Court Opinion

ID: 4686990
Source: CourtListenerOpinion
Date Created: 2021-05-14 16:15:09.011649+00
Date Added: 2024-06-11T08:04:38.011124
License: Public Domain

J-A09036-21

                                   2021 Pa. Super. 96

    ZACHARY BARBER, JEFFREY BARBER,            :   IN THE SUPERIOR COURT OF
    ADMINISTRATOR OF THE ESTATE OF             :        PENNSYLVANIA
    LINDA LEE JENKINS A/K/A/ LINDA             :
    LEE BARBER, DECEASED                       :
                                               :
                                               :
                v.                             :
                                               :
                                               :   No. 615 WDA 2020
    BRUCE STANKO, NORTH HILLS                  :
    PHARMACY SERVICES, LLC;                    :
    PACERCHECK, INC.; ET AL                    :
                                               :
                                               :
    APPEAL OF: SEMPRA FINANCE, LLC             :
    ("SEMPRA")                                 :

                  Appeal from the Order Entered June 5, 2020
      In the Court of Common Pleas of Allegheny County Orphans' Court at
                            No(s): No. 4037 of 2005

BEFORE:      STABILE, J., MCCAFFERY, J., and PELLEGRINI, J.*

OPINION BY PELLEGRINI, J.:                               FILED: MAY 14, 2021

        Sempra Finance, LLC (Sempra) appeals from the order entered in the

Court of Common Pleas of Allegheny County (Allegheny County Orphans’

Court) granting Zachary Barber’s motion to coordinate a Butler County case

in Allegheny County pursuant to Pennsylvania Rule of Civil Procedure 213.1.1

____________________________________________

*   Retired Senior Judge assigned to the Superior Court.

1 Pennsylvania Rule of Civil Procedure 213.1, Coordination of Actions in
Different Counties, provides, in pertinent part:

        (a) In actions pending in different counties which involve a
        common question of law or fact or which arise from the same
(Footnote Continued Next Page)
J-A09036-21

The matters to be coordinated involve allegations about sales of certain

annuities to be paid by Zachary Barber (Zachary) to Sempra that were

purportedly approved in the Court of Common Pleas of Butler County but were

created by structured settlement agreement approved by Allegheny County

Orphans’ Court when Zachary was a minor.

       While what is before us involves a narrow procedural question involving

whether the Allegheny County Orphans’ Court properly coordinated these

actions, it is necessary to have an understanding of the requirements that

need to be met to transfer payments under the Pennsylvania Structured

Settlement Protection Act (SSPA), 40 P.S. §§ 4001-4009, as well as a review

of the underlying facts.

                                               I.

                                               A.

       Structured settlements were rare until a series of IRS rulings in the late

1970s declared that periodic payments in structured settlements would not be

subject to     federal    income     tax.       Congress effectively codified these

administrative rulings with the passage of the Periodic Payment Settlement

____________________________________________

       transaction or occurrence, any party, with notice to all other
       parties, may file a motion requesting the court in which a
       complaint was first filed to order coordination of the actions. …

Pa.R.C.P. No. 213.1(a).

                                               2
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Act of 1982. See PUBLIC LAW 97-473—JAN. 14, 1983.2 The passage of this

Act incentivized plaintiffs to forgo a lump-sum payment in favor of a structured

settlement to provide tort victims with long-term economic security by

providing guaranteed income with spendthrift protection.

       While structured settlements provided those benefits, payees of

structured settlements were precluded from securing a lump-sum payment by

cashing in their remaining payments to take care of current needs or wants,

real or imagined.      Like all things involving substantial sums of money and

wants and desires, there developed an industry to allow plaintiffs to “change

their minds” and transfer their payments to a factoring company who offered

less than the present value of those payments. The practice of structured

settlement transfers raised a concern that personal injury claimants are being

exploited by factoring companies that take advantage of vulnerable and

unsophisticated claimants.        See Johnson v. Structured Asset Services,

____________________________________________

2 While a personal injury plaintiff who receives a lump sum payment may
exclude that payment from taxable income under 26 U.S.C. § 104(a)(2), any
future return from the plaintiff’s investment of the lump-sum payment is
treated as taxable investment income. In contrast, all the structured
settlement payments that are received on account of personal injuries are
excludable from income such that a structured settlement effectively shelters
from taxation the return from the investment of the putative lump-sum
payment. See Western United Life Assurance Company v. Hayden, 64
F.3d 833, 839 (3rd Cir.1995); CGU Life Insurance Company of America
v. Metropolitan Mortgage & Securities Co., Inc., 131 F. Supp. 2d 670, 679
(E.D. Pa. 2001).

                                               3
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LLC, 148 S.W.3d 711, 728 (Tex.App.2004) (“Because the underlying purpose

of a structured settlement is not only to compensate an injured party but also

to protect that party from his own improvidence, a number of commentators,

courts, and legislatures have become concerned by the growing number of

companies, sometimes called ‘factoring companies,’ that purchase structured

settlements from a personal injury victim by paying him immediate cash for

the right to future payments under the settlement.”).

