar & McCown, L.L.P.
15851 Dallas Parkway, Suite 800
Addison, Texas 75001
T: (972) 371-2411
F: (972) 371-2410
Trial Court and Appellate Counsel
Sara Swain, Pro Se
3303 Quarry Place Lane
Katy, Texas 77493-1847
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE iii
TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL ........................................................... ii
TABLE OF CONTENTS ......................................................................................... iv
TABLE OF AUTHORITIES ................................................................................... vi
REQUEST FOR ORAL ARGUMENT ................................................................... xi
STATEMENT OF FACTS AND PROCEDURAL HISTORY ................................1
SUMMARY OF THE ARGUMENT ........................................................................7
ARGUMENT AND AUTHORITIES ........................................................................8
A. The right to receive structured settlement payments is a property right; such
rights are freely assignable and alienable; and restraints against alienability
are disfavored and strictly construed under Texas law. ..................................8
B. By approving the Swain-Peachtree Transfer and rendering the Final Order,
employing a Servicing Agreement to facilitate Swain’s desire to transfer
partial payments, the trial court did not improperly “rewrite” the underlying
contracts between Swain and MetLife. .........................................................18
C. The Rains Case is different. ...........................................................................24
D. The Servicing Arrangement approved in the Final Order was appropriate and
consistent with Texas principal-agency law and did not adversely or
materially impact MetLife. ............................................................................29
E. The Final Order (including the Servicing Arrangement) does not contravene
the Texas Transfer Statute, either directly or indirectly. ...............................39
F. The Servicing Arrangement did not impose upon MetLife a contractual or
business relationship with Peachtree. ............................................................41
G. The Final Order and Servicing Arrangement did not create new or material
burdens or risks for MetLife. The alleged bankruptcy risk is remote and
immaterial. .....................................................................................................45
H. Swain is Not Hindered by the Servicing Arrangement in Transferring
Additional Payments......................................................................................48
I. The Final Order and Servicing Arrangement do not contravene the
Wisconsin Order. ...........................................................................................53
J. The trial court did not abuse its discretion in approving the Swain-Peachtree
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE iv
Transfer ..........................................................................................................55
PRAYER ..................................................................................................................60
CERTIFICATE OF COMPLIANCE .......................................................................60
CERTIFICATE OF SERVICE ................................................................................61
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE v
TABLE OF AUTHORITIES
Federal Cases
Centex Constr. Co. v. Kennedy, 332 F. Supp. 1213 (S.D. Tex 1971) .......................9
In re: Martin, 117 B.R. 243 (Bankr N.D. Tex. 1990) ...................................... 10, 12
Settlement Capital Corporation, Inc. v. Pagan, 649 F. Supp. 2d 545 (N.D. Tex.
2009) ..............................................................................................................11
State Cases
Ames v. Great Southern Bank, 672 S.W.2d 447 (Tex. 1984) ..................................34
Astie v. Aubrey, Inc., 1999 Tex. App. Lexis 3838 (Tex. App.—Amarillo 1999, no
pet.) ................................................................................................................45
Benson v. Greenville National Exchange Bank, 253 S.W.2d 918 (Tex. Civ. App.—
Texarkana 1952, writ ref'd n.r.e.) ..................................................................11
Car, Ltd. v. Smith, 590 S.W.2d 738 (Tex. Civ. App.—Houston [14th Dist.] 1979,
writ ref’d n.r.e.) ..............................................................................................35
Carr v. Hunt, 651 S.W.2d 875 (Tex. App.—Dallas 1983, writ ref’d n.r.e.) ...........32
Casteel v. Gunning, 402 S.W.2d 529 (Tex. Civ. App.—El Paso 1966, writ ref'd
n.r.e.) ..............................................................................................................11
Cearly v. Cearly, 544 S.W.2d 661 (Tex. 1976) .........................................................8
Central Power & Light Co. v. Purvis, 67 S.W.2d 1086 (Tex. Civ. App.—San
Antonio 1934, writ ref'd) ...............................................................................10
Citizens State Bank v. O’Leary, 167 S.W.2d 719 (Tex. 1942) ............................9, 11
Cloughly v. NBC-Bank-Seguin, N.A., 773 S.W.2d 652 (Tex. App.—San Antonio
1989, writ denied) ............................................................................................9
CNOOC Se. Asia Ltd. v. Paladin Res. (SUNDA) Ltd., 222 S.W.3d 880 (Tex.
App.—Dallas 2007, pet. denied). ........................................................... 33, 36
Coleman v. Klockner & Co. AG, 180 S.W.3d 577 (Tex. App.—Houston [14th Dist.]
2005, no pet.) .................................................................................................33
Crim Truck & Tractor v. Navistar Intern. Transp. Corp., 823 S.W.2d 591 (Tex.
1992) ..........................................................................................................9, 10
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE vi
Crooks v. M1 Real Estate Partners, Ltd., 238 S.W.3d 474 (Tex. App.—Dallas
2007, pet. denied) ..........................................................................................33
Crowell v. Bexar County, 351 S.W.3d 114 (Tex. App.—San Antonio 2011, no pet.)
................................................................................................................ 13, 22
Daugherty v. McDonald, 407 S.W.2d 954 (Tex. Civ. App.—Fort Worth 1966, no
writ)................................................................................................................32
Davis v. Davis, 495 S.W.2d 607 (Tex. Civ. App.—Dallas 1973, writ dism’d) ........8
Dow Chem. Co. v. Francis, 46 S.W.3d 237 (Tex. 2001) .........................................56
First National Bank v. Roberts, 286 S.W.2d 462 (Tex. App.—Austin 1956, no
writ)................................................................................................................54
Gaines v. Kelly, 235 S.W.3d 179 (Tex. 2007) .........................................................33
Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757 (Tex. 2003)....................57
Golden Spread Elec. Coop., Inc. v. Denver City Energy Assoc., L.P., 269 S.W.3d
183 (Tex. App.—Amarillo, pet. denied) .......................................................29
Harding Co. v. Sendero Resources, Inc., 365 S.W.3d 732 (Tex. App.—Texarkana
2012, pet. denied) ................................................................................... 35, 36
Herbert v. Herbert, 754 S.W.2d 141 (Tex. 1988) ...................................................57
In re FH Partners, L.L.C., 335 S.W.3d 752 (Tex. App.—Austin 2011, no pet.)
............................................................................................................... passim
In re: ADM Investor Servs., 304 S.W.3d 371 (Tex. 2010) ......................................33
In re: J. Rains, Annuitant, 2015 Tex. App. LEXIS 8219 (Tex. App.—Amarillo
2015, no pet. h.) ..................................................................................... passim
Intermedics, Inc. v. Grady, 683 S.W.2d 842 (Tex. App.—Dallas 1983, writ ref’d
n.r.e.) ..............................................................................................................32
J.G. Wentworth Originations, LLC v. Freelon, 446 S.W.3d 426 (Tex. App.—
Houston [1st Dist.], no pet.) .............................................................. 18, 49, 54
J.G. Wentworth Originations, LLC v. Perez, 2014 Tex. App. Lexis 8798 (Tex.
App.—Houston [1st Dist.], no pet.) .................................................. 18, 49, 54
Jarvis v. K&E Re One, LLC, 390 S.W.3d 631 (Tex. App.—Dallas 2012, no pet.)32,
33
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE vii
Johnson v. Holly Farms of Texas, Inc., 731 S.W.2d 641 (Tex. App.—Amarillo
1987, no writ).................................................................................................32
Johnson v. Structured Asset Services, LLC, 148 S.W.3d 711 (Tex. App.—Dallas
2004, no pet.) .......................................................................................... 10, 11
Levine v. Bayne, 92 S.W.3d 1 (Tex. App.—San Antonio 1999) .............................14
Lone Star Partners v. NationsBank Corp., 893 S.W.2d 593 (Tex. App.—Texarkana
1994, writ denied) ..........................................................................................36
Madison & Pennings, Inc. v. Foundation Engineering Co., 390 S.W.2d 48 (Tex.
App.—Houston [1st Dist.], 1965 no writ). .....................................................54
McMillan v. Rutherford, 14 S.W.2d 132 (Tex. Civ. App.—Amarillo 1929, no writ)
.......................................................................................................................54
Menger v. Ward, 87 Tex. 622, 30 S.W. 853 (Tex. 1895) ........................................15
Mischer v. Burke, 456 S.W.2d 550 (Tex. Civ. App.—Houston [1st Dist.] 1970, writ
ref'd n.r.e) .......................................................................................................11
Nahm v. J.R. Fleming & Co., 116 S.W.2d 1174 (Tex. Civ. App.—Eastland 1938,
no writ)...........................................................................................................34
Nathan A. Watson Co. v. Employers Mut. Cas. Co., 218 S.W.3d 797 (Tex. App.—
Fort Worth 2007, pet. denied) .......................................................................32
Paragon Indus. Applications, Inc. v. Stan Excavating, LLC, 432 S.W.3d 542 (Tex.
App.—Texarkana 2014, no pet.) ...................................................................33
Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex. 1986) ...........................................56
Ross v. Sep, 154 S.W.2d 958 (Tex. Civ. App.—Texarkana 1941, writ ref’d.) .......34
Ross v. Tex. One P’ship, 796 S.W.2d 206 (Tex. App.—Dallas 1990, writ denied) 35
Royal Indem. Co. v. Marshall, 388 S.W.2d 176 (Tex. 1965) ..................................29
Salinas v. Allen, 366 S.W.3d 842 (Tex. App.—Amarillo 2012, no pet.) ................57
Settlement Capital Corporation et al. v. State Farm Mutual Automobile Insurance
Company et al, 646 N.W.2d 550 (Minn Ct. App. 2002) ...............................59
State Farm Fire & Cas. Co. v. Gandy, 925 S.W.2d 696 (Tex. 1996) .............. 11, 12
Texas Mun. League Intergovernmental Risk Pool v. Tex. Workers Comp. Comm’n.,
74 S.W.3d 377 (Tex. 2002) .............................................................................9
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE viii
Townsend v. Univ. Hosp., 83 S.W.3d 913 (Tex. App.—Texarkana 2002, pet.
denied) ...........................................................................................................33
Transcon. Realty Investors, Inc. v. Wicks, 2014 Tex. App. LEXIS 8504 (Tex.
App—Dallas 2014, pet. denied) ......................................................................9
United Residential Props., L.P. v. Theis, 378 S.W.3d 552 (Tex. App.—Houston
[14th Dist.] 2012, no pet.) ........................................................................ 32, 33
Vaughn v. DAP Fin. Servs., Inc., 982 S.W.2d 1 (Tex. App.—Houston [1st Dist.]
1997, no pet.) .................................................................................................13
Vernor v. Southwest Federal Land Bank Ass’n, 77 S.W.3d 364 (Tex. App.—San
Antonio 2002, pet. denied) ................................................................. 9, 13, 16
Walker Ins. Servs. v. Bottle Rock Power Corp., 108 S.W.3d 538 (Tex. App.—
Houston [14th Dist.] 2003, no pet.) ......................................................... 33, 36
Walker v. Walker, 619 S.W.2d 196 (Tex. Civ. App.—Tyler 1981, writ ref’d n.r.e.)
.......................................................................................................................45
Washington Square Financial, LLC D/B/A Imperial Structured Settlements v. RSL
Funding, LLC, 418 S.W.3d 761 (Tex. App.—Houston [14th Dist.] 2013. pet.
denied) ...........................................................................................................11
Wright v. Sydow, 173 S.W.3d 534 (Tex. App.–Houston [14th Dist.] 2004, pet.
denied) ...........................................................................................................17
Statutes
26 U.S.C. § 5891 ......................................................................................................47
TEX. BUS. & COM. CODE § 2.210 .............................................................................13
TEX. CIV. PRAC. & REM. CODE § 141.002 ................................................................54
TEX. CIV. PRAC. & REM. CODE § 141.004................................................... 11, 42, 43
TEX. CIV. PRAC. & REM. CODE § 31.002..................................................................29
TEX. CIV. PRAC. & REM. CODE §§ 141.001 et seq. .......................................... passim
TEX. CIV. PRAC. & REM. CODE §§ 63.001 et. seq.....................................................29
TEX. PROP. CODE § 12.014 .......................................................................................54
TEX. TAX CODE § 1.04 ...............................................................................................9
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE ix
WIS. STAT. § 806.18 .................................................................................................54
Rules
TEX. R. APP. P. 39 .................................................................................................... xi
Other Authorities
3 TEX. JUR. AGENCY § 19 .........................................................................................33
4 Arthur Corbin, Corbin on Contracts, §§ 868-869 (1951) ....................................13
7 TEX. JUR. 3D ASSIGNMENTS § 8 (1997) .................................................................10
RESTATEMENT (SECOND) OF CONTRACTS § 317 (1981) ...........................................13
TEX. JUR. 3D CORPORATIONS § 390 ..........................................................................33
TEX. JUR. JUDGMENTS § 623 ....................................................................................54
Walter W. Cook, The Alienability of Choses in Action, 29 Harv. L. Rev. 816
(1916) .............................................................................................................12
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE x
REQUEST FOR ORAL ARGUMENT
Pursuant to TEX. R. APP. P. 39, Appellee Peachtree Settlement Funding, LLC
respectfully requests the opportunity to present oral argument in this appeal.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE xi
ORAL ARGUMENT REQUESTED
No. 01-15-00147-CV
IN THE COURT OF APPEALS
FOR THE FIRST DISTRICT OF TEXAS AT HOUSTON
Metropolitan Life Insurance Company and Metropolitan Insurance & Annuity
Company,
Appellants,
Peachtree Settlement Funding, LLC and Sara Swain,
Appellees.
Appeal from Cause No. 201474548
In the 234th Judicial District Court, Harris County, Texas
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC
TO THE HONORABLE COURT OF APPEALS:
STATEMENT OF FACTS AND PROCEDURAL HISTORY
In 2001, a lawsuit was settled on behalf of Sara Swain (“Swain”), who was
then 16 years old, by her maternal grandparents in Wisconsin. (RR Vol. 2 at pp. 7-
8). That lawsuit arose from an accident that resulted in the death of Swain’s mother.
(RR Vol. 2 at p. 7)1. The case was settled by way of a structured settlement and
Swain became entitled to receive monthly payments from the settling parties
1
References to the record shall be “CR” for the Clerk’s Record; “SUPP. CR” for the Supplemental
Clerk’s Record; “RR” for the Reporters Record for the February 2, 2015 hearing; and “SUPP. RR”
for the Reporter’s Record for the April 6, 2015 hearing.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 1
identified in the settlement agreement (the “Settlement Agreement”). (RR Vol. 2 at
p. 8). Because she was a minor, the settlement was approved by a Wisconsin court
(the “Wisconsin Order”).
Metropolitan Insurance & Annuity Company (“Metropolitan Annuity”)
assumed the obligation to make the payments due Swain under the Settlement
Agreement (the “Settlement Payments”) by way of a “qualified assignment.” (CR
31). Metropolitan Annuity funded its obligation to make the Settlement Payments
by purchasing an annuity (the “Annuity”) from an affiliate, Metropolitan Life
Insurance Company (“Metropolitan Life”). (CR 31).2 Neither Metropolitan Annuity
nor Metropolitan Life (sometimes collectively referred to as “MetLife”) was a party
to the Settlement Agreement or the Wisconsin Order.
Swain became entitled to receive monthly payments of $1,460.00 per month
commencing May 10, 2010, when she reached age 25, continuing for the duration
of her life, guaranteed for 40 years (through April 10, 2050) and increasing 3%
annually each May. (CR 30-21).
It is undisputed that Swain is entitled to receive the Periodic Payments and
that MetLife is obligated to make the Periodic Payments to Swain. The right to
2
The payments due and payable by Metropolitan Life under the Annuity, which correspond to
the Settlement Payments in terms of the timing and amount of same, shall be referred to as the
“Annuity Payments.” The Settlement Payments and Annuity Payments shall sometimes be
referred to collectively as the “Periodic Payments.”
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 2
receive the Periodic Payments belongs to Swain and that right is an intangible
property right. It is undisputed that MetLife does not own any right, title or interest
in the Periodic Payments.
In 2015, Swain developed a need for liquidity relative to a portion of her
Periodic Payments. She wanted to purchase a home. (SUPP. RR at pp. 9-10). Swain
agreed to assign to Peachtree a portion of her monthly Periodic Payments from May
2015 through April 2026. (CR 14-27). In return, Peachtree agreed to pay Swain a
lump sum of $49,716.26 (the “Purchase Price”).3 (CR 14-27). Swain agreed to
assign to Peachtree one hundred thirty-two (132) partial monthly payments of $495
each out of her total monthly payment from May 2015 through April 2026 (the
“Peachtree Assigned Payments,”) (CR 26).4 Both the total monthly payment and the
Peachtree Assigned Payments increased 3% each year. From May 2015 through
April 2016, for example, the monthly Periodic Payments are $1,643.24, of which
Swain assigned to Peachtree $ 495.00 and retained $1,148.24 per month.5
As part of the proposed Swain-Peachtree Transfer and as required by Chapter
3
Originally, Swain and Peachtree agreed to a purchase price of $41,334.00. (CR 27). Swain and
her Grandfather (who advised her in the transaction) negotiated a higher price, increasing the
purchase price to $49,716.26. (SUPP. RR at p. 11, lines 4-5). The payments to be transferred and
assigned to Peachtree did not change.
4
The transaction by and between Peachtree and Swain will be referred to as the “Swain-Peachtree
Transfer”.
5
A schedule of the monthly Periodic Payments due and payable during the 132 month Term (the
“Term Payments”), the portion transferred and assigned to Peachtree (the Peachtree Assigned
Payments), and the portion to be received by Swain (the Swain Retained Payments) was admitted
as an exhibit by the trial court.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 3
141 of the Texas Civil Practice & Remedies Code (the “Texas Transfer Statute”),
Swain received a disclosure statement from Peachtree and executed a Purchase
Contract (the “Transfer Agreement”). (CR 14-27). On or about December 30, 2014,
Peachtree initiated a legal proceeding in the 234th District Court by filing an
application for approval of the transaction. (CR 3-7). Peachtree filed an Amended
Application for Approval of Sale of Partial Payment Rights (the “Amended
Application”, CR 8-27) on January 8, 2015 and secured a hearing on the Amended
Application on February 2, 2015 and provided notice to all “interested parties,”
including MetLife. (CR 8-27).
Metropolitan Life and Metropolitan Annuity, as interested parties, appeared
and opposed the Swain-Peachtree Transfer by filing an Opposition to Application
for Approval of Transfer of Structured Annuity Benefits (“MetLife Opposition”).
(CR 28-51). MetLife urged the Court to deny court approval of the transaction on a
number of grounds, even though MetLife routinely remains neutral in such
transactions and even though the transaction would have ZERO impact on MetLife.
MetLife opposed the Swain-Peachtree Transfer, contending:
 the transaction violated the Texas Transfer Statute by requiring
MetLife to divide payments;
 there was no legal basis for imposing a Servicing Arrangement on
MetLife, circumventing the Texas Transfer Statute’s prohibition
against compelling MetLife to divide payments;
 Peachtree was not entitled to mandatory, injunctive relief against
MetLife;
 the Servicing Arrangement raised constitutional and practical
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 4
concerns;
 the Swain-Peachtree Transfer was barred by anti-assignment
language;
 Peachtree failed to establish that the transfer was in Swain’s best
interest;
 because Metropolitan Annuity owned the Annuity, Swain had no
right to assign any payments.
(CR 32-50). Peachtree responded to the MetLife Opposition by filing its Brief in
Support of Application for Transfer of Structured Settlement Payments and in Reply
to Metropolitan Life Insurance Company and Metropolitan Insurance & Annuity
Company’s Objection (the “Peachtree Response,” CR 54-80) and an Appendix in
Support of Peachtree Settlement Funding, LLC’s Response.6
At a hearing on February 2, 2015, the trial court overruled MetLife’s
Opposition and signed a Final Order Approving Transfer of Structured Settlement
Payments (the “Final Order,”) approving the Swain-Peachtree Transfer. (CR 89-
95). A Servicing Arrangement was included in the Final Order, whereby Peachtree
would receive the Term Payments from MetLife, retain the Peachtree Assigned
Payments, and remit the Swain Retained Payments to Swain.
MetLife filed a Notice of Appeal on February 13, 2015. (CR 96-98).
Peachtree filed a Motion for New Trial and/or to Supplement the Record and Present
6
The Appendix in Support of Peachtree’s Response was not included in the record in this case.
Some documents that were included in the aforementioned appendix are included in the Appendix
to this Brief and will be referenced accordingly.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 5
Additional Testimony on March 3, 2015 (the “Motion to Supplement,”).7 (CR 107-
111). As set forth in the Motion to Supplement, the trial court had a busy docket on
February 2, 2015 and although Swain attended the February 2nd hearing and
addressed her reasons for wanting to complete the Swain-Peachtree Transfer, and
was questioned by Judge Wesley Ward, the exchange was not on the record. (CR
108-109). At the April 6th hearing, Swain testified as to her personal and financial
situation and her reasons for wanting to complete the Swain-Peachtree Transfer.
