THE COURTS

Title 231--RULES
OF CIVIL PROCEDURE

PART I. GENERAL

[231 PA. CODE CHS. 200]

Proposed New Rule 229.2 Governing Petitions to Transfer Structured Settlement Payment Rights; Proposed Recommendation No. 214

[36 Pa.B. 3521]
[Saturday, July 8, 2006]

   The Civil Procedural Rules Committee is proposing that new Rule 229.2 governing petitions to transfer structured settlement payment rights be promulgated as set forth in this recommendation.

   The recommendation is published in full in the Pennsylvania Bulletin, the advance reports of West's Atlantic and Pennsylvania Reporters, the Pennsylvania Law Weekly, the Philadelphia Legal Intelligencer and the Pittsburgh Legal Journal. The recommendation is also published electronically as part of the Home Page of the Administrative Office of Pennsylvania Courts at http://www.aopc.org.

   The proposed recommendation has not been submitted to the Supreme Court of Pennsylvania for review but rather is being submitted to the bench and bar for comments and suggestions prior to its submission to the Supreme Court. All communications should be sent not later than August 31, 2006 to:

Harold K. Don, Jr.,
Counsel
Civil Procedural Rules Committee
5035 Ritter Road, Suite 700
Mechanicsburg, Pennsylvania 17055

or E-Mail to
civil.rules@pacourts.us

Annex A

TITLE 231. RULES OF CIVIL PROCEDURE

PART I. GENERAL

CHAPTER 200. BUSINESS OF COURTS

Rule 229.2. Petition to Transfer Structured Settlement Payment Rights.

   (a)  Words used in this rule, which are defined by the Structured Settlement Protection Act, shall have the meaning set forth in the Act.

   Official Note:  See Section 2 of the Act, 40 P. S. § 4002, which defines numerous terms including ''best interests,'' ''dependents,'' ''payee,'' ''structured settlement obligor,'' and ''structured settlement payment rights.''

   (b)  A petition to transfer structured settlement payment rights shall be filed in the county in which the payee is domiciled.

   Official Note:  See Section 4 of the Act, 40 P. S. § 4004, providing that the court of common pleas of the judicial district in which the payee is domiciled shall have jurisdiction over the petition.

   (c)  The parties to the petition shall be the payee and the transferee.

   (d)  The petition shall be verified by the transferee and shall contain:

   (1)  the payment provisions of the structured settlement agreement and the payment rights that the payee seeks to transfer,

   (2)  separate paragraphs which in bold type sets forth

   (i)  the net amount payable to the payee after deduction of all commissions, fees, costs, expenses and charges, and

   (ii)  the following statement setting forth the interest rate: ''Based on the net amount that the payee will receive from this transaction ($ ______ ) and the amounts and timing of the structured settlement payments that would be assigned, the payee is, in effect, paying interest at a rate of _____ % per year.''

   (3)  three attachments:

   (i)  a Payee's Affidavit in Support of Petition, in the form prescribed by subdivision (f) as Attachment 1,

   (ii)  an initial order of court scheduling the hearing, in the form prescribed by subdivision (g), and

   (iii)  a final order of court granting the petition, in the form prescribed by subdivision (h).

   Official Note:  These three attachments are in addition to any other documents which are required to support the findings set forth in Section 3 of the Act, 40 P. S. § 4003.

   Subdivision (d) requires that two documents be verified. As the two documents contain different information, each must be verified by a different person. The petition to transfer structured settlement payment rights must be verified by the transferee. The Payee's Affidavit in Support of Petition must be verified by the payee. The transferee is not required to verify the information set forth in the Payee's Affidavit.

   (e)  If the petition and Payee's Affidavit in Support of Petition meet the requirements of this rule and contain factual allegations which, if established, will support the findings set forth in Section 3 of the Act, 40 P. S. § 4003, the court shall enter an order scheduling a hearing date.

   (f)  The Payee's Affidavit in Support of Petition shall be substantially in the following form:

(Caption)

Payee's Affidavit in Support of
Petition to Transfer Structured Settlement Rights

I state that the information below is true and correct:

   1.  Payee's name, address and age:  __________
 
__________

   2.  Marital Status:

         ____ Never Married;      ____ Married;
         ____ Separated;             ____ Divorced

If married or separated, name of spouse:  ______ .

