[PUBLISH]

In the

United States Court of Appeals

For the Eleventh Circuit

____________________

No. 21-11340

____________________

LUJERIO CORDERO, 

Plaintiff-Appellant,

versus

TRANSAMERICA ANNUITY SERVICE CORPORATION, 

a.k.a. Wilton Re Annuity Service Corporation, 

Defendant-Third-Party Plaintiff-Appellee, 

TRANSAMERICA LIFE INSURANCE COMPANY, 

Defendant-Cross Claimant-Appellee,

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ALLIANCE ASSET FUNDING, LLC, et al.,

Third-Party Defendants-Cross Defendants.

____________________

Appeal from the United States District Court

for the Southern District of Florida

D.C. Docket No. 1:18-cv-21665-DPG

____________________

Before WILSON, ROSENBAUM, Circuit Judges, and CONWAY,∗ District Judge.

PER CURIAM:

This appeal involves a plaintiff who received a structured

settlement because of a tort injury but ultimately sold his settlements to a factoring company. Factoring companies routinely 

reach out to injured tort victims who received structured settlements and provide lump-sum cash payments to those individuals 

in exchange for the settlement payments often at significantly less 

than face value. Because of factoring companies’ possible abusive 

and exploitative tactics in negotiating with injured tort victims, 

∗ Honorable Anne C. Conway, United States District Judge for the Middle District of Florida, sitting by designation.

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almost every state has statutes to protect the victims from those

possible tactics. 

In the case on appeal, plaintiff-appellant Lujerio Cordero, a 

childhood victim of lead poisoning, assigned his rights to more 

than $900,000 in structured settlement payments to factoring companies for pennies on the dollar. However, as a result of the lead 

poisoning, Cordero lacked the capacity to understand the six structured settlement transfer agreements he entered into with the factoring companies—agreements that contained allegedly false statements about Cordero’s need for immediate funds and failed to disclose his limited mental capacity.1 Nevertheless, Florida state 

courts—after holding hearings where Cordero was not present or 

represented, sometimes hundreds of miles away from his home—

approved the six agreements based on the factoring companies’ incomplete set of facts.

Rather than suing the factoring companies directly, however, Cordero sued defendants-appellees Transamerica Annuity 

Service Corporation and Transamerica Life Insurance Company 

(collectively, “Transamerica”), the companies that issued and 

funded his periodic payments before he assigned them to the factoring companies. By suing Transamerica, Cordero seeks to hold it 

accountable for consenting to his assignments. Our opinion relates 

1 Cordero uses the phrases “diminished mental capacity” and “limited mental 

capacity” in his briefing; therefore, we adopt his terminology for the purposes 

of this opinion.

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to Cordero’s breach of contract claim, which the district court dismissed with prejudice.2

This case presents a novel issue of New York law: whether

a plaintiff sufficiently alleges a breach of the implied covenant of 

good faith and fair dealing if he demonstrates that the defendant 

drastically undermined a fundamental objective of the parties’ contract, even when the underlying duty at issue was not explicitly referred to in the writing? Because this is an important question without a clear answer, we certify it to the New York Court of Appeals.

I 

We begin with the facts as alleged in Cordero’s second 

amended complaint.3

A. Cordero’s Settlement Agreement and Qualified Assignment 

During his early childhood, Cordero fell victim to lead poisoning caused by the paint in his New York apartment building. 

The lead poisoning resulted in debilitating and permeant health 

2 In his appeal, Cordero also challenges the district court’s with-prejudice dismissal of his claim for exploitation of a vulnerable adult under Florida’s Adult 

Protective Services Act, Florida Statute § 415.1111. We defer our decision on 

this claim. See infra Part IV.

3 For the purposes of this appeal, we assume that the factual allegations of the 

second amended complaint are true, and we draw all reasonable inferences in 

Cordero’s favor.

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issues, including permanent cognitive impairment. As a result, 

Cordero, acting through his mother as guardian, sued the landlord. 