        On account of these concerns, Congress amended the Internal Revenue

Code in 2002 to impose “a tax equal to 40 percent of the factoring discount”

upon any person or entity “who acquires directly or indirectly structured

settlement     payments       rights    in     a   structured   settlement   factoring

transaction....” 26 U.S.C. § 5891(a).3 However, a statutory exception to that

____________________________________________

3   Pursuant to 26 U.S.C. § 5891, structured settlement factoring transactions:

        (a) Imposition of tax.--There is hereby imposed on any person
        who acquires directly or indirectly structured settlement payment
        rights in a structured settlement factoring transaction a tax equal
        to 40 percent of the factoring discount as determined under
        subsection (c)(4) with respect to such factoring transaction.

        (b) Exception for certain approved transactions.—

              (1) In general.--The tax under subsection (a) shall not
        apply in the case of a structured settlement factoring transaction
        in which the transfer of structured settlement payment rights is
        approved in advance in a qualified order.

(Footnote Continued Next Page)

                                               4
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tax has been created for any transfer of structured settlement payment rights

that is approved in advance by a qualified court order.          See 26 U.S.C.

§ 5891(b)(1). To constitute a “qualified order” under Section 5891 to avoid

paying a 40 percent tax on the factoring discount amount, any company

wishing to purchase a payee’s structured settlement rights must secure a

court order concluding that the transfer is in the payee’s best interests.

       Like almost all states, Pennsylvania has adopted the SSPA to

functionally allow the transfer of structured settlement payments. It provides,

among other things, that, “[n]o transfer of structured settlement payment

rights shall be effective ... unless the payee has filed a petition requesting

such transfer and the petition has been granted by final order or decree of a

court of competent jurisdiction based on such court’s express written findings

____________________________________________

            (2) Qualified order.--For purposes of this section, the
       term “qualified order” means a final order, judgment, or decree
       which—

                     (A)finds that the transfer described in paragraph (1)

                   (i) does not contravene any Federal or State statute
              or the order of any court or responsible administrative
              authority, and

                   (ii) 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(a), (b)(1), (2)(A)(i)(ii).

                                               5
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that .... [t]he payee has established that the transfer is in the best interests

of the payee or his dependents.” 40 P.S. § 4003(a)(3).

      It has been said that the SSPA places the common pleas court in

“position of a guardian of a person who stands in the presumptive position of

the defenseless recipient of a benefit. It is for the Court to determine, as a

guardian would, on an independent basis, whether the transaction serves the

best interests of an unsophisticated (if not incompetent) person” and “is to

ensure that an otherwise financially defenseless and possibly injured individual

would receive a regular, sustaining source of income.” In re Jacobs, 936
A.2d 1156, 1160 (Pa. Super. 2007).

      Requiring a judge to serve as guardian to protect the interests places

the judge in unfamiliar territory. Generally, the petition to transfer payment

is unopposed, with plaintiff-payee wanting to transfer payments so that it can

receive payments for what he or she considers in its best interests, whether

it is or not, and the factoring company wanting it approved so it can make the

most money.      That requires the trial judge to make an independent

determination of whether the sale is in the best interests of the plaintiff-payee

based on economic factors that it is not within its ken and with parties who

are not that forthcoming. Moreover, this determination is made even more

difficult because the proceedings are non-adversarial, with no factual

development and competing positions to inform its judgment as would be the

usual. It depends on the forthrightness and good faith of counsel to provide
                                       6
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all the information available for the judge to make an informed decision on

what is in the best interests of the plaintiff-payee to avoid fraud on the court.

       While 40 P.S. § 4003 sets forth several conditions that must be met

before a transfer can be approved, other sections are pertinent here. Section

4004 of the SSPA, 40 P.S. § 4004, provides that the petition to transfer

structured settlement payments shall be filed where the payee is domiciled;

another of those conditions requires that the transfer must also be “expressly

approved in writing by ... any court or responsible administrative authority

that   previously     approved   the   structured   settlement.”       40   P.S.

§ 4003(a)(5)(i)(B).    This approval is required because they are commonly

used to resolve tort claims of minors, as well as adults who have suffered

injuries that have rendered them legally incompetent, before any transfer can

be effectuated.

       Now to the underlying facts.

                                       B.

       In 2005, Zachary, when he was less than three years old, was in a car

crash in which his mother was killed. Zachary’s father, Jeffrey Michael Barber,

Jr. (Father), filed a wrongful death lawsuit against the driver in the Court of

Common Pleas of Allegheny County on behalf of Zachary and himself at Case

                                       7
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No. GD 05-2884 (“Wrongful Death Action”).4 Father was to receive a lump of

$471,950.00, along with various future lump-sum payments and monthly

income until he reached the age of 40.

       Because Zachary was a minor, any settlement had to be approved by

the Allegheny County Orphans’ Court. On July 6, 2005, the Allegheny County

Orphans’ Court approved a structured settlement (Settlement Approval Order)

for Zachary as part of the personal injury action settlement. The Settlement

Approval Order provided for distribution of approximately $2,700,000.00 to

Zachary by Prudential Insurance Company of America and Travelers Life and

Annuity in 58 separate payments from February 7, 2020, when he turned 18

until February 7, 2031, when he turned 29. He also was to receive a balance

of $869.00 that was to be placed in a federally insured certificate of deposit,

“until he reaches the age of majority or by further order of this [c]ourt.”5

(Order, 7/06/05, at 2-3).

