Commentary about Joseph v City of New York, in a Connecticut law firm's newsletter, has inspired old "dirigible" Patrick Hindert's published mischaracterization of the Court's findings as a "Pandora's Box" for the structured settlement industry.
According to the ancient Greek myth, Pandora (the first woman in Greek mythology) opened a container releasing all the evils of mankind, leaving only hope inside once she had closed it again. In modern times, the expression Pandora's "Box" is a version of "curiosity killed the cat" or as referred to in Wikipedia, "a metaphor for the unanticipated and irreversible consequences of technical and scientific development"
On the subject of structured settlements, Joseph v City of New York illustrates to me
- that both the plaintiff and defense need to have a structured settlement consultant to advise them about structured settlements at the time of settlement
- that attorneys from both sides need to be mindful about how settled cases are placed on record, particularly when there is a structured settlement.
- that it is a good business practice to incorporate all the required initial disclosure terms under the New York General Obligations Law 5-1702 in the executed settlement agreement as provided in the introduction to that section in the GOL (see after #4 below) as opposed to a separate unsigned disclosure.
- that a structured settlement affidavit be employed as part of the petition for Court approval of settlement (that has been used by 4structures.com, LLC and 3 other firms that I am aware of… for years), or a declaration if Court approval of the settlement is not required.
S 5-1702. Initial disclosure of structured settlement terms. In
negotiating a structured settlement of claims brought by or on behalf of
a claimant who is domiciled in this state, the defendant or defendant`s
legal representative shall disclose in writing to the claimant or the
claimant`s legal representative all of the following information that is
not otherwise specified in the structured settlement agreement:
(a) the amounts and due dates of the periodic payments to be made
under the structured settlement agreement. In the case of payments that
will be subject to periodic percentage increases, the amounts of future
payments may be disclosed by identifying the base payment amount, the
amount and timing of scheduled increases, and the manner in which
increases will be compounded;
(b) the amount of the premium payable to the annuity issuer;
(c) the nature and amount of any cost that may be deducted from any of
the periodic payments;
(d) where applicable, that any transfer of the periodic payments is
prohibited by the terms of the structured settlement and may otherwise
be prohibited or restricted under applicable law; and
(e) a statement that the claimant is advised to obtain independent
professional advice relating to the legal, tax and financial
implications of the settlement, including any adverse consequences and
that the defendant or defendant`s legal representative may not refer any
advisor, attorney or firm for such purpose.
"Hindenberg" appears to inaccurately state that the following disclosures are part of the initial disclosure requirement in the New York statute
However, they ARE are part of other states' initial disclosure provisions AND these disclosures are typically and voluntarily included in the structured settlement affidavits of many New York licensed settlement consultants involved in the placing the structured settlements that accompany a petition for Court approval. In addition to the 5-1702 disclosure, a form of such affidavit is a requirement in Bronx County New York.
I agree with Pullman & Comley's conclusion that "settling defendants who fail to comply with the initial disclosures, or otherwise fail to agree upon material terms prior to reporting a case settled, may find themselves later unable to enforce the settlement." However there is no "Pandora's Box".
Perhaps drawing inspiration from the 1984 classic Ghostbusters set in New York City,"Hindenberg" "Pand-handles" for readership by implying that the "evil of mankind" is going to be released if there is "enforcement " of what is already being done for the most part by brokers active on New York cases . .
To which the following paraphrased quote from that movie is only appropriate response. "As a duly licensed" structured settlement broker in the state of New York, "I order you" (Hindenberg) "to cease any and all supernatural activity and return forthwith to your origin, or to the nearest, convenient parallel dimension".
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