239 Cal. App. 4th 741
Cal. Ct. App.2015Background
- Felicia Alford, a minor, settled a personal injury claim against State Farm insureds in 1994 with a court-approved structured settlement funded by an annuity from State Farm Life.
- The original schedule provided guaranteed payments: $10,000 annually (2003–2006), then $50,000 (2009), $100,000 (2016), and $151,558.80 (2021).
- In 2012, Alford entered a contract with RSL reducing the August 11, 2016 payment to $30,000 in exchange for $50,000; RSL assigned its interest to Extended Holdings, Ltd. (EHL).
- The trial court approved the 2012 transfer; State Farm did not contest it, so State Farm was obligated to pay $50,000 to EHL from the 2016 payment.
- In 2013, Alford executed a second transfer with RSL for $25,000 of the 2016 $100,000 payment and $25,000 of the 2021 $151,558.80 payment, in exchange for a current payment of $22,500, and RSL sought court approval.
- State Farm opposed the 2013 transfer on grounds including that the transfer would require division of payments in violation of the Structured Settlement Protection Act (SSPA) and would increase State Farm’s burdens; the trial court approved, State Farm appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the transfer requires division of payments under the SSPA | RSL argues the statute is permissive (may). | State Farm contends the statute is mandatory; division is prohibited. | Mandatory prohibition on division; order to split payments reversed. |
| Whether State Farm waived or is estopped from objecting | Waiver/estoppel due to 2012 consent and later positions should bind State Farm. | State Farm expressly preserved rights and did not intend to surrender them. | No waiver or judicial estoppel; rights reserved and not forfeited. |
| Effect of the 2012 order on future transfers | 2012 order implies waiver of future objections. | Explicit language shows waiver did not apply to future transactions. | 2012 order does not bar future objections; preserved rights remain. |
Key Cases Cited
- Gogri v. Jack in the Box, Inc., 166 Cal.App.4th 255 (2008) (statutory interpretation and de novo review of statute)
- Martinez v. Enterprise Rent-A-Car Co., 119 Cal.App.4th 46 (2004) (foreign authorities persuasive for SSPA interpretation)
- People v. Harner, 213 Cal.App.3d 1400 (1989) (negative form of may indicates mandatory prohibition)
- J.G. Wentworth Originations, LLC v. Freelon, 446 S.W.3d 426 (Tex.Ct.App.2014) (SSPA-like provision interpreted as prohibiting division)
- German-American Sav. Bank v. Gollmer, 155 Cal. 683 (1909) (waiver principles; not controlling here)
- Tarrant Bell Prop., LLC v. Superior Court, 51 Cal.4th 538 (2011) (interpretation of permissive vs mandatory language)