____________________________________________

4The Defendants listed in the caption were the defendants involved in the car
accident.

5The quoted restrictive language is required by Allegheny County Local Rule
2039 when “the proceeds of settlement are to be deposited in a savings
account or in a certificate of deposit.” Allegheny County Local Rule 2039.

                                               8
J-A09036-21

                                               C.

        In 2012, Father began selling Zachary’s annuities.6 In total, Father sold

$1,570,000.00 of the annuities for a total purchase price of $822,673.41. To

carry out those transfers, Father and Pinnacle Capital, LLC (Pinnacle) filed

three petitions pursuant to the Pennsylvania Structured Settlement Protection

Act (SSPA), 40 P.S. §§ 4001-4009.7

____________________________________________

6 Four petitions were filed in the Butler County Court of Common Pleas
between 2007 through 2012 seeking the approval of the sale of Father’s
annuities to Stone Street. Three of the petitions represent that Father would
use the money to start a business. (Second Amended Petition, 2/02/20, at
11). The fourth petition filed in May 2012 states that Father would use the
money to pay off a loan and to make home improvements. (See id.). Each
of the petitions to sell Father’s annuities were granted. (See id.). Through
those sales, Father depleted most of his structured settlement by the end of
2012. (See id.).

7   Section 4003(a) of the SSPA provides in pertinent part that:

        No transfer of structured settlement payment rights shall be
        effective and no structured settlement obligor or annuity issuer
        shall be required to make any payment to any transferee of
        structured settlement payment rights unless the payee has filed a
        petition requesting such transfer and the petition has been
        granted by final order or decree of a court of competent
        jurisdiction based on such court’s express written findings that …
        [t]he payee has received or expressly waived in a separate written
        acknowledgment signed by the payee, independent legal advice
        regarding the implications of the transfer, including consideration
        of the tax ramifications of the transfer.

40 Pa.C.S. § 4003(a)(4).

(Footnote Continued Next Page)

                                               9
J-A09036-21

                                               D.

       The first petition seeking to sell the structured settlement was filed in

2012 by Father and Pinnacle in the Butler County Court of Common Pleas for

the transfer of $600,000.00 of the annuity to Pinnacle for $307,673.41. In

his petition, Father represented that he resided in Butler County. The 2012

Butler County petition alleged that Father intended to use the lump sum

payment to “purchase his home outright” and to put it in Zachary’s name.

The Butler County Court of Common Pleas, by Judge Michael Yaeger, denied

the petition as not being in Zachary’s best interest.

       Notwithstanding that the petition was denied in Butler County, 41 days

later, Father and Pinnacle filed a nearly identical petition in the Beaver County

Court of Common Pleas. In this petition, Father represented that he resided

in Beaver County. Neither party informed the court that the earlier petition

had been denied by the Butler County Court of Common Pleas. The petition

also did not mention that the structured settlement was created by the

Allegheny County 2005 Settlement Approval Order. On May 21, 2013, the

____________________________________________

“Payee” is defined as “[a] person domiciled in this Commonwealth who is
receiving tax-free payments under a structured settlement and proposes to
make a transfer of payment rights thereunder.” 40 P.S. § 4002.

Father filed the petition in his own name and as guardian of Zachary. Even
though there was an apparent conflict between Zachary and Father’s interest,
Zachary was not appointed separate representation in any of proceedings
seeking to sell his annuities to fund his Father’s obligations.

                                               10
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Beaver County Court of Common Pleas approved the transfer.           The court

specifically found, in pertinent part, that:

      (1) the Payee, [Father], as Parent and Natural Guardian of
      [Zachary], a minor, has established that the transfer is in the best
      interests of the payee or the payee’s dependents;

      (2) based on the certification by an attorney for the transferee,
      and the court having not been made aware of any statute,
      regulation or order that would be incompatible with the proposed
      transfer, the transfer will not contravene any applicable federal or
      state statute or regulation, or the order of any court or
      administrative authority;

      (3) the transfer complies with the remaining requirements of the
      [SSPA], including Sections 3(a)(2), 3(a)(4), 3(a)(5) and 3(a)(6);

      (4) the payments that are to be transferred are designated as
      follows: one lump sum payment of $425,000.00 due and payable
      on February 7, 2020; and one lump sum payment in the amount
      of $175,000.00 due on February 21, 2020, to Pinnacle’s
      Designated Assignee, Michael J. Pickett[;]

                                    *   *      *

      (5) the payee shall receive from the transferee the amount of
      $307,673.41, from which no funds are owed for counsel fees,
      administrative fees, or other costs, fees or expenses.

(Beaver County Order, 5/21/13). No mention of or approval for this transfer

was sought or received from the Allegheny County Orphans’ Court.

                                        E.

