Court Opinion

ID: 4029269
Source: CourtListenerOpinion
Date Created: 2016-08-29 07:28:24.947077+00
Date Added: 2024-06-11T13:27:09.900996
License: Public Domain

Affirmed as Modified and Opinion filed August 25, 2016.

                                     In The

                    Fourteenth Court of Appeals

                             NO. 14-15-00584-CV

      METROPOLITAN LIFE INSURANCE COMPANY AND
 METROPOLITAN TOWER LIFE INSURANCE COMPANY, Appellants
                                       V.

STRUCTURED ASSET FUNDING, LLC D/B/A 123 LUMPSUM; ANDREW
  JONATHAN SETTLEMENT FUND, LLC; AND BRADLEY TURPIN,
                       Appellees

               On Appeal from the County Court at Law No. 2
                         Galveston County, Texas
                    Trial Court Cause No. CV-0073918

                                OPINION

      Personal-injury claims frequently conclude with a structured-settlement
agreement in which the parties agree that, instead of receiving compensation for
the injury in a single lump sum, the claimant will receive periodic payments. The
tortfeasor’s liability insurer often arranges for these periodic payments by
purchasing an annuity and naming the claimant as the payee. Payees wanting to
receive payments ahead of schedule may sell the right to receive some or all of the
future payments to a factoring company at a discount, but the transfer must be
approved by a court in accordance with the Texas Structured Settlement Protection
Act. See TEX. CIV. PRAC. & REM. CODE ANN. § 141.001–.007 (West 2011).

      Here, the tortfeasor’s liability insurer’s successor and the annuity issuer
appeal from a court order that approved a transfer including a servicing
arrangement and taxed the costs of court against them. We find no error in the
portion of the court order approving the transfer, but we agree that the trial court
erred in taxing court costs against the insurers. We therefore modify the judgment
to tax costs against the factoring company and affirm the judgment as modified.

                                 I. BACKGROUND

      After Bradley Turpin was seriously injured in a motor vehicle accident in
2002, he successfully sued the responsible tortfeasor. To pay the judgment, the
parties agreed to a structured settlement in which Turpin would receive periodic
payments as compensation for his injuries.       The tortfeasor’s liability insurer
entered into a “qualified assignment agreement” with Metropolitan Tower Life
Insurance Co. (“Met Tower”) in which Met Tower assumed the responsibility for
Turpin’s periodic payments.     To fund those payments, Met Tower bought an
annuity from Metropolitan Life Insurance Company (“Metlife”). We refer to the
two insurers collectively as “Metropolitan.” As part of the settlement, Turpin also
received periodic payments from a separate annuity issued or paid for by
Prudential.

      When Turpin wanted more money than he was currently receiving from the
periodic payments, he sold a portion of the income stream to a factoring company
at a discounted rate. By early 2013, he had completed six such transfers, receiving
                                         2
$767,000 for periodic payments having a future value of over $3 million. Two of
the transfers were from the income stream provided by the Metropolitan annuity.

      In 2015, Structured Asset Funding, LLC d/b/a 123 LumpSum (“LumpSum”)
offered Turpin $175,000 in exchange for the right to a $1,850 portion of each of
174 of Turpin’s monthly payments. In accordance with the Texas Structured
Settlement Protection Act (“the Act”), LumpSum filed an application for approval
of the transfer in a Galveston county court at law and served Metropolitan, as an
interested party, with copies of the application, the transfer agreement, and other
required documents. See TEX. CIV. PRAC. & REM. CODE ANN. § 141.006. After a
hearing, the trial court appointed an independent financial consultant to advise the
court, at LumpSum’s expense, on the competitiveness of LumpSum’s offer. The
consultant’s report is not in the record, but correspondence to the trial court from
Turpin and LumpSum show that LumpSum responded to the report by increasing
its offer to $190,000, and that Turpin wanted to accept the amended offer. The
trial court approved the transfer, so that LumpSum paid Turpin $190,000 for the
right to a stream of payments having a future value of $321,900.

      Under the trial court’s final order, the payments to LumpSum and to Turpin
reach their respective owners through the following “Servicing Arrangement”:

       The 174 monthly payments that Turpin is to receive from the
         Metropolitan annuity from April 15, 2015 through September 15, 2029
         are referred to in the judgment as “the Term Payments.”

       Each monthly Term Payment is made up of two parts: the $1,850 portion
         purchased by LumpSum is called the “Turpin Assigned Payment,” and
         the remaining amount to be retained by Turpin is called the “Remaining
         Turpin Monthly Payment.”

                                         3
        Metropolitan is to send the entirety of each Term Payment to
            LumpSum’s assignee Andrew Jonathan Settlement Fund, LLC (“Andrew
            Jonathan”).

        Andrew Jonathan is to retain the $1,850 Turpin Assigned Payment and
            remit the Remaining Turpin Monthly Payment to Turpin.

       The trial court taxed costs against Metropolitan. Turpin and LumpSum
signed the order, approving it as to both form and substance, and Metropolitan
appealed.

                                 II. ISSUES PRESENTED

       Metropolitan presents the following issues for review:

       1.      The trial court impermissibly rewrote the terms of the settlement
agreement, the qualified assignment, and the annuity, by requiring Metropolitan to
pay certain periodic payments to Andrew Jonathan instead of to Turpin.