(SUPP. RR at pp. 6-11). MetLife’s counsel appeared at the April 6th hearing,
opposed the Motion to Supplement, and cross-examined Swain. (SUPP. RR at pp.
13-14). Judge Ward acknowledged that he and Swain had discussed the transaction
at the earlier hearing and confirmed with Swain that the statements she made to the
court at on February 2 were true and correct. (SUPP. RR at pp. 5-6)
Following the hearing, Judge Ward signed an Order Granting the Motion to
Supplement the Record and Present Additional Testimony and an Order Confirming
and Reaffirming Final Order Approving Transfer of Structured Settlement Payment
7
Peachtree filed the Motion to Supplement in order to extend the trial court’s plenary power, so
that the testimony of Swain, which had previously been offered at the February 2nd hearing but did
not appear in the record, would appear on the record. Swain’s reason for entering into the Transfer
Agreement with Peachtree was to put a down payment on a home. (RR at p. 37, lines 15-22). At
the beginning of the February 2nd hearing and before the Judge went on the record, Swain told the
Judge about her plans to purchase a home. By the time of the April 6th hearing, Swain had, in fact
used the funds she received in connection with the Swain-Peachtree Transfer to purchase a home,
which purchase was closing that same week. (SUPP. RR at p. 10, lines 3-13).
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 6
Rights.8 (SUPP. CR 12-16).
SUMMARY OF THE ARGUMENT
At its core, MetLife’s contention is that MetLife cannot be compelled by the
Texas Transfer Statute to divide payments AND the trial court erred when it signed
the Final Order, which included a Servicing Arrangement, whereby MetLife would
deliver the Term Payments to Peachtree and Peachtree would receive a portion of
said payments (the Peachtree Assigned Payments) as a transferee/assignee and a
portion (the Swain Retained Payments) as a payment agent. MetLife opposed the
Servicing Arrangement, in effect refusing to allow Swain to transfer and assign
partial payments, even though the proposed transfer and the Final Order, including
the Servicing Arrangement, did not adversely impact or affect MetLife.
MetLife contends that the Final Order improperly modifies and rewrites its
contracts with Swain and contravenes the Texas Transfer Statue. Yet, MetLife
ignores the basic principles of principal-agency law and refuses to recognize that
the Final Order properly designates Peachtree as Swain’s payment agent for the
Swain Retained Payments. MetLife’s contracts with Swain remain in effect. There
has been no material alteration of MetLife’s payment obligations and the Final Order
and the Texas Transfer Statute make clear that MetLife will fulfill its payment
8
Although MetLife opposed the Motion to Supplement below, MetLife has not appealed the trial
court’s decision to grant said motion, hold the second hearing, and allow Peachtree and Swain to
supplement the record.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 7
obligations by complying with the Final Order. The Final Order does not contravene
the Texas Transfer Statute.
The trial court’s determination that the transfer was in Swain’s best interest is
not contrary to the evidence and did not constitute an abuse of the court’s discretion.
MetLife’s other buffet of legal arguments – that the Final Order improperly imposes
a mandatory business/contractual or principal-agency relationship on MetLife and
Peachtree, violates the Wisconsin Order, and materially and adversely impacts
MetLife are all without merit and are not supported by the record or Texas law. The
Final Order should be affirmed.
ARGUMENT AND AUTHORITIES
A. The right to receive structured settlement payments is a property right; such
rights are freely assignable and alienable; and restraints against alienability
are disfavored and strictly construed under Texas law.
In light of MetLife’s arguments below and on appeal, an examination of
common law principles relating to alienability and assignability of property and
contract rights, including the right to receive payments in the future, is relevant and
instructive.
Property includes both real and personal property and includes obligations,
rights and other intangibles. Davis v. Davis, 495 S.W.2d 607, 611 (Tex. Civ. App.—
Dallas 1973, writ dism’d) overruled on other grounds Cearly v. Cearly, 544 S.W.2d
661 (Tex. 1976). It has long been the rule in Texas that contractual rights are
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 8
personal property. See Centex Constr. Co. v. Kennedy, 332 F. Supp. 1213, 1215
(S.D. Tex 1971). Intangible personal property includes:
a claim, interest . . . right, or other thing that has value but cannot be
seen, felt, weighed, measured or otherwise perceived by the senses
although its existence may be evidenced by a document. It includes a
stock, bond, note, or account receivable . . . insurance policy, annuity,
pension, cause of action, contract, and goodwill.
TEX. TAX CODE § 1.04(6); see also Texas Mun. League Intergovernmental Risk Pool
v. Tex. Workers Comp. Comm’n., 74 S.W.3d 377, 387 (Tex. 2002).
Texas courts have long recognized that all species of property are freely
assignable. Citizens State Bank v. O’Leary, 167 S.W.2d 719, 721 (Tex. 1942). Any
species of property is assignable and everything which can be called a debt may be
assigned. In re FH Partners, L.L.C., 335 S.W.3d 752, 766-767 (Tex. App.—Austin
2011, no pet.); Cloughly v. NBC-Bank-Seguin, N.A., 773 S.W.2d 652, 655 (Tex.
App.—San Antonio 1989, writ denied).
The Texas Supreme Court has held that “as a general rule, all contracts are
assignable.” Crim Truck & Tractor v. Navistar Intern. Transp. Corp., 823 S.W.2d
591, 596 (Tex. 1992) (emphasis added); see also Transcon. Realty Investors, Inc. v.
Wicks, 2014 Tex. App. LEXIS 8504, *7 (Tex. App—Dallas 2014, pet. denied); FH
Partners, 335 S.W.3d at 766-767; Vernor v. Southwest Federal Land Bank Ass’n,
77 S.W.3d 364, 366 (Tex. App.—San Antonio 2002, pet. denied). The Texas
Supreme Court noted that an exception to this general rule of assignability “is that a
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 9
contract that relies on the personal trust, confidence, skill, character or credit of the
parties, may not be assigned without the consent of the parties.” Crim Truck, 823
S.W.2d at 596.
Even where a contract is not assignable, the right to receive payments under
the contract is assignable. In re: Martin, 117 B.R. 243, 249 (Bankr N.D. Tex. 1990).
Except as provided by statute, contracts calling for the payment of money are
assignable. 7 TEX. JUR. 3D ASSIGNMENTS § 8 (1997). All contracts and contract
rights are assignable unless the assignment is contrary to public policy or the contract
involves a matter of trust and confidence. See Central Power & Light Co. v. Purvis,
67 S.W.2d 1086, 1088 (Tex. Civ. App.—San Antonio 1934, writ ref'd); In re Martin,
117 B.R. at 249.
Courts in Texas have held that structured settlement payments may be
assigned (even when the assignment occurred prior to the enactment of the Texas
Transfer Statute and was not court approved) and such assignments are not contrary
to Texas public policy. Johnson v. Structured Asset Services, LLC, 148 S.W.3d 711,
731 (Tex. App.—Dallas 2004, no pet.) (“We agree with the majority of the courts
that the assignment of structured settlement payments is not against public policy.”);
Settlement Capital Corporation, Inc. v. Pagan, 649 F. Supp. 2d 545, 557 (N.D. Tex.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 10
2009), citing Johnson.9 With the enactment of the Texas Transfer Statute, the Texas
Legislature has unequivocally determined and acknowledged that structured
settlement payments may be lawfully assigned, albeit in accordance with a state
statute that provides for court approval of such transactions.
It is not the policy of the law of this State to favor restraints upon the alienation
of property. Citizens State Bank, 167 S.W.2d at 721. Alienability is a legal incident
of property and restrictions against it are contrary to public policy. Benson v.
Greenville National Exchange Bank, 253 S.W.2d 918, 923 (Tex. Civ. App.—
Texarkana 1952, writ ref'd n.r.e.). Generally speaking, property may be freely sold
and delivered, subject to reasonable restrictions which have been properly imposed.
Mischer v. Burke, 456 S.W.2d 550 (Tex. Civ. App.—Houston [1st Dist.] 1970, writ
ref'd n.r.e). Such restrictions are usually regarded with disfavor and are strictly
construed. Casteel v. Gunning, 402 S.W.2d 529, 538 (Tex. Civ. App.—El Paso
1966, writ ref'd n.r.e.).
In 1996, the Texas Supreme Court examined the change in the law over time
relating to the alienability of choses in action in State Farm Fire & Cas. Co. v.
Gandy, 925 S.W.2d 696 (Tex. 1996). While not directly on point, as that case
9
The 14th Court of Appeals has determined that a contract to transfer and assign structured
settlement payments that has not received the “statutorily required court approval” mandated by
TEX. CIV. PRAC. & REM. CODE § 141.004 is unenforceable and contrary to public policy.
Washington Square Financial, LLC D/B/A Imperial Structured Settlements v. RSL Funding, LLC,
418 S.W.3d 761, 769-770 (Tex. App.—Houston [14th Dist.] 2013. pet. denied).
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 11
involved the assignment of a chose in action lying in tort, the discussion of the
change in the law relating to free alienability of property rights is relevant. In Gandy,
the Texas Supreme Court noted that at early common law, “a chose in action could
not be assigned,” but that as early as the fifteenth century, the common-law rule
against alienability began to give way to the demand of commerce that assigned
debts are enforceable. Gandy, 925 S.W.2d at 706, citing Walter W. Cook, The
Alienability of Choses in Action, 29 Harv. L. Rev. 816, 821 (1916). Justice Hecht
wrote that the “pressures against the rule of inalienability were commercial and thus
affected only debts and other contractual rights that were not personal to the owner
and could survive to his estate up on his death.” Gandy, 925 S.W.2d at 706. The
only remnants of the rule against alienability of choses in action to survive passage
of the common law to America were those pertaining to some torts. Id. Justice
Hecht noted that only five days after the Republic of Texas adopted the common law
in 1840, a statute was enacted allowing the assignment of negotiable and non-
negotiable written instruments. Id. Even “contract rights not covered by the statue
could be assigned.” Id. at 707.
A contractual right can be assigned, unless the assignment materially changes
the duty of the obligor, or materially increases the burden or role imposed on the
obligor by the contract, or materially impairs the obligor's chance of obtaining return
performance. In re: Martin, 117 B.R. at 249; RESTATEMENT (SECOND) OF
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 12
CONTRACTS § 317(2)(9) (1981); 4 Arthur Corbin, Corbin on Contracts, §§ 868-869
(1951); see TEX. BUS. & COM. CODE § 2.210(b).
Numerous Texas courts of appeal, including this Court, have followed the
precedents and jurisprudence of the Texas Supreme Court relating to the assignment
of contract rights and debts. See Crowell v. Bexar County, 351 S.W.3d 114, 117
(Tex. App.—San Antonio 2011, no pet.) (Generally all contracts are assignable,
rejecting claim of debtors on promissory note that lender’s assignee could not
enforce terms of the note.); Vaughn v. DAP Fin. Servs., Inc., 982 S.W.2d 1, 14 (Tex.
App.—Houston [1st Dist.] 1997, no pet.); Vernor, 77 S.W.3d at 366. In Vernor, the
San Antonio Court of Appeals rejected the debtor/obligor’s argument that the
assignment of a note was an exception to the general rule that all contracts are
assignable, because it was a promissory note that relied on the personal credit of the
parties. Vernor, 77 S.W.3d at 366. Only the debtor/obligor’s credit was implicated,
not the assignor’s (the bank that assigned the note), and thus the note was assignable
as a matter of law. Id. (emphasis added).
In Crowell the court noted that the deed in question provides that all rights
under the deed inure to the “respective successors and assigns” of the parties and
was thus freely assignable. Crowell, 351 S.W.3d at 118. (emphasis in original).10
10
The underlying Settlement Agreement and Qualified Assignment in this case includes a similar
provision which provide that the settlement agreement would be binding on and inure to the benefit
of the parties and their respective “successors and assigns.” (See footnote 15 herein).
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 13
The San Antonio Court of Appeals also rejected an argument that a contract for
attorneys’ fees was not assignable because it involved personal services and trust of
the parties. Levine v. Bayne, 92 S.W.3d 1, 5 (Tex. App.—San Antonio 1999), rev’d
on other grounds, 40 S.W.3d 92 (2001). The attorneys could assign their accounts
receivable without securing the consent of the parties obligated to pay said fees. Id.
The Austin Court of Appeals also recognized the “presumption or general rule
under Texas law . . . that all contracts are freely assignable.” FH Partners, 335
S.W.3d at 760. “It is the longstanding rule in Texas that the right to collect a debt –
including not only debts based in contract but also the broader category of rights to
recover money known as choses in action–is generally assignable.” Id. at 760 (citing
Gandy and Citizens State Bank).
The FH Partners case involved an action by the assignee (FH Partners) to
enforce a loan and security agreement (the Agreement) against a builder of
residential swimming pools (the Pool Companies). Id. at 753-787. The loan had
originally been made by State Bank and upon default, the loan was assigned to FH
Partners. Id. at 754. The court examined long-established authorities and the history
of alienability and assignability of contracts and property rights. Id. at 761-767.
Citing to long-established Texas Supreme Court precedent, the FH Partners court
held that “at one time no non-negotiable obligation was assignable. But this was by
reason of a state and stage of society and a dominant sentiment that have long passed.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 14
The doctrine has been abandoned even in theory.” Id. at 762.
The Pool Companies, which were obligated to make the payments and were
challenging the assignment, unsuccessfully argued that the “general rule” derives
solely from contract language that specifically permits assignment, the negotiability
of the instrument in question, or statutes that have been repealed or did not apply.
Those arguments were rejected by the Austin Court of Appeals. Id. at 762. The
Pool Companies also argued that the right to receive the loan payments could not be
assigned without their consent. That contention was also rejected and the court
rebuffed the Pool Companies’ efforts to “avoid the general rule,” by invoking the
exception that a contract that relies “on the personal trust, confidence, skill, character
or credit of the parties” is not assignable. Id. at 762.
The notion underlying this ‘personal trust … or credit’ exception is that
the general policy of free assignment should yield to a contracting
party’s interest in choosing the person with whom it deals with respect
to certain types of contractual rights or duties that, by their nature,
contemplate or require performance only by a specific person.
Id. citing Menger v. Ward, 87 Tex. 622, 30 S.W. 853, 855 (Tex. 1895) (emphasis
added) (“Rights arising out of a contract can not [sic] be transferred if they involve
a relation of personal confidence, such that the party whose agreement conferred
those rights must have intended them to be exercised only by him in whom he
actually confided.”). These types of rights or duties:
arise on account of suretyship; technical guaranty; personal
relationship, as between master and servant; personal skill or services,
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 15
as in such a case, or that of an attorney for his client; personal terms of
contract, as where a particular obligee is made the measure of
performance, the agreement is to supply what he “needs,” or he is to be
“satisfied”; or confidence or trust, as from lender toward borrower—it
being everywhere conceded that in such instances a man has a right to
choose the individuals with whom he will deal.
FH Partners, 335 S.W.3d at 762-763. “But, saving exceptions of these kinds, the
full and unexceptional liberty of restricting alienation of contractual rights has given
way,” and Texas law has been quite “liberal in favoring assignment.” Id.
The Court agreed with FH Partners’ argument that the “personal trust or
credit” exception, which prevents debtors from unilaterally assigning their
obligations without creditors’ consent, did not restrict a creditor from assigning its
corresponding rights against the debtor. Id. at 764.
There is simply no Texas authority holding that a creditor’s right to
receive payment on a debt is the sort of contractual right that Texas law
regards as being predicated on a debtor’s ‘personal trust … or credit’ in
a creditor, such that the creditor cannot freely assign that right.
Id. citing Vernor, 77 S.W. 3d at 366. “No Texas court has so held and, lacking such
authority, we will not be the first.” Id.
Because State Bank (the assignor and original creditor) was not required to
obtain the Pool Companies’ consent for the assignment, the absence of such consent
could not render the assignment invalid. Id. At 767. By refusing to recognize FH
Partners’ rights as an assignee, the trial court abused its discretion. Id.
The Periodic Payments are unquestionably the property of Swain. As
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 16
discussed above, Texas law and public policy has long recognized the importance of
free alienability and assignability of property rights, which includes intangible
property like structured settlement payments.11 Although Texas law does require
such transfers to be court approved in accordance with the Texas Transfer Statute,
Texas law and the state’s public policy allows Texas citizens (like Swain) to transfer
and assign structured settlement payments in transactions which are court approved
in accordance with the Texas Transfer Statute. Nothing in the Texas Transfer Statute
nor in the other laws of this state or the decision of its courts suggest or support a
conclusion that MetLife might unilaterally obstruct the Swain-Peachtree Transfer by
withholding their consent to said transaction or to the Servicing Arrangement
approved by the trial court to facilitate said transaction.
MetLife’s has sought to restrict and restrain Swain’s right to liquidate, through
a court-approved assignment, a portion of her future payment rights by relying on
inapplicable legal principles, an absurd interpretation of the Texas Transfer Statute,
and speculative and fanciful arguments of potential prejudice and possible liability
if the trial court’s decision is affirmed. MetLife’s appeal, and its arguments aimed
at obliterating the court-approved transfer, must be examined in light of the Texas
legal authorities and public policy detailed above which favor free alienability of
A state’s public policy is embodied in its constitution, statutes, and the decisions of its courts.
11
Wright v. Sydow, 173 S.W.3d 534, 551 (Tex. App.–Houston [14th Dist.] 2004, pet. denied).
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 17
property rights.
B. By approving the Swain-Peachtree Transfer and rendering the Final Order,
employing a Servicing Agreement to facilitate Swain’s desire to transfer
partial payments, the trial court did not improperly “rewrite” the underlying
contracts between Swain and MetLife.
MetLife opposed the Swain-Peachtree Transfer in the trial court on a number
of grounds, as described on pages 4-5 above. But the crux of its legal argument is
that MetLife (a) could not be forced to split payments amongst Swain and Peachtree
and (b) a Servicing Arrangement whereby Peachtree would receive and service the
unassigned portions of the payments to Swain as her payment agent cannot be
imposed over MetLife’s objection. Because the Texas Transfer Statute provides that
a structured settlement obligor/annuity issuer cannot be compelled to split payments
amongst payees and transferees or between multiple transferees12, when MetLife
made clear, by filing the MetLife Opposition, that it would not divide payments,
Peachtree proposed the Servicing Arrangement, a tool commonly employed by
funding companies to facilitate transactions when a payee desires to complete a
transaction involving partial payments and the issuer/obligor refuses to divide
payments amongst the payee and a transferee.13
12
TEX. CIV. PRAC. & REM. CODE § 141.006(5) provides that “neither the structured settlement
obligor nor the annuity issuer may be required to divide any periodic payment between the payee
and any transferee or assignee or between two or more transferees or assignees.”
13
This Court has reviewed and condoned the use of a servicing arrangement in J.G. Wentworth
Originations, LLC v. Freelon, 446 S.W.3d 426 (Tex. App.—Houston [1st Dist.], no pet.) and J.G.
Wentworth Originations, LLC v. Perez, 2014 Tex. App. Lexis 8798 (Tex. App.—Houston [1st
Dist.], no pet.).
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 18
Some issuers/obligors agree to divide payments amongst a payee and
transferee. Some decline to divide payments and prefer that a court-approved
servicing arrangement be employed by the payee and transferee. Only MetLife,
amongst all structured settlement obligors/annuity issuers, refuses both to divide
payments AND opposes servicing arrangements, effectively forcing payees to either
liquidate 100% of specified structured settlement payments or none of them.
In order to address MetLife’s refusal to divide payments and still satisfy
Swain’s desire to transfer and assign partial payments, so that she could purchase a
home for her family and continue to receive a significant portion of her monthly
payments, Peachtree advanced the Servicing Arrangement in the Peachtree
Response (CR 54-80) and at both hearings. MetLife had already raised and opposed
the prospect of a Servicing Arrangement in its MetLife Opposition, before Peachtree
proposed same.14
14
MetLife complains on appeal that Peachtree did not plead for a Servicing Arrangement in its
Application/Amended Application. (Appellants’ Brief at p. 28) Peachtree did not initially request
a Servicing Arrangement because MetLife often voluntarily splits payments amongst a payee (like
Swain) and a transferee (like Peachtree), allowing payees to liquidate less than 100% of specified
payments. Examples of MetLife’s willingness to split and divide payments are reflected in
multiple Texas court orders included in the appendix filed by Peachtree in the trial court. Peachtree
had no reason to know when it filed this case whether MetLife would or would not divide
payments. MetLife’s own arguments are contradictory, as MetLife argues that Peachtree “fights
to act as servicer and does not offer the role to others” (Appellants’ Brief at p. 32) and
simultaneously complains that Peachtree did not request to be a servicer in its pleadings.
(Appellants’ Brief at p. 28). It is acceptable to Peachtree if issuers/obligors divide payments when
a payee seeks to assign partial payments. Peachtree actually prefers that structure. In any event,
the possibility of Peachtree and Swain proposing a Servicing Arrangement, should MetLife decline
to split payments, was not a surprise to Peachtree and the issue was fully litigated. MetLife
thoroughly briefed and argued the Servicing Arrangement issue in the trial court. (CR 34-41).
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 19
On appeal, MetLife’s legal arguments are focused on the unassigned portions
of the Term Payments, which are subject to the court-approved Servicing
Arrangement. In essence, MetLife’s argument is that it must consent to a Servicing
Arrangement.
