RSL Funding, LLC v. Aegon Structured Settlements, Inc. and Monumental Life Insurance Company
384 S.W.3d 405
Tex. App.2012Background
- Reese settled personal injury suit; payments funded by an annuity purchased by Aegon’s predecessors from Monumental’s predecessors.
- Reese and RSL entered a transfer arrangement wherein RSL would buy portions of future lump sums and pay Reese in exchange for assignment of those rights.
- RSL filed an application under the Texas Structured Settlement Protection Act (SSPA) for court approval of the transfer, listing Reese’s estate as beneficiary.
- Aegon and Monumental later informed that Madison Reese, not Reese’s estate, was the actual beneficiary; notice defect prompted continuances to ensure proper notice to the beneficiary Madison Reese.
- The trial court approved the transfer and awarded Aegon and Monumental attorney’s fees and expenses; RSL appeals on grounds of improper statute, improper fee basis related to objections to a first-refusal/right to security interests, and improper notice defenses.
- The appellate court affirmed the fee award, applying SSPA provisions and noting that findings of fact were not requested and none were needed to uphold the award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether fees were recoverable under the SSPA after transfer approval | RSL—fees arise only post-approval; penalties not applicable | Aegon—fees arise as a consequence of noncompliance with SSPA | Yes; fees allowed under SSPA (post-transfer consequences) |
| Whether notice defects justify fee award | Notice to beneficiary was adequate under SSPA | Notice failed to meet Rule 21a last-known-address requirement | Fees upheld based on noncompliance with notice requirements and associated costs |
| Whether the term “transfer” includes transfer agreements for fee recovery | Transfer of rights must be post-approval; agreement alone not a transfer | SSPA defines transfer broadly to include transfer agreements | Fees permissible; SSPA covers transfer agreements and related costs |
Key Cases Cited
- Rush v. Barrios, 56 S.W.3d 88 (Tex.App.-Houston [14th Dist.] 2001) (implied findings when none requested; standard of review for fee awards)
- In re Rapid Settlements, Ltd., 202 S.W.3d 456 (Tex.App.-Beaumont 2006) (transfer includes transfer agreement; pre-approval issues)
- Rapid Settlements, Ltd. v. Green, 294 S.W.3d 701 (Tex.App.-Houston [1st Dist.] 2009) (arbitrator’s award as transfer under SSPA)
- Rapid Settlements, Ltd. v. Symetra Life Ins. Co., 234 S.W.3d 788 (Tex.App.-Tyler 2007) (SSPA compliance; risk to annuity issuer)