      On January 25, 2016, Beaver County Court of Common Pleas approved

another petition to transfer $250,000.00 of Zachary’s structured settlement

to Habitus Funding, as assignee of Pinnacle, in exchange for the lump sum

payment of $175,000.00 to Father, as parent and natural guardian of
                                        11
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Zachary.8 (See Beaver County Order, 1/25/16). Again, there was no mention

in the petition of the Settlement Approval Order and no approval was sought

or received from the Allegheny County Orphans’ Court.

                                               F.

       On February 5, 2018, Sempra and Father filed a joint SSPA petition in

Butler County Court of Common Pleas seeking to transfer a $720,000.00

annuity owned by Zachary to Sempra for $275,000.00 (Butler County

Petition).   The Butler County Petition did not mention that the structured

settlement was created by the Settlement Approval Order. At the hearing on

the Butler County Petition, Father testified to the following:

       •   No previous transfers of Zachary’s structured settlement
       payments had occurred.

       •    Father and his wife struggled to make monthly mortgage
       payments on the family home in Butler County (the Property)
       where Zachary Barber resided.

       •     Father intended to use the payment from Sempra to pay off
       a high-interest mortgage encumbering the Property, which was in
       default.

       •     If the Butler County Petition were approved, Father would
       transfer title to the Property to Zachary when he became eighteen
       years old, and

____________________________________________

8 Pinnacle represents it paid the money for the annuities to a trust account
controlled by Zachary’s Guardian Ad Litem (GAL), Attorney Michael Pawk,
although the Beaver County orders do not expressly reference that payment
should be made to such an account.

                                               12
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      •     Father would transfer certain of the Property’s oil and gas
      rights, which generated between $2,000.00 and $8,000.00 per
      month, to Zachary.

(See N.T. Butler County Transfer of Structured Settlement Hearing, 3/12/18,

at 6, 9-10, 14-16).

      In addition, Father and his wife testified that Zachary knew and

approved of the proposed transfer and that it was in his best interest. (See
id. at 26, 28). When Judge Yeager was not satisfied with the rate of return

or that Father “was taking [his] son’s money to do this,” Sempra increased

the purchase price to $340,000.00. (Id. at 19); (see id. at 27).

      On April 18, 2018, Judge Yeager entered an order approving the Butler

County Petition, finding, in relevant part:

      3. [Father] has established the Proposed Transfer is in his best
      interest or in the best interest of Zachary [and his] dependents, if
      any.

                                  *    *      *

      9. Pursuant to 26 U.S.C. § 5891, the Proposed Transfer does not
      contravene any federal or state statute or the order of any court
      or responsible administrative authority, and is in the best interest
      of Zachary [], taking into account the welfare and support of his
      dependents, if any.

      10. Sempra intends to assign all of its rights, title and interest in
      and to the Assigned Payments to Habitus Funding (“Assignee”).

                                   *    *     *

             J. In consideration for the Assigned Payments, Sempra shall
      remit a check in the amount of $340,000.00 made payable to
      “Jeffrey Barber and his attorneys, Lutz & Pawk”.

                                       13
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           K. This order is a “Qualified Order” within the meaning of 26
      U.S.C. § 5891.

(Butler County Order, 4/18/18).

      Judge Yeager based his decision on Father’s representations and subject

to the terms and conditions of the Deed of Trust between Father and his wife

and Father as Trustee for the benefit of Zachary. Pursuant to the Deed of

Trust, Father and his wife agreed to convey the Property and all gas rights

and royalty interests associated with the Property to Father as Trustee for

Zachary’s benefit, effective April 16, 2018. (See id. attached Deed of Trust,

Schedule A). On May 2, 2018, pursuant to the Butler County order’s terms,

Sempra issued a wire transfer in the amount of $340,000.00 to Father’s

attorneys.

                                       G.

      On January 31, 2020, Zachary’s paternal grandparents, on his behalf,

presented a first emergency motion for rule to show cause in the Allegheny

County Orphans’ Court.      (First Emergency Motion).     Contrary to Father’s

testimony at the March 18, 2018 Butler County hearing that Zachary

previously was aware of the annuity transfers, Zachary stated that it was not

until 2020, shortly before his 18th birthday that he first learned of the sale of

over $1.5 million of his annuities. The First Emergency Motion, which named

Pinnacle and Father, sought to enforce the July 5, 2005 Settlement Approval

Order and a declaratory judgment that any sale of Zachary’s future settlement

                                       14
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payments was void and any future payments solely his property. The First

Emergency Motion alleged that:

     •     As a result of his mother’s death, Zachary was awarded a
     confidential seven-figure settlement;

     •    Father had kept all information about the settlement from
     Zachary;

     •    Father has consistently told Zachary that the money
     Zachary would receive in the settlement would be divided equally
     between the two of them;

     •     Father converted Zachary’s future $500,000.00 payment
     into a present payment to himself of $175,000.00 without court
     approval or involvement;

     •      Father would attempt to access money belonging to Zachary
     for his own use and benefit when it became available to him on
     his eighteenth birthday, February 7, 2020;

     •    Zachary was in a situation that would lead to irreparable
     harm if he continued to reside with his father, and therefore had
     moved to his paternal grandparents’ residence;

     •     Father has continually refused to share any information with
     Zachary about the settlement or to give him permission to speak
     with account managers;

     •     Although Zachary was to receive substantial monetary
     payments on February 7 and 21, 2020, Father had represented to
     him that he will receive $1,500.00 on his eighteenth birthday.