   3.  Minor children and other dependents:

   Names, ages, and places of residence: __________
 
__________

   4.  Income:

   (a)  Payee's monthly income and sources: __________
 
__________

   (b)  If presently married, spouse's monthly income and sources: __________
 
__________

   5.  Child support, alimony or alimony pendente lite

   Obligation to pay: ____ Yes   ____ No

   If yes, describe the obligations and state whether there are arrearages: __________
 
__________

   6.  Previous petitions to transfer

   Have you previously filed a petition to transfer structured settlement payment rights?

   ____ Yes   ____ No

   If yes, for each petition that you filed,

   (a)  state the name of the court, the term and number, and the court ruling: __________
 
__________

   (b)  if you received money, itemize the manner in which the money was used and attach receipts and cancelled checks: __________
 
__________

   7.  Prior approval of this structured settlement

   Has any court or responsible administrative authority previously approved the structured settlement that is the subject of this petition? ____ Yes   ____ No

   8.  Reasons for transfer

   Describe in detail your reasons for the proposed transfer, including an explanation as to why a sale of a lesser amount of the structured settlement amount will not better serve your interests: __________
 
__________

   9.  Payment of debts

   If you seek the transfer in order to pay debts, lists each debt, including the name of the creditor and the amount presently owed:

Debt	Creditor	Amount Owed
______	______	$______
______	______	$______
______	______	$______

Verification

   I verify that the statements made in this affidavit are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. § 4904, relating to unsworn falsification to authorities.

DATE: ______      __________Signature                     

   (g)  The proposed initial order of court shall be substantially in the following form:

(CAPTION)

Initial Order of Court

   On this ____ day of ______ , ______ , it is ordered that a hearing on this Petition to Transfer Structured Settlement Payment Rights will be held on ______ , in Courtroom _____ at _____ o'clock. Within seven (7) days, the transferee shall notify the structured settlement obligor and the annuity issuer of the hearing date. The payee shall bring income tax returns for the prior two (2) years to the hearing. The payee, the payee's spouse, and any person receiving child support payments, alimony, or alimony pendente lite should attend the hearing.

BY THE COURT:
               _________________
J.      

   (h)  The proposed final order of court shall be substantially in the following form:

(CAPTION)
Final Order of Court

   On this ____day of ______ , _____, it is ordered that the Petition for Court Approval for Transfer of Structured Settlement Payment Rights is granted.

   The court specifically finds that the payee has established that the transfer is in the best interests of the payee or the payee's dependents. The court also finds the remaining requirements of the Structured Settlement Protection Act, 40 P. S. § 4001 et seq., have been met.

   The payee shall receive from the transferee, as of ______ , the amount of $ _____ , from which no funds are owed for counsel fees, administrative fees, or other costs, fees or expenses.

BY THE COURT:
               _________________
J.      

Explanatory Comment

   In 2000, the General Assembly passed the Structured Settlement Protection Act, Act of February 11, 2000, P. L. 1, 40 P. S. § 4001 et seq., providing for, inter alia, the court of common pleas to permit the transfer of structured settlement payment rights only upon an express finding that the transfer is in the best interests of the payee. While the Act requires the disclosure of information to the payee concerning the transfer, it does not specify what factual allegations or other information must be included in the petition to enable the trial court to make its determination. New Rule 229.2 is intended to provide the additional information necessary for a trial court to determine whether a petition to transfer structured settlement payment rights satisfies the best interest standard.

   Subdivision (c) of the proposed rule identifies the parties to the petition as the payee and the transferee. The transferee is required to verify the petition and, in doing so, must set forth the circumstances surrounding the proposed transfer of structured settlement payment rights. The petition must show that the requirements of the Act have been satisfied, i.e., the proper disclosures have been made to the payee. In contrast, the payee is required through the Payee's Affidavit in Support of Petition to provide the necessary information to enable the trial to determine whether the transfer is in the best interests of the payee. The court will enter an orderscheduling a hearing date only if the petition and the payee's affidavit meet the requirements of the rule and contain factual allegations, which, if established, satisfy the requirements of Section 3 of the Act, 40 P. S. § 4003.

By the Civil Procedural Rules Committee

R. STANTON WETTICK, Jr.,   
Chair

[Pa.B. Doc. No. 06-1260. Filed for public inspection July 7, 2006, 9:00 a.m.]

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