The following electronically-filed and numbered papers were read upon this motion: Notice of Motion/Order to Show Cause 1-12 Answering Papers Reply Decision/Order Petitioner seeks an Order from the Court granting it judicial approval of the transfer/sale of 144 monthly life contingent payments, the aggregate amount of which totals $148,176.00, that are due to be paid to Joseph Fontana in the future (beginning November 10, 2035 and ending October 10, 2047). Joseph Fontana will receive the net sum of $3,000.00 in exchange for the sale of those payments. The Allstate parties have not submitted any response to the requested relief, nor has Mr. Fontana, who apparently seeks to transfer/sell these payments to petitioner in exchange for the aforementioned sum of cash. New York’s Structured Settlement Protection Act (SSPA), General Obligations Law, Title 17 was enacted to provide greater protection to individuals entering into structured settlement agreements, and/or negotiating to sell or transfer a periodic payment to a third party. Since 2002, such transfers require judicial approval in order to protect the long-term financial security of the structured settlement payees (Matter of Peachtree Settlement Funding, LLC (Oladipo), 34 Misc3d 1223A [Sup Ct, Nassau County 2012]; Matter of J.G. Wentworth Originations, LLC v. Baek, 2011 NY Slip Op 30614 [U] [Sup Ct Nassau County, 2011]; Matter of Settlement Funding of New York, LLC (Ciraolo) v. Structured Settlement Trust and Allstate Life Insurance Co., 2009 NY Slip Op 32553U [Sup Ct, Nassau County, Trial Order 2009]). Specifically, General Obligations Law §5-1706 sets forth the express findings that a Court must make in order to authorize a transfer of any structured settlement payment to a third party. Among the findings required to be made for approval of the transfer are that the transfer complies with the requirements of Title 17; that the transfer “is in the best interests of the payee;” that the discount rate applied is “fair and reasonable;” that the payee has been advised in writing to seek independent professional advice regarding the transfer, and has either received such advice or knowingly waived such advice in writing. The “best interests” analysis must be approached on a case-by-case basis, considering whether the transfer of a structured settlement payment “will provide needed financial rescue without jeopardizing or irreparably impairing the financial security afforded to the payee…by the periodic payments” (Matter of the Petition of Settlement Capital Corporation (Ballos), 1 Misc3d 446, 455 [Sup Ct, Queens County 2003]; Matter of Settlement Capital Corp. v. Yates, 12 Misc.3d 1198 [A][Sup Ct Kings County 2006]). Among the factors to be considered, are the payee’s age, mental and physical capacity, maturity level, ability to show sufficient income independent of the payments sought for transfer, the stated purpose for the transfer, and the payee’s ability to appreciate the financial terms and consequences of the proposed transfer based on independent legal and financial advice (Ballos, at 455; see also Matter of Settlement Funding of NY L.L.C (Point Du Jour), 38 Misc3d 1204 [A] [Sup Ct Queens County 2012]; Matter of Settlement Funding of NY L.L.C. (Williams), 29 Misc3d 1231 [A] [Sup Ct Queens County 2010]; Matter of the Petition of Ryan R. Barr and 321 Henderson Receivables L.P. v. Hartford Life Insurance Co., 4 Misc3d 1021A [Sup Ct, Nassau County 2004]). Based upon counsel’s affirmation, Mr. Fontana has previously petitioned the Supreme Court, Suffolk County, for the same type of relief herein requested. Most of his applications (2003, 2005, 2010, and 2020) were granted, but his 2006 application was denied. In the present application, Mr. Fontana has filed an affidavit in support of this petition. The affidavit is sworn to on November 20, 2021. Mr. Fontana avers that he “will be using the $3,000 to catch up on back bills. We are behind on rent, utilities, and our phone service bills.” There is no proof supporting the plans for any of the money that he seeks. Mr. Fontana further states that he is “59 years old, single and ha[s] no minor dependents. I am retired from the police force and collect an income of approximately $50,000.00 from social security and pension;” yet, he has signed the List of Dependents form documenting the name of his spouse, Denise Fontana. There is no information as to whether Denise Fontana contributes to household income. Mr. Fontana has also failed to submit any proof of his own claimed income. These deficiencies and contradictory information, standing alone, constrain the Court to deny the application. It bears noting that Mr. Fontana declined to obtain independent professional representation concerning the legal, tax and/or financial implications of the proposed transaction, indicated by his electronic signature on the form supplied by petitioner, who is not a disinterested, impartial advocate for the payee (see Matter of Settlement Capital Corporation (Ballos), supra at fn. 4). Furthermore, the petition is not verified by anyone from J.G. Wentworth, but only by counsel for petitioner; therefore, the statements made therein are not evidence, including that the transfer of payments complies with all applicable statutes. The petitioner/transferee must demonstrate that the discount rate used to determine the gross advance amount, and the fees and expenses used to determine the net advance amount, are “fair and reasonable” (CPLR §5-1706 (b); Matter of Settlement Capital Corporation (Ballos), supra at 460-62; Matter of Petition of Washington Square Financial LLC v. Allstate Assignment Company, 29 Misc3d 1204A, [Sup Ct Queens County 2010]). Courts have routinely declined to accept as fair and reasonable high discount rates, when transferees fail to explain why a particular discount rate is selected, and why the rate should be deemed fair and reasonable (Matter of Settlement Funding of New York, LLC for Approval of a Transfer of a Structured Settlement payment Right of Christlyne B. Point Du Jour, 29 Misc3d 1230A [Sup Ct, Queens County 2010); Matter of Settlement Funding of New York, LLC for Approval of a Transfer of a Structured Settlement Payment Right of Kareem M. Williams, supra; Matter of Petition of Washington Square Financial LLC, supra; Settlement Funding of New York, LLC v. Hartford-Comprehensive Employee Ben. Svc. Co., 25 Misc3d 1220A [Sup Ct, Queens County 2009]; Matter of the Petition of Settlement Capital Corporation (Ballos), supra). In this case, and independent from the deficiencies and contradictory information contained in Mr. Fontana’s affidavit, the petitioner has utterly and abysmally failed to demonstrate the fairness and reasonableness of the discount rate. In fact, this Court finds that the proposed transfer/sale is unconscionable. The petitioner fails to explain why the discount rate used is fair and reasonable aside from the conclusory statement made in paragraph 15 (b) of the petition. Furthermore, in exchange for future guaranteed aggregate payments of $148,176.00, Mr. Fontana will receive the paltry sum of $3,000.00, which is only 2 percent of the aggregate amount of the payments, and 2.46 percent of the discounted present value of the aggregate payments ($121,506.34). Relative to the 2.46 percent calculation, the Disclosure Statement states that, based on the proposed $3,000.00 that Mr. Fontana would receive, “this is the equivalent of interest payments to Us at a rate of 23.03 percent per year.” The Court finds the proposed transfer/sale to be eminently unfair, unreasonable, and unconscionable. Thus, it is clear to this Court that Mr. Fontana is not receiving the benefit of the settlement he reached, and that the proposed transaction is not in his best interests. For all the foregoing reasons, including the paucity of proof, the incongruity concerning a spouse, and the applied discount rate without a scintilla of evidence of its reasonableness, the Court denies the instant petition, and the proceeding is dismissed. The foregoing constitutes the Decision and Order of this Court. Dated: February 7, 2022 FINAL DISPOSITION [X] NON-FINAL DISPOSITION []