Cordero subsequently executed a structured settlement 

agreement (the “Settlement Agreement”) with his landlord’s insurer. The Settlement Agreement released the landlord and his insurance carrier from liability in exchange for periodic payments to 

Cordero—$3,183.94 each month for thirty years—beginning when 

he turned eighteen. The Settlement Agreement states that 

Cordero’s payments shall be provided for and secured by an annuity contract issued by Transamerica Life Insurance Company and 

that Transamerica Annuity Service Corporation will fund the periodic payments through the annuity contract. The Settlement 

Agreement also recognizes the parties’ consent to a qualified assignment of the liability to make the periodic payments.

On the day that Cordero executed the Settlement Agreement, he entered into another agreement with his landlord’s insurance company and Transamerica Annuity Service Corporation titled “Transamerica Qualified Assignment and Release” (the “Qualified Assignment”). Both the Settlement Agreement and the Qualified Assignment contain New York choice of law provisions as 

well as anti-assignment provisions. 

Important to this case, the Settlement Agreement includes a 

section titled “Payee’s Rights to Periodic Payments” that states, in 

relevant part: “Said periodic payments cannot be accelerated, deferred, increased or decreased by the Plaintiff(s) or any Payee . . .

nor shall the Plaintiff(s) have the power to sell, mortgage, 

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encumber or anticipate same, or any part thereof, by assignment 

or otherwise.” Similarly, the Qualified Assignment states: “None of 

the Periodic Payments may be accelerated, deferred, increased or 

decreased and may not be anticipated, sold, assigned or encumbered.” The parties received special tax treatment because they executed a qualified assignment pursuant to 26 U.S.C. §§ 104 and 130.

See id. § 130(c) (stating that the term “qualified assignment” refers 

to “any assignment of a liability to make periodic payments as damages . . . if such periodic payments cannot be accelerated, deferred, 

increased, or decreased by the recipient of such payments”).

B. Cordero’s Six Structured Settlement Transfers 

Roughly four years after Cordero began receiving payments 

under the Settlement Agreement and the Qualified Assignment, he 

entered into the first of six structured settlement transfer agreements with two factoring companies. Cordero’s mother helped facilitate the first agreement when he was twenty-two years old, and

a salesman helped him fill out the necessary documents, which he

lacked the capacity to understand. In this initial agreement and the 

five that followed, Cordero exchanged his rights to monthly payments for immediate lump-sum cash payments.

Although the terms of his transfers varied, all six agreements 

were extremely unfavorable to Cordero. Under the terms of the 

sixth (and least favorable) agreement, Cordero received only 

$22,000.00 in exchange for an aggregate value of $167,134.42 in 

monthly payments. Through these six transfers, Cordero assigned 

away all of his periodic payment rights over a period of twenty-two 

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months, receiving only $268,130.00 from the factoring companies

in return for his remaining structured settlement payments with a 

total aggregate value of $959,834.42 spread over more than twenty 

years.

Cordero’s six structured settlement transfer agreements 

were facilitated pursuant to Florida’s Structured Settlement Protection Act (Florida’s “SSPA”). Fla. Stat. § 626.99296. Florida’s SSPA 

provides that a structured settlement payment rights transfer is 

only effective if “the transfer is authorized in advance in a final order by a court of competent jurisdiction[.]”4 Id. § 626.99296(3)(a). 

To approve a transfer agreement under Florida’s SSPA, the reviewing court must find, among other things, that: (1) the transfer “does 

not contravene other applicable law”; (2) the “payee has established that the transfer is in [his] best interests”; and (3) “the net 

amount payable to the payee is fair, just, and reasonable under the 

circumstances then existing.” Id. § 626.99296(3)(a)(1), (3), (6). 

Under Florida’s SSPA, the factoring companies that handled

Cordero’s assignments were required to provide notice of each

4 26 U.S.C. § 5891 generally imposes “a tax equal to 40 percent of the factoring 

discount” on “any person who acquires . . . structured settlement payment 

rights in a structured settlement factoring transaction.” Id. § 5891(a). However, the statute provides an exception for structured settlement factoring 

transactions that are “approved in advance in a qualified order.” Id.

§ 5891(b)(1). Forty-nine states have enacted corresponding statutes that provide instructions on obtaining a “qualified order.” See, e.g., Fla. Stat. 

§ 626.99296.

