January 10, 2013

Florida Court Denies Transfer of Longshore Act Payments

By Stephen R. Harris and Elizabeth L. McLachlan

The Circuit Court of Sumter County, Florida has issued an order denying a payee’s transfer of settlement payments that arose from a claim under 33 U.S.C.S. § 901 et seq.  (the “Longshore Act”).  In the matter styled In Re: Approval for Transfer of Structured Settlement Proceeds by Derrick Robotham, No. 2012-CA-1494 (Fla. Cir. Ct. Jan. 7, 2013), Circuit Court Judge Michelle Morley held that the proposed transfer would contravene 33 U.S.C.S. § 916, which prohibits assignment of Longshore Act payments.  Therefore, because Florida Stat. § 626.99296 (the “Florida SSPA”) requires that the proposed transfer not contravene any applicable law, the Florida SSPA could not be satisfied, and the Court denied the transfer.

On or about September 6, 2012, Peachtree Settlement Funding, LLC (“Peachtree”) and Derrick Robotham entered into a Purchase Contract (the “Purchase Agreement”).  Under the Purchase Agreement, Mr. Robotham purported to sell the right to receive certain periodic payments due to him pursuant to settlement effectuated in 2003 of a workers’ compensation claim under the Longshore Act.

The annuity issuer objected to the proposed transfer on the grounds that, inter alia, the proposed transfer failed to satisfy the requirements of the Florida SSPA because it contravened federal law, namely the Longshore Act.

The Longshore Act provides that “[n]o assignment, release, or commutation of compensation or benefits due or payable under this Act, except as provided by this Act, shall be valid…”  33 U.S.C.S. § 916.  The Florida SSPA provides that, to be approved by a court, any transfer must “not contravene other applicable law.” § 626.99296(3)(a)(1), Fla. Stat.  The Court held that the proposed transfer would contravene the Longshore Act.  Therefore, because the proposed transfer would be in violation of the Longshore Act and could not satisfy the Florida SSPA, the Court denied the transfer petition. 

The annuity issuer was represented by Stephen R. Harris and Elizabeth L. McLachlan of Drinker Biddle & Reath. 

If you have any questions regarding this matter, or if we can be of any assistance in resolving other pending issues, please do not hesitate to contact one of the lawyers listed above.

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