       2.      The trial court erred in designating Andrew Jonathan as Turpin’s
payment agent.1

       3.      The trial court improperly circumvented the Act by requiring
Metropolitan to indirectly divide periodic payments through Andrew Jonathan as
“servicer.”

       4.      The trial court erred in compelling Metropolitan to pay the unassigned
Remaining Turpin Monthly Payments to Andrew Jonathan, thereby forcing
Metropolitan into a business and contractual relationship with Andrew Jonathan.

       1
          Although this contention was briefed under the same heading as Metropolitan’s first
issue, the arguments are so distinct that we discuss it as a separate issue.

                                             4
      5.     In imposing the servicing arrangement on Metropolitan, the trial court
granted relief LumpSum did not request and to which it was not entitled under the
Act or under Texas procedural law.

      6.     By approving the transfer, the trial court violated the Act and abused
its discretion because the transfer is not in Turpin’s best interest.

      7.     The trial court improperly taxed costs against Metropolitan.

                                    III. ANALYSIS

      The construction of a statute is a question of law, which we review de novo.
See Lippincott v. Whisenhunt, 462 S.W.3d 507, 509 (Tex. 2015) (per curiam). Our
aim in construing a statute is to give effect to the legislature’s intent. See id. We
identify that intent by looking first to the statute’s plain language. See id. We
presume that the legislature purposefully chose which words to include in the
statute and which to omit. See id. We do not consider statutory provisions in
isolation, but read the statute as a whole. See In re Mem’l Hermann Hosp. Sys.,
464 S.W.3d 686, 701 (Tex. 2015) (orig. proceeding).

A.    The trial court did not impermissibly rewrite the Uniform Qualified
      Assignment & Release.
      In its first issue, Metropolitan argues that by requiring Metropolitan to pay
the unassigned portion of the 174 Term Payments to Andrew Jonathan (i.e., the
Remaining Turpin Monthly Payments), the trial court improperly rewrote the terms
of three documents. Metropolitan refers to these three documents—the settlement
agreement, the qualified assignment, and the annuity—as the “Governing
Contracts.” According to Metropolitan, these contracts required Metropolitan to
pay Turpin, and the trial court is not authorized to rewrite these contracts without
Metropolitan’s consent.

                                            5
       This argument is a straw man.2 It begins with Metropolitan’s creation of a
category of three documents which it calls the “Governing Contracts.” There is no
such category of documents in the Act. The Act instead speaks of the “terms of the
structured settlement,” which includes not only the three documents cited by
Metropolitan but also “any order or other approval of the court.” See TEX. CIV.
PRAC. & REM. CODE ANN. § 141.002(17). Because the legislature has declared that
a court order approving a transfer of structured settlement payment rights becomes
part of the “terms of the structured settlement,” it cannot be said that the trial court
lacked authority to order the periodic payments delivered to someone other than a
payee named in an earlier contract.

       Metropolitan then states that the trial court ordered Metropolitan to pay
Andrew Jonathan even though the qualified assignment says, “Periodic Payments
[are] payable to Bradley D. Turpin.” Metropolitan argues that this is reversible
error because courts are not authorized to rewrite the parties’ contract. In support
of this argument, Metropolitan relies on In re Rains, 473 S.W.3d 461, 469–70
(Tex. App.—Amarillo 2015, no pet.) and Wolf Hollow I, L.P. v. El Paso Mktg.,
L.P., 472 S.W.3d 325, 334 (Tex. App.—Houston [14th Dist.] 2015, pet. denied)
(“Courts are not authorized to rewrite agreements by inserting additional terms,
definitions, or provisions that the parties could have included themselves, or by
implying terms for which the parties have not bargained.”). We do not find the
Rains decision persuasive, and the language that Metropolitan quotes from Wolf
Hollow is taken out of context.

       The Rains court reversed a transfer under the Act. Citing no supporting
authority, the authoring court stated,

       2
        A straw man is a misrepresentation created “for the express purpose of being knocked
down.” See MADSEN PIRIE, THE BOOK OF THE FALLACY 160 (1985).

                                             6
      [W]e found nothing [in the Act] that authorized a trial court to
      unilaterally modify the terms of a previously existing contract. . . .
      So, the trial court had no authority to simply decide to change those
      portions of the annuity contract obligating [Metropolitan] to pay
      Rains.     The terms of the contract regarding [Metropolitan’s]
      obligation to pay Rains were unambiguous and definite; thus, the
      court was obligated to enforce them as written unless the parties
      agreed otherwise. Not all of them did here. So, the trial court erred.
Rains, 473 at 469–70.

      But the Rains court painted with too broad a brush. Statements about a trial
court’s lack of authority to rewrite a contract—including the statement in Wolf
Hollow—generally are made in the context of contract interpretation or
construction. See Gen. Am. Indem. Co. v. Pepper, 161 Tex. 263, 265, 339 S.W.2d
660, 661 (1960) (“A court is not at liberty to revise an agreement while professing
to construe it.”); E. Tex. Fire Ins. Co. v. Kempner, 87 Tex. 229, 236, 27 S.W. 122
(1894) (explaining that courts “cannot make a new contract for [the parties], nor
change that which they have made under the guise of construction”). As this court
commonly states the rule, “We may not rewrite the parties’ contract or add to its
language under the guise of interpretation.”          Cherokee Cty. Cogeneration
Partners, L.P. v. Dynegy Mktg. & Trade, 305 S.W.3d 309, 312 (Tex. App.—
Houston [14th Dist.] 2009, no pet.) (emphasis added).