(See First Emergency Motion, 1/30/20, at 2, Paragraphs 6, 8-10, 12-13; 3,

Paragraphs 17-20).    The First Emergency Motion also sought an order

“requiring future payments[, including the payments due on February 7 and

21, 2020,] be paid to the Prothonotary of the Court of Common Pleas and be

                                    15
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accessed only by Z.B. upon motion to this Honorable Court after he achieves

the age of majority.” (Id. at 3, Paragraph 20). The First Emergency Motion

did not seek the return of the $340,000.00 already paid by Sempra to Father

pursuant to the Butler County order.

      Because the court “was shocked and seriously concerned about the

allegations, which included violations of [statutes], forum shopping, and

fraud[,]” the Allegheny County Orphans’ Court entered an order on January

31, 2020, “out of an abundance of caution for the sole purpose of safeguarding

[Zachary Barber’s] funds until this matter could be properly adjudicated.”

(Orphans’ Ct. Op., at 6). The order provided:

      unless and until otherwise ordered by the Court, Prudential
      Insurance Company of America and Travelers Life & Annuity
      Company, are hereby ORDERED to deposit with the Prothonotary
      of the Court of Common Pleas of Allegheny County any amounts
      payable for the benefit of Z.B., a minor. The Court further
      ORDERS, upon reaching the age of majority, Z.B. may file a
      motion seeking release of the funds being held.

(Order, 1/31/2020).      This order had the effect of short-circuiting annuity

payments now to be paid to Sempra and others when they became due under

the structured settlement agreement even though they had already paid

Father for assignment of those proceeds.

      On February 3, 2020, Zachary ’s grandparents filed a second emergency

motion (Second Emergency Motion) naming Father, Pinnacle and Sempra. It

alleged   that   the   Butler   County   Court   of   Common   Pleas   relied   on

misrepresentations in Father’s affidavit in support of the Butler County petition
                                         16
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in which he “falsely states that [Zachary] has never previously transferred

rights under the structured settlement.”            (Second Emergency Motion,

2/02/20, at 14) (emphasis omitted); (see id. at Exhibit K, Butler County

Petition, Barber, Jr. Affidavit, at 1, Paragraph 6).    The Second Emergency

Motion also averred that Father falsely stated in his Beaver County petition

that he resided there when he did not. The grandparents sought an order

voiding the May 21, 2013 and January 25, 2016 Beaver County orders, the

April 18, 2018 Butler County order, and any other yet undiscovered orders

related to Zachary’s settlement funds. (See id. at 17). On March 13, 2020,

Zachary filed a First Amended Petition (Amended Petition) substituting himself

for his grandparents.

       Sempra filed preliminary objections to the Amended Petition, arguing

that Zachary’s claims: (1) were an impermissible collateral attack on a final

order entered in Butler County, a court of coordinate jurisdiction, and (2) were

time-barred pursuant to 42 Pa.C.S. § 5505.9

       On May 11, 2020, in light of the allegations made by Zachary and his

grandparents, Sempra filed a petition to enforce the Butler County April 18,

2018 order (Butler County Petition to Enforce), asking that the Butler County

Court of Common Pleas determine whether Father failed to comply with the

____________________________________________

9“A court upon notice to the parties may modify or rescind any order within
30 days of its entry.” 42 Pa.C.S. § 5505.

                                               17
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Butler County order and, if so, to compel him to transfer the Property to

Zachary, along with any proceeds from the oil and gas rights since the order’s

entry, as well as any other appropriate relief, including sanctions. (See Butler

County Petition to Enforce, 5/11/20, at 13). On May 17, 2020, Judge Yeager

issued a rule requiring any party intending to respond to the Butler County

Petition to Enforce to do so and scheduling a conference.

                                      H.

      On May 19, 2020, Zachary filed a motion to coordinate the Allegheny

Case seeking to transfer the Butler County case to the Allegheny County

Orphans’ Court (Motion to Coordinate). The Motion to Coordinate asserted

that the “common question of law and fact in both actions is whether Judge

Yeager’s Order complies with the Pennsylvania Structured Settlement

Protection Act.”    (Alleged Common Question).        (Motion to Coordinate,

5/19/20, at 5, Paragraph 24).      In its response, Sempra argued that the

Allegheny County Orphans’ Court lacked subject matter jurisdiction to modify

or rescind the Butler County order due to the passage of time and the

coordinate jurisdiction doctrine, and that the Butler County court was the only

court with authority to enforce its April 18, 2018 order.