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proposed transfer and the application for its authorization to 

Transamerica. Id. § 626.99296(4)(a). In response, Transamerica

could “support, oppose, or otherwise respond to the transferee’s 

application, in person or by counsel, by submitting written comments to the court or by participating in the hearing.” Id. 

§ 626.99296(4)(a)4 (requiring the factoring companies to inform interested parties that they “may” support, oppose, or otherwise respond to the application). 

Cordero’s six transfer agreements vaguely alleged a variety

of seemingly false reasons why he needed the immediate payments, such as outstanding debts, school expenses, and purchasing

a reliable vehicle. Cordero waived his right to “independent professional advice” for each transfer, and he asserts that he lacked the 

capacity to understand the preprinted form that was used to obtain 

his waivers as well as the transfer agreements that he signed. Nevertheless, Cordero signed the agreements, sometimes in the presence of a notary, and each agreement included a document that

reflected Transamerica’s consent. However, Transamerica consented to each transfer without contacting Cordero or seeking his 

informed consent.

A Florida state court approved each transfer agreement after

a hearing, but the six hearings were not recorded. Cordero did not 

attend the hearings, and he was not represented by counsel at 

them. Instead, the factoring company was the only party represented at Cordero’s SSPA hearings. The hearings occurred in either 

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Sumter or Broward County, though Cordero lived in Miami-Dade 

County.5

Despite the fact that every transfer was highly unfavorable 

to Cordero, Florida courts approved all six of Cordero’s structured 

settlement transfers. In the meantime, Transamerica received a 

$750.00 administrative fee from the factoring companies for each 

transfer.

II 

When we have substantial doubt about the answer to a dispositive question of state law, we “should certify that question to 

the state supreme court in order to avoid making unnecessary state 

law guesses and to offer the state court the opportunity to explicate 

state law.” Fla. VirtualSchool v. K12, Inc., 735 F.3d 1271, 1274–75 

(11th Cir. 2013) (quoting Forgione v. Dennis Pirtle Agency, Inc., 93 

F.3d 758, 761 (11th Cir. 1996)) (internal quotation marks omitted).

This useful tool allows us “to avoid making unnecessary Erie 

‘guesses’” when a case presents a determinative question of state 

law not controlled by precedent. Whiteside v. GEICO Indem. Co., 

977 F.3d 1014, 1018 (11th Cir. 2020) (quoting CSX Transp., Inc. v. 

City of Garden City, 325 F.3d 1236, 1239 (11th Cir. 2003)) (internal 

quotation marks omitted); see N.Y. Ct. App. R. § 500.27(b).

5 We take judicial notice of the facts that: (1) Miami-Dade County is located 

in south Florida, next to Broward County and (2) Sumter County is located in 

central Florida, more than two hundred miles away from Miami-Dade 

County. See Fed. R. Evid. 201.

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 While we note that Cordero only raised this tool in a footnote in his reply brief, we nevertheless conclude that “a party need 

not raise the issue at all” because certification primarily relates to 

federalism concerns. Whiteside, 977 F.3d at 1018. “Ordinarily a 

court will order certification on its own motion, given that it is in 

the best position to determine whether it feels confident in its reading of the state law.” Id. (quoting 17A Charles Alan Wright et al.,

Federal Practice and Procedure § 4248 (3d ed. 1998)) (internal quotation marks omitted).

III 

 Our question for the New York Court of Appeals relates to 

Cordero’s breach of contract claim. In his second amended complaint, Cordero alleges that Transamerica breached the anti-assignment language in the Settlement Agreement and the Qualified Assignment when it allowed Cordero to assign his payment rights to 

the factoring companies. While Cordero and Transamerica agree 

that New York law governs the agreements, they disagree as to 

whether Transamerica had a duty to “enforce” the anti-assignment 

language. Transamerica argues that neither anti-assignment provision imposed any express duty on Transamerica and the provisions

inured to its benefit, not Cordero’s. Although Cordero asserted 

multiple theories of liability in his briefing, our question focuses on 

whether Transamerica breached the covenant of good faith and 

fair dealing, which is implicit in every contract under New York 

law. See Spinelli v. Nat’l Football League, 903 F.3d 185, 205 (2d Cir. 

2018).

