Court Opinion

ID: 7804753
Source: CourtListenerOpinion
Date Created: 2022-08-30 14:07:13.986889+00
Date Added: 2024-06-11T16:29:53.705381
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                             APPROVAL OF THE APPELLATE DIVISION
      This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
   internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                      SUPERIOR COURT OF NEW JERSEY
                                                      APPELLATE DIVISION
                                                      DOCKET NO. A-2690-20

IN THE MATTER OF
OFRED TAVAREZ
____________________

                 Submitted January 31, 2022 – Decided August 30, 2022

                 Before Judges Messano and Accurso.

                 On appeal from the Superior Court of New Jersey,
                 Law Division, Bergen County, Docket No. L-4041-16.

                 Fox Rothschild LLP, attorneys for appellant
                 SuttonPark Structured Settlements, LLC (Stephanie
                 Nolan Deviney, on the brief).

                 Respondents have not filed a brief.

PER CURIAM

       SuttonPark Structured Settlements, LLC appeals from an April 22, 2021

order vacating an earlier order that approved Advanced Funding LLC's

purchase and assignment of certain annuity payments owing to Ofred Tavarez

as a result of the structured settlement of a lawsuit for brain injuries he

suffered as a result of lead poisoning. The earlier order, entered in July 2016,
directed that Tavarez was to receive his agreed $203,000 purchase price, and

all monthly annuity payments thereafter due him on and after May 17, 2020,

would be paid to SuttonPark, Advance Funding's assignee.1

      In reliance on the July 2016 order, SuttonPark promptly paid Advance

Funding the $203,000 Advance Funding was to pay to Tavarez pursuant to the

order. Advance Funding, however, did not tender those funds to Tavarez.

Instead, Advance Funding sent Tavarez two checks, each for $40,000, one of

which bounced. After Tavarez complained, Advance Funding tendered

another $62,000 by electronic transfer, leaving $101,000 unpaid.

      Tavarez's further efforts to collect what he was owed were futile. He

testified he contacted the lawyer who represented Advance Funding in the

2016 proceeding, only to be told the company went bankrupt. Further research

indicated the president of the company had fled the country. In November

2019, six months before the annuity payments were to transfer to SuttonPark,

Tavarez filed a pro se complaint to vacate the order, "because [the] company

1
  The assigned payments consisted of 180 monthly payments of $2,019.46
beginning on May 17, 2020, and continuing through April 17, 2035, increasing
at a rate of 3% per annum. An earlier iteration of a disclosure statement dated
April 6, 2016, put the aggregate amount of the transferred payments at
$450,717.24, having a discounted then-present value of $363,516.66 at a
discount rate of 1.8%.
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disappeared and gave me checks with no funds. I have tried over the years to

find them and was told they fled."

      SuttonPark opposed the motion, arguing Tavarez needed to have filed

his motion to vacate the July 2016 order no later than July 2017 pursuant to

Rule 4:50-2, and having paid Advance Funding the $203,000, SuttonPark was

entitled to receive the annuity payments, leaving Tavarez to his remedies

against Advance Funding.

      After hearing argument and limited testimony from Tavarez and the

president and general counsel of SuttonPark, Judge Robert C. Wilson issued an

order vacating his prior July 2016 order, accompanied by a written opinion.

The judge relied on our opinion in Selective Ins. Co. of Am. v. Hudson E. Pain

Mgmt. Osteopathic Med. & Physical Therapy, 416 N.J. Super. 418 (App. Div.

2010). There, we observed "that an assignee takes subject to all defenses of

the obligor against the assignor, including non-performance by the assignor,"

meaning

            that the right of the assignee under the contract is no
            better than its assignor's rights. If the assignor is
            entitled to be paid, the assignee is entitled to be paid,
            but if the assignor is not entitled to be paid because of
            some failure of performance on the part of the
            assignor, then the assignee is not entitled to be paid
            either.

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              [Id. at 427 (quoting Shaw v. State Farm Fire & Cas.
              Co., 37 So. 3d 329, 333 (Fla. Dist. Ct. App. 2010) (en
              banc), disapproved on other grounds, Nunez v. Geico
              Gen. Ins. Co., 117 So. 3d 388, 397 (Fla. 2013)).]

      Judge Wilson noted SuttonPark did not dispute that its assignor

Advanced Funding did not pay Tavarez in full, and thus failed to perform

under the 2016 structured settlement order. Relying on Selective, the judge

reasoned that if Advanced Funding is not entitled to the future stream of

annuity payments because of its failure to perform, its assignee SuttonPark is

not entitled to the future annuity payments either. Although the judge found

nothing to suggest SuttonPark was less than "a good faith purchaser of the

rights of Advance Funding," the judge found SuttonPark "failed to do its due

diligence."

