J.G. Wentworth Originations, LLC v. Freelon
| Decision Date | 12 August 2014 |
| Docket Number | No. 01–13–00059–CV.,01–13–00059–CV. |
| Citation | 446 S.W.3d 426 |
| Parties | J.G. WENTWORTH ORIGINATIONS, LLC, Appellant v. Shantel D. FREELON and RSL Funding, LLP, Appellees. |
| Court | Texas Court of Appeals |
Earl S. Nesbitt, David S. Vassar, Matthew T. Bracy, Patrick P. Sicotte, Nesbitt, Vassar & McCown, L.L.P., Addison, TX, for Appellant.
E. John Gorman, John R. Craddock, The Feldman Law Firm LLP, Houston, TX, for Appellees.
Panel consists of Justices JENNINGS, HIGLEY, and SHARP.
Appellant, JG Wentworth Originations, LLC (“JGW”), challenges the district court's order approving the application of appellee, RSL Funding, LLP (“RSL”), for the transfer of certain payments to RSL from a structured settlement owned by Shantel Freelon.1 In three issues, JGW contends that the district court erred in granting RSL's application in contravention of two prior court orders and the Structured Settlement Protection Act (“SSPA”).2
We affirm.
As a part of a 1992 settlement agreement in a personal injury suit brought by her parents, Freelon is entitled to $1,596.16 per month, with three percent annual increases, beginning October 1, 2009 and continuing for twenty years through September 2029, and thereafter for the duration of her life. The defendants who settled the lawsuit assigned to Confederation Life Insurance and Annuity Company (“Confederation”) the obligation to make the payments to Freelon, and Confederation purchased an annuity to fund Freelon's monthly payments. Pacific Life Insurance Company (“Pacific”) subsequently assumed the obligation to make the payments, and it presently retains that obligation.
In 2008, Freelon entered into a transfer agreement with 321 Henderson Receivables Originations, LLC, now known as JGW. Freelon agreed to convey from her structured settlement monthly payments in the amount of $450 from January 1, 2009 through and including September 1, 2009 and monthly payments in the amount of $596.16, with three percent annual increases, from October 1, 2009 through and including December 1, 2019 (the “2009 JGW—Freelon Transaction”). The 165th District Court of Harris County approved the transfer and signed a final order3 (the “2009 JGW—Freelon Order”). The 2009 JGW—Freelon Order assigned the pertinent payments to JGW and directed Pacific to make the payments to JGW.
Because Freelon sold only a portion of her structured-settlement payments, the 2009 JGW—Freelon Order approved a payment “Servicing Arrangement,” which required that Pacific remit 100 percent4 of the monthly structured-settlement payments to JGW (the “2009 Servicing Arrangement”). Pursuant to the 2009 Servicing Arrangement, JGW was to retain its portion of each monthly payment it received from Pacific, which constituted its assigned payment, and then remit the remaining portion due to Freelon. The 2009 JGW—Freelon Order provided that the 2009 Servicing Arrangement was to remain “binding and fully enforceable against [JGW] and Ms. Freelon, and under no circumstances [would JGW] or Ms. Freelon seek to compel [Pacific], nor [would Pacific] be required, to modify the [2009] Servicing Arrangement so as to redirect any portion of the affected periodic payments to any entity other than [JGW].”
In 2011, Freelon completed a second transaction with JGW to sell it additional portions of her monthly structured-settlement payments. Freelon agreed to convey from her structured settlement to JGW monthly payments in the amount of $425, with three percent annual increases, beginning April 1, 2011 and continuing through and including December 1, 2019 (the “2011 JGW—Freelon Transaction”). After a hearing on March 25, 2011, the 164th District Court of Harris County approved the transfer and signed a final order5 (the “2011 JGW—Freelon Order”). The 2011 JGW—Freelon Order provided for a servicing arrangement (the “2011 Servicing Arrangement”).
The 2011 Servicing Arrangement provided that Pacific was to remit 100 percent of Freelon's monthly structured-settlement payments to JGW. JGW was to retain the portion of the payments assigned to it, including the portions of Freelon's payments transferred to it in 2009, and then remit the newly calculated remaining unassigned portion to Freelon.
Freelon subsequently entered into a third transaction to sell a portion of her monthly structured-settlement payments to RSL. The 152nd District Court of Harris County approved the transfer and signed a final order6 (the “2011 RSL—Freelon Transaction”). Because the 2011 RSL—Freelon Transaction involved the transfer of payments commencing in January 2020, one month after the final payment transferred to JGW in the 2009 and 2011 JGW—Freelon Orders came due, and one month after the end of the JGW servicing term, it did not impact the 2009 or 2011 Servicing Arrangements. The 2011 RSL—Freelon Transaction required Pacific to send 100 percent of the monthly structured-settlement payments to RSL, and RSL was obligated to remit a portion of those payments to Freelon beginning in January 2020.