While Chapter 141 of the Texas Civil Practice & Remedies Code required
court approval of the Swain-Peachtree Transfer, the statute does not allow the party
obligated to make those payments to torpedo the transaction by withholding their
consent (i) to the transfer of payments or (ii) the delegation of the right to receive
unassigned payments in the case of a transfer or partial payments.
The Texas Transfer Statute constituted the concerted and deliberate decision
and actions of the Texas Legislature to provide a statutory process and procedure to
oversee, but definitely permit, the transfer and assignment of structured settlement
payment rights. Nothing in the Texas Transfer Statute bestows upon a structured
settlement obligor (like Metropolitan Annuity) or an annuity issuer (like
Metropolitan Life) the right to unilaterally prevent a transfer of structured settlement
payments that a Texas court finds to be in the payee’s best interest and otherwise
consistent with the Texas Transfer Statute by withholding its consent.
MetLife argues that the Servicing Arrangement constitute an attempt by the
trial court to unilaterally modify the terms of a previously existing contract–i.e. the
structured settlement documents which initially provided for payments to be made
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 20
to Swain. If that were indeed the law, then no person (generically a payee) entitled
to receive future payments under any contract (whether under a structured settlement
or some other contract) could ever assign their contractual right to receive the
payments without the consent of the party obligated to make said payments, because
such a change (in the view of MetLife) would constitute a unilateral “rewrite” and
“modification” of the obligation to make the payments to the person identified in the
contract. That is simply not the law in Texas.
While MetLife has the right to contract with the party of its choice, unless that
contract involved a matter of “personal trust, confidence, skill, character or credit of
the parties” it does not have the absolute right under Texas law to insist that it forever
make payments (whether assigned or pursuant to a court-approved Servicing
Arrangement) only to the party with whom it originally contracted. That would be
true whether or not the Texas Transfer Statute existed. MetLife’s only obligation
relative to the Periodic Payments is to make those payments to Swain (or to her
“successors or assigns,” as set forth in the underlying Settlement Agreement and
Qualified Assignment),15 or to her payment agent, as provided in the Final Order on
15
MetLife filed various documents as part of its Appendix to its Appellants’ Brief, including
redacted copies of the purported Settlement Agreement, Qualified Assignment, Annuity, and the
Wisconsin Order (Appendix to Appellant’s Brief, pp. 24-39). NONE of these documents appear
in the Record (either in the Clerk’s Record or in the Reporter’s Record). NONE of these
documents were offered or admitted into evidence at either hearing conducted by the trial court.
Nevertheless, both the Settlement Agreement and the Qualified Assignment (the Annuity was a
contract between Metropolitan Annuity and Metropolitan Life and neither Swain nor her guardian
were parties to the Annuity), provide that those documents are “binding upon and inure to the
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 21
the dates that they are due. There is no return performance required of Swain and the
contract does not depend on any personal trust, confidence, skill, character or credit
of Swain.
No one disputes that parties have a right to choose the person to whom they
will provide credit or insurance, or choose to paint their portrait or play quarterback
for their football team. But once MetLife agrees to make payments to a specific
person like Swain, it does not have the unfettered right to insist that it will always
and forever make payments only to the original person with whom it contracted.
And dressing up such an argument as “we have the right to contract with whom we
choose,” a “court cannot unilaterally modify our contract” or a court “cannot infringe
upon our liberty to contract” does not change the fact that Texas law (the Texas
Transfer Statute and Texas common law) does not support MetLife’s position.
MetLife’s argument that it must provide “obligor consent” to the Servicing
Arrangement, is contrary to the legal principles and authorities cited herein. It is
undisputed that MetLife’s intransigence in refusing to split payments and opposing
servicing arrangements, constitutes a disfavored restraint on the assignability rights
of Swain relative to this financial asset and harms payees by restricting their ability
benefit of . . . ” the parties’ “successors and assigns” (¶ 14.0 of the Settlement Agreement and ¶10
of the Qualified Assignment). Thus, both documents contemplate that Swain could assign her right
to receive the payments due under those documents. The San Antonio Court of Appeals in Crowell
noted that the inclusion of such language in a contract makes the rights under such contract “freely
assignable”.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 22
to choose to transfer and assign less than 100% of future payments. Not only is that
contrary to Texas law regarding alienability of property rights, but it also defeats the
overriding purpose of the Texas Transfer Statute.
MetLife is not entitled to withhold its consent to the transaction because the
exception to the general rule of free assignability of contractual rights without an
obligor’s consent when the contract requires return performance or depends on the
personal trust, confidence, skill, character, or credit of the parties, does not apply to
restrict a creditor/payee from assigning its rights to receive payment from the
obligor. See FH Partners, 335 S.W.2d at 762-763.
There is no dispute that MetLife’s obligation to make the future structured
settlement/annuity payments is not a contract that depends on the personal trust,
skill, or credit of Swain. MetLife simply makes the payments as they come due.
There is no return performance required of Swain or any obligation on her part to do
anything in order to receive the payments. Swain became entitled to receive the
payments when she released and traded her tort claim for the Periodic Payments.
While MetLife would not be permitted, without Swain’s consent, to assign the
obligation to make the Periodic Payments to another person or entity, the converse
is not true.
Swain, as MetLife’s creditor here, is free to assign the right to receive the
future structured settlement payments, and delegate the right to receive the
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 23
unassigned payments to Peachtree. MetLife’s arguments in opposing the transaction
under the theory that it may choose to contract with anyone it wants and refuse to
make payments to a payment agent is misplaced and wrong.
Moreover, an obligor should not be able to impede and prohibit a partial
assignment of a debt, contract rights, or future structured settlement payment rights
pursuant to a statutory scheme and a court order, when the procedure and process
used to facilitate such partial transfer does not impact or prejudice the obligor in any
way. The Texas Transfer Statute makes clear that following a court-approved
transfer, MetLife is released from any and all liability and that Peachtree is liable to
MetLife for any liabilities, including attorney’s fees and costs, arising from
MetLife’s compliance with the order of the court. TEX. CIV. PRAC. & REM. CODE §
141.005(1) and (2).
C. The Rains Case is different.
MetLife predictably peppers its Brief with references to In re: J. Rains,
Annuitant, 2015 Tex. App. LEXIS 8219 (Tex. App.—Amarillo 2015, no pet. h.) (the
“Rains Case”), effectively urging this Court to dispense with its duty to review the
record and unique facts of this case and simply apply the conclusions of the Amarillo
court in the Rains Case. While Peachtree maintains that the Rains Case was decided
wrongly, relative to the “modification” of contract issue, it is indisputable that the
Rains Case is different and distinguishable from the current case in multiple ways.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 24
MetLife made many of the same legal arguments, both in the Hill County
District Court from which the Rains Case came and in the Amarillo Court of
Appeals, that they are making here. They have also made those same arguments in
other Texas cases, where a payee sought to transfer partial payments and MetLife
refused to divide payments, while simultaneously opposing a servicing
arrangement.16 The Rains Case was the first Texas case in which MetLife raised its
many legal arguments in opposing a transfer of partial payments and a servicing
arrangement. (The undersigned handled that case on appeal, but not in the trial
court.) The final order submitted and signed in Rains is different from the one
MetLife is attacking in this case. Moreover, several Texas trial courts have
considered partial payment transfers, servicing arrangements, and final orders very
similar to the Final Order in this case, and have approved partial payment transfers
and servicing arrangements over MetLife’s objection.17
MetLife’s legal arguments, save for the “unilateral modification of contract
16
A copy of the Table of Contents from MetLife’s Appellant’s Brief filed in the Rains Case is
included in the Appendix at Tab 7, pp. 38-41, which sets forth the legal issues challenged by
MetLife on appeal in that case.
17
See the final orders signed in the Klemer Case (Appendix at Tab 10, pp. 52-58); the Galvan
Case (Appendix at tab 8, pp. 42-48); the Hughes Case, (Appendix at Tab 13, pp. 69-77), the Turpin
Case (Appendix at Tab 14, pp. 78-86), and the Cortez Case (Appendix at Tab 12, pp. 62-68. Each
of those cases involved a proposed transfer of partial payments and a servicing arrangement. In
each case, MetLife objected to the proposed transfer, making the same legal arguments that they
have made here, including that the servicing arrangement constituted a unlawful rewrite of their
contract. In each case, the trial court overruled MetLife’s objection and approved the partial
transfers and servicing arrangements, using an order very similar to Final Order in this case.
MetLife has appealed two of those cases–the Turpin Case and the Hughes Case, but did not appeal
the other three.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 25
argument,” were rejected by the Hill County District Court and that determination
was left undisturbed by the appellate case. Although failing to find merit in
MetLife’s arguments that Wentworth and the trial court (i) improperly sought to
compel MetLife to divide structured settlement payments in contravention of the
Texas Transfer Statute; (ii) imposed an involuntary contractual or agency
relationship on MetLife; and (iii) imposed an injunction on MetLife, the Amarillo
Court, relying on inapplicable case authorities, did find that the trial court sought to
unilaterally modify the underlying contract between MetLife and Ms. Rains via the
court order rendered in that case. With all due respect to the Amarillo Court of
Appeals, and recognizing that the form of the court order at issue in Rains Case was
wanting, the conclusion was a reach and contrary to Texas law.
Of course, under Texas law, the opinion in Rains is merely persuasive, not
binding, authority on this Court. Even if the Rains Case had been binding authority,
it is clearly distinguishable.
The Final Order in this case (and the other orders includes in the Appendix)
set forth and describe the Servicing Arrangement; identified Peachtree as Swain’s
“authorized payment agent;” authorized and directed MetLife to make the Term
Payments to Peachtree, who was responsible for servicing and remitting the
unassigned portions of same (the Swain Retained Payments) to Swain; and provided
that MetLife would satisfy and discharge its payment obligations by complying with
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 26
the Servicing Arrangement and Final Order. The order which the Rains court found
lacking had none of that.
In fact, the Rains order did not mention a servicing arrangement or payment
agent at all, and only tangentially addressed the issue in a single sentence, stating
that the “Annuity Issuer and Annuity Owner are not required to split structured
settlement payments and shall forward the entire amount of each structured
settlement payment that includes the Assigned Payment to Transferee with
Transferee to retain each Assigned Payment and remit the remainder of each
payment to the Payee.” (Appendix at Tab 6, p. 36). The only reference to a discharge
and release of the issuer/obligor in the Rains Order related to the “Assigned
Payments.” (Appendix at Tab 6, p. 36).
One simply cannot automatically accept the Rains Case, and its cryptic order,
as relevant or decisive relative to the unique facts, issues, and Final Order in this
case. Although MetLife parrots may of the same legal arguments (including the one
that was relied upon in the Rains Case and the several others that were rejected), the
crux of this case, being the propriety of the Final Order rendered, is different because
of the substantive, legal differences between the orders.
The Rains Court ventured into dangerous waters by taking a step towards
usurping the power and authority of the Texas Legislature and Texas trial courts
charged with responsibility to review transactions under the Texas Transfer Statute.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 27
The Texas Legislature bestowed upon Texas courts the sometimes unsettling task of
telling competent, mature, independent adults what they can and cannot do with their
financial assets. At no time, did the Texas Legislature indicate that obligor consent
was also required.
The Rains court made a significant leap in transforming the legal arguments
actually made by MetLife into a determination that the trial court could not approve
the proposed transfer without MetLife’s consent, finding that doing so would be a
court mandated “modification” of the underlying contract. Surely no court would
sanction an argument that an alleged “modification” of the terms of the underlying
contracts was not permissible in a garnishment or child support case. Yet, that is a
logical next step under the rationale in the Rains Case.
Had Swain become obligated to pay child support and a child support
withholding order was served on MetLife requiring it to make payments to the child
support obligee, MetLife could not oppose said withholding order based on an
argument that said order constituted a “modification” of the underlying structured
settlement agreement and annuity. The same would be true in the context of tax liens
and in connection with the rules and statutes relating to garnishment and turnover
orders. (TEX. CIV. PRAC. & REM. CODE §§ 63.001-63.008 and § 31.002). MetLife
would not be permitted to ignore tax liens, garnishment judgments, and turnover
orders issued under the authority of applicable Federal or State statutes simply
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 28
because they felt that the court order directing them to make payments to someone
other than the person they contracted with improperly rewrote their contract.
The two cases cited by the Rains court are inapplicable and distinguishable.
Golden Spread Elec. Coop., Inc. v. Denver City Energy Assoc., L.P., 269 S.W.3d
183, 187 (Tex. App.—Amarillo, pet. denied) involved interpretation of a contract
for “spinning reserves” of electricity for generation and sale. In Royal Indem. Co.
v. Marshall, 388 S.W.2d 176, 181 (Tex. 1965), a 1965 case, the Texas Supreme
Court reversed a judgment for an insured because neither the damaged automobiles
at issue nor the address at which they were kept were expressly mentioned in the
insurance policy at issue.
Neither of those cases involved a court order, rendered under a statutory
scheme, which directed an obligor to make payments to someone other than their
original contractual payee. While parties are free to contract with whom they wish,
that principle is not absolute and forever.
D. The Servicing Arrangement approved in the Final Order was appropriate
and consistent with Texas principal-agency law and did not adversely or
materially impact MetLife.
MetLife argues that the Servicing Arrangement amounts to imposition of an
agency relationship upon MetLife over its objection. (Appellants’ Brief at pp. 23-
24). The trial court correctly rejected that argument. Realizing that Texas law is
contrary to its position (relative to the Servicing Arrangement), MetLife tried to twist
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 29
the facts and record, contending that Peachtree and the trial court imposed upon
MetLife a principal-agent relationship between Peachtree and MetLife. (Appellants’
Brief at pp. 23-24). That simply is not the case. Peachtree never suggested or argued
that it could or did create a principal-agent relationship with MetLife.
Nevertheless, a principal-agent relationship was created—between Swain and
Peachtree. The nature and scope of that relationship was narrow and was set forth
in the Final Order. In addition to receiving the Peachtree Assigned Payments,
Peachtree is also to receive the unassigned portion of the Periodic Payments during
the Term (for 132 months) and remit the unassigned portions of said payments
(Retained Swain Payments) to Swain. The Final Order confirms Peachtree as
Swain’s, NOT MetLife’s, payment agent and Swain and Peachtree expressly agreed
and consented to, and the Final Order approved, said arrangement.
The Final Order describes the partial payments transferred and assigned to
Peachtree and the partial payments to be retained by Swain. (CR 90). It authorizes
and directs MetLife to pay and remit to Peachtree “as Swains’ designated and
authorized payment agent” the Term Payments (i.e. 100% of the monthly structured
settlement/annuity payments from May 2010 to April 2026). (CR 92). It expressly
sets forth Peachtree’s obligations as “payment agent” and reiterates that MetLife
would “discharge and satisfy” their payment obligations relating to the Term
Payments by making said payments to Peachtree, and would have no current, future,
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 30
legal or contractual liability or obligation to Swain for said Term Payments. (CR
92-93).
Swain desired to transfer and assign only a portion of her monthly payments.
MetLife objected to such transfer because it did not want to divide the monthly
payments amongst Swain and Peachtree and could not be compelled to do so under
the Texas Transfer Statute. MetLife also objected to Peachtree and Swain’s
proposed solution–which was the Servicing Arrangement.
Texas law is clear that a principal-agency relationship is legal and does not
require the consent of anyone other than the principal and the agent (here, Swain and
Peachtree). Furthermore, the legal principles which govern the principal-agent
relationship protects MetLife and, in the context of the Final Order and Servicing
Arrangement, facilitates the transaction desired by Swain in accordance with the
Texas Transfer Statute. Nothing in the principal-agent relationship created by Swain
and Peachtree violates or contravenes the Texas Transfer Statute or Texas common
law or materially or adversely prejudices, changes, or abrogates MetLife’s legal or
contractual rights.
Agency is a consensual, legal relationship created by an express or implied
agreement between the parties, or by operation of law. For there to be an agency
relationship, there must be some act constituting an appointment of a person as an
agent, as it is a consensual relationship. Johnson v. Holly Farms of Texas, Inc., 731
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 31
S.W.2d 641, 645 (Tex. App.—Amarillo 1987, no writ) quoting Carr v. Hunt, 651
S.W.2d 875, 879 (Tex. App.—Dallas 1983, writ ref’d n.r.e.). Actual authority is
authority a principal intentionally confers upon the agent. Jarvis v. K&E Re One,
LLC, 390 S.W.3d 631, 639-640 (Tex. App.—Dallas 2012, no pet.); United
Residential Props., L.P. v. Theis, 378 S.W.3d 552, 564 (Tex. App.—Houston [14th
Dist.] 2012, no pet.).
A principal may confer actual authority on an agent either expressly or by
implication. Johnson, 731 S.W.2d at 645. Intermedics, Inc. v. Grady, 683 S.W.2d
842, 847 (Tex. App.—Dallas 1983, writ ref’d n.r.e.). The existence of an agency
relationship may be implied from the conduct of the parties or from the facts and
circumstances surrounding the transaction in question. Johnson, 731 S.W.2d at 645;
Intermedics, 683 S.W.2d at 879.
The general maxim is that whatever a person may do himself/herself, he or
she may do by another. Nathan A. Watson Co. v. Employers Mut. Cas. Co., 218
S.W.3d 797 (Tex. App.—Fort Worth 2007, pet. denied); 3 TEX. JUR. AGENCY § 19.
Any person who is not under a legal disability to act for itself and who has capacity
to affect his or her legal relations by consenting to a delegable act or transaction may
authorize an agent to act for him or her with the same effect as if that person were to
act in person. Daugherty v. McDonald, 407 S.W.2d 954 (Tex. Civ. App.—Fort
Worth 1966, no writ). A corporation may serve as an agent for an individual. TEX.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 32
JUR. 3D CORPORATIONS § 390.
An “agent” is one who is authorized by a person or entity to transact business
or manage some affair for the person or entity. Coleman v. Klockner & Co. AG, 180
S.W.3d 577, 588 (Tex. App.—Houston [14th Dist.] 2005, no pet.); Townsend v. Univ.
Hosp., 83 S.W.3d 913, 921 (Tex. App.—Texarkana 2002, pet. denied).
An agent’s authority to act on behalf of a principal depends on some
communication by the principal either to the agent (actual or express authority) or
to the third party (apparent or implied authority). Gaines v. Kelly, 235 S.W.3d 179,
182 (Tex. 2007); In re: ADM Investor Servs., 304 S.W.3d 371, 374 (Tex. 2010);
Jarvis, 390 S.W.3d at 639. Actual authority is created by or through written or
spoken words or conduct of the principal. United Residential, 378 S.W.3d at 564;
Walker Ins. Servs. v. Bottle Rock Power Corp., 108 S.W.3d 538, 549-550 (Tex.
App.—Houston [14th Dist.] 2003, no pet.); CNOOC Se. Asia Ltd. v. Paladin Res.
(SUNDA) Ltd., 222 S.W.3d 880, 899 (Tex. App.—Dallas 2007, pet. denied).
Express authority is delegated to an agent by words that expressly and directly
authorize the agent to do an act on behalf of the principal. Paragon Indus.
Applications, Inc. v. Stan Excavating, LLC, 432 S.W.3d 542, 549 (Tex. App.—
Texarkana 2014, no pet.); Crooks v. M1 Real Estate Partners, Ltd., 238 S.W.3d 474,
483 (Tex. App.—Dallas 2007, pet. denied).
An agent acting within the scope of the agent’s authority binds the principal
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 33
as if the principal had performed the action taken. Ames v. Great Southern Bank,
672 S.W.2d 447 (Tex. 1984). What a principal does through an agent, he does
himself. Nahm v. J.R. Fleming & Co., 116 S.W.2d 1174 (Tex. Civ. App.—Eastland
1938, no writ). A third party is not liable to the principal for an agent’s breach of
duty if the third party did not participate in the agent’s wrongful act. Ross v. Sep,
154 S.W.2d 958 (Tex. Civ. App.—Texarkana 1941, writ ref’d.) (emphasis added).
In effect, MetLife argues that any subsequent court order, whether a transfer
order issued under the Texas Transfer Statute, or a garnishment judgment or turnover
order, child support withholding order, tax lien, or other court order, which might
direct MetLife to make any of the Periodic Payments to ANYONE other than Swain
would amount to a court improperly and unilaterally rewriting MetLife’s contractual
agreements and depriving MetLife of the liberty to choose with whom to contract.
Under this rationale, a court could never approve a transfer of structured settlement
payment rights, or any other payment rights, nor could it issue a garnishment or
turnover order, a child or spousal support withholding order, or enter a divorce
decree/property division requiring MetLife to make payments to someone other than
the original payee because MetLife would be making payments to someone other
than the person designated in the underlying structured settlement documents.
Perhaps realizing the absurdity of such a position, MetLife limits its
arguments, only claiming that the trial court rewrote its contracts by approving the
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 34
Servicing Arrangement and by directing the Swain Retained Payments to be remitted
to Peachtree, not by approving the transfer/assignment of the Peachtree Assigned
Payments. However, those arguments taken to their inevitable conclusion, would
mean that there could never, ever be an assignment of a contract right to receive
payments because an assignment necessarily changes the person to whom the
payments are to be made. The fallacy of MetLife’s arguments, and the
inapplicability of the concept that courts cannot rewrite the contracts of parties by
imposing new or additional terms on said parties to this case, is highlighted by these
contradictory positions.