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“Under New York law, parties to an express contract are 

bound by an implied duty of good faith, but breach of that duty is 

merely a breach of the underlying contract.” Fasolino Foods Co. v. 

Banca Nazionale del Lavoro, 961 F.2d 1052, 1056 (2d Cir. 1992) (citation and internal quotation marks omitted). The covenant of 

good faith and fair dealing encompasses “any promises which a reasonable person in the position of the promisee would be justified 

in understanding were included,” and it “embraces a pledge that 

neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits 

of the contract.” Dalton v. Educ. Testing Serv., 663 N.E.2d 289, 291 

(N.Y. 1995) (citations and internal quotation marks omitted). If the 

underlying contract “contemplates the exercise of discretion, this 

pledge includes a promise not to act arbitrarily or irrationally in 

exercising that discretion.” Id. A party may also breach the implied 

covenant if it exercises its discretion “malevolently, for its own gain

as part of a purposeful scheme designed to deprive [the other party] 

of the benefits” of the agreement. Richbell Info. Servs., Inc. v. Jupiter Partners, L.P., 765 N.Y.S.2d 575, 587 (N.Y. App. Div. 2003).

“The duty of good faith and fair dealing, however, is not 

without limits, and no obligation can be implied that would be inconsistent with other terms of the contractual relationship.” Dalton, 663 N.E.2d at 291–92. Under “New York law, the covenant of 

good faith and fair dealing does not give rise to new, affirmative 

duties on contracting parties.” Compania Embotelladora Del Pacifico, S.A. v. Pepsi Cola Co., 976 F.3d 239, 248 (2d Cir. 2020)

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(applying New York law); see Vanlex Stores, Inc. v. BFP 300 Madison II LLC, 887 N.Y.S.2d 576, 577 (N.Y. App. Div. 2009) (“[T]he 

implied covenant of good faith and fair dealing inherent in every 

contract cannot be used to create terms that do not exist in the 

writing.”).

In arguing that Transamerica breached the implied covenant of good faith and fair dealing, Cordero cites to 511 West 232nd 

Owners Corp. v. Jennifer Realty Co., 773 N.E.2d 496 (N.Y. 2002). 

In Jennifer Realty, the New York Court of Appeals considered 

whether the sponsor of a plan to convert a building into a cooperative breached the covenant of good faith and fair dealing when it

held on to forty-one of the sixty-six apartments, allowed its offering 

plan to lapse, and rejected purchase offers for the unsold units. Id.

at 498. Specifically, the tenant-owners and co-op board asserted 

that the sponsor breached “its contractual duty to dispose of all its 

shares within a reasonable time.” Id.

The trial court “dismissed the contract claim, finding that 

the offering plan contained no promise by the sponsor to sell unsold shares within any particular time frame.” Id. The Appellate 

Division reversed, holding “that the sponsor’s offering plan included an implied promise to sell all unsold units within a reasonable time.” Id. at 499; see 511 W. 232nd Owners Corp. v. Jennifer 

Realty Co., 729 N.Y.S.2d 34, 36 (N.Y. App. Div. 2001) (citations 

omitted) (stating that “[i]mplied promises are recognized when either the promises are so clearly within the contemplation of the 

parties that it is unnecessary to express them, or when the promises 

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are beyond the thought of the parties but necessary to effectuate 

the purpose of the contract” and that “[t]he intentions of the parties

to the contract are instructive of whether an implied promise exists”). Ultimately, the New York Court of Appeals affirmed the Appellate Division and found that the plaintiffs stated a cause of action 

for breach of contract. Jennifer Realty Co., 773 N.E.2d at 499.

The Court of Appeals concluded that the plaintiffs’ complaint “sufficiently alleged, at a minimum, that the sponsor undertook a duty in good faith to timely sell so many shares in the building as necessary to create a fully viable cooperative,” explaining:

The complaint asserts that the sponsor—by its initial 

offering plan and each of its 10 periodic amendments—offered for sale the shares in the cooperative 

corresponding to its 66 apartments, but instead retained a majority of those shares. The complaint narrates that the sponsor had represented that its expected profits would depend on market conditions 

and the length of time required to sell shares offered 

under the offering plan, but gave no hint that it would 

make a sizeable profit by retaining a majority of those 

shares and leasing apartments at market rates, free of 

the strictures of rent regulation. Similarly, the complaint states that the offering plan cautioned purchasers as to numerous investment risks, but did not mention the risk that the sponsor would keep most of the 

shares for itself. Based primarily on these allegations, 

plaintiffs assert that the parties could not have intended—and plaintiffs could not reasonably 

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anticipate—that the sponsor would retain a majority 

of shares in the cooperative.