      Unlike a contract action, however, an application for approval of a transfer
agreement is not an action for the breach, enforcement, or interpretation of a
contract; thus, the trial court did not purport to “interpret” a qualified assignment
agreement as identifying the payee to be someone other than the person named.
Rather, the trial court exercised the authority conferred by the legislature to require
the structured settlement obligor or annuity issuer “to make any payment directly
or indirectly to any transferee of structured settlement payment rights” rather than

                                          7
paying the individual named as the payee in the qualified assignment agreement.
See TEX. CIV. PRAC. & REM. CODE ANN. § 141.004.

       The qualified assignment agreement itself recognizes Turpin’s right to sell
or assign periodic payments if the transfer “has been approved in advance in a
‘Qualified Order’” as defined in 26 U.S.C. § 5891(b)(2) “and otherwise complies
with applicable state law, including without limitation any applicable state
structured settlement protection statute.” Section 5891(b)(2) defines a “qualified
order” to include an order authorized by a state statute and containing express
findings that the transfer does not contravene any state or federal statute; does not
contravene a court order or an order of any administrative authority; and “is in the
best interest of the payee, taking into account the welfare and support of the
payee’s dependents.”        26 U.S.C. § 5891(b)(2) (2014).             Because the Texas
Structured Settlement Act requires the same findings, an order that complies with
the Act is a “qualified order.” Compare id. with TEX. CIV. PRAC. & REM. CODE
ANN. § 141.004. The final order in this case included all of the required findings.

       In sum, Metropolitan’s argument fails because this is not a contract action; it
is a statutory action. In passing the Act, the legislature authorized the trial court to
approve a transfer if certain conditions are met, and Metropolitan does not
challenge the validity of the Act. Thus, the case does not turn on whether the trial
court acted in accordance with the certain contracts,3 but on whether the trial court
acted in accordance with the statute. We overrule Metropolitan’s first issue.

       3
         Section 141.004(3) does not require the trial court to find that the transfer does not
contravene the terms of any contract.

                                              8
B.    The trial court did not err in ordering Metropolitan to make the term
      payments to Andrew Jonathan “as Mr. Turpin’s designated and
      authorized payment agent for purposes of receiving the Term
      Payments.”
      Metropolitan next argues that the trial court erred in designating Andrew
Jonathan as Turpin’s payment agent. According to Metropolitan,

      to support the Trial Court’s agency designation, [LumpSum] would
      have needed to show at a minimum that: (1) a proper agency
      agreement was established before the Trial Court; (2) [Metropolitan],
      which was not a party to the agency agreement but was a party to the
      [settlement agreement, the qualified assignment, and the annuity],
      could be compelled by Mr. Turpin pursuant to the [structured
      settlement agreement, the qualified assignment, and the annuity] to
      comply with the agency agreement; (3) the [Structured Settlement
      Protection Act] case was a proceeding in which Mr. Turpin could
      seek, and in fact did seek, to compel MetLife to comply with the
      alleged agency agreement; and (4) the [structured settlement
      agreement, the qualified assignment, and the annuity]’s requirement
      that payments be made “to Bradley D. Turpin” could be amended
      pursuant to the alleged agency agreement.
      Metropolitan cites no authority in support of these requirements. Moreover,
this argument, like the one preceding it, is based on the incorrect premise that this
is a contract action. This was not a proceeding to enforce the preexisting terms of
the structured settlement agreement, the qualified assignment, or the annuity. It
also was not a proceeding to compel Metropolitan to comply with a preexisting
agency agreement between Turpin and Andrew Jonathan. This instead was a
proceeding for approval of a transfer of structured settlement payment rights, and
the court order granting that approval became part of the “terms of the structured
settlement agreement.”

      Metropolitan also asserts that there is no evidence of an agency relationship
between Turpin and Andrew Jonathan. In reviewing such a no-evidence challenge,
we consider the evidence in the light most favorable to the judgment, “crediting
                                         9
favorable evidence if reasonable jurors could, and disregarding contrary evidence
unless reasonable jurors could not.” City of Keller v. Wilson, 168 S.W.3d 802, 807
(Tex. 2005). The evidence is legally insufficient to support the finding only if
(1) there is a complete absence of evidence of a vital fact, (2) the court is barred by
rules of law or evidence from giving weight to the only evidence offered to prove a
vital fact, (3) the evidence offered to prove a vital fact is no more than a mere
scintilla, or (4) the evidence conclusively establishes the opposite of the vital fact.
Id. at 810.