      On June 1, 2020, the Allegheny County Orphans’ Court heard argument

on the Motion to Coordinate. As it explains in its opinion:

            Pa.R.C.P. 213.1 provides for the coordination of actions
      pending in different counties. It is ironic that Sempra would claim
      that there was no action pending in Butler County, when it was
                                      18
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     Sempra that filed a Petition to Enforce April 18, 2018 Order on
     May 11, 2020, which resulted in the filing of the Motion for
     Coordination of Actions before this court. This court contacted
     Judge Yeager in Butler County and thoroughly discussed the fact
     that Allegheny County was the situs of the original Order dated
     July 6, 2005. Judge Yeager was in complete agreement that the
     proper venue for adjudicating all matters concerning Zachary
     Barber’s annuities is Allegheny County.

            Rule 213.1 directs the court to consider several matters
     when deciding in which county to proceed on an action “which
     arose from the same transaction or occurrence”. This entire case
     is controlled by the July 6, 2005 order issued [in the] Allegheny
     County Court of Common Pleas. The fact that Sempra, and []
     Pinnacle, went to the surrounding counties and circumvented
     Allegheny County does not result in Allegheny County losing
     jurisdiction; rather, it simply demonstrates that Sempra and
     Pinnacle were forum shopping, as they did not believe they would
     be successful in Allegheny County.

            The question to be answered is: why is Sempra fighting
     jurisdiction in Allegheny County, noting that Pinnacle did not
     appeal the June 1, 2020 order? The only answer is Sempra is
     attempting to hide from Allegheny County, even though the entire
     matter started in Allegheny County and the July 6, 2005 Order
     specifically states “the funds are not to be withdrawn by the minor
     until he reaches the age of majority or by further order of this
     court,” not the court in Beaver County or the court in Butler
     County.

                                     19
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(Orphans’ Court Opinion, 9/21/20, at 4-5); (see also Order, 6/05/20, at 1).10

Sempra timely appealed11 the Allegheny County Orphans’ Court’s June 1,

2020 order. It and the Allegheny County Orphans’ Court have complied with

Rule 1925(a). See Pa.R.A.P. 1925.

                                               II.

       On appeal, Sempra argues that the Allegheny County Orphans’ Court

abused its discretion in granting the Motion to Coordinate because “(a) no

‘question of fact or law’ is common to the cases, (b) the Butler County case is

____________________________________________

10 Similarly, on June 4, 2020, Judge Yeager entered an order in Butler County
directing that all proceedings filed in this matter are coordinated with the
action in Allegheny County Orphans’ Court, that the matter was transferred to
Allegheny County, and that all further litigation in both matters shall be
conducted in Allegheny County Orphans’ Court. The order further cancelled
any proceedings related to Sempra’s Petition to Enforce and directed that “any
and all actions on the underlying Structured Settlement, dissipation thereof,
or expenditures therefrom are prohibited without further Order of Court from
the Court of Common Pleas of Allegheny County, Pennsylvania.” (Zachary
Barber’s Brief, at Appendix 4).

11 On June 22, 2020, the Allegheny County Orphans’ Court issued an order
staying any open matters pending this appeal and directing that its January
31, 2020 order (that all settlement monies due Zachary be paid into the
Allegheny County Prothonotary) remain in full force and effect. (See Order,
6/22/20); Pa.R.A.P. 1701(b)(1) (“After an appeal is taken … the trial court …
may … [t]ake such action as may be necessary to preserve the status quo[.]”);
(Orphans’ Ct. Op., at 7). This stayed the Allegheny County Orphans’ Court’s
consideration of related motions to dissolve the January 31, 2020 order and
preliminary objections to Zachary’s Amended Petition. Several parties have
appealed the Allegheny County Orphans’ Court’s June 22, 2020 order at
Docket Nos. 684, 702, 753 and 754 of 2020. These appeals and the court’s
June 22, 2020 order are not the subject of our review and will be addressed
in a separate opinion.

                                               20
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not ‘pending,’ and (c) the orphans’ court lacks subject matter jurisdiction over

Zachary Barber’s claims against Sempra.”            (Sempra’s Brief, at 16)

(unnecessary capitalization omitted).12

                                               A.

       Sempra’s first argument, broadly stated, is that the Allegheny County

Orphans’ Court abused its discretion in its consideration of the factors

enumerated in Rule 213.1(c). Specifically, Sempra argues that there is no

“common question” because, although both cases “touched upon the

structured settlement approved by the orphans’ court’s July 6, 2005 order,

the similarities end there.” (Id. at 21). Sempra also explains that the Butler

County case is closed other than its petition to enforce the April 18, 2020

order, so the only issue remaining in that case is whether Father violated the

____________________________________________

12 We review the court’s order granting the Motion to Coordinate for an abuse
of discretion.

       [w]here the record provides a sufficient basis to justify the order
       of coordination, no abuse of discretion exists. Whether we would
       have reached the same conclusion is immaterial. In exercising its
       discretion, the trial court should receive guidance not only from
       the enumerated [Rule 213.1(c)] criteria ... but also from the
       explanatory comment to Rule 213.1(c), which explains that the
       ultimate determination that the court must make is whether
       coordination is “a fair and efficient method of adjudicating the
       controversy.”

Pennsylvania Manufacturers' Ass'n Ins. Co. v. Pennsylvania State
Univ., 63 A.3d 792, 794 (Pa. Super. Ct. 2013) (citation omitted).