Moreover, the complaint alleges that by keeping a 

majority of shares, the sponsor defeated the purpose 

of the contract. Plaintiffs assert that by rejecting offers 

from prospective buyers and allowing its offering 

plan to lapse, the sponsor frustrated plaintiffs’ ability 

to resell their shares, interfered with the Co-op 

Board’s refinancing of the building’s mortgage and 

caused shareholders’ maintenance payments to increase. . . . In sum, plaintiffs allege that the sponsor’s 

retention of shares so drastically undermined the contract that its fundamental objective—the creation of a 

viable cooperative—has been subverted.

Id. at 499–500. While the Court of Appeals confirmed that the 

plaintiffs sufficiently “pleaded that they reasonably understood the 

offering plan to state a duty, at the very least, to sell a sufficient 

number of shares in a timely manner so as to create a viable cooperative,” it held only that the plaintiffs’ contract cause of action survived the sponsor’s motion to dismiss. Id. at 501 (analyzing the motion to dismiss under N.Y. C.P.L.R. 3211).

In light of Jennifer Realty, it appears plausible that, under 

New York law, a plaintiff may allege a breach of the implied covenant of good faith and fair dealing if he sufficiently pleads that the 

defendant drastically undermined a fundamental objective of the 

parties’ contract, even when the contract does not explicitly refer 

to the underlying duty at issue. See id. (“By spelling out the basis 

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for their claim that the sponsor failed to exercise good faith and 

deal fairly in fulfilling the terms and promises contemplated by the 

offering plan, plaintiffs pleaded a valid cause of action for breach of 

contract.”). However, we are unsure whether we can equivocally 

derive this rule from Jennifer Realty, or whether such a rule would 

apply in this specific context. It is possible that the New York Court 

of Appeals intended Jennifer Realty to apply narrowly to cases dealing with similar subject matter or only to cases where the law related to the contract at issue was well-settled when the parties executed the contract. Lacking clarity, we appeal to the New York 

Court of Appeals for assistance.

IV 

This case presents a novel issue of New York law because 

Cordero seeks to hold Transamerica liable for consenting to his assignments of his structured settlement payments. This issue is important. It raises public policy concerns related to the conduct of 

factoring companies as well as companies that issue and fund annuities. Accordingly, we respectfully certify the following question 

to the New York Court of Appeals under Rule 500.276:

Does a plaintiff sufficiently allege a breach of the implied covenant of good faith and fair dealing under 

New York law if he pleads that the defendant 

6 New York Court of Appeals Rule 500.27(a) allows “any United States Court 

of Appeals” to certify a determinative question of law to the New York Court 

of Appeals if there is no controlling precedent. 

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drastically undermined a fundamental objective of 

the parties’ contract, even when the underlying duty 

at issue was not explicitly referred to in the writing?

Our question is intended to serve only as a guide, and “we 

do not intend to restrict the issues considered by the state court or 

to limit the state court’s discretion in choosing how to frame or to 

answer these issues in the light of the facts of this case.” Whiteside, 

977 F.3d at 1022 (citation and internal quotation marks omitted). 

Rather, we “know that the [New York Court of Appeals] may do 

as it wishes,” and we “ask broadly for the state court’s help in getting the state law right in this case.” Id. (quoting F.D.I.C. v. Skow, 

741 F.3d 1342, 1347 (11th Cir. 2013)) (internal quotation marks 

omitted).

The entire record of this case, including the parties’ briefs, is 

transmitted to the New York Court of Appeals, along with our gratitude for the Court’s time and consideration. We defer our decision 

in this appeal until the Court of Appeals has had the opportunity to 

consider our certified question.

QUESTION CERTIFIED. 

 

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