      The record establishes that Andrew Jonathan is Turpin’s designated payment
agent. LumpSum’s general counsel Duane West explained the reason for the
servicing arrangement, attesting that Andrew Jonathan is “a bankruptcy-remote
entity/special-purpose vehicle set up to collect the payments made by the insurance
company,” so that if LumpSum were to file for bankruptcy protection, the
payments from Metropolitan to Andrew Jonathan and from Andrew Jonathan to
Turpin would be unaffected. Turpin testified that he understood the servicing
arrangement; that he was completely comfortable with it; and that he was asking
the trial court to approve it.    Finally, the trial court’s transfer order contains
Turpin’s express written agreement to the agency relationship.          The pertinent
language is as follows:

      By signing and approving this order, Mr. Turpin acknowledges,
      understands, and agrees that he will receive the Remaining Turpin
      Monthly Payments through Andrew Jonathan (as the servicer under
      this Final Order and as his designated payment agent solely for
      purposes of receiving and distributing the Term Payments to Mr.
      Turpin pursuant to the Servicing Arrangement and this Final Order)
      and that [Metropolitan] shall not be obligated to make any portion of
      the Term Payments directly to Mr. Turpin; that Mr. Turpin shall look
      solely and exclusively to Andrew Jonathan for the Remaining Turpin
      Monthly Payments; and that [Metropolitan] shall not, following the
      signing of this Final Order by the Court, have any obligation or
                                          10
        liability (contractual or legal) to Mr. Turpin relative to the Term
        Payments, including the Remaining Turpin Monthly Payments.
Turpin signed the order, approving it as to form and substance; thus, he expressly
authorized Andrew Jonathan to act as his designated payment agent to receive the
Term Payments and to distribute the amounts due to Turpin.

        We overrule this issue.

C.      The trial court did not improperly circumvent the prohibition against
        requiring the structured settlement obligor or the annuity issuer to
        divide any periodic payment.
        Metropolitan contends that by approving the servicing arrangement, the trial
court improperly circumvented section 141.005(4) of the Act, which states,
“Following a transfer of structured settlement payment rights under this
chapter . . . neither the structured settlement obligor nor the annuity issuer may be
required to divide any periodic payment between the payee and any transferee or
assignee or between two or more transferees or assignees . . . .” TEX. CIV. PRAC. &
REM. CODE ANN. § 141.005(4).

        To apply this provision to the parties concerned in this case, we must
identify the people or entities to which the terms refer.

      “Structured settlement obligor”—here, Met Tower—“means, with respect to
        any structured settlement, the party that has the continuing obligation to
        make periodic payments to the payee under a structured settlement
        agreement or a qualified assignment agreement.” Id. § 141.002(15).

      An “annuity issuer” is “an insurer that has issued a contract to fund periodic
        payments under a structured settlement.” Id. § 141.002(1). MetLife is the
        annuity issuer.

                                          11
    Turpin is the “payee,” that is, “an individual who is receiving tax-free
      payments under a structured settlement and proposes to transfer payment
      rights under the structured settlement.” Id. § 141.002(9).

    A “transferee” is “a party acquiring or proposing to acquire structured
      settlement payment rights through a transfer.” Id. § 141.002(21). The trial
      court’s order identifies LumpSum as the transferee.

    “Assignee” is not a defined term under the Act, so we will afford the word
      its ordinary meaning unless “a different, more limited, or precise definition
      is apparent from the term’s use in the context of the statute.” See Sw.
      Royalties, Inc. v. Hegar, No. 14-0743, 2016 WL 3382151, at *4 (Tex. June
      17, 2016) (quoting State v. $1,760.00 in U.S. Currency, 406 S.W.3d 177,
      180 (Tex. 2013) (per curiam)). An “assignee” is commonly understood to
      mean “a person to whom a right or liability is legally transferred” or “a
      person appointed to act for another.”              See NEW OXFORD AMERICAN
      DICTIONARY 97 (Angus Stevenson & Christine Lindberg eds., 3d ed. 2010).
      Under Texas common law, an assignee “stands in the shoes of his assignor.”
      Katy Springs & Mfg., Inc. v. Favalora, 476 S.W.3d 579, 604 (Tex. App.—
      Houston [14th Dist.] 2015, pet. denied) (quoting Sw. Bell Tel. Co. v. Mktg.
      on Hold Inc., 308 S.W.3d 909, 920 (Tex. 2010)). Because “assignee” or
      “assignees” is used in the Act only in phrases such as “transferee or
      assignee” and “transferees or assignees,”4 we understand the word to refer to
      a person who receives an assignment from a transferee.

Thus, if we replaced each role referred to in section 141.005(4) with the name of
the person or entity playing that role in the proposed transfer, then section

      4
          See TEX. CIV. PRAC. & REM. CODE ANN. §§ 141.005(4), 141.007(d).

                                             12
141.005(4) would read as follows: “Following a transfer of structured settlement
payment rights under this chapter, neither Met Tower nor MetLife may be required
to divide any periodic payment between Turpin and LumpSum or Andrew
Jonathan.”

      Metropolitan contends that the trial court is not permitted “to force
[Metropolitan] to do indirectly what it could not force [Metropolitan] to do
directly.” For several reasons, we do not find this argument persuasive.

      First, and as we have just seen, the legislature drew distinctions in the Act
among structured settlement obligors, annuity issuers, payees, transferees, and
assignees. The legislature specified that annuity issuers and structured settlement
obligors cannot be required to make divided payments, but it did not extend the
same prohibition to transferees or assignees. We presume that in identifying the
entities that cannot be compelled to divide a periodic payment, the legislature
deliberately omitted transferees and assignees from the list. See Lippincott, 462
S.W.3d at 509 (“We presume the Legislature included each word in the statute for
a purpose and that words not included were purposefully omitted.” (citing In re
M.N., 262 S.W.3d 799, 802 (Tex. 2008))).