In March 2012, Freelon entered into a fourth transaction to sell a portion of her monthly structured-settlement payments to RSL. RSL then filed an application in the 269th District Court of Harris County seeking approval under the SSPA of a second transfer of certain monthly structured-settlement payments from Freelon to it. The case was then transferred to the 152nd District Court. RSL sought approval for the transfer to it of 140 monthly payments of $250 beginning January 1, 2016 and continuing through and including August 1, 2027.
JGW filed a Plea in Intervention and Objection to Transfer as an interested party as defined by the SSPA. In its Plea and Objection, JGW asserted that it had a justiciable interest in the transaction based on its obligations under the Servicing Arrangements made pursuant to the 2009 and 2011 JGW—Freelon Orders; the orders are final, non-appealable, and cannot be modified or changed; and the proposed transfer could not be approved because it would contravene the 2009 and 2011 JGW—Freelon Orders.
RSL filed an amended application three days before the scheduled May 18, 2012 hearing seeking approval for a larger transaction between it and Freelon involving payments beginning on October 1, 2012 and through September 1, 2029 (“the 2012 RSL—Freelon Transaction”). After the May 18 hearing, RSL filed an Objection to Plea in Intervention and Motion to Show Authority, arguing that JGW did not have standing as an interested party under the SSPA to appear in the matter and oppose the proposed transfer between it and Freelon. On June 25, 2012, the district court signed an order denying RSL's objection to Plea in Intervention and Motion to Show Authority.
On May 24, 2012, RSL filed a pleading entitled “RSL Funding LLC's Supplemental Claim for Declaratory Judgment Against J.G. Wentworth Originations, LLC,” seeking a determination of JGW's tax liability relative to excise taxes unrelated to the RSL—Freelon proposed transfer of structured settlement payments. JGW removed RSL's declaratory-judgment action to federal court, and RSL filed a motion to transfer or sever and remand the case. JGW opposed remand of RSL's request for declaratory judgment, but did not oppose the severance and remand of RSL's application for court approval of the 2012 RSL—Freelon Transaction. The federal district court remanded the portion of the case relating to the SSPA transfer of structured-settlement payments, and it retained RSL's declaratory-judgment action.
The district court subsequently approved the 2012 RSL—Freelon Transaction and signed a final order (the “2012 RSL—Freelon Order”). The 2012 RSL—Freelon Order requires JGW to distribute the payments it receives from Pacific to RSL's designated assignee, Extended Holdings, Limited, rather than to Freelon directly. In the 2012 RSL—Freelon Order, the district court concluded that the 2012 RSL—Freelon Transaction does not contravene any prior court order or any applicable statute.
The trial court's determination that RSL's transfer application does not contravene any applicable statute or court order is a question of law that we review de novo. See Tex. Dep't of Transp. v. Needham, 82 S.W.3d 314, 318 (Tex.2002). We review a trial court's interpretation of a statute involving purely legal determinations under a de novo standard of review. See id. In construing statutes, we ascertain and give effect to the Texas Legislature's intent as expressed by the language of the statute. See State v. Shumake, 199 S.W.3d 279, 284 (Tex.2006). We use definitions prescribed by the legislature and any technical or particular meaning the words have acquired. Tex. Gov't Code Ann. § 311.011(b) (Vernon 2013). Otherwise, we construe the statute's words according to their plain and common meaning, unless a contrary intention is apparent from the context, or such a construction would lead to absurd results. City of Rockwall v. Hughes, 246 S.W.3d 621, 625–26 (Tex.2008). We presume that the legislature intended a just and reasonable result by enacting the statute. Tex. Gov't Code Ann. § 311.021(3) (Vernon 2013). When a statute's language is clear and unambiguous, it is inappropriate to resort to rules of construction or extrinsic aids to construe the language.See St. Luke's Episcopal Hosp. v. Agbor, 952 S.W.2d 503, 505 (Tex.1997) ; Ex parte Roloff, 510 S.W.2d 913, 915 (Tex.1974).
In its first and second issues, JGW argues that the 2012 RSL—Freelon Order, as a matter of law, contravenes both the 2009 and 2011 JGW—Freelon Orders because it requires and directs JGW to “act differently” by imposing on it “entirely new and different obligations and liabilities.”
The SSPA requires court approval for all direct or indirect transfers of structured settlement payment rights in Texas. See Tex. Civ. Prac. & Rem.Code Ann. § 141.004 (Vernon 2011).
The SSPA contains the following pertinent definitions:
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