If the facts are uncontroverted or otherwise established, the existence of an
agency relationship is a pure question of law. Harding Co. v. Sendero Resources,
Inc., 365 S.W.3d 732 (Tex. App.—Texarkana 2012, pet. denied). The question of
whether a principal-agent relationship exists under established facts is a question of
law for the court. Ross v. Tex. One P’ship, 796 S.W.2d 206, 210 (Tex. App.—Dallas
1990, writ denied). Agency may be established either by direct testimony or by
circumstantial evidence such as the relationship of the parties and their conduct
concerning the transaction at hand. Car, Ltd. v. Smith, 590 S.W.2d 738, 741 (Tex.
Civ. App.—Houston [14th Dist.] 1979, writ ref’d n.r.e.).
In order for an agency relationship to exist, there must be a meeting of the
minds between the parties to establish the relationship. Lone Star Partners v.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 35
NationsBank Corp., 893 S.W.2d 593, 599-600 (Tex. App.—Texarkana 1994, writ
denied). An agency relationship may be implied from the conduct of the parties or
from the facts and circumstances surrounding the transaction in question. Harding
Co. at 742, citing CNOOC, 222 S.W.3d at 899 and Walker, 108 S.W.3d at 550.
Swain had the legal right and authority to designate Peachtree as its payment
agent, to receive Periodic Payments from May 2015 through April 2026. The Final
Order approved that relationship and Swain confirmed her agreement to that
arrangement in her testimony to the trial court and by approving the Final Order.18
The agency relationship was limited in scope and term—as it related only to the
arrangement whereby MetLife would make 100% of the Term Payments (which
included the Peachtree Assigned Payments and the Swain Retained Payments) to
Peachtree, who would then remit the Swain Retained Payments to Swain. Peachtree
accepted its role as payment agent.
By virtue of the statements, acts, and conduct of the parties and the Final
Order, it is clear that a principal-agent relationship was created between Swain and
Peachtree relating to the Swain Retained Payments, whereby Peachtree would
receive those unassigned payments as Swain’s payment agent and would remit them
to her. Once the principal-agent relationship is established, a third party satisfies its
18
In her testimony, found in SUPP. RR at p. 12, Swain acknowledged that 100 percent of the
payments being sent to Peachtree during the term of the transaction was acceptable to her. She
also signed the Final Order, approving it as to form and substance. (CR 95).
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 36
obligations to the principal (for example payment obligations) by dealing with the
agent. In this case, when MetLife makes the Term Payments, to Peachtree, as
Swain’s designated and court appointed payment agent, MetLife will satisfy its
contractual and legal obligations to Swain.
By making the Swain Retained Payments to Peachtree, MetLife is making the
payments to Swain. Even if the legal authorities cited by MetLife relating to courts
not having the authority to rewrite and modify the terms of a parties contract were
applicable (and they are not), no modification occurred because, as a matter of law,
by complying with the Final Order, MetLife would still be making the Swain
Retained Payments to Swain.
Unlike most principal-agent relationships, the relationship here was
acknowledged in open court and confirmed by a court order, which provides the
parties further protections. Not only does Peachtree now have a fiduciary obligation
to Swain, as her agent, but it is subject to being held in contempt of court for failing
to comply with its court-ordered obligations relating to the unassigned, serviced
payments. MetLife will, without question, satisfy and comply with its payment
obligations to Swain (relating to the Swain Retained Payments) by remitting said
payments to Peachtree as Swain’s payment agent. Legally, MetLife making the
Swain Retained Payments to Peachtree pursuant to the Servicing Arrangement and
Final Order is the same as MetLife making said payments directly to Swain.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 37
While it was unnecessary for the creation of a legally binding principal-agent
relationship, the fact that the Servicing Arrangement and the principal-agency
relationship between Swain and Peachtree was acknowledged and confirmed in open
court and in the Final Order further protects MetLife and dispels the myths of
potential future liability and risk to MetLife perpetuated by MetLife, not in an effort
to be protected from said liabilities, but rather to support its efforts to obstruct the
Swain-Peachtree Transfer.
What is also abundantly clear, is that the creation of the principal-agent
relationship between Swain and Peachtree relative to the Servicing Arrangement
does not require the consent of MetLife. MetLife is only slightly, and certainly not
materially, impacted by the payment agent relationship embodied in the Servicing
Arrangement and despite its hollow protestations to the contrary, MetLife may
legally rely on said relationship in making future payments. Texas law is
unequivocal in that the creation of the principal-agent relationship between
Peachtree and Swain requires the consent of the principal (Swain) and a meeting of
the minds of the principal and agent, but approval of third parties is not required.
Nothing in the Texas Transfer Statute or the underlying structured settlement
documents changed this.
Once the principal-agent relationship between Swain and Peachtree was
created (and confirmed by the trial court), MetLife could legally and properly,
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 38
without fear of legal liability or repercussions, deliver the Swain Retained Payments
to Peachtree, and as a matter of law, it was just as if MetLife was making said
payments directly to Swain.
The Servicing Arrangement was proper under Texas principal-agency law, the
confirmation of said relationship and the Servicing Arrangement by the trial court
did not constitute an improper, unilateral “modification” or “rewrite” of the
underlying contracts, and MetLife is not empowered to defeat the creation of such
principal-agent relationship by withholding their consent to same. The fact that the
Servicing Arrangement and principal-agent relationship was in furtherance of a
transaction permitted by a Texas statute and confirmed in a court order only further
enhances the propriety and legality of the arrangement.
E. The Final Order (including the Servicing Arrangement) does not
contravene the Texas Transfer Statute, either directly or indirectly.
MetLife seeks to transform the Texas Transfer Statute provision providing
that an issuer/obligor may not be required to divide payments amongst payee and a
transferee or amongst multiple transferees into an unwritten, implied prohibition
against the use of a servicing arrangement and a rejection of well-settled principal-
agency law. It is axiomatic, that the Servicing Arrangement does NOT require
MetLife to split or divide any payments in contravention of the Texas Transfer
Statute. It is ludicrous to suggest otherwise and MetLife’s arguments to the contrary
delve into the realm of the absurd.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 39
Pursuant to the Final Order MetLife makes 100% of the Term Payments to
Peachtree. The fact that Peachtree receives a portion of the Term Payments (the
Peachtree Assigned Payments) as an assignee and a portion (the Swain Retained
Payments) as Swain’s payment agent, does not alter the fact that MetLife is not
dividing payments. The Final Order confirms as much.19
Peachtree acknowledges that the Texas Transfer Statute provides that an
issuer/obligor may not be required to divide payments amongst a payee and a
transferees/assignee in connection with a transfer. TEX. CIV. PRAC. & REM. CODE §
141.005(4). That provision is the genesis of the Servicing Arrangement.
Knowing the Servicing Arrangement does not actually require it to divide
payments, MetLife argues that Peachtree has attempted to use the Servicing
Arrangement in an improper effort to “circumvent” the Texas Transfer Statute. That
is not accurate.
The fact that the Texas Transfer Statute does not expressly authorize or
mention a servicing arrangement, does not mean that a servicing arrangement is not
a legal, efficient, and effective method for completing a transfer where a payee seeks
to transfer partial payments and the obligor/issuer declines to divide payments.
There was no attempt to circumvent the Texas Transfer Statute by Peachtree or
19
The trial court expressly found and ordered that MetLife was not and would not in the future be
required to divide structured settlement payments. (CR 91, 93).
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 40
Swain, and the trial court did not act contrary to the Texas Transfer Statute in signing
the Final Order and approving the Servicing Arrangement.
Most issuers/obligors voluntarily agree to split payments in connection with
a court-approved transfer. If they do, then a servicing arrangement is unnecessary.
But if they do not wish to divide payments, a court-approved transfer of structured
settlement payments, coupled with a servicing arrangement included in the final
order, is a standard, accepted, and fairly routine process employed in the industry in
order to allow a payee to transfer and assign partial payments, and accommodate an
obligor/issuer’s decision to decline to divide payments. Servicing arrangements do
not materially burden or prejudice issuers/obligors, are always acknowledged and
agreed to by the parties directly impacted, and are court approved. There is nothing
improper with a servicing arrangement in general or the particular one included in
the Final Order in this case.
F. The Servicing Arrangement did not impose upon MetLife a contractual or
business relationship with Peachtree.
MetLife argues that by approving the “Servicing Arrangement” the trial court
improperly forced MetLife into a non-consensual contractual and business
relationship with Peachtree. At no time has Peachtree suggested or argued that the
Final Order creates such a relationship.
The Texas Legislature has granted Texas courts jurisdiction and the legal
authority and responsibilities to consider, approve and/or deny proposed transfers of
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 41
structured settlement payment rights when such transactions are presented through
the filing of an application under the Texas Transfer Statute. TEX. CIV. PRAC. &
REM. CODE §§ 141.004, 141.006. Courts accomplish this task by rendering a “final
court order.” TEX. CIV. PRAC. & REM. CODE § 141.004. Texas courts have the
inherent authority, and responsibility, to make rulings and findings and enter
orders/judgments to effect the approval (or denial) of such transfers. See TEX. CIV.
PRAC. & REM. CODE § 141.004. The Texas Transfer Statute effectively becomes a
nullity if a Texas court does not have the authority to order a structured settlement
obligor and/or annuity issuer to pay and remit to a transferee or an assignee
structured settlement payments that are the subject of an application and transfer.20
The Final Order includes language directing the issuer/obligor to make
payments to Peachtree. (CR 92).21 All transfer orders include similar language. The
numerous court orders included in the appendix filed in the trial court along with
Peachtree’s Response includes orders where MetLife has been directed to make
payments pursuant to a servicing arrangement and where MetLife has voluntarily
20
TEX. CIV. PRAC. & REM. CODE § 141.004 provides “no structured settlement obligor or annuity
issuer shall be required to make any payment directly or indirectly to any transferee . . . unless the
transfer has been approved . . . in a final court order . . . ” Peachtree maintains that this provision
allows courts to order issuers/obligors to make payments to someone other than the original payee.
At the very least, that authority is implicit in the statute.
21
“It is further ordered that the furtherance of the Court’s order granting the Application and
approving the proposed transfer described herein, Metropolitan Life Insurance Company and
Metropolitan Insurance and Annuity Company, are hereby authorized and directed to pay and
remit to Peachtree (as Ms. Swain’s designated and authorized payment agent for purpose of
receiving the Term Payments . . . )”.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 42
divided payments.
Even were it not included in § 141.004, the authority of a court to direct
obligors/issuers to make payments to a transferee would be inherent and ancillary to
the authority granted Texas Courts to review and approve transfers. Seemingly,
MetLife does not challenge the authority of the trial court to render such orders in
the context of rendering a judgment (or final order) approving a transfer of structured
settlement payment rights under the Texas Transfer Statute, but does raise the point
in the context of the Servicing Arrangement.
The trial court’s approval of the Servicing Arrangement was in furtherance of
its approval of the proposed transfer of partial monthly payments by Swain to
Peachtree. The Servicing Arrangement was agreed to by Swain and Peachtree and
was approved by the trial court in order to (i) comply with the Texas Transfer Statute
(by not forcing MetLife to split payments); and (ii) facilitate the court’s order
approving the transfer of partial monthly payments by Swain. MetLife endeavors to
shift the argument, contending that the inclusion of the Servicing Arrangement
impermissibly creates and imposes a non-consensual contractual or business
relationship between MetLife and Peachtree.
In furtherance of that effort, MetLife has cited to authorities that provide that
a court may not create or impose a new contract between private parties, but those
legal principles, just like the arguments relating to specific performance and
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 43
mandatory injunctions raised elsewhere in Appellants’ Brief, are inapplicable.
Texas courts do not impermissibly create contractual or business relationships
between parties when entering a child support withholding order, or a garnishment
or turnover order. Those order simply allow courts to implement the statutes and
policies of the State. The same is true with the Texas Transfer Statute.
MetLife complains that the trial court created rights and obligations amongst
“former strangers” and that if a problem arises, the parties will not be able to rely on
a written agreement. The Texas Transfer Statute and the detailed provisions of the
Final Order control the arrangement. MetLife has one obligation under the Final
Order—deliver the Term Payments to Peachtree, which is no different than its
current obligation except that the name on the check is changed. MetLife also
complains that the arrangement has the “indicia” of a contractual relationship
because MetLife is required to perform certain duties. Yet, it is not required to do
anything more than what it is already doing—making payments. The Final Order
directs MetLife to make the Term Payments to Peachtree and the Final Order and
the Texas Transfer Statute control the rights, obligations and potential liabilities
between said parties. (And MetLife is fully protected and indemnified, by statute,
for complying with the Final Order.) No new business or contractual relationship
has been created.
Texas courts have recognized that where a party’s obligation to make
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 44
payments to another party is court-ordered, there is no contract nor any claim for
anticipatory breach of contract when the party fails to make such payments. Walker
v. Walker, 619 S.W.2d 196, 199 (Tex. Civ. App.—Tyler 1981, writ ref’d n.r.e.)
(Wife sued for “anticipatory breach of contract” for ex-husband’s failure to make
monthly payments required under divorce decree, seeking to have the remaining,
unmatured payments accelerated. The court held that the ex-husband’s payment
obligation was based on the divorce decree and “not founded upon any contractual
agreement.”); see also Astie v. Aubrey, Inc., 1999 Tex. App. Lexis 3838 (Tex.
App.—Amarillo 1999, no pet.) (not designated for publication) (Agreed temporary
injunction order was not a contract between the parties).
G. The Final Order and Servicing Arrangement did not create new or
material burdens or risks for MetLife. The alleged bankruptcy risk is
remote and immaterial.
Servicing arrangements are not prohibited by and are consistent with the
Texas Transfer Statute and Texas law of principal-agent. The Servicing
Arrangement in this case does not burden, bias, or prejudice MetLife. There is no
material change in the duties or obligations of MetLife to make the monthly
payments in question. There is no material increase in the burden or risk to MetLife
if the Final Order stands. In fact, the risk is less, in light of the statutory protections
and indemnities imposed when an issuer/obligor, like MetLife, is directed to make
payments pursuant to a Final Order issued under the Texas Transfer Statute.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 45
MetLife desperately argued that it will somehow be harmed or subjected to
additional risks if the Final Order stands. Yet, the “risks” to which MetLife cites are
contrived, speculative, and fanciful. Moreover, MetLife presented no evidence in
the trial court to support its contention that a court-sanctioned servicing arrangement
actually creates substantial administrative burdens and expenses and subjects
MetLife to undue risks. All that MetLife offered was speculation, argument, and
conjecture. MetLife offered no evidence, because there is none.
Before the Final Order was signed, MetLife was making monthly structured
settlement/annuity payments in the amount of $1,643.24 per month to Swain. After
the Final Order was signed, MetLife was to remit those same payments to Peachtree.
The amount and timing of the payments has not been altered or changed and
MetLife’s payment obligations remain the same.
MetLife received everything it bargained for in the underlying structured
settlement. Metropolitan Annuity received money from the Settling Parties in return
for agreeing to make the future Settlement Payments it qualified for tax benefits.
Metropolitan Life sold an annuity to fund the payment obligations of Metropolitan
Annuity. The money and tax benefits received by and bestowed on MetLife are not
in peril. See 26 U.S.C. § 5891. The defendants in the underlying lawsuit were
released and that release is final and irrevocable. Swain is not required to provide
MetLife anything or otherwise “perform” under the original structured settlement;
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 46
she was simply required to release her claims against the settling defendants and she
did so, thus there is no risk of MetLife not obtaining any return performance from
Swain by virtue of the Final Order.
MetLife argues that it “may” be served with a garnishment, bankruptcy, or
child support order seeking to attach Swain’s structured settlement payments and
therefore those possible events require denial of the transfer. However, those risks
are present now and the Servicing Arrangement of which MetLife complains does
not exacerbate or increase those remote risks. In fact, the Final Order likely
decreases, or at least mitigates those risks.
Now, post Final Order, when MetLife is presented with a garnishment,
bankruptcy, or child support order, MetLife should refer the party delivering said
order to the Final Order and Peachtree, who would deal with the situation. MetLife
could not oppose a garnishment based on a claim that doing so improperly imposes
a non-consensual business or contractual relationship on it with the garnishor. It
could not oppose a child support order based on a claimed administrative burden or
speculative, potential double liability or because the underlying final judgment
approving the structured settlement provides that payments are to be made to Swain
and Swain only. Such arguments would get it nowhere in those proceedings, and
should not in this case.
In the unlikely event that a garnishment/child support/bankruptcy order was
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 47
not addressed to MetLife’s satisfaction, it could file (and has in the past filed) an
interpleader and join all of the parties making claims to the payments at issue and
remit the payments to the interpleader court. In an interpleader action, MetLife
would not only be discharged quickly, it could also recover attorneys’ fees.
MetLife suggests that if Peachtree were to file bankruptcy all manner of
speculative mischief and misfortune might occur that would be burdensome, costly,
and distracting to MetLife. That contention is simply a product of MetLife’s
imagination. Peachtree is a part of a publicly traded company. The company is
solvent and stable. Peachtree is currently servicing millions of dollars of payments
to investors on a monthly basis, relative to securitizations and other financing
transactions. It services payments to payees, like Swain, in transactions involving
court-approved servicing arrangements all over the country. It has procedures,
policies, and processes to service payments to its customers and is experienced in
doing so. It also has retained independent, institutional back-up servicers who will
assume servicing obligations in the unlikely event of a servicing failure by
Peachtree. When J.G. Wentworth went through a pre-packaged bankruptcy during
the financial crisis, not a single services payment went awry.
H. Swain is Not Hindered by the Servicing Arrangement in Transferring
Additional Payments.
MetLife suggests that if Swain decides to later sell the unassigned (serviced)
portion of Swain’s monthly payment to another company, that could result in
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 48
litigation whereby someone might challenge the Servicing Arrangement. There is
no indication that Swain will in the future seek to transfer and assign the remainder
of her monthly payment to another transferee. That is speculation. If, however, that
occurs, the issue of whether Peachtree will service payments to the funding company
acquiring the unassigned, serviced payments in a separate court-approved
transaction, will be addressed in the subsequent transfer action and, in light of the
Final Order, will not involve MetLife. Furthermore, that issue was recently resolved
by this very Court in two cases where J.G. Wentworth Originations, LLC was
required, pursuant to a court-approved servicing arrangement, to service payments
to a third-party purchaser (a competitor of J.G. Wentworth’s). Freelon; Perez.
The Freelon and Perez cases, in addition to resolving the subsequent servicing
question raised by MetLife, are instructive on other issues in this case. In both of
those cases, this Court addressed underlying servicing arrangements approved in
transfer orders rendered by multiple courts in Harris County (Freelon) and Fort Bend
County (Perez). The prior court orders directed Wentworth to make unassigned
payments that were subject to a servicing arrangement to the payee, and this Court
rejected Wentworth’s contention that a court order rendered by a different court in a
subsequent transfer proceeding which directed Wentworth to make payments to
someone other than the payee contravened the prior court order. Freelon, 446 S.W.
3d at 433); Perez, 2014 Tex. App. Lexis at 13-14). This Court sanctioned the use of
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 49
servicing arrangements, including servicing arrangements that would require the
servicer to make payments not only to a payee, but to a payee’s subsequent court-
approved assignee. That situation not only did not contravene the prior court orders,
but also did not violate the Texas Transfer Statute and this Court noted that the
statute “appears to anticipate that payees may later transfer additional payments” to
a different transferee, after they initially transferred partial payments and agreed to
a servicing arrangement. Freelon, 446 S.W. 3d at 433. If MetLife’s position is
adopted, payees will not be able to transfer partial payments to different transferees
or employ servicing arrangements to facilitate such.
MetLife has strained to come up with every speculative, contrived situation
that could possibly arise that might result in some sort of burden to, or issue for,
MetLife, notwithstanding the fact that MetLife’s only obligation is to remit the Term
Payments to Peachtree. It is extremely unlikely that any of the potential scenarios
raised by MetLife would actually occur. If they do, they will have to be dealt with
regardless of whether there is a Servicing Arrangement or not. The most likely
scenario is that MetLife will send the monthly payments to Peachtree each month,
Peachtree will retain the assigned portions of same, and will remit the remainder to
Swain and that will continue until the end of the 132-month period set forth in the
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 50
Final Order.22
MetLife argues, unconvincingly, that if the Final Order stands, MetLife will
continue to be subject to liability. In doing so, MetLife ignores the fact that
Peachtree and Swain have released it from any liability for making the Term
Payments to Peachtree in accordance with the Final Order and that the trial court has
directed MetLife to make the Term Payments to Peachtree. It is inconceivable that
MetLife could be held liable for complying with a court order, especially when the
party to whom they claim they could be subject to potential liability (Swain) was a
party to and approved said order, and released MetLife for complying with same.