      Second, when the legislature intended an “indirect” transaction or payment
to fall within the scope of one of the Act’s provisions, it expressly said so. See
TEX. CIV. PRAC. & REM. CODE ANN. § 141.004 (“No direct or indirect transfer of
structured settlement payment rights shall be effective and no structured settlement
obligor or annuity issuer shall be required to make any payment directly or
indirectly to any transferee . . . unless the transfer has been approved in advance in
a final court order . . .”). We presume that the legislature intentionally omitted any
reference in section 141.005 to “indirect” division of periodic payments because
the legislature did not intend to prohibit them. See Phila. Indem. Ins. Co. v. White,

                                         13
490 S.W.3d 468, 489 (Tex. 2016) (explaining that because the legislature included
fault-based language in some provisions and omitted it from other provisions of the
same chapter of the Property Code, the court must presume the omission was
deliberate); Montrose Mgmt. Dist. v. 1620 Hawthorne, Ltd., 435 S.W.3d 393, 406
(Tex. App.—Houston [14th Dist.] 2014, pet. denied) (explaining that a comparison
of a statute’s provision including a particular limitation with a provision omitting
the limitation demonstrates that if the legislature intended to include the limitation
in both provisions, “it knew how to say so”).

      Third, the other Texas appellate court to address the issue has recognized
that the Act permits a transferee (or its assignee) to divide payments between itself
and the payee, or between itself and another transferee. See, e.g., J.G. Wentworth
Originations, LLC v. Freelon, 446 S.W.3d 426, 432–33 (Tex. App.—Houston [1st
Dist.] 2014, no pet.); J.G. Wentworth Originations, LLC v. Perez, No. 01-13-
00264-CV, 2014 WL 3928590, at *5–6 (Tex. App.—Houston [1st Dist.] Aug. 12,
2014, no pet.) (mem. op.). Indeed, MetLife recently presented the same argument
verbatim to the First Court of Appeals, and we agree with that court’s reasoning:

      Citing Fox v. Robison, 111 Tex. 73, 229 S.W. 456, 458 (1921),
      MetLife asserts, “[T]he Texas Supreme Court specifically prohibited a
      party from circumventing a statute’s provisions in order to achieve
      indirectly what the party could not achieve directly under the statute.”
      Thus, we ask what could [the transferee] not achieve, either directly or
      indirectly, under Section 141.005(4)? The answer is that [the
      transferee] could not obtain an order requiring MetLife to split the
      periodic monthly payments between [the transferee] and [the
      payee]. . . .
      As we noted in RSL–3B–IL, Ltd., the [Act] implicitly recognizes that
      requiring an annuity issuer to divide payments between the payee and
      transferee or two or more transferees or assignees would result in an
      unforeseen increase in transaction costs and responsibilities. RSL–
      3B–IL, Ltd., 470 S.W.3d at 136. We indicated that Section 141.005(4)
      protects obligors and annuity issuers, such as MetLife, from incurring
                                         14
      unforeseen transaction costs and responsibilities because they cannot
      be required to divide payments. See id. In other words, Section
      141.005(4) serves the purpose of preventing obligors and annuity
      issuers from bearing increased transaction costs and responsibilities.
      See id. . . . We hold that the order did not circumvent Section
      141.005(4) as MetLife claims.
Metro. Ins. & Annuity Co. v. Peachtree Settlement Funding, LLC, No. 01-15-
00147-CV, 2016 WL 3162770, at *8 (Tex. App.—Houston [1st Dist.] June 2,
2016, no pet.) (citing RSL-3B-IL, Ltd. v. Prudential Ins. Co. of Am., 470 S.W.3d
131, 136 (Tex. App.—Houston [1st Dist.] 2015, pet. denied)).

      We overrule this issue.

D.    The trial court did not improperly compel Metropolitan to have a
      business, contractual, or agency relationship with Andrew Jonathan.
      In its next issue, Metropolitan argues that the trial court reversibly erred by
forcing Metropolitan into a non-consensual relationship with Andrew Jonathan.
Metropolitan characterizes the relationship variously as a business relationship, a
contractual relationship, or an agency relationship.

      Metropolitan first contends that the trial court’s order improperly created an
uncertain long-term business relationship between two prior strangers, and that
“[a]s a court-imposed relationship, . . . when problems arise the parties will not be
able to rely on a negotiated written agreement to sort things out.” Metropolitan
fails to cite any authority in support of its position that such a court-imposed
relationship is legally impermissible.

      As for the nonconsensual nature of the relationship between Metropolitan
and Andrew Jonathan, Metropolitan’s consent is unnecessary.           In stating the
requirements for a trial court to approve a transfer of structured settlement payment
rights, the legislature neither conditioned such approval on the agreement of the

                                         15
structured settlement obligor and annuity issuer nor authorized them to veto the
proposed transfer.

      Finally, the parties do not need to refer to a “negotiated written agreement”
between Metropolitan and Andrew Jonathan “to sort things out” if problems should
arise over the course of their relationship. Their relationship already is governed
by “the terms of the structured settlement,” which expressly includes the trial
court’s order.   See TEX. CIV. PRAC. & REM. CODE ANN. § 141.002(17).                If
complying with the court order should subject to Metropolitan to liabilities, costs,
or attorney’s fees, then Metropolitan has a statutory cause of action against the
transferee to recover them. See id. § 141.005(2).

