by John Darer CLU ChFC CSSC RSP CLTC
Valerio Sanders has filed a class action complaint Feb. 11 in the St. Clair County Illinois Circuit Court against JGWPT Holdings Inc., JGWPT Holdings LLC, J.G. Wentworth LLC, Peachhi LLC, Peach Holdings Inc., Peachtree Financial Solutions LLC, Peachtree Settlement Funding LLC, Settlement Funding LLC, doing business as Peachtree Settlement Funding, and Chicago personal injury lawyers Brian Mack and the Mack Law Group PC, citing violations of the Illinois Consumer Fraud and Deceptive Business Practice Act.
According to the complaint, the JGWPT entities purchased deferred payment annuities from consumers, including plaintiff Valerio Sanders, for an amount that was discounted to present cash value, but intentionally failed to inform consumers that if their settlement contained an anti-assignment clause, no lump sum payment could be made to the consumer. The plaintiff further alleges, JGWPT entities failed to inform consumers, including the plaintiff, that anti-assignment clauses prohibited the sale of deferred payment annuities.
In 2013, an Illinois 5th District panel, sitting for the 4th District Illinois Court of Appeals, held that an Illinois state court, which had previously approved transfers requested by Cathy Brenston:
- Had a duty to enforce anti-assignment provisions in Brenston's original structured settlement documentation; and
- Had no authority under the Illinois protection act to approve the transfer petitions – even though all of the relevant parties had waived the anti-assignment provisions.
A companion case involving Peachtree and Cathy Brenston remains on appeal in the 3rd District Illinois Court of Appeals and will be argued February 27, 2014. The parties had previously stayed their appeal waiting for the Illinois Supreme Court to rule on the Brenston 4th District case.
The new class action against JGWPT et al. also sounds in forum shopping. In a subsequent transfer involving Plaintiff Sanders and the Defendants, Defendant Brian Mack's representation that jurisdiction and venue were proper was also a fraudulent misrepresentation because the action was filed in Madison County, Illinois and the Plaintiff never lived in Madison County and the underlying action did not accrue there.
A potential whistleblower from a NASP member company told me several years ago that Illinois was a target state for cash now pusher forum shopping. I believe that there is alot more to discover.
If the structured settlement protection act is not complied with the IRS can levy a 40% excise tax as set forth in IRC 5891. Forum shopping is clearly rampant in spite of the remonstrations of counsel associated with the National Association of Settlement Purchasers. The question is how willing is the United States government going to be to kick some ass?
Who else is going to come forward? Do the companies that are not engaging in these practices have the guts to do the right thing and use their resources to turn the bad actors in?
Reference Illinois Appellate decision in Settlement Funding LLC v Cathy Brenston 2013 IL App (4th) 120869