MetLife’s arguments regarding the speculative burdens that might
conceivably be visited upon it by the Servicing Arrangement conveniently also the
fact that the Texas Transfer Statute provides obligors/issuers protection against such
burdens and potential liabilities. Section 141.005 provides, in relevant part, that
“following a transfer of structured settlement payment rights under this chapter: (1)
the structured settlement obligor and the annuity issuer shall, as to all parties except
22
Despite unsuccessfully objecting to payee’s attempts to transfer and assign partial payments in
a number of cases, where MetLife refuses to divide payments or cooperate in a servicing
arrangement, resulting in numerous Texas courts signing order approved servicing arrangements
over MetLife’s objection, MetLife chooses not honor these court orders. Instead, MetLife divides
the payments amongst payees and transferees. In this case, MetLife has been dividing the Term
Payments amongst Swain and Peachtree since the Final Order. Peachtree tolerates MetLife’s
decision to disregard the court orders, further rebutting MetLife’s contention that Peachtree tries
to force itself into the role of servicer. Additionally, all of the contrived potential liabilities of
MetLife evaporate. It is important to note that MetLife chooses to divide these payment, it is not
ordered to do so.
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 51
the transferee, be discharged and released from any and all liability for the
transferred payments.” TEX. CIV. PRAC. & REM. CODE § 141.005(1) (emphasis
added). While subsection (1) applies to the payments actually transferred and
assigned, subsection (2) is broader and provides that (again following a transfer) the
transferee (Peachtree) shall be liable to the structured settlement obligor
(Metropolitan Annuity) and the annuity issuer (Metropolitan Life) for “any other
liabilities and costs, including reasonable costs and attorneys’ fees, arising from
compliance by the parties with the order of the court or arising as a consequence of
the transferee’s failure to comply with this chapter.” TEX. CIV. PRAC. & REM. CODE
§ 141.005(2)(B) (emphasis added).
In approving the Swain-Peachtree Transfer, the trial court signed the Final
Order, approved the ancillary Servicing Arrangement, and directed MetLife to make
the Term Payments to Peachtree (which included the Peachtree Assigned Payments
to be retained by Peachtree and the Swain Retained Payments to be remitted by
Peachtree to Swain). (CR 89-95). Should MetLife incur any liability or costs for
complying with the Final Order, it has a statutory and court-ordered right to recover
from Peachtree.
There simply was no evidence presented to the trial court which established
or even suggested that MetLife will be unduly (or even slightly) burdened,
distracted, or prejudiced by the Servicing Arrangement, and they will not be, and
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 52
should it incur any liability or costs as a result of complying with the Final Order,
those costs are Peachtree’s responsibility.
I. The Final Order and Servicing Arrangement do not contravene the
Wisconsin Order.
MetLife next argues that the Final Order contravenes the terms of the
Wisconsin Order, which order provided for payments to be made to Swain. Here
MetLife’s argument rests on the weakest of grounds. MetLife is not even a party to
the Wisconsin Order and is reduced to arguing that because that order states that the
Settlement Payments are payable to Swain, any order, agreement, statute, or
document that provides for payment to any party other than Swain is in
contravention of the Wisconsin Order and therefore prohibited.
MetLife is well aware that structured settlement documents, whether court
orders or settlement agreements, generally provide that payments will be made to a
specific payee (here, Swain). That is a necessity. The Texas Transfer Statute creates
a mechanism for payees to transfer “structured settlement payment rights,” when
such transfers are court-approved and otherwise complies with the Texas Transfer
Statute. “Structured settlement payment rights” is defined as rights to receive
periodic payments under a structured settlement. TEX. CIV. PRAC. & REM. CODE §
141.002(16). Structured settlement is defined as “an arrangement for periodic
payment . . . established by a settlement or judgment in resolution of tort claim.”
TEX. CIV. PRAC. & REM. CODE § 141.002(13) (emphasis added). Thus, the Texas
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 53
Transfer Statute contemplates that structured settlement payments arising under a
judgment could be transferred and such payments may also be subject to a payment
agent arrangement.
Additionally, judgments are freely assignable under Texas and Wisconsin
law. TEX. PROP. CODE § 12.014(a); WIS. STAT. § 806.18; see also TEX. JUR.
JUDGMENTS § 623; First National Bank v. Roberts, 286 S.W.2d 462, 464 (Tex.
App.—Austin 1956, no writ); McMillan v. Rutherford, 14 S.W.2d 132 (Tex. Civ.
App.—Amarillo 1929, no writ). It is permissible to transfer only an interest in a
judgment. Madison & Pennings, Inc. v. Foundation Engineering Co., 390 S.W.2d
48, 50 (Tex. App.—Houston [1st Dist.], 1965 no writ).
Just like in the Freelon and Perez matters, the fact that the Final Order directs
MetLife to make payments to someone other than to the original payee identified in
the Wisconsin Order (and other structured settlement documents) does not mean that
the Final Order contravenes those documents. The transaction is completed pursuant
to a comprehensive statutory scheme and court order and an immaterial change in
the identity of the party receiving the payments by virtue of said court order is not
improper.
If an insurance company such as MetLife could use this argument to prohibit
transfers, there would be no transfers and no need for the Texas Transfer Statute.
This specious argument would swallow the Texas Transfer Statute and every other
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 54
statute and render them impotent.
The language in the Wisconsin Order which necessarily states that Swain is
entitled to receive the Settlement Payments does not mean that the Final Order
contravenes the Wisconsin Order. Even if it did, the Texas Transfer Statute
expressly contemplates that a court may approve a transfer even if such transfer
contravenes contractual provisions of the settlement documents and in such event
provides protection to the structured settlement obligor and annuity issuer (here,
Metropolitan Annuity and Metropolitan Life).
Section 141.005 of the Texas Transfer Statute provides, in relevant part, that
“if the transfer contravenes the terms of the structured settlement,” the transferee
(here, Peachtree) shall be liable to both the structured settlement obligor
(Metropolitan Annuity) and the annuity issuer (Metropolitan Life) for any taxes
incurred as a result of the transfer, as well as any other liabilities or costs, including
attorneys’ fees, arising from compliance with a court order pursuant to the Texas
Transfer Statute. TEX. CIV. PRAC. & REM. CODE § 141.005 (emphasis added). The
Texas Legislature has acknowledged and expressly contemplated that a transfer
under the Texas Transfer Statute may be approved by a court even though it
contravenes the settlement documents.
J. The trial court did not abuse its discretion in approving the Swain-
Peachtree Transfer
MetLife next argues that the trial court abused its discretion in finding that the
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 55
transfer was in Swain’s best interest, considering the welfare and support of her
dependents. (CR 91). Judge Ward had the advantage of two hearings separated by
60 days. Swain and counsel for MetLIfe and Peachtree participated in both hearings.
Although Swain’s testimony appeared on the record only at the second hearing, she
discussed her reasons for wanting to complete the transaction at both. Counsel for
MetLife had the opportunity to cross-examine Swain. Judge Ward had the
opportunity to see and question Swain and evaluate her intelligence, sincerity, and
truthfulness. He made the best interest determination and that decision should not
be disturbed so that MetLife may achieve its objective of exerting its control over
the transaction. It should be noted that MetLife would never have opposed the
proposed transaction on best interest grounds, had Swain decided to liquidate 100%
of her future payments.
Abuse of discretion is a high bar and one MetLife cannot possibly meet in this
case. In conducting its factual sufficiency review, the court of appeals must consider
and weigh all of the evidence, and can set aside the decision of the fact finder only
if the evidence is so weak or if the finding is so against the great weight and
preponderance of the evidence that it is clearly wrong and unjust. Dow Chem. Co.
v. Francis, 46 S.W.3d 237, 242 (Tex. 2001) citing Pool v. Ford Motor Co., 715
S.W.2d 629, 635 (Tex. 1986). The court of appeals is obligated to review the
evidence but may not reverse simply because it feels that the evidence preponderates
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 56
toward an answer that differs from that of the trial court fact finder. Salinas v. Allen,
366 S.W.3d 842, 844 (Tex. App.—Amarillo 2012, no pet.) citing Herbert v. Herbert,
754 S.W.2d 141, 144 (Tex. 1988). The court of appeals may not substitute its
judgment for that of the fact finder. Salinas, 366 S.W.3d at 844 citing Golden Eagle
Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003).
It was apparent to anyone in attendance at the hearings that Swain had
carefully considered her financial needs and structured the transaction in a manner
that gave her comfort and security by deciding to transfer only a portion of her
monthly payments for a limited period of time, specifically retaining the right to
receive at least $1,197.54 per month (increasing 3% annually) from the monthly
payments. (SUPP. RR at p. 11).
When she testified Swain was 29 years old and lived as a family with her
boyfriend, William, and an 18-month-old daughter. (SUPP. RR at pp. 6, 7, 10).
However, they were living in a house with relatives, who had eight children and they
needed a home of their own. (SUPP. RR at p. 10). Swain’s educational background
includes finishing high school and some college. (SUPP. RR at p. 7). Both Swain
and her boyfriend work. (SUPP. RR at p. 7, lines 2-17). Swain earns about $700.00
per week, after taxes, from her job at Brenner’s Steakhouse. (SUPP. RR at p. 7, lines
2-11). Although William’s income does not appear in the record, Swain confirmed
that he was self-employed as a contractor. (SUPP. RR at p. 7, lines 12-17).
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 57
Swain testified that she intended to use the proceeds of the transaction to repay
her Grandfather $9,000.00 that he had lent her to purchase a car and would use the
rest to put a down payment on a home for her family in Katy. (SUPP. RR at pp. 9-
10). Swain secured offers from other companies and she consulted with her
Grandfather regarding the transaction, who has run an accounting business in
Wisconsin for over 20 years. (SUPP. RR at pp. 10-11, 13). She confirmed, on cross-
examination, that her Grandfather was her financial advisor. (SUPP. RR at 11-13).
Swain also confirmed at the second hearing that she was closing on her home
purchase that same week. (SUPP. RR at p. 10, lines 3-8). Swain continues to receive
substantial monthly payments from her structured settlement. The discount rate used
to calculate the Purchase Price was 7.822%. (RR Ex. 2). At the conclusion of the
Swain-Peachtree Transfer in 2026, when Swain will be 41 years old, she will again
be entitled to receive the full amount of the monthly payments, which by that time
will be around $2,274 per month. (RR. Ex. 1).
MetLife’s counsel cross-examined Swain and the only issue he addressed with
her was the amount of money that Peachtree was going to make off the transaction
and the rate of the deal. (SUPP. RR at pp. 13-14).
Prior to the Rains Case (which had not been decided at the time of the Final
Order) there was little guidance from Texas case law relative to a best interest
determination. A Minnesota appellate court, in reviewing a structured settlement
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 58
transfer under that state’s transfer statute, said that the “best interest determination”
involves a global consideration of the facts, circumstances, and means of support
available to the payee and his or her dependents. Settlement Capital Corporation et
al. v. State Farm Mutual Automobile Insurance Company et al, 646 N.W.2d 550,
556 (Minn Ct. App. 2002). These considerations include, among other case specific
factors, the reasonable preference of the payee, in light of the payee’s age, mental
capacity, maturity level, and stated purpose for the transfer. Id. The court should
inquire whether the payee has means of support aside from the structured settlement
payments to be transferred and whether the payee can meet his financial obligations
to his dependents. Id. The Minnesota court noted that the payee, Ms. Lundgren,
was 21 years old, had no cognitive disabilities, was married and had two children;
she and her spouse were employed and wanted to put a down payment on a home;
and she understood the terms of the transfer and the discount rate used to determine
the purchase price. Id. The Minnesota court concluded that there had been a
sufficient showing that the transfer was in Lundgren’s best interest. Id.
Applying the factors from the Settlement Capital case to this case, leads easily
to the conclusion that Peachtree and Swain offered significant and certainly
sufficient evidence to support the trial court’s decision that the transfer was in
Swain’s best interest. Even under the more onerous factors promulgated for the first
time in the Rains Case, the trial Judge’s best interest determination stands up well
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 59
and is not “clearly wrong or unjust.” There was no abuse of discretion here.
PRAYER
Peachtree Settlement Funding, LLC requests that the Final Order be affirmed.
NESBITT, VASSAR & McCOWN, L.L.P.
/s/ Earl S. Nesbitt
Earl S. Nesbitt
State Bar No. 14916900
enesbitt@nvmlaw.com
David S. Vassar
State Bar No. 20503175
dvassar@nvmlaw.com
Patrick P. Sicotte
State Bar. No. 24079330
psicotte@nvmlaw.com
15851 Dallas Parkway, Suite 800
Addison, Texas 75001
Telephone: (972) 371-2411
Telecopier: (972) 371-2410
CERTIFICATE OF COMPLIANCE
Pursuant to TEX. R. APP. P. 9, I hereby certify that, according to the word
count of the word-processing program used to draft the Brief of Appellee Peachtree
Settlement Funding, LLC, the portion of the foregoing Brief subject to the word limit
imposed by TEX. R. APP. P. 9 contains 14,996 words.
/s/ Earl S. Nesbitt
Earl S. Nesbitt
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 60
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the forgoing Brief of Appellee
Peachtree Settlement Funding, LLC was served upon the following counsel of
record/interested parties on this 26th day of October, 2014:
Via E-Mail
and Certified Mail
Patrick B. Larkin
Larkin Law Firm
11200 Broadway Street, Suite 2705
Pearland, Texas 77584
Via E-Mail
and Certified Mail
Andrew J. Lorin
Stephen R. Harris
Patrick M. Harrington
Drinker Biddle & Reath LLC
One Logan Square, Suite 2000
Philadelphia, Pennsylvania 19103
Via Regular Mail
Sara Swain
544 HCR 2122 West
Aquilla, Texas 76622
/s/ Earl S. Nesbitt
Earl S. Nesbitt
BRIEF OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 61
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC
DOCUMENT TAB/PAGES
Flow Chart of Peachtree/Swain Transaction Tab 1/pp. 3-8
TEX. CIV. PRAC. & REM. CODE §§ 141.001 et. seq. Tab 2/pp. 9-18
TEX. PROP. CODE § 12.014 Tab 3/pp. 19-20
In re: S. Swain, In the 234th Judicial District Court of Harris County, Texas;
Cause No. 201474548
Final Order Approving Transfer of Structured Tab 4/pp. 21-28
Settlement Payment Rights
Order Confirming and Reaffirming Final Order Tab 5/pp. 29-32
Approving Transfer of Structured Settlement
Payment Rights
In re: J. Rains, Annuitant, In the 66th Judicial District Court of Hill County,
Texas; Cause No. 51350
Final Order Approving Transfer of Structured Tab 6/pp. 33-37
Settlement Payment Rights
Metropolitan Life Insurance Company and Metropolitan Insurance & Annuity
Company, In the Court of Appeals for the Seventh District of Texas at Amarillo;
Cause No. 07-14-00132-CV
Table of Contents from Brief of Appellants Tab 7/pp. 38-41
In re J. Galvan, Annuitant, In the County Court at Law of Kleberg County,
Texas; Cause No. 14-231-C
Final Order Approving Transfer of
Structured Settlement Payment Rights Tab 8/pp. 42-48
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 1
DOCUMENT TAB/PAGES
In re J. Galvan, Annuitant, In the Court of Appeals for the Thirteenth District
of Texas at Corpus Christi; Cause No. 13-14-00463-CV
Memorandum Opinion (Dismissing Appeal) Tab 9/pp. 49-51
In re T. Klemer, Annuitant, In the County Court at Law of Hood County, Texas;
Cause No. CO6666
Final Order Approving Transfer of Tab 10/pp. 52-58
Structured Settlement Payment Rights
Metropolitan Life Insurance Company and Metropolitan Reinsurance Company
v. T. Klemer and J.G. Wentworth Originations, In the Court of Appeals for the
Second District of Texas at Fort Worth; Cause No. 02-14-00151-CV
Memorandum Opinion (Dismissing Appeal) Tab 11/pp. 59-61
In re: Michael Cortez, in the County Court at Law No. 3 of Brazoria County,
Texas; Cause No. CI52847
Final Order Approving Transfer of Partial Tab 12/pp. 62-68
Structured Settlement Payment Rights
In re: Esperanza Hughes, In the 79th Judicial District Court of Jim Wells
County, Texas; Cause No. 15-03-54382-CV
Final Order Approving Transfer of Partial Tab 13/pp. 69-77
Structured Settlement Payment Rights
In re: Bradley Turpin, In the County Court at Law No. 2 of Galveston County,
Texas; Cause No. CV-0073918
Final Order Approving Transfer of Tab 14/pp. 78-86
Structured Settlement Payment Rights
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC – PAGE 2
TAB 1
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 3
( Promise to Pay $ )
Lawsuit
Sara Swain Settling Parties
Settlement Agreement
( Release )
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 4
( Promise to Pay $ )
Sara Swain Lawsuit
(Through her Settling Parties
Settlement Agreement
Guardian)
Order Approving Minor's
Settlement
( Release )
( Obligation to
make future Qualified
settlement Assignment
payments )
Metropolitan Insurance &
Annuity Company
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 5
( Promise to Pay $ )
Lawsuit
Sara Swain Settlement Agreement Settling Parties
( Release )
( Obligation to
make future Qualified
settlement Assignment
payments )
Payments
Metropolitan Insurance &
Annuity Company
( issued to fund
payment Annuity
obligations )
Metropolitan Life Insurance
Company
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 6
( Promise to Pay $ )
Lawsuit
Sara Swain Settlement Agreement Settling Parties
( Release ) ( Obligation to
make future Qualified
settlement Assignment
(Right to payments )
Transfer Agreement
Partial and Court Order
Monthly Payments
Payments) Metropolitan Insurance &
Annuity Company
( issued to fund
Peachtree Settlement Funding payment Annuity
obligations )
Metropolitan Life Insurance
Company
( Promise to Pay $ )
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 7
Lawsuit
Sara Swain
Settlement Agreement Settling Parties
(Principal)
( Release )
( Obligation to
make future Qualified
Transfer Unassigned settlement Assignment
Right to Agreement,
Structured payments )
Receive Court Order,
Partial Servicing Settlement
Arrangement Payments
Monthly
Payments) Metropolitan Insurance &
Annuity Company
132 ( issued to fund
Peachtree Settlement Funding
Monthly payment Annuity
(Payment Agent of Sara Swain)
Payments obligations )
Metropolitan Life Insurance
Company
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 8
TAB 2
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 9
Page 1
1 of 7 DOCUMENTS
LexisNexis (R) Texas Annotated Statutes
Copyright © 2014 by Matthew Bender & Company, Inc.
a member of the LexisNexis Group
All rights reserved.
*** This document is current through the 2013 3rd Called Session ***
CIVIL PRACTICE AND REMEDIES CODE
TITLE 6. MISCELLANEOUS PROVISIONS
CHAPTER 141. STRUCTURED SETTLEMENT PROTECTION ACT
GO TO TEXAS CODE ARCHIVE DIRECTORY
Tex. Civ. Prac. & Rem. Code § 141.001 (2014)
§ 141.001. Short Title
This chapter may be cited as the Structured Settlement Protection Act.
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 10
Page 2
2 of 7 DOCUMENTS
LexisNexis (R) Texas Annotated Statutes
Copyright © 2014 by Matthew Bender & Company, Inc.
a member of the LexisNexis Group
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*** This document is current through the 2013 3rd Called Session ***
CIVIL PRACTICE AND REMEDIES CODE
TITLE 6. MISCELLANEOUS PROVISIONS
CHAPTER 141. STRUCTURED SETTLEMENT PROTECTION ACT
GO TO TEXAS CODE ARCHIVE DIRECTORY
Tex. Civ. Prac. & Rem. Code § 141.002 (2014)
§ 141.002. Definitions
In this chapter:
(1) "Annuity issuer" means an insurer that has issued a contract to fund periodic payments under a structured
settlement.
(2) "Court" means:
(A) the court of original jurisdiction that authorized or approved a structured settlement; or
(B) if the court that authorized or approved the structured settlement no longer has jurisdiction to approve a
transfer of payment rights under the structured settlement under this chapter, a statutory county court, a statutory
probate court, or a district court located in the county in which the payee resides.
(3) "Dependents" includes a payee's spouse, minor children, and all other persons for whom the payee is legally
obligated to provide support, including alimony.
(4) "Discounted present value" means the present value of future payments determined by discounting the
payments to the present using the most recently published Applicable Federal Rate for determining the present value of
an annuity, as issued by the United States Internal Revenue Service.
(5) "Gross advance amount" means the sum payable to the payee or for the payee's account as consideration for a
transfer of structured settlement payment rights before any reductions for transfer expenses or other deductions to be
made from the consideration.
(6) "Independent professional advice" means advice of an attorney, certified public accountant, actuary, or other
licensed professional adviser.
(7) "Interested party" means, with respect to any structured settlement:
(A) the payee;
(B) any beneficiary irrevocably designated under the annuity contract to receive payments following the payee's
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 11
Page 3
Tex. Civ. Prac. & Rem. Code § 141.002
death;
(C) the annuity issuer;
(D) the structured settlement obligor; and
(E) any other party that has continuing rights or obligations under the structured settlement.
(8) "Net advance amount" means the gross advance amount less the aggregate amount of the actual and estimated
transfer expenses required to be disclosed under Section 141.003(5).