      Metropolitan similarly argues that the trial court violated its liberty to enter
into, or to refuse to enter into, a contractual or agency relationship with Andrew
Jonathan. The trial court, however, created neither a contractual nor an agency
relationship between Metropolitan and Andrew Jonathan.            Their relationship
instead is governed by the trial court’s order as authorized by the Act. Under the
terms of that order, Andrew Jonathan is Turpin’s agent, not Metropolitan’s agent.

      Metropolitan additionally complains that it will have no remedy if Andrew
Jonathan fails to pay Turpin, but should that occur, then it would be Turpin who is
be harmed, not Metropolitan. By statute, Metropolitan cannot be held liable to
Turpin for those payments. See TEX. CIV. PRAC. & REM. CODE ANN. § 141.005(1)
(after a transfer, “the structured settlement obligor and the annuity issuer shall, as
to all parties except the transferee, be discharged and released from any and all
liability for the transferred payments). To that end, the trial court included the
following language in the final order:

      IT IS FURTHER ORDERED that [MetLife] and [Met Tower] shall
      absolutely, irrevocably, and forever discharge and satisfy their legal

                                         16
      and contractual obligation to make the Term Payments (including the
      Turpin Assigned Payments and the Remaining Turpin Monthly
      Payments) by paying and remitting said Term Payments to Andrew
      Jonathan, pursuant to this court order and the Servicing Arrangement
      and by doing so, [MetLife] and [Met Tower] are forever released
      from, and shall have not have, any current or future liability or
      obligation to Mr. Turpin for the Term Payments.
      Under this same heading, Metropolitan argues at length that servicing
arrangements increase its burdens and risks. Under the Act, however, it is the
payee’s best interest we consider, not the best interests of the structured settlement
obligor or the annuity issuer. Moreover, the Act prohibits a trial court from
compelling Metropolitan to divide payments, but nothing prohibits Metropolitan
from voluntarily splitting payments; thus, if Metropolitan believed that a servicing
arrangement would increase its burdens and risks, then it could have avoided those
increases by agreeing to divide the payments itself. Indeed, it has done so in the
past: this is the third court-approved transfer of Turpin’s periodic payments from
the Metropolitan annuity, and in both of the earlier transfers, Metropolitan agreed
that it would divide the payments between Turpin and the transferee.

      We overrule this issue.

E.    The trial court granted relief that was permitted under the Act,
      requested by LumpSum, and supported by the record.
      According to Metropolitan, the trial court reversibly erred in imposing the
serving arrangement because no such relief is available under the Act, and even if
it were available, LumpSum neither requested nor proved its entitlement to such
relief. We address each of these points in turn.

      1.    A transfer may include a servicing arrangement.

      Metropolitan contends that the Act does not give transferees the standing or
authority to seek any relief other than “approval of a transfer.” Metropolitan

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assumes that a servicing arrangement cannot be part of a transfer, but the Act
permits a trial court to approve a transfer not only to a transferee, but also to the
transferee’s assignee. See id. § 141.005(4). Here, the trial court’s order transferred
Turpin’s right to receive periodic payments to LumpSum, and LumpSum assigned
the right to Andrew Jonathan as permitted by the Act. The trial court’s final order
therefore refers to the “transfer of the Turpin Assigned Payments by Mr. Turpin to
[LumpSum] and, ultimately, to Andrew Jonathan, as reflected in the Transfer
Agreement and described in the Application.”

      Metropolitan also asserts that the Act does not “contemplate an order
relating to untransferred payment rights.” Stated in the terms used by the trial
court, Metropolitan contends that even if the trial court could transfer the right to
receive the “Turpin Assigned Payments” of $1,850 per month to Andrew Jonathan
as LumpSum’s assignee, the Act did not contemplate the transfer of the right to
receive the “Remaining Turpin Monthly Payments.” Again, we disagree. Nothing
in the Act prohibits a servicing arrangement.        Moreover, section 141.005(5)
provides, “Following a transfer of structured settlement payment rights under this
chapter . . . any further transfer of structured settlement payment rights by the
payee may be made only after compliance with all of the requirements of this
chapter.” Id. § 141.005(5) (emphasis added). A successive transfer—such as
would occur if Turpin were to transfer the right to the payments he is now
receiving from Andrew Jonathan—would be a “further transfer” that is “following
a transfer.”

      In a related vein, Metropolitan asserts that the Act allows Turpin to sell the
rights to the entirety of any number of monthly payments, but it does not allow
Turpin to sell the right to a portion of a monthly payment. We find no support for
this contention in the Act. As defined by the legislature, “‘[p]eriodic payments’

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includes both recurring payments and scheduled future lump-sum payments.” Id.
§ 141.002(10).    Because “periodic payments” include all payments, and the
legislature addressed multiple transfers by a single payee, the legislature must have
intended to permit transfers of less than all of the future periodic payments. The
legislature imposed no limits on how a transfer of the right to a portion of the
future periodic payments must be carved out; thus, the Act permits a payee who
chooses to sell only a portion of his periodic payments to sell all of some monthly
(or lump-sum) payments, or some of all monthly (or lump-sum) payments, or any
combination of these.