                                               21
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April 18, 2018 Butler County order, and, if so, whether he should be held in

contempt for violating it. It contends that these questions are not raised in

Zachary’s Amended Petition and, in fact, although the Motion to Coordinate

asserted that the Alleged Common Question was whether Judge Yeager’s April

18, 2018 order complies with the SSPA, this is not at issue in the Butler County

case. (See Sempra’s Brief, at 16, 20-21).

       It also posits three further considerations13 that supported the denial of

the Motion to Coordinate. First, the SSPA required Sempra and Father to file

the Butler County Petition in Butler County because it is the “court of common

pleas of the judicial district in which the payee is domiciled.” 40 P.S. § 4004.

Second, Pinnacle, which is identified in Father’s amended petition, is not a

party in the Butler County case and, therefore, has no interest in the Petition

to Enforce.

                                               1.

       We first address Sempra’s claim that there is no “common question of

law or fact.” Pursuant to Rule 213.1(c):

       In determining whether to order coordination and which location
       is appropriate for the coordinated proceedings, the court shall
       consider, among other matters:

____________________________________________

13Sempra presents these three considerations under the larger heading that
there was no common issue of law or fact supporting the grant of the Motion
to Coordinate. Although these arguments do not really go to that precise
argument, we will address them in the order in which Sempra presented them.

                                               22
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           (1) whether the common question of fact or law is
      predominating and significant to the litigation;

            (2) the convenience of the parties, witnesses and counsel;

            (3) whether coordination will result in unreasonable delay
      or expense to a party or otherwise prejudice a party in an action
      which would be subject to coordination;

            (4) the efficient utilization of judicial facilities and personnel
      and the just and efficient conduct of the actions;

            (5) the disadvantages of duplicative and inconsistent
      rulings, orders or judgments;

              (6) the likelihood of settlement of the actions without further
      litigation should coordination be denied.

Pa.R.C.P. No. 213.1(c).

      This Court has held that “the trial court must consider the enumerated

factors but is free to consider other matters as well in making its

determination.” Pennsylvania Manufacturers' Ass'n Ins. Co., supra at

796 (finding party’s argument that trial court abused its discretion in

considering “tangential considerations” beyond those enumerated in Rule

213.1(c) lacked merit because it conflicted with the Rule’s plain language

directing that court may consider “other matters.”).           Moreover, “Courts

interpreting the [SSPA] have concluded that the statute is designed to protect

beneficiaries of structured settlements from being taken advantage of by

others.” See In re Benninger, 357 B.R. 337, 351 (Bankr. W.D. Pa. 2006).

      In this case, Sempra’s Butler County Petition to Enforce requests a

determination of whether Father has violated the Butler County order by not
                                        23
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transferring the agreed-upon Property and oil and gas rights in exchange for

Zachary’s annuities, i.e., whether Zachary is being protected. The Emergency

Petitions, Amended Petitions and Motion to Coordinate all allege malfeasance

on behalf of Father, Sempra and Pinnacle in obtaining the proceeds of his

structured settlement, i.e., their failure to protect Zachary.

      The Butler County Petition is part of the broad common question

whether the purpose of the 2005 Settlement Approval Order is being met, i.e.,

whether Zachary has been protected or if he has been taken advantage of to

his great detriment, whether it be by Pinnacle obtaining the transfer of

payment pursuant to the Beaver County orders, by Sempra obtaining transfer

of payments in Butler County, or by Father obtaining Zachary’s payments

through misrepresentations, fraud and failure to obtain required approvals.

Among other things, those common questions involve whether the Butler and

Beaver County orders are ineffective and/or invalid due to the parties’ failure

to receive approval of the transfer of payments established by the 2005

Settlement Approval Order as required by 40 P.S. § 4003(a)(5)(i)(B); whether

those orders were part of a fraudulent scheme to deprive Zachary of his

payments under the 2005 Settlement Approval Order; and whether the parties

to the action committed fraud on the court based on misrepresentations made

to the court in obtaining approval.         Accordingly, the Allegheny County

Orphans’ Court properly exercised its discretion when it found that there is a

                                       24
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question common in both the action before it as well as the Butler County

action.

                                       2.

      Next, we turn to Sempra’s argument that the SSPA required it to file the

Butler County petition in Butler County.

      Pursuant to Section 4004 of the SSPA, “[t]he court of common pleas of

the judicial district in which the payee is domiciled shall have jurisdiction over

any petition … for a transfer of structured settlement payment rights.” 40

P.S. § 4004. Further, “[i]t is axiomatic that a court must have the power to

enforce its own orders.”    Davin v. Davin, 842 A.2d 469, 472 (Pa. Super.

2004). It is undisputed that Father resides in Butler County, Pennsylvania,

and did so at the time the Butler County petition was filed.

      While Sempra is correct that the petition to approve the transfer of the

structured settlement payment rights was required to be filed in Butler

County, and that the Butler County court had the right to enforce its April

2020 order, that does not mean that the Allegheny County Orphans’ Court

cannot alter it. First, we note that the Butler County Court of Common Pleas

agreed to transfer consideration of the contempt petition to Allegheny County

Orphans’ Court because that is where the original Settlement Approval Order

was approved.

