Symetra Life Insurance Company et al v. Rapid Settlements LTD

Filing 323

DECLARATORY JUDGMENT entered..(Signed by Judge Lee H Rosenthal) Parties notified.(leddins, )

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
SYMETRA LIFE INSURANCE COMPANY, §
et al.,
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§
Plaintiffs,
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§
NATIONAL ASSOCIATION OF
§
SETTLEMENT PURCHASERS,
§
§
Intervenor,
§
§
VS.
§
§
RAPID SETTLEMENTS, LTD.,
§
§
Defendant.
§

CIVIL ACTION NO. H-05-3167

DECLARATORY JUDGMENT
In accordance with the court’s Amended Memorandum and Order of today’s date, this court
grants declaratory judgment in favor of of Symetra Life Insurance Company and Symetra Assigned
Benefits Service Company (collectively, “Symetra”) and the National Association of Settlement
Purchasers, as follows:
1.

Rights of first refusal, security interests, and powers of attorney coupled with interests in
structured-settlement payment rights from payees are “transfers” under the state Structured
Settlement Protection Acts (the “Acts” or “Act”).

2.

Rapid Settlements, Ltd. (“Rapid”) must comply with the applicable Act when seeking any
transfer. Such compliance includes seeking court approval of any transfer agreement under
those Acts making court approval a condition precedent to the effectiveness of any transfer
agreement. See, e.g., CAL. INS. CODE § 10136(c)(1); NEV. REV. STAT. § 42.030(1); W. VA.

CODE § 46-A-6H-3(a). Rapid may not use arbitration or other methods to effect a transfer
in a manner prohibited by the Acts or other law, as discussed in detail in this court’s opinions
issued earlier in this litigation.
3.

Section 5891 of the Internal Revenue Code determines what tax treatment a transfer receives
if it is effective, not whether a transfer is effective. Section 5891 does not preempt the Acts.

4.

If Rapid or its affiliated or related entities or individuals — before, during, or after proposing
to acquire structured-settlement payment rights from a payee under the applicable Act —
gives the payee a loan, advance, or any consideration before a court approves the proposed
transfer under the applicable Act, Rapid or its affiliated or related entities or individuals may
not garnish, levy on, attach, seize, assert an interest in, secure a judgment or arbitration
award related to, or otherwise make a claim to the payee’s structured-settlement payment
rights based on that loan, advance payment, or consideration, in the absence of court
approval of the specific contemplated transfer as required by the applicable Act.

5.

Symetra may object to Rapid’s proposed transfers of structured-settlement payment rights.

SIGNED on May 1, 2012, at Houston, Texas.
______________________________________
Lee H. Rosenthal
United States District Judge

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