      2.      LumpSum requested and pleaded facts showing entitlement to such
              relief.
      LumpSum stated in its application to the trial court that Turpin agreed in the
transfer agreement “to assign and transfer the Assigned Payments to Transferee
[LumpSum] and/or its successors and assigns.”          LumpSum also attached the
transfer agreement to the application and incorporated it by reference. Paragraph
8.11 of the transfer agreement provides that LumpSum may assign its rights and
interests in the transfer agreement, “the other Transaction Documents, the Annuity,
the Settlement Documents, and/or the Periodic Payments,” and upon such
assignment,

      the transferor shall look solely to such assignee for any payment (e.g.,
      the Transfer Price, the servicing of non-Transferred Payments) and
      any other performance hereunder or thereunder. . . . If Purchaser does
      make an assignment as contemplated hereby, any such reference in
      this Agreement and its related documents shall mean Purchaser’s
      assignee.”
      In its response and objection to the Application, Metropolitan raised the
issue of a servicing arrangement. LumpSum responded by filing a brief in support
of its application, and addressed Metropolitan’s objection in the brief.

                                         19
      Finally, the request for the proposed servicing arrangement was tried without
objection. See Roark v. Stallworth Oil & Gas, Inc., 813 S.W.2d 492, 495 (Tex.
1991) (“The party who allows an issue to be tried by consent and who fails to raise
the lack of a pleading before submission of the case cannot later raise the pleading
deficiency for the first time on appeal.”). Counsel for both sides discussed it in
their opening statements, and both of the witnesses at the hearing testified about it
without objection. Turpin stated that he received payments on the Prudential
annuity through a servicing arrangement and had experienced no problems with it.
He testified that he understood the servicing arrangement that LumpSum proposed,
and he asked the trial court to approve it.      LumpSum’s general counsel also
testified on the subject, and explained how the servicing arrangement would work
in this case. Thus, the pleadings and the parties’ conduct at the hearing placed the
matter of the servicing arrangement before the trial court.

      Under the same heading, Metropolitan argues that it was not sued for
injunctive relief, and that, in any event, LumpSum did not show itself entitled to
injunctive relief. Our answer to that argument is the same as our answer to
LumpSum’s arguments that assume that this was an action to enforce or construe a
contract: this is a special statutory proceeding under the Act, and it is the Act’s
requirements that apply, not those concerning a different kind of action.

      We overrule this issue.

F.    The trial court did not abuse its discretion in finding the transfer to be
      in Turpin’s best interest.
      As we have observed before, “the Act’s purpose is to protect those who have
entered into structured settlements of their personal-injury claims from transferring
their rights to future periodic payments for a lump-sum payment that is
inadequate.” Wash. Square Fin., LLC v. RSL Funding, LLC, 418 S.W.3d 761, 769

                                         20
(Tex. App.—Houston [14th Dist.] 2013, pet. denied). Stated more pointedly, the
Act exists “to protect unwary tort claimants from potential abuse in their
transactions with factoring companies.” Transamerica Occidental Life Ins. Co. v.
Rapid Settlements, Ltd., 284 S.W.3d 385, 391 (Tex. App.—Houston [1st Dist.]
2008, no pet.). For that reason, the Act requires that a trial court approving a
transfer must expressly find that “the transfer is in the best interest of the payee,
taking into account the welfare and support of the payee’s dependents.” See TEX.
CIV. PRAC. & REM. CODE ANN. § 141.004. We review the trial court’s best-interest
finding for abuse of discretion. See Peachtree Settlement Funding, LLC, 2016 WL
3162770, at *12.

        “Best interest” is not defined in the Act, and Metropolitan urges us to follow
the Seventh Court of Appeals’ best-interest analysis as set forth in In re Rains.
The Rains court looked at eight factors in determining “the best interest of the
payee,” and an additional ten factors “to shield against possible exploitation and
abuse” by the transferee. See In re Rains, 473 S.W.3d at 464.5

        5
          Together, the eighteen factors that the Rains court included in its best-interest analysis
are as follows:
   1.       the financial resources and income available to the payee and the payee’s dependents
            from sources other than the structured settlement payments;
   2.       the extent or amount of the payee’s debt and expenses; the debt and expenses of the
            payee’s family; and the ability to pay those debts and expenses;
   3.       the real and personal assets available to the payee and the payee’s family;
   4.       the future yet reasonably foreseeable liabilities of the payee and the payee’s family;
   5.       the future yet reasonably foreseeable domestic, economic, physical, medical, and
            educational needs of the payee and the payee’s dependents;
   6.       the payee’s current need for and intended use of the lump sum to be received;
   7.       the number and ages of the dependents maintained by the payee;
   8.       the percentage of payments being assigned;
   9.       the payee’s age, education, and acumen;

                                                 21
         Because these factors take the court’s analysis well beyond the scope of the
inquiry authorized by the Act, we again decline to follow Rains. We instead hold
that “best interest” is to be determined by general reasonableness and consistency
with the Act’s purpose, which is to protect the payee from a factoring company’s
overreaching by requiring the factoring company to make certain disclosures and
by requiring a trial court to find that the transfer is in the payee’s best interests,
“taking into account the welfare and support of the payee’s dependents.” If the
exchange is reasonable and the payee is left with sufficient resources to provide for
the welfare and support of himself and his dependents, then the trial court’s best-
interest analysis need go no further.