(9) "Payee" means an individual who is receiving tax-free payments under a structured settlement and proposes to
transfer payment rights under the structured settlement.
(10) "Periodic payments" includes both recurring payments and scheduled future lump-sum payments.
(11) "Qualified assignment agreement" means an agreement providing for a qualified assignment within the
meaning of Section 130, Internal Revenue Code of 1986 (26 U.S.C. Section 130), as amended.
(12) "Settled claim" means the original tort claim or workers' compensation claim resolved by a structured
settlement.
(13) "Structured settlement" means an arrangement for periodic payment of damages for personal injuries or
sickness established by settlement or judgment in resolution of a tort claim or for periodic payments in settlement of a
workers' compensation claim.
(14) "Structured settlement agreement" means the agreement, judgment, stipulation, or release embodying the
terms of a structured settlement.
(15) "Structured settlement obligor" means, with respect to any structured settlement, the party that has the
continuing obligation to make periodic payments to the payee under a structured settlement agreement or a qualified
assignment agreement.
(16) "Structured settlement payment rights" means rights to receive periodic payments under a structured
settlement, whether from the structured settlement obligor or the annuity issuer, if:
(A) the payee is domiciled in or the domicile or principal place of business of the structured settlement obligor
or the annuity issuer is located in this state;
(B) the structured settlement agreement was authorized or approved by a court located in this state; or
(C) the structured settlement agreement is expressly governed by the laws of this state.
(17) "Terms of the structured settlement" include, with respect to any structured settlement, the terms of the
structured settlement agreement, the annuity contract, any qualified assignment agreement, and any order or other
approval of the court.
(18) "Transfer" means any sale, assignment, pledge, hypothecation, or other alienation or encumbrance of
structured settlement payment rights made by a payee for consideration, except that the term does not include the
creation or perfection of a security interest in structured settlement payment rights under a blanket security agreement
entered into with an insured depository institution, in the absence of any action to redirect the structured settlement
payments to the insured depository institution, or its agent or successor in interest, or to enforce the blanket security
interest against the structured settlement payment rights.
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 12
Page 4
Tex. Civ. Prac. & Rem. Code § 141.002
(19) "Transfer agreement" means the agreement providing for a transfer of structured settlement payment rights.
(20) "Transfer expenses" means all the expenses of a transfer that are required under the transfer agreement to be
paid by the payee or deducted from the gross advance amount, including court filing fees, attorney's fees, escrow fees,
lien recording fees, judgment and lien search fees, finders' fees, commissions, and other payments to a broker or other
intermediary, except that the term does not include preexisting obligations of the payee payable for the payee's account
from the proceeds of a transfer.
(21) "Transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a
transfer.
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 13
Page 5
3 of 7 DOCUMENTS
LexisNexis (R) Texas Annotated Statutes
Copyright © 2014 by Matthew Bender & Company, Inc.
a member of the LexisNexis Group
All rights reserved.
*** This document is current through the 2013 3rd Called Session ***
CIVIL PRACTICE AND REMEDIES CODE
TITLE 6. MISCELLANEOUS PROVISIONS
CHAPTER 141. STRUCTURED SETTLEMENT PROTECTION ACT
GO TO TEXAS CODE ARCHIVE DIRECTORY
Tex. Civ. Prac. & Rem. Code § 141.003 (2014)
§ 141.003. Required Disclosures to Payee
At least three days before the date on which the payee signs a transfer agreement, the transferee shall provide to the
payee a separate disclosure statement, in bold type at least 14 points in size, that states:
(1) the amounts and due dates of the structured settlement payments to be transferred;
(2) the aggregate amount of the payments;
(3) the discounted present value of the payments to be transferred, which shall be identified as the "calculation of
current value of the transferred structured settlement payments under federal standards for valuing annuities," and the
amount of the Applicable Federal Rate used in calculating the discounted present value;
(4) the gross advance amount;
(5) an itemized listing of all applicable transfer expenses, other than attorney's fees and related disbursements
payable in connection with the transferee's application for approval of the transfer, and the transferee's best estimate of
the amount of those expenses;
(6) the net advance amount;
(7) the amount of any penalties or liquidated damages payable by the payee in the event of any breach of the
transfer agreement by the payee; and
(8) a statement that the payee has the right to cancel the transfer agreement, without penalty or further obligation,
not later than the third business day after the date the agreement is signed by the payee.
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 14
Page 6
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LexisNexis (R) Texas Annotated Statutes
Copyright © 2014 by Matthew Bender & Company, Inc.
a member of the LexisNexis Group
All rights reserved.
*** This document is current through the 2013 3rd Called Session ***
CIVIL PRACTICE AND REMEDIES CODE
TITLE 6. MISCELLANEOUS PROVISIONS
CHAPTER 141. STRUCTURED SETTLEMENT PROTECTION ACT
GO TO TEXAS CODE ARCHIVE DIRECTORY
Tex. Civ. Prac. & Rem. Code § 141.004 (2014)
§ 141.004. Approval of Transfers of Structured Settlement Payment Rights
No direct or indirect transfer of structured settlement payment rights shall be effective and no structured settlement
obligor or annuity issuer shall be required to make any payment directly or indirectly to any transferee of structured
settlement payment rights unless the transfer has been approved in advance in a final court order based on express
findings by the court that:
(1) the transfer is in the best interest of the payee, taking into account the welfare and support of the payee's
dependents;
(2) the payee has been advised in writing by the transferee to seek independent professional advice regarding the
transfer and has either received the advice or knowingly waived the advice in writing; and
(3) the transfer does not contravene any applicable statute or an order of any court or other governmental
authority.
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 15
Page 7
5 of 7 DOCUMENTS
LexisNexis (R) Texas Annotated Statutes
Copyright © 2014 by Matthew Bender & Company, Inc.
a member of the LexisNexis Group
All rights reserved.
*** This document is current through the 2013 3rd Called Session ***
CIVIL PRACTICE AND REMEDIES CODE
TITLE 6. MISCELLANEOUS PROVISIONS
CHAPTER 141. STRUCTURED SETTLEMENT PROTECTION ACT
GO TO TEXAS CODE ARCHIVE DIRECTORY
Tex. Civ. Prac. & Rem. Code § 141.005 (2014)
§ 141.005. Effects of Transfer of Structured Settlement Payment Rights
Following a transfer of structured settlement payment rights under this chapter:
(1) the structured settlement obligor and the annuity issuer shall, as to all parties except the transferee, be
discharged and released from any and all liability for the transferred payments;
(2) the transferee shall be liable to the structured settlement obligor and the annuity issuer:
(A) if the transfer contravenes the terms of the structured settlement, for any taxes incurred by the parties as a
consequence of the transfer; and
(B) for any other liabilities or costs, including reasonable costs and attorney's fees, arising from compliance by
the parties with the order of the court or arising as a consequence of the transferee's failure to comply with this chapter;
(3) the transferee shall be liable to the payee:
(A) if the transfer contravenes the terms of the structured settlement, for any taxes incurred by the payee as a
consequence of the transfer; and
(B) for any other liabilities or costs, including reasonable costs and attorney's fees, arising as a consequence of
the transferee's failure to comply with this chapter;
(4) neither the structured settlement obligor nor the annuity issuer may be required to divide any periodic
payment between the payee and any transferee or assignee or between two or more transferees or assignees; and
(5) any further transfer of structured settlement payment rights by the payee may be made only after compliance
with all of the requirements of this chapter.
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 16
Page 8
6 of 7 DOCUMENTS
LexisNexis (R) Texas Annotated Statutes
Copyright © 2014 by Matthew Bender & Company, Inc.
a member of the LexisNexis Group
All rights reserved.
*** This document is current through the 2013 3rd Called Session ***
CIVIL PRACTICE AND REMEDIES CODE
TITLE 6. MISCELLANEOUS PROVISIONS
CHAPTER 141. STRUCTURED SETTLEMENT PROTECTION ACT
GO TO TEXAS CODE ARCHIVE DIRECTORY
Tex. Civ. Prac. & Rem. Code § 141.006 (2014)
§ 141.006. Procedure for Approval of Transfers
(a) An application under this chapter for approval of a transfer of structured settlement payment rights shall be made
by the transferee and shall be brought in the court.
(b) At least 20 days before the date of the scheduled hearing on any application for approval of a transfer of
structured settlement payment rights under Section 141.004, the transferee shall file with the court and serve on all
interested parties a notice of the proposed transfer and the application for authorization, including with the notice:
(1) a copy of the transferee's application;
(2) a copy of the transfer agreement;
(3) a copy of the disclosure statement required under Section 141.003;
(4) a listing of each of the payee's dependents, together with each dependent's age;
(5) notice that any interested party is entitled to support, oppose, or otherwise respond to the transferee's
application, either in person or by counsel, by submitting written comments to the court or by participating in the
hearing; and
(6) notice of the time and place of the hearing and notification of the manner in which and the time by which
written responses to the application must be filed to be considered by the court.
(c) Written responses to the application under Subsection (b)(6) must be filed on or after the 15th day after the date
the transferee's notice is served.
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 17
Page 9
7 of 7 DOCUMENTS
LexisNexis (R) Texas Annotated Statutes
Copyright © 2014 by Matthew Bender & Company, Inc.
a member of the LexisNexis Group
All rights reserved.
*** This document is current through the 2013 3rd Called Session ***
CIVIL PRACTICE AND REMEDIES CODE
TITLE 6. MISCELLANEOUS PROVISIONS
CHAPTER 141. STRUCTURED SETTLEMENT PROTECTION ACT
GO TO TEXAS CODE ARCHIVE DIRECTORY
Tex. Civ. Prac. & Rem. Code § 141.007 (2014)
§ 141.007. General Provisions; Construction
(a) The provisions of this chapter may not be waived by any payee.
(b) Any transfer agreement entered into by a payee who resides in this state must provide that disputes under the
transfer agreement, including any claim that the payee has breached the agreement, shall be determined in and under the
laws of this state. The transfer agreement may not authorize the transferee or any other party to confess judgment or
consent to entry of judgment against the payee.
(c) Transfer of structured settlement payment rights may not extend to any payments that are life-contingent unless,
prior to the date on which the payee signs the transfer agreement, the transferee has established and agreed to maintain
procedures reasonably satisfactory to the structured settlement obligor and the annuity issuer for:
(1) periodically confirming the payee's survival; and
(2) giving the structured settlement obligor and the annuity issuer prompt written notice in the event of the
payee's death.
(d) A payee who proposes to make a transfer of structured settlement payment rights may not incur any penalty,
forfeit any application fee or other payment, or otherwise incur any liability to the proposed transferee or any assignee
based on any failure of the transfer to satisfy the conditions of this chapter.
(e) Nothing contained in this chapter may be construed to authorize any transfer of structured settlement payment
rights in contravention of any law or to imply that any transfer under a transfer agreement entered into before the
effective date of this chapter is valid or invalid.
(f) Compliance with the requirements in Section 141.003 and fulfillment of the conditions in Section 141.004 are
solely the responsibility of the transferee in any transfer of structured settlement payment rights, and neither the
structured settlement obligor nor the annuity issuer bear any responsibility for, or any liability arising from,
noncompliance with the requirements or failure to fulfill the conditions.
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 18
TAB 3
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 19
Page 1
LexisNexis (R) Texas Annotated Statutes
Copyright © 2014 by Matthew Bender & Company, Inc.
a member of the LexisNexis Group
All rights reserved.
*** This document is current through the 2013 3rd Called Session ***
PROPERTY CODE
TITLE 3. PUBLIC RECORDS
CHAPTER 12. RECORDING OF INSTRUMENTS
GO TO TEXAS CODE ARCHIVE DIRECTORY
Tex. Prop. Code § 12.014 (2014)
§ 12.014. Transfer of Judgment or Cause of Action
(a) A judgment or part of a judgment of a court of record or an interest in a cause of action on which suit has been
filed may be sold, regardless of whether the judgment or cause of action is assignable in law or equity, if the transfer is
in writing.
(b) A transfer under this section may be filed with the papers of the suit if the transfer is acknowledged or sworn to
in the form and manner required by law for acknowledgement or swearing of deeds.
(c) If a transfer of a judgment is filed, the clerk shall record the transfer appropriately. If a transfer of a cause of
action in which a judgment has not been rendered is filed, the clerk shall note and briefly state the substance of the
transfer on the court docket at the place where the suit is entered.
(d) A transfer filed under this section is notice to and is binding on a person subsequently dealing with the judgment
or cause of action.
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 20
TAB 4
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 21
CAUSE NO. 201474548
INRE: § IN THE DISTRlCT C~'f
§ ~ .
S. SWAIN § HARRJS COUNTY,
§
§ 2341li JUDIClAL DISTRICT
Final Order Approving Transfer of
Structured Settlement Payment Rigbts
On the 2°d day of February, 2015, this case came on for fm al hearing and trial and
consideration by the Court of the Application for Approval of the Transfer of Structured
Settlement Payment Rights {the "Application") filed by Peachtree Settlement Funding, LLC, as
the transferee ("Peachtree" or "Transferee"), and Sara Swain as the payee ("Payee.. or ''Ms.
Swain") pursuant to Chapter 141 of the Texas Civil Practice & Remedies Code (the "Texas
Transfer Statute"). The Court, after due consideration of the Application, the
Opposition/Objection to the proposed transfer filed by Metropolitan Insurance and Annuity
Company and Metropolitan Life Insurance Company (the " MetLife Opposition"), and the other
pleadings and documents on fi le with the Court and the evidence and testimony presented at the
hearing, hereby makes the following findings:
l. This Court has subject matter jurisdiction over this proceeding and personal
jurisdiction over the parties. Venue of this matter is proper in Harris County, Texas and this
Court because Ms. Swam resides in Harris County, Texas. All persons/entities entitled to be
served and/or provided notice of these proceedings have been served and/or provided such
notice or have appeared in this proceeding directly and/or through counsel.
2. Ms. Swain is currently entitled to receive structured settlement payments from
Metropolitan Insurance and Annuity Company ("Metropolitan Insurance"). Metropolitan
Insurance funded its obligation to make those structured settlement payments to Ms. Swain
FINAL ORDER APPROVI~G TRANSFER OF STRti!CTURED
SETILEMENT PAYMENT RIGHTS - Page 1 of 7
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 22
through the issuance of an annuity (Group Annuity contract # 8281/Certificate # 74875) by
Metropolitan Life Insurance Company ("Metropolitan Life").
3. Ms. Swain has one dependent, as that tenn is defmed in the Texas Transfer
Statute, a daughter. age l and Y2.
4. Ms. Swain agreed in a Purchase Contract dated on or about January 5, 2015 (the
"Transfer Agreement," a copy of which was filed with the Court as an exhibit to the
Application) to transfer and assign to Peachtree 132 partial monthly payments commencing
May 1o. 20 l5 and continuing through and including April l 0, 2026, in the initial amount of
Four Hundred Ninety-Five and No/100 DolJars ($495.00) per month, increasing by 3% in May
of 2016 and in May of each subsequent year through April of 2026. (These monthly payments
which were to be transferred and assigned to Peachtree, from May of 20 15 through April of
2026 shaH hereafter be referred to as the "Assigned Payments!' The total monthly structured
settlement/annuity payments coming due and owing from May of 2015 through April of 2026
[the "Term"), shall be referred to as the "Tenn Payments." The portion of each monthly Term
Payment coming due and owing from May of 20 15 through April of 2026 that are not being
transferred and assigned by Ms. Swain and which shall be retained by Ms. Swain, shall
hereafter be referred to as the "Retained Swain Monthly Payments")
5. The proposed transfer of the Assigned Payments by and between Peachtree and
Ms. Swain, as reflected in the Transfer Agreement and described in the Application, satisfies
and complies with all statutory requirements of Chapter 141 of the Texas Civil Practice and
Remedies Code (the "Texas Transfer Statute"), and does not contravene any applicable statute
or an order of any court or other governmental authority. The transfer also satisfies the lntemal
FINAL ORDER APPROVING TRANSFER OF STROCTURED
SEITLEMENT PAYMENT RIGHTS - Page 2 of 7
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 23
Revenue Code Section 5891 and does not contravene any Federal or State starute or the order of
any court or responsible administrative authority.
6. The transfer is in the best interest of Payee, taking into account the welfare and
support of Payee's dependent.
7. Payee has been advised in writing by Transferee to seek independent
professional advice regarding the transfer, and has either received the advice or knowingly
waived the opporrunity to seek and receive said advice in writing.
8. Disclosures to the Payee were made, and notices of the hearing and the filing of
the Application were provided to all interested parties, including Metropolitan Life and
Metropolitan Insurance (collectively, sometimes referred to herein as "MetLife,) in accordance
with the Texas Transfer Starute. Payee has been advised that her death prior to the due date of
the last Assigned Payment shall not affect the transfer of the Assigned Payments from Payee to
Peachtree and Payee understands she is giving up his rights, and the rights of her heirs,
successors and/or beneficiaries, to the Assigned Payment, and Payee has requested that this
transfer be approved.
9. The Court has considered the objection/opposition filed by Metropolitan
Insurance and Metropolitan Life and herby overrules and denies said objection/opposition.
10. The Court further fmds that Metropolitan insurance and Metropolitan Life are
not being and will not be required or directed to divide any !>'tructured settlement/annuity
payments amongst Ms. Swain and Peachtree or any other party.
11. This Order is a "Qualified Order" pursuant to 26 U.S.C. sec. 5891 , el seq.
Based on the foregoing fmdings and the evidence submitted to the Court and being
satisfied that the proposed transfer satisfies all applicable statutory requirements, IT IS
FINAL ORDER APPROVING TRANSFER OF STR.QCTURED
SETTLEMENT PAYMENT RIGHTS- Page 3 of 7
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 24
ORDERED, ADJUDGED, AND DECREED that the Application is GRANTED and the
transfer and assignment of all of Payee's right, title, and interest in and to the Assigned
Payments by the Payee to Peachtree. its successors and/or, assigns, is APPROVED.
fT IS FURTHER ORDERED that the MetLife Opposition is hereby denied and
overruled.
IT lS FURTHER ORDERED that in furtherance of the Court' s order granting the
Application and approving the proposed transfer descnbed herein, Metropolitan Life insurance
Company and Metropolitan Insurance and Annuity Company, are hereby authorized and directed
to pay and remit to Peachtree (as Ms. Swain's designated and authorized payment agent for
purposes of r~ceiving the Tenn Payments) 100% of the Term Payments (the monthly structured
settlement/annuity paymentc; that come due and owing by Metropolitan Life and/or Metropolitan
Insurance from May of 2015 through April of 2026}, when and as said payments come due.
Upon receipt of each monthly Term Payment, Peachtree is entitled to retain the portion of each
Tem1 Payment that constitutes an Assigned Payment, and is ordered to pay and remit to Ms.
Swain the portion of said Tenn Payments that constitute the Remaining Swain Monthly
Payments. (This arrangement sha 11 be referred to as the "Servicing Arrangement.")
JT IS FURTHER ORDERED that the Term Payments shall be sent directly to Peachtree
by Metropolitan Life pursuant to this order and the Servicing Arrangement described herein, at
the following address or to such other address designated by Peachtree:
Peachtree Settlement Funding, LLC
P.O . Box 83364
Woburn, MA 0181 3-3364
IT IS FURTHER ORDERED that Metropolitan Life and Metropolitan Insurance sha ll
absolutely, irrevocably, and forever discharge and satisfy their legal and contractual obligation
FINAL ORDER APPROVING TRANSFER OF STRUCTURED
SETTLEMENT PAYMENT RIGHTS - Page 4 of 7
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 25
to make the Tenn Payments (including the Assigned Payments and the Remaining Swain
Monthly Payments) by paying and remitting said Tenn Payments to Peachtree pursuant to this
court order and the Servicing Arrangement and by doing so, Metropolitan Life and Metropolitan
Insurance are released from, and shall have not have, any current or future liability to Ms.
Swain for the Term Payments. By signing and approving this order, Ms. Swain acknowledges,
understands, and agrees that he will receive the Remaining Swain Monthly Payments through
Peachtree (as her designated payment agent solely for purposes of receiving and distributing the
Term Payments pursuant to the Servicing Agent and this Final Order) and that Metropolitan
Life and Metropolitan Insurance shall not be obligated to make any portion of the Term
Payments directly to Ms. Swain; that Ms. Swain shall look solely and exclusively to Peachtree
for the Remaining Swain Month ly Payments; and that Metropolitan Life and Metropolitan
insurance shall not, following the signing of this Final Order by the Court, have any obligation
or liability (contractual or legal) to Ms. Swain relative to the Term Payments, including the
Remaining Swain Monthly Payments.
IT IS FURTHER ORDERED that the Remaining Swain Monthly Payments shall remain
the property of Ms. Swain, even though said payments are to be paid and remitted to Peachtree
pursuant to the Servicing Arrangement and this Final Order.
lT IS FURTHER ORDERED that Metropolitan Life and Metropolitan Insurance are not
being forced or required or ordered to split or divide any structured settlement/annuity payments
amongst Ms. Swain and Peachtree and shall not be required to do so in the future.