      Second, Allegheny County Orphans’ Court’s approval of the sale was

required. 40 P.S. § 4003 (a)(5)(i) provides that:
                                       25
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      No transfer of structured settlement payment rights shall be
      effective and no structured settlement obligor or annuity issuer
      shall be required to make any payment to any transferee of
      structured settlement payment rights unless the payee has filed a
      petition requesting such transfer and the petition has been
      granted by final order or decree of a court of competent
      jurisdiction based on such court’s express written findings that:

                                     ***

            (5) If the transfer would contravene the terms of the
      structured settlement:

                  (i) the transfer has been expressly approved in writing
      by:
                                     ***

      (B) any court or responsible administrative authority that
      previously approved the structured settlement[.]

40 P.S. § 4003 (a)(5)(i)(B) (emphasis added).

      Sempra argues that the Allegheny County Orphans’ Court’s approval

was not required pursuant to Section 4003(a)(5)(i)(B) because Judge Yeager

made a finding that the proposed transfer did not contravene the terms of the

structured settlement. This is a mischaracterization of Judge Yeager’s finding.

While his decision included boilerplate language contained in 26 U.S.C.

§ 5891, this language is found in the section about whether the court’s orders

were “Qualified Orders” for tax purposes and is not a finding regarding the

2005 Settlement Approval Order. See 26 U.S.C. § 5891. This is not surprising

because it appears that the Butler County court was not made aware of the

Allegheny County Orphans’ Court’s 2005 Settlement Approval Order.

                                      26
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       Because Section 4003(a)(5)(i)(B) applied and it requires that the court

that approved the structured settlement agreement must approve in writing

the proposed transfer, the Allegheny County Orphan’s Court was required to

approve any changes in payments made under the 2005 Settlement Approval

Order. See In re Am. Dredging Co., 2011 WL 4971829, at *2 (E.D. Pa. Oct.

18, 2011)14 (finding that sale of portion of settlement for a lesser lump sum

than would have been realized if paid at the set disbursement date “would

contravene the terms of that structured settlement agreement. Accordingly,

pursuant to the language of the statute, [the court that approved the original

settlement] must expressly approve[] in writing the transfer of structured

settlement rights before the [another] court may grant its approval.”). This

____________________________________________

14 In Am. Dredging Co., the federal Eastern District Court of Pennsylvania
approved a stipulated settlement awarded as part of a wrongful death claim
in 1989. The settlement included, inter alia, a $37,500.00 payment to be
issued on July 1, 2014. In 2011, the payee entered into a purchase agreement
wherein she consented to the transfer of $22,500.00 of the lump sum she was
to realize on July 1, 2014, in exchange for $13,100.00. The payee filed a
petition for a partial transfer of settlement in Monroe County as required by
the SSPA. After a hearing, the county court requested that the petitioners
obtain approval from the District Court, where the agreement was originally
approved. The District Court observed that this “proposed transfer would
contravene the terms of that structured settlement agreement. Thus,
pursuant to the language of the statute, this court must expressly approve[]
in writing the transfer of structured settlement rights before the state court
may grant its approval.” Am. Dredging Co., supra at *2. Similarly, here,
the transfers contravened the terms of the Settlement Approval Order where
they all provided for the sale of annuities to third parties for significantly less
than they were worth, prior to the time at which they were to be paid to
Zachary.

                                               27
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approval is especially important here because Allegheny County Orphans’

Court approved the settlement when Zachery was a minor and he was still a

minor when the Butler County Petition was filed. This advances the SSPA’s

purpose to protect beneficiaries of structured settlements, especially minors,

from being taken advantage of by others.

       For all these reasons, Sempra’s argument does not merit relief.15

                                               3.

       Next, Sempra argues that because Pinnacle is a party in the Allegheny

County Orphans’ Court but is not involved in the Butler County action, the

Allegheny County Orphans’ Court erred in coordinating the case.             While

Pinnacle is not a party to the Butler County action, it is involved in the bigger,

common question of whether Zachary’s interests are being protected as

required by the SSPA or whether he has been taken advantage of.

Consideration of all matters related to the structured settlement in one

location, rather than doing it piecemeal in separate jurisdictions, will result in

“the efficient utilization of judicial facilities and personnel and the just and

____________________________________________

15  Sempra maintains that the Allegheny County Orphans’ Court misread the
July 6, 2005 order by interpreting it as requiring its approval before any
assignment or transfer of settlement funds. Sempra argues that this limiting
language applied only to the $896.00 balance of the settlement. While we
agree with Sempra that the Allegheny County Orphans’ Court misread the July
6, 2005 Settlement Approval Order’s limiting language that it had to approve
changes only to the $896.00 settlement balance, that argument is irrelevant,
given that the SSPA requires the court that previously approved settlement to
approve the settlement agreement, i.e., the Allegheny County Orphans’ Court.
                                     28
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efficient conduct of the actions” and will avoid “inconsistent rulings, orders or

judgments[.]”    Pa.R.C.P. 213.1(c)(4), (5).      For all these reasons, the

Allegheny County Orphans’