         The evidence in this case surpasses that standard. Turpin testified that he is
a 49-year-old former police officer and is married to a teacher. The Turpins have a
21-year-old daughter who is starting college, and they have 9-year-old twins. They
also have $118,000 in debt, and Turpin wants to use the payment he would receive
from LumpSum to pay off that debt, leaving some to apply to his daughter’s
college tuition and some in reserve. In addition to Turpin’s wife’s unspecified

   10.      the payee’s business or financial acumen;
   11.      the payee’s ability to secure independent and informative financial advice;
   12.      the payee’s attempt to secure independent and informative financial advice if the
            payee otherwise lacked financial acumen;
   13.      the value being received in exchange for the value being relinquished by the payee;
   14.      the payee’s effort, if any, to maximize the return;
   15.      the payee’s search for and communication with other factoring companies;
   16.      the presence of other factoring companies or entities willing to strike a bargain and
            the value they would give in exchange for the value received;
   17.      the financial alternatives available to the payee, if any; and
   18.      the financial capability of the factoring company to perform, depending upon the
            manner in which the assignment is structured.
See In re Rains, 473 S.W.3d at 464.

                                                  22
salary, the Turpin’s household income includes $1,800 per month from Turpin’s
medical pension and a small amount from a Prudential annuity.                    From
Metropolitan, even after the transfer, Turpin would continue to receive $5,400 per
month, which will increase to $6,457 per month in May 2028 and to $10,807 per
month in October 2029. From 2019 to and including 2039, Turpin also will
receive five lump-sum payments from Metropolitan totaling $900,000.              Thus,
Turpin will continue to have a yearly income of at least $86,400, not including his
wife’s income, the Prudential annuity, the lump-sum payments, and the increases
in the Metropolitan monthly annuity payments.

      LumpSum agreed to buy 174 monthly payments of $1,850, having a present
value of $279,350.01 and a future value of $321,900. LumpSum originally offered
$175,000, but the trial court appointed independent financial consultant Pat
Robertson to determine if better offers were available. Correspondence in the
record indicates that J.G. Wentworth offered $198,000 for the same stream of
payments, and an unidentified company offered $192,000. LumpSum then raised
its offer to $190,000 (a nominal discount rate of 7.833% and an effective rate of
8.121%). Turpin wrote to the court that he preferred to accept LumpSum’s offer
because they previously had worked together and he trusted the company. He also
wanted to avoid the delay from litigating another transfer.

      On this record, the trial court reasonably could conclude that LumpSum was
not exploiting Turpin and that after the transfer Turpin would have sufficient
resources to provide for the welfare and support of himself and his dependents.
We therefore conclude that the trial court did not abuse its discretion in finding that
the transfer was in Turpin’s best interest, and we overrule this issue.

                                          23
G.     The trial court erred in taxing costs against Metropolitan.

       In its final issue, Metropolitan argues that the trial court erred in taxing costs
against it. We agree. Under section 141.007(f) of the Act, “fulfillment of the
conditions in Section 141.004 are solely the responsibility of the transferee in any
transfer of structured settlement payment rights.” Section 141.004 provides that
“[n]o direct or indirect transfer of structured settlement payment rights shall be
effective . . . unless the transfer has been approved in advance in a final court order
based on express findings by the court . . . .” Fulfilling the requirement to obtain a
court order approving the transfer ceases to be “solely the responsibility of the
transferee” when the trial court shifts the financial responsibility for the court costs
to the structured settlement obligor and the annuity issuer.

       We therefore sustain this issue and modify the judgment to tax costs against
transferee LumpSum. As modified, we affirm the trial court’s judgment.6

                                      IV. CONCLUSION

       We hold that the Texas Structured Settlement Protection Act authorizes a
trial court to approve a transfer that includes a servicing arrangement, and that
approval of such a transfer was properly placed before the trial court both by the
pleadings and by the conduct of the transferee and the interested parties at the
hearing.

       We further conclude that the trial court did not abuse its discretion in finding
that the transfer of $1,850 out of each of 174 monthly payments in exchange for
       6
         In a post-submission memorandum of authorities, Metropolitan refers us to the Fourth
Court of Appeals’ recent opinion in In re Hughes, No. 04-15-00482-CV, 2016 WL 4208116
(Tex. App.—San Antonio Aug. 10, 2016, no pet. h.), stating, “The Hughes opinion held that the
structured settlement transfer was in violation of the anti-assignment language in the settlement
documents, which is the exact same issue raised in [this] case.” That issue is not before the
court. To quote from Metropolitan’s reply brief, “[Metropolitan] did not raise the issue of
assignability in its Opening Brief and it is, therefore, beyond the scope of this appeal.”

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$190,000 was in Turpin’s best interest.      Finally, we hold that under section
141.007(f) of the Act, payment of court costs is solely the responsibility of the
transferee, and thus, the trial court erred in shifting that responsibility to the
structured settlement obligor and the annuity issuer. We therefore modify the
judgment to tax costs against LumpSum as the transferee, and as modified, we
affirm the trial court’s order.

                                      /s/    Tracy Christopher
                                             Justice

Panel consists of Justices Boyce, Christopher, and Jamison.

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