IT IS FURTHER ORDERED that Metropolitan Life and Metropolitan insurance shall
irrevocably change the beneficiary for the Assigned Payments to the Transferee, and no other
individual or entity other than the Transferee shall have the authority to change the beneficiary
FINAL ORDER APPROVING TRANSFER OF STJUiCTURED
SElTLEl\tENT PAYMENT RIGHTS - Page 5 nf 7
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 26
for the Assigned Payments.
unding, LLC, 20 1 King ofPrussi oad, Suite 200, Radnor, PA 19087,
copy to Peachtree counsel. ~
IT IS FURTHER ORDERED that pursuant to the Texas Transfer Statute, by making and
delivering the Term Payments to Transferee as set forth in the preceding paragraphs, MetLife
shall, as to all parties except the Transferee, be discharged and released from any and all
liability for the Term Payments.
All costs of Court are taxed against MetLife. This Order is a fma l judgment and is
intended to and does fully and finally dispose of all claims and relief requested in this
proceeding. All other relief not expressly granted in this order is DENlED.
SIGNED this l day of February, 2015.
FEB- 2 2015
FrNAL ORDER APPROVING TRANSFER OF STR.flCTURED
SETILEMENT PAYMENT RIGHTS- Page 6 of 7
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 27
Agreed to and Approved NESBITT, VASSAR & MCCOWN, LLP
As to Form and Substance: 15851 Dallas Parkway, Suite 800
Addison, TX 75001
PH. (972) 371-2411
~~~)
Swam
::l~o7C//Ut ~
Earl S. Nesbitt
State Bar No. 14916900
DavidS. Vassar
State Bar No. 20503175
ATTORNEYFORPEACHTREESETTLEMENT
FUNDING, LLC
FINAL ORDER APPROVING TRANSFER OF STRUCTURED
SETTLEMENT PAYMENT RIGHTS - Page 7 of 7
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 28
TAB 5
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 29
-.p
INRE: §
§
S. SWAIN §
§
§
ORDER CONFIRMING AND REAFFIRMING FINAL ORDER APPROVING
TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS
On February 2, 2015 a hearing was held in this Court to consider the Amended Applications
for Approval of Sale of Partial Payment Rights filed by Peachtree Settlement Funding, LLC (the
"Application'') relating to a proposed transfer of certain structured settlement payment rights by Sara
Swain to applicant and transferee Peachtree Settlement Funding, LLC ("Peachtree") in accordance
with Chapter 141 of the Texas Civil Practice & Remedies Code (the "Texas Transfer Statute'').
Peachtree appeared at the February 2, 2015 hearing through counsel; payee Sara Swain appeared in
person; and interested parties Metropolitan Life Insurance Company and Metropolitan Insurance and
Annuity Company (collectively, "MetLife") filed an objection to the Application and proposed
transfer involving Sara Swain and Peachtree and appeared at the February 2, 2015 hearing through
counsel. The Court heard and considered evidence and the arguments of counsel and at the
conclusion of the February 2 hearing, the Court granted the Application and approved the transaction
described in the Application and signed a Final Order Approving Transfer of Structured Settlement
Payment Rights (the "Final Order").
Another hearing was held in this case on April6, 2015, relating to Peachtree's Motion to
Supplement the Record and Present Additional Testimony (the "Peachtree Motion"), filed pursuant
to TEx. R. CN. P. 270, at which Peachtree and MetLife appeared through counsel and Ms. Swain
appeared in person. The Court heard and considered some evidence at the February 2 hearing
ORDER CONFIRMING AND REAFFIRMING FINAL ORDER APPROVING TRANSFER OF
STRUCTURED SETTLEMENT PAYMENT RIGHTS- Page 1
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 30
regarding the Application, but there was some questions raised as to whether the record accurately
reflected all of said evidence. Therefore, the Court, fmding that it still has plenary power and
jurisdiction over this case, granted the Peachtree Motion and permitted the parties to formally offer
evidence at the hearing held on April 6, 2015 to insure that the record was accurate and complete.
Having heard and considered the evidence and the arguments of counsel, the Court confirms
and reaffirms its fmdings and rulings set forth in the Final Order and incorporates all ofthe fmdings
and rulings set forth in the Final Order herein, as if fully set forth at length, including granting the
Application and making the requisite fmdings under the Tex. Civ. Prac. & Rem. Code Ann. §
141.001 et. Seq. (the Texas Transfer Statute), which are set forth in the Final Order.
IT IS ORDERED, ADJUDGED, AND DECREED that the Final Order, together with this
Order, shall constitute a fmaljudgment in this case. All other relief, not specifically granted herein
and in the Final Order is hereby denied.
SIGNED on the b day of April, 2015.
JUDGE PRESIDING
ORDER CONFIRMING AND REAFFIRMING FINAL ORDER APPROVING TRANSFER OF
STRUCTURED SETTLEMENT PAYMENT RIGHTS- Page 2
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 31
AGREED AS TO FORM AND
SUBSTANCE
NESBITT, VASSAR & MCCOWN, LLP
15851 Dallas Parkway, Suite 800
~~~='
Sara warn
Addison, TX 75001
PH. (972) 371-2411
::=pm&
Earl S. Nesbitt
State Bar No. 14916900
DavidS. Vassar
State Bar No. 20503175
ATTORNEYFORPEACHTREESETTLEMENT
FUNDING, LLC
ORDER CONFIRMING AND REAFFIRMING FINAL ORDER APPROVING TRANSFER OF
STRUCTURED SETTLEMENT PAYMENT RIGHTS- Page 3
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 32
TAB 6
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 33
• •
NO. 51350
IN.RE §
§
J. RAINS, §
§
ANNUITANT §
Final Order Approving Transfer of
Structured Settlement l'aymentRlghts
On this day, fue Court considered fue ApplicationofJ,G, Wentworth Originations, LLC
(also referred to herein as the "Transferee" or "JGW") for Approval of the Transfer of
Structured Settlement Payment Rights (the "Application") from Jamie Rains (".Payee'') to JGW
pursuant to Chapter 141 of the Texas Civil Ptactico & Remedies Code. The Cqurt, after due
consideration of the Appllcation, any response iliereto, and fue evidence on file and presented
at the hearing, hereby makes the following findings:
1. Tho transfer satisfies all statutory requiretnenfs of (he Structured Settlement
Protection Act, Chapter !41 of the Texas Civil Practice and Remedies Code (the "Aon, and
does not contravene any applicable statute or an orilllr of any court or other governmental
authority; the transfer also satisfies the Internal Revenue Code Seotion 5891 and does not
contravene any Federal or State statute or fue order of any court or responsible administrative
authority;
2. 1'he transfer is in the best interest of Payee, taking into account the welfare nrtd
support ofPayeo's dependents,"if any;
3. Payee has been advised in writing by Transferee to seek independent
professional advice regarding the transfer, and has either received the advice ot knowingly
wuived the advioe in writing;
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 34
• -------- -- ------- -· •
4, Jurisdiction and venue are proper in this Court, and disclosures to Payee were
Illade, aud notices wore given to the lntere•tod Parties ln accordance with tho Act. Payee has
been advised that her death prior to the due date of the last Assigned Payment shall not affect
.,
tho traMfer of the Assigned Payment. (defined below) from Payee to JGW and Payee
understands she is giving up his rights, and tho rights of her heirs, successors and/or
beneficiaries, to the Assigned Payments, and Payee has requested that this transfer be apprcvecl,
and
5. This Ordor Is a "Quallfied Otder" pursuant to 26U,S.C. sec. 5891, et seq.
BASED on the foregoing findings and being satisfied that the proposed tran.fer satisfies
all appHcablo smtutt>ry requitements, it is hereby,
ORDERED, ADJUDGED, AND DECREED that the Application is GRANTED and the
llllsignment by Payee to JGW its successors and/or, !lllsigns, of all Payee's right, title, and interest
I
in and to the Assigned Payment$ is APPROVED. It is further
ORDEREO that Annuity Issuer, Metropolitan Lifo In.mtanco Company, and Annuity
Owner, Metropolitlln insurance And Annuity Company, are hereby directed on the dates set forth
below to deliver and make psysble to JGW its successors and/or assigns, the following
structured settlement payments, regardless of whether Payee is living:
A) 120 monthly payments of $405,00 each, beginning on March22, 2014 and ending on
February 22, 2024
(the "Assigned Payments"). '111e Assigned Payments shall be sent to the following address or to
sucb. other address designated by, J.G, Wentworth Originations, LLC:
J.G. Wentwotth Originations, LLC
P.O Box 83364
Woburn, MA 01813-3364
It is further
-2-
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 35
• •
.•
ORDERED that the Annuity Issuer and Annuity Owner are not required to split
structured settlement payments and shall forward the entire amount of each structured
settlement payment that includes an Assigned Payment to Transferee with Trl!l1Sferee to retain
each Assigned Payment and remit the remainder of each payment to tho Payee.
ORDERED that the Tl'lUlSferce shall be liable to that Annuity Issuer and Annuity
Owner:
a. If the !nmsfer contravenes the tenns of the structured settlement, for any
taxes incurred by Annuity Owner or the Annuity Issuer as a consequence
of the transfer; aod
b. For any liabilities or cosls, including reasonable costs and attorneys' fees,
arising from comp&nce by such parties with this order of the Court or
IU'ising as a consequence of the Transferee's failure to comply wlth the
Act.
ORDERED that the Annuity Issuer and Annuity Owner shall irrevocably change tho
bonefi.ci!U')' for tho Transferred payments to the Transferee, and no other inclividual or entity
other than tjlo Transferee shali hi!Ve tho authority to change beneficiary for the Transferred
Payments.
ORDERED that Annuity IS11uer and Annuity Owner are directed to issue a fonnal
acknowledgement letter of the transfer within twenty (20) days of the date of recoipt of this
Order, The formal acknowledgement letter shall be delivered to JGW, 201 King of Prussia
Road, Suite 200, Radnor, PA 19087. It is further
ORDERED that ptU'suant to the Act, by making and delivering the Assigned Payments
to Transferee as set forth in the precedlng puragraphs, Anoulty Owner and Annuity Issuer shall,
as to all pries except Transferee, be dlscherged and released from any and all liability for the
Assigned Paytnents.
. 3-
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 36
. .
• •
This Order finally disposes of all claims and nll parties; all motions not speoi:fically
granted herein nre DENIED.
This Is a Final Judgment.
SIGNEDthis Jl dayof £&.ry zofl/
Agreed to and Approved JULIBPIEVANS LAW FIRM
As ta Fann and Substruwo: P.o. Box 924506
HoUSTON, TX 77292-4506
(281) 846~252 (TaLiiPHONB)
(888) 598-3598 (FACSJMJLl!)
BY: ~g/k{_j?/ ~·
Julie E\:ans :;50
P. 42.1(a). Appellants’ motion to dismiss is granted, and the appeal is hereby
DISMISSED. Costs will be taxed against appellants. See TEX. R. APP. P. 42.1(d)
("Absent agreement of the parties, the court will tax costs against the appellant.").
Having dismissed the appeal at appellants’ request, no motion for rehearing will be
entertained, and our mandate will issue forthwith.
PER CURIAM
Delivered and filed the 2nd
day of October, 2014.
2
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 51
TAB 10
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 52
NO. C06666
INRE § IN THE COUNTY COURT AT LAW
§
T. KLEMER, § OF
§
ANNUITANT § HOOD COUNTY, TEXAS
Final Order Approving Transfer of
Structured Settlement Payment Rights
On this day, came on for final hearing and trial the Application of J.G. Wentworth
Originations, LLC (also referred to herein as the "Transferee" or "JGW") for Approval of the
Transfer of Structured Settlement Payment Rights (the "Application") from Tycen Klemer
("Payee" or "Mr. Klemer") to JGW pursuant to Chapter 141 of the Texas Civil Practice &
Remedies Code (the "Texas Transfer Statute"). The Court, after due consideration of the
Application, the Opposition/Objection to the proposed transfer filed by Metropolitan
Reinsurance Company and Metropolitan Life Insurance Company (the "MetLife Opposition"),
and the other pleadings and documents on file with the Court and the evidence and testimony
presented at the hearing, hereby makes the following findings:
I. This Court has subject matter jurisdiction over this proceeding and personal
jurisdiction over the parties. Venue of this matter is proper in Hood County, Texas and this
Court because Mr. Klemer resides in Hood County, Texas. All persons/entities entitled to be
served and/or provided notice of these proceedings have been served and/or provided such
notice or have appeared in this proceeding directly and/or through counsel.
2. Mr. Klemer is currently entitled to receive structured settlement payments from
Metropolitan Reinsurance Company ("Metropolitan Reinsurance"). Metropolitan Reinsurance
funded its obligation to make those structured settlement payments to Mr. K.lemer through the
FINAL ORDER APPROVING TRANSFER OF STB.liJCTURED
SETTLEMENT PAYMENT RIGHTS- Page I of6
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 53
issuance of an annuity (contract # NS24995ALX) by Metropolitan Life Insurance Company
("Metropolitan Life").
3. Mr. Klemer has one dependent, as that term is defined in the Texas Transfer
Statute, a son, age 3.
4. Mr. Klemer agreed in a Purchase Contract dated on or about January 2, 2014 (the
"Transfer Agreement," a copy of which has been filed with the Court) to transfer and assign to
JGW one (!) partial lump sum structured settlement payment in the amount of Thirty-Five
Thousand and No/100 Dollars ($35,000.00) due and payable on August 15,2016, out of a total
lump sum payment due on said date in the amount of $50,000.00. (The portion of the August
15, 2016 lump sum structured settlement payment transferred and assigned to JGW [in the
amount of$ 35,000.00] shall hereafter be referred to as the "Assigned Payment." The entire
lump sum payment, in the amount of $50,000.00, due on August 15, 2016, shall be referred to
as the "2016 Payment." The portion of the 2016 Payment that has not been transferred and
assigned to JGW, and is being retained by Mr. Klemer, shall hereafter be referred to as the
"Remaining Klemer Payment").
5. The proposed transfer of the Assigned Payment by and between JGW and Mr.
Klemer, as reflected in the Transfer Agreement and described in the Application, satisfies and
complies with all statutory requirements of Chapter 141 of the Texas Civil Practice and
Remedies Code (the "Texas Transfer Statute"), and does not contravene any applicable statute
or an order of any court or other governmental authority. The transfer also satisfies the Internal
Revenue Code Section 5891 and does not contravene any Federal or State statute or the order of
any court or responsible administrative authority.
FINAL ORDER APPROVING TRANSFER OF STRUCTURED
SETTLEMENT PAYMENT RIGHTS -Page 2 of6
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 54
6. The transfer is in the best interest of Payee, taking into account the welfare and
support of Payee's dependent;
7. Payee has been advised in writing by Transferee to seek independent
professional advice regarding the transfer, and has either received the advice or knowingly
waived the opportunity to seek and receive said advice in writing.
8. Disclosures to the Payee were made, and notices of the hearing and the filing of
the Application were provided to all interested parties, including Metropolitan Life and
Metropolitan Reinsurance (collectively, sometimes referred to herein as "MetLife") in
accordance with the Texas Transfer Statute. Payee has been advised that his death prior to the
due date of the last Assigned Payment shall not affect the transfer of the Assigned Payment
from Payee to JGW and Payee understands he is giving up his rights, and the rights of his heirs,
successors and/or beneficiaries, to the Assigned Payment, and Payee has requested that this
transfer be approved.
9. The Court has considered the objection/opposition filed by Metropolitan
Reinsurance and Metropolitan Life and herby overrules and denies said objection/opposition.
I 0. The Court further finds that Metropolitan Reinsurance and Metropolitan Life is
not being and will not be required or directed to divide any structured settlement/annuity
payments amongst Klemer and JGW or any other party.
II. This Order is a "Qualified Order" pursuant to 26 U.S.C. sec. 5891, et seq.
Based on the foregoing findings and the evidence submitted to the Court and being
satisfied that the proposed transfer satisfies all applicable statutory requirements, IT IS
ORDERED, ADJUDGED, AND DECREED that the Application is GRANTED and the
FINAL ORDER APPROVING TRANSFER OF STRIJCTURED
SETTLEMENT PAYMENT RIGHTS- Page 3 of6
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 55
assignment by Payee to JGW its successors and/or, assigns, of all Payee's right, title, and
interest in and to the Assigned Payment is APPROVED.
IT IS FURTHER ORDERED that the MetLife Opposition 1s hereby denied and
overruled.
IT IS FURTHER ORDERED that Annuity Issuer, Metropolitan Life Insurance Company,
and Annuity Owner, Metropolitan Reinsurance Company, are hereby directed to pay and remit to
JGW 100% of the 2016 Payment (in the amount of$50,000.00), when said payment comes due
on or about August 15, 2016. Upon receipt of the 2016 Payment, JGW is entitled to retain the
portion of said 2016 Payment that constitutes the Assigned Payment (in the amount of
$35,000.00), and is ordered to pay and remit to Mr. Klemer the portion of said payment that
constitutes the Remaining Klemer Payment (in the amount of $15,000.00). (This arrangement
shall be referred to as the "Servicing Arrangement.")
IT IS FURTHER ORDERED that 2016 Payment shall be sent directly to JGW by
Metropolitan Life pursuant to this order and the Servicing Arrangement described herein, at the
following address or to such other address designated by J.G. Wentworth Originations, LLC:
J.G. Wentworth Originations, LLC
P.O Box 83364
Woburn, MA 01813-3364
IT IS FURTHER ORDERED that Metropolitan Life and Metropolitan Reinsurance shall
absolutely and irrevocably discharge and satisfy their legal and contractual obligation to make
the 2016 Payment (including the Assigned Payment and the Remaining Klemer Payment) by
paying and remitting said payment to JGW pursuant to this court order and the Servicing
Arrangement and by doing so, Metropolitan Life and Metropolitan Reinsurance is released
from, and shall have not have, any current or future liability to Mr. Klemer for the 2016
FINAL ORDER APPROVING TRANSFER OF STRUCTURED
SETTLEMENT PAYMENT RIGHTS- Page 4 of6
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 56
Payment. By signing and approving this order below, Mr. Klemer acknowledges, understands,
and agrees that he will receive the Remaining Klemer Payment through JGW and that MetLife
shall not be obligated to make any portion of the 2016 Payment directly to Mr. Klemer; that Mr.
Klemer shall look solely and only to JGW for the Remaining Klemer Payment; and that
MetLife shall not, following the signing of this Final Order by the Court, have any obligation
(contractual or legal) or liability to Mr. Klemer relative to the 2016 Payment, including the
Remaining Klemer Payment.
IT IS FURTHER ORDERED that the Remaining Klemer Payment shall remain the
property of Mr. Klemer, even though said payment is to be paid and remitted to JGW pursuant
to the Servicing Arrangement.
IT IS FURTHER ORDERED that MetLife is not required and is not being ordered to
split or divide any structured settlement payments amongst Mr. Klemer and JGW.
IT IS FURTHER ORDERED that MetLife shall irrevocably change the beneficiary for
the Assigned Payment to the Transferee, and no other individual or entity other than the
Transferee shall have the authority to change the beneficiary for the Assigned Payment.
IT IS FURTHER ORDERED that Annuity Issuer and Annuity Owner are directed to
issue a formal acknowledgement letter of the transfer within twenty (20) days of the date of
receipt of this Order. The formal acknowledgement letter shall be delivered to J.G. Wentworth
Originations, L.L.C., 201 King of Prussia Road, Suite 200, Radnor, PA 19087, with a copy to
JGW's counsel.
IT IS FURTHER ORDERED that pursuant to the Texas Transfer Statute, by making and
delivering the 2016 Payment to Transferee as set forth in the preceding paragraphs, MetLife
FINAL ORDER APPROVING TRANSFER OF STRECTURED
SETTLEMENT PAYMENT RIGHTS- Page 5 of 6
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 57
shall, as to all parties except Transferee, be discharged and released from any and all liability
for the 2016 Payment.
All costs of Court are taxed against MetLife. This Order is a final judgment and is
intended to and does fully and finally dispose of all claims and relief requested in this
proceeding. All other relief not expressly granted in this order is DENIED.
SIGNED this __ day of May 2014.
MAY 07 _2014
~
Agreed to and Approved NESBITT, VASSAR & MCCOWN, LLP
As to Form and Substance: 15851 Dallas Parkway, Suite 800
Addison, TX 75001
PH. (972) 371-2411
::l=j!Jjl)jfr----
Earl S. Nesbitt
State Bar No. 14916900
DavidS. Vassar
State Bar No. 20503175
ATTORNEY FOR J.G. WENTWORTH
ORIGINATIONS, LLC
FINAL ORDER APPROVING TRANSFER OF STRUCTURED
SETTLEMENT PAYMENT RIGHTS -Page 6 of 6
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 58
TAB 11
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 59
COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-14-00151-CV
METROPOLITAN LIFE INSURANCE APPELLANTS
COMPANY AND METROPOLITAN
REINSURANCE COMPANY
V.
T. KLEMER AND J.G. APPELLEES
WENTWORTH ORGINATIONS, LLC
------------
FROM THE COUNTY COURT OF HOOD COUNTY
TRIAL COURT NO. C06666
------------
MEMORANDUM OPINION1 AND JUDGMENT
------------
We have considered “Appellant’s Unopposed Motion To Voluntarily
Dismiss Appeal.” It is the court’s opinion that the motion should be granted;
therefore, we dismiss the appeal. See Tex. R. App. P. 42.1(a)(1), 43.2(f).