      Judge Wilson determined "[b]oth parties were injured by the

presumptively fraudulent middleman, Advance Funding," but "contract law

dictates that an assignee who takes the rights of the assignor is at the mercy of

[its] performance." The judge concluded Advanced Funding violated the 2016

structured settlement order "at the outset due to its nonpayment," and "then

sold its rights to [the annuity] payment[s] — which it never successfully

acquired — to SuttonPark" and is now nowhere to be found. The judge found

the appropriate remedy was to vacate the 2016 structured settlement order,

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resulting in "Tavarez remaining the beneficiary of the annuity." Because

Tavarez had already received $102,000, however, the judge wrote he would

"not preclude a motion from SuttonPark to recoup a portion of its losses from

the future annuity payments" to Tavarez. 2

      SuttonPark appeals, but it does not address the substance of Judge

Wilson's opinion that it failed to investigate the bona fides of its assignor and

that its rights as an assignee can rise no higher than those of its assignor — an

omission we take as a tacit acknowledgement of its soundness. See Telebright

Corp., Inc. v. Dir., N.J. Div. of Tax'n, 424 N.J. Super. 384, 393 (App. Div.

2
   That provision of the order prompted finality review in this court. In
response to a letter from the Clerk's Office asking SuttonPark to address the
issue, its counsel responded by insisting the court's order "disposed of all
issues as to all parties," and that a motion based on the "language in the April
2021 order regarding recouping funds would be improper." Counsel argued
"[t]he trial court did not have jurisdiction under New Jersey Court Rules and
case law to consider the motion, let alone a collateral motion based upon
language inserted by the trial court for an issue that was not even before the
trial court." Further, counsel contended that "[b]y filing a motion to recoup,
SuttonPark risks waiving the jurisdictional argument — an issue the appellate
court must decide."

      Although we were obviously satisfied based on SuttonPark's
representation that all proceedings in the trial court were concluded, thus
allowing this appeal to proceed, we express no opinion on whether the entire
controversy doctrine would now bar any motion for recoupment post this
appeal. See R. 4:30A; Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo,
Hyman & Stahl, P.C., 237 N.J. 91, 108-09 (2019).
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                                        5
2012) (deeming the failure to brief issues constitutes waiver). Instead,

SuttonPark contends the trial court "lacked jurisdiction to vacate the July 2016

order," a contention we dismiss as without sufficient merit to warrant

discussion in a written opinion. See R. 2:11-3(e)(1)(E).

      Although SuttonPark is correct that motions to reopen a judgment for

fraud or other misconduct of an adverse party under Rule 4:50-1(c) must be

made within one year after the judgment, a time period not enlargeable

pursuant to Rule 1:3-4(c), it ignores that relief under Rule 4:50-1(f), which is

not subject to that time limitation, is available for exceptional situations, and

in such cases "its boundaries are as expansive as the need to achieve equity

and justice." Court Inv. Co. v. Perillo, 48 N.J. 334, 341 (1966).

      The 2016 order was entered pursuant to N.J.S.A. 2A:16-63 to -69, the

Structured Settlement Protection Act — legislation designed to protect

"recipients of long-term structured settlements from aggressive marketing by

factoring companies seeking to persuade these people to cash out future

payments at sharp discounts." In re Transfer of Structured Settlement Rights

by Spinelli, 353 N.J. Super. 459, 464 (Law Div. 2002) (quoting Sponsor's

Statement to A. 2146 (Feb. 28, 2000)). The annuity payments Advanced

Funding persuaded Tavarez to "cash out" resulted from a personal injury suit

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for brain damage he suffered from exposure to lead paint. Tavarez, who was

pro se on the Rule 4:50 motion, states in a document in the record that he can

neither read nor write because of his learning disability. Case notes in the

Clerk's Office reflect repeated attempts to explain the requirements for filing a

brief on appeal, including conversations with Tavarez's sister, who claimed she

was assisting him due to his disability. No brief was filed in his behalf.

      Given the circumstances, we have no hesitation in concluding Judge

Wilson did not abuse his broad discretion in finding the equities strongly

favored Tavarez, and that vacating the 2016 order pursuant to Rule 4:50-1(f)

was required to ensure a fair and just result. See Hous. Auth. of Morristown v.

Little, 135 N.J. 274, 283-6 (1994). Accordingly, we affirm the judgment,

essentially for the reasons expressed in Judge Wilson's thorough and

thoughtful written opinion.

      Affirmed.

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