1
See Tex. R. App. P. 47.4.
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 60
Costs of the appeal shall be paid by appellants, for which let execution
issue. See Tex. R. App. P. 42.1(d).
PER CURIAM
PANEL: MEIER, J.; LIVINGSTON, C.J.; and GABRIEL, J.
DELIVERED: August 14, 2014
2
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 61
TAB 12
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 62
CAUSE NO. CI52847
INRE: § IN THE COlJNTY COURT AT LAW
§
MICHAEL CORTEZ § NO.3 OF
§
§ BRAZORIA COUNTY, TEXAS
Final Order Approving Transfet· of
Partial Structured Settlement Pavment Rights
On this day came on for fmal hearing and trial and consideration by the Court of the
Application for Approval of Sale of Partial Payment Rights (the "Application") filed J.G.
Wentwo1ih Originations, LLC ("J.G. Went\vorth" or "Transferee"), and Michael Cotiez as the
payee ("Payee" or "Mr. Cmiez") pursuant to Chapter 141 of the Texas Civil Practice &
Remedies Code (the "Texas Transfer Statute"). The Comi, after due consideration of the
Application, the Objection and Response to the proposed transfer filed by Metropolitan
Insurance and Annuity Company and Metropolitan Life Insurance Company (the "MetLife
Opposition"), and the other pleadings and documents on file vvith the Comi and the evidence
and testimony presented at the hearing, hereby makes the following findings:
1. This Comi has subject matter jurisdiction over this proceeding and personal
jurisdiction over the parties. Venue of this matter is proper in Brazoria County, Texas and this
Court because Mr. Cortez resides in Brazoria County, Texas. All persons/entities entitled to be
served ancl/or provided notice of these proceedings have been served and/or provided such
notice or have appeared in tlus proceeding directly and/or through counsel.
2. Mr. Cortez is currently entitled to receive stmctured settlement payments from
Metropolitan Insurance and Annuity Company ("Metropolitan Insurance"). Metropolitan
Insurance funded its obligation to make those structured settlement payments to Mr. Cortez
,pr.t~ ___
I'ROiLV,
t:i
n~l~~~
~Pf'"
FINAL ORDER APPROVING TRANSFER OF PARTIAL
STRUCTURED SETTLEMENT PAYMENT RIGHTS-- Page
s
~.J -
j
~.
~·.·•':<~
;t;.,~~·
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 63
,through the issuance of an annuity (Group Annuity contract # 8281/Certificate #31578) by
Metropolitan Life Insurance Company ("Metropolitan Life").
3. lvir. Cortez is married and bas one minor child and one on the way therefore
currently has two dependents, as that tenn is defined in the Texas Transfer Statute.
4. }.1r. Cortez agreed in a Purchase Contract dated on or about April 8, 2015 (the
"Transfer Agreement," a copy of which was filed with the Court as an exhibit to the
Application) to transfer and assign to J.G. Wentworth 328 partial monthly payments in the
amount of One Hundred Seventy-Eight and No/1 00 Dollars ($178.00) conm1encing August 10,
2015 and continuing through and including November 10, 2042. (These monthly payments
which were to be transferred and assigned by Mr. C01iez from August of 2015 through
November of 2042 shall hereafter be refened to as the "Cortez Assigned Payments." The total
monthly structured settlement/annuity payments coming due and owing from August of 2015
through November of 2042 [the "Tem1"], shall be refened to as the «Tenn Payments." The
portion of each monthly Term Payment coming due and owing from August of 2015 through
November of 2042 that are not being transferred and assigned by Mr. Cortez and which shall be
retained by }.1r. Cortez, shall hereafter be referred to as the "Retained Cortez Monthly
Payments").
5. The proposed trm1sfer of the Cortez Assigned Payments by Mr. Cortez to J.G.
Wentworth, as reflected in the Transfer Agreement and described in the Application, satisfies
m1d complies with all statutory requirements of Chapter 141 of the Texas Civil Practice and
Remedies Code (the "Texas Transfer Statute"), and does not contravene m1y applicable statute
or an order of any court or other governn1ental authority. The transfer also satisfies the Internal
Revenue Code Section 5891 and does not contravene any Federal or State statute or the order of
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 64
'6. The transfer is in the best interest of Payee, taking into account the welfare and
support of Payee's dependents, if any.
7. Payee has been advised m vvriting by J.G. Wentwo1ih to seek independent
professional advice regarding the transfer, and has either received the advice or knowingly
waived the opportunity to seek and receive said advice in writing.
8. Disclosures to the Payee were made, and notices of the hearing and the filing of
the Application were provided to all interested parties, including Metropolitan Life and
Metropolitan Insurance (collectively, sometimes refened to herein as "MetLife") in accordance
with the Texas Transfer Statute. Payee has been advised that his death prior to the due date of
the last Cortez Assigned Payment shall not affect the transfer of the Cortez Assigned Payments
from Payee to J.G. WentwOiih and Payee understands he is giving up his rights, and the rights
of his heirs, successors and/or beneficiaries, to the Cortez Assigned Payment, and Payee has
requested that this transfer be approved.
9. The Court has considered the objection/opposition filed by Metropolitan
Insurance and Metropolitan Life and herby ovenules and denies said objection/opposition.
10. The Court further fmds that Metropolitan Insurance and Metropolitan Life are
not being and will not be required or directed to divide any stmctured settlement/annuity
payments amongst Mr. COiiez and J.G. Wentvvorth or any other party.
11. This Order is a "Qualified Order" pursuant to 26 U.S.C. sec. 5891, et seq.
Based on the foregoing findings and the evidence submitted to the Court and being
satisfied that the proposed transfer satisfies all applicable statutory requirements, IT IS
ORDERED, ADJUDGED, AND DECREED that the Application is GRAl"\l'TED and the
transfer and assignment of all of Payee's right, title, and interest in and to the Cortez Assigned
Payments by the Payee to J.G. WentwOiih, is APPROVED.
FTNALOlWRR APPROVTNQTRANSFRR OFPARTIAL
STRUCTURED SETTLEMENT PAYMENT RIGHTS - Page 3 of 6
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 65
IT IS FURTHER ORDERED that the MetLife Opposition 1s hereby denied and
overruled.
IT IS FURTHER ORDERED that in furtherance of the Court's order granting the
Application and approving the proposed transfer described herein, Metropolitan Life Insurance
Company and Metropolitan Insurance and A1muity Company, are hereby authorized and directed
to pay and remit to J.G. Wentwo1th (as Mr. Cortez designated and authorized payment agent for
purposes ofreceiving the Term Payments) 100% of the Term Payments (the monthly structured
settlement/mmuity payments that come due and owing by Metropolitm1 Life at1d/or Metropolitan
Insurance from August of 2015 through November of 2042), when and as said payments come
due. Upon receipt of each monthly Tenn Payment, J.G. Wentworth is entitled to retain the
portion of each Term Payment that constitutes a Cortez Assigned Payment ($ 178.00 out of the
total monthly payment of$ 678.00 per month), and is ordered to timely pay and remit to Mr.
Cortez the poriion of said Term Payments that constitute the Remaining Cortez Monthly
Payments. (Tilis arrangement shall be refened to as the "Servicing Anangement.")
IT IS FURTHER ORDERED that the Tenn Payments shall be sent directly to J.G.
Wentworth by Metropolitan Life pursum1t to this order and the Servicing Arrm1gement described
herein, at the following address or to such other address designated by J.G. Wentworth:
J.G. \Ventworth Originations, LLC
P.O. Box 83364
Woburn, MA 01813-3364
IT IS FURTHER ORDERED that Metropolitan Life and Metropolitan Insurance shall
absolutely, irrevocably, and forever discharge and satisfY their legal and contractual obligation
to make the Term Payments (including the Cortez Assigned Payments and the Remaining
Cortez Monthly Payments) by paying and remitting said Tenn Payments to J.G. Wentworth
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 66
·and Metropolitan Insurance are forever released from, and shall have not have, any current or
future liability or obligation to Mr. Cortez for the Tem1 Payments. By signing and approving
this order, 1\1r. Cortez acknowledges, understands, and agrees that he will receive the
Remaining Cortez Monthly Payments through J.G. Wentworth (as his designated payment agent
solely for purposes of receiving and distributing the Tenn Payments pursuant to the Servicing
Anangement and this Final Order) and that Metropolitan Life and Metropolitan Insurance shall
not be obligated to make any portion of the Tem1 Payments directly to Mr. Cortez; that 1\1r.
Cortez shall look solely and exclusively to J.G. Wentworth for the Remaining Cortez Monthly
Payments; and that Metropolitan Life and Metropolitan Insurance shall not, following the
signing ofthis Final Order by the Court, have any obligation or liability (contractual or legal) to
Mr. Cortez relative to the Tem1 Payments, including the Remaining Cortez Monthly Payments.
IT IS FURTHER ORDERED that the Remaining Cortez Monthly Payments shall
remain the property of 1\1r. Cortez, even though said payments are to be paid and remitted to
J.G. Wentw01ih pursuant to the Servicing ArTangement and this Final Order.
IT IS FURTHER ORDERED that Metropolitan Life and Metropolitan Insurance are not
being forced or required or ordered to split or divide any structured settlement/annuity payments
a111ongst Mr. Cortez and J.G. Wentworth and shall not be required to do so in the future.
IT IS FURTHER ORDERED that Metropolitan Life and Metropolitan Insurance shall
irr-evocably change the beneficiary for the Cortez Assigned Payments to the Transferee, and no
other individual or entity other than the Transferee shall have the authority to change the
beneficiary for the Cortez Assigned Payments.
IT IS FURTHER ORDERED that pursuant to the Texas Transfer Statute, by making and
delivering the Term Payments to J.G. Wentworth as set forth in the preceding paragraphs,
THE SiATE OF T'EN\S
COUNiY OF 8R.A10RtA . . .
1a:rti!y that !he abo~-e and foreg..."'~~.:s a run, boo aoo.
o;ffi)ct photcage 6 of 6
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 68
TAB 13
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 69
Filed 07-01-2015 AT 11 :29 AM
R. David Guerrero
District Clerk
Jim Wells County, Texas
SANDRA GARCIA, Deputy
CAUSE NO. 15-03-54382-CV
INRE: § IN THE DISTRICT COURT
§
ESPERANZA HUGHES § JIM WELLS COUNTY, TEXAS
§
§ 79TH JUDICIAL DISTRICT
FINAL ORDER APPROVING TRANSFER OF
PARTIAL STRUCTURED SETTLEMENT PAYMENT RIGHTS
On the 81h day of June 2015, this case came on for final hearing and trial and
consideration by the Court of the Application for Approval of Structured Annuity Benefits (the
"Application") filed by Peachtree Settlement Funding, LLC, as the transferee ("Peachtree" or
"Transferee"), and Esperanza Hughes as the payee ("Payee" or "Ms. Hughes.") pursuant to
Chapter 141 ofthe Texas Civil Practice & Remedies Code (the "Texas Transfer Statute"). The
Court, after due consideration of the Application, the Objection and Response to the proposed
transfer filed by Metropolitan Tower Resources Group, Inc. and Metropolitan Life Insurance
Company (the "MetLife Opposition"), and the other pleadings and documents on file with the
Court and the evidence and testimony presented at the hearing, hereby makes the following
findings:
1. This Court has subject matter jurisdiction over this proceeding and personal
jurisdiction over the parties. Venue ofthis matter is proper in Jim Wells County, Texas and this
Court because Ms. Hughes resides in Jim Wells County, Texas. All persons/entities entitled to
be served and/or provided notice of these proceedings have been served and/or provided such
notice or have appeared in this proceeding directly and/or through counsel.
2. Ms. Hughes is currently entitled to receive structured settlement payments from
Metropolitan Tower Resources Group, Inc. ("Metropolitan Tower"). Metropolitan Tower
funded its obligation to make those structured settlement payments to Ms. Hughes through the
FINAL ORDER APPROVING TRANSFER OF PARTIAL
STRUCTURED SETTLEMENT PAYMENT RIGHTS -- Page 1 of 7
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 70
issuance of an annuity (Group Annuity contract# 8298/Certificate # 84882) by Metropolitan
Life Insurance Company ("Metropolitan Life").
3. Ms. Hughes is married and has one minor child and therefore has two
dependents, as that term is defined in the Texas Transfer Statute.
4. Ms. Hughes agreed in a Purchase Contract dated on or about March 21, 2015
(the "Transfer Agreement," a copy of which was filed with the Court as an exhibit to the
Application) to transfer and assign to Peachtree 237 partial monthly payments in the amount of
One Thousand Five Hundred and No/100 Dollars ($1,500.00) commencing August 1, 2015 and
continuing through and including April 1, 2035. (These monthly payments which are being
transferred and assigned by Ms. Hughes from August of 2015 through April of 2035 shall
hereafter be referred to as the "Hughes Assigned Payments." The total monthly structured
settlement/annuity payments coming due and owing from August of 2015 through April of
2035 [the "Term"], shall be referred to as the "Term Payments." The portion of each monthly
Term Payment coming due and owing from August of 2015 through April of 203 5 that are not
being transferred and assigned by Ms. Hughes and which shall be retained by Ms. Hughes after
this proceeding concludes, shall hereafter be referred to as the "Retained Hughes Payments").
5. The proposed transfer of the Hughes Assigned Payments by Ms. Hughes to
Peachtree, as reflected in the Transfer Agreement and described in the Application, satisfies and
complies with all statutory requirements of Chapter 141 of the Texas Civil Practice and
Remedies Code (the "Texas Transfer Statute"), and does not contravene any applicable statute
or an order of any court or other governmental authority. The transfer also satisfies the Internal
Revenue Code Section 5891 and does not contravene any Federal or State statute or the order of
any court or responsible administrative authority.
FINAL ORDER APPROVING TRANSFER OF PARTIAL
STRUCTURED SETTLEMENT PAYMENT RIGHTS -- Page 2 of 7
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 71
6. The transfer is in the best interest of Ms. Hughes, taking into account the welfare
and support ofher dependents.
7. Ms. Hughes has been advised in writing by Peachtree to seek independent
professional advice regarding the transfer, and has either received the advice or knowingly
waived the opportunity to seek and receive said advice in writing.
8. Disclosures to the Payee were made, and notices of the hearing and the filing of
the Application were provided to all interested parties, including Metropolitan Life and
Metropolitan Tower (collectively, sometimes referred to herein as "MetLife") in accordance
with the Texas Transfer Statute. Payee has been advised that her death prior to the due date of
the last Hughes Assigned Payment shall not affect the transfer of the Hughes Assigned
Payments from Payee to Peachtree and Payee understands she is giving up her rights, and the
rights of her heirs, successors and/or beneficiaries, to the Hughes Assigned Payments, and
Payee has requested that this transfer be approved.
9. The Court has considered the objection/opposition filed by Metropolitan Tower
and Metropolitan Life and herby overrules and denies said objection/opposition. Metropolitan
Tower and Metropolitan Life's request for an award of attorneys fees is hereby denied.
10. The Court further finds that Metropolitan Tower and Metropolitan Life are not
being and will not be required or directed to divide any structured settlement/annuity payments
amongst Ms. Hughes and Peachtree or any other party.
11. This Order is a "Qualified Order'' pursuant to 26 U.S.C. sec. 5891, et seq.
12. Ms. Hughes and Peachtree agreed that the purchase price to be paid relative to the
transaction between Peachtree and Ms. Hughes would be One Hundred Fifty-Eight Thousand
Five Hundred Sixteen and 92/100 Dollars ($158,516.92).
FINAL ORDER APPROVING TRANSFER OF PARTIAL
STRUCTURED SETTLEMENT PAYMENT RIGHTS --Page 3 of 7
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 72
Based on the foregoing findings and the evidence submitted to the Court and being
satisfied that the proposed transfer satisfies all applicable statutory requirements, IT IS
ORDERED, ADJUDGED, AND DECREED that the Application is GRANTED and the
transfer and assignment of Ms. Hughes right, title, and interest in and to the Hughes Assigned
Payments to Peachtree is APPROVED.
IT IS FURTHER ORDERED that the MetLife Opposition is hereby denied and overruled
and the request for attorneys fees by Metropolitan Tower and Metropolitan Life is denied.
IT IS FURTHER ORDERED that in furtherance of the Court's order granting the
Application and approving the proposed transfer described herein, Metropolitan Life Insurance
Company and Metropolitan Tower Resources Group, Inc., are hereby authorized and directed to
pay and remit to Peachtree (as Ms. Hughes's designated and authorized payment agent for
purposes of receiving the Term Payments) 100% of the Term Payments (the monthly structured
settlement/annuity payments that come due and owing by Metropolitan Life and/or Metropolitan
Tower from August of 2015 through April of 2035), when and as said payments come due.
Upon receipt of each monthly Term Payment, Peachtree is entitled to retain the portion of each
Term Payment that constitutes a Hughes Assigned Payment($ 1,500.00 out of the total monthly
payment of$ 6,500.00 per month), and is ordered to pay and remit to Ms. Hughes the portion of
said Term Payments that constitute the Remaining Hughes Payments. (This arrangement shall
be referred to as the "Servicing Arrangement.")
IT IS FURTHER ORDERED that the Term Payments shall be sent directly to Peachtree
by Metropolitan Life pursuant to this order and the Servicing Arrangement described herein, at
the following address or to such other address designated by Peachtree:
F!NAT. OROVR APPROV!Nr. TR4.NSFVR OF PARTIAl.
STRUCTURED SETTLEMENT PAYMENT RIGHTS -- Page 4 of 7
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 73
Peachtree Settlement Funding, LLC
P.O. Box 83364
Woburn, MA 01813-3364
IT IS FURTHER ORDERED that Metropolitan Life and Metropolitan Tower shall
absolutely, irrevocably, and forever discharge and satisfy their legal and contractual obligation
to make the Term Payments (including the Hughes Assigned Payments and the Remaining
Hughes Payments) by paying and remitting said Term Payments to Peachtree pursuant to this
court order and the Servicing Arrangement and by doing so, Metropolitan Life and Metropolitan
Tower are forever released from, and shall have not have, any current or future liability or
obligation to Ms. Hughes for the Term Payments. By signing and approving this order, Ms.
Hughes acknowledges, understands, and agrees that she will receive the Remaining Hughes
Payments through Peachtree (as her designated payment agent solely for purposes of receiving
and distributing the Term Payments pursuant to the Servicing Arrangement and this Final
Order) and that Metropolitan Life and Metropolitan Tower shall not be obligated to make any
portion of the Term Payments directly to Ms. Hughes; that Ms. Hughes shall look solely and
exclusively to Peachtree for the Remaining Hughes Payments; and that Metropolitan Life and
Metropolitan Tower shall not, following the signing of this Final Order by the Court, have any
further payment obligation or liability (contractual or legal) to Ms. Hughes relative to the Term
Payments, including the Remaining Hughes Payments.
IT IS FURTHER ORDERED that the Remaining Hughes Payments shall remain the
property of Ms. Hughes, even though said payments are to be paid and remitted to Peachtree
pursuant to the Servicing Arrangement and this Final Order.
IT IS FURTHER ORDERED that Metropolitan Life and Metropolitan Tower are not
being forced or required or ordered to split or divide any structured settlement/annuity payments
amongst Ms. Hughes and Peachtree and shall not be required to do so in the future.
FINAL ORDER APPROVING TRANSFER OF PARTIAL
STRUCTURED SETTLEMENT PAYMENT RIGHTS -- Page 5 of 7
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 74
IT IS FURTHER ORDERED that Metropolitan Life and Metropolitan Tower shall
irrevocably change the beneficiary for the Hughes Assigned Payments to the Transferee, and no
other individual or entity other than the Transferee shall have the authority to change the
beneficiary for the Hughes Assigned Payments.
IT IS FURTHER ORDERED that pursuant to the Texas Transfer Statute, by making and
delivering the Term Payments to Peachtree as set forth in the preceding paragraphs, MetLife
shall, as to all parties except Peachtree, be discharged and released from any and all liability for
the Term Payments.
rt All costs of Comt ate taxed ~tg~tiH~t MetLife. This Order is a final judgment and is
intended to and does fully and finally dispose of all claims and relief requested in this
proceeding. All other relief not expressly granted in this order is DENIED.
July
1
SIGNED this ~ day of~2015.
FINAL ORDER APPROVING TRANSFER OF PARTIAL
STRUCTURED SETTLEMENT PAYMENT RIGHTS --Page 6 of 7
APPENDIX OF APPELLEE PEACHTREE SETTLEMENT FUNDING, LLC -- PAGE 75
JUtVl.8- 2015 12: 58F' FROI'·l: RCCUPRTE FF JJ.JT U Jl!-i, I C36 i ) 6E?A -4388
Agt\~d to and Appn:::wed
As to Form and Substa-nce:
NESBITT, VASSAR & MCCOVllN~ .LLP
l :5851 DaUw .Parkway~ Suite 800
Addjs(m~ TX 75Q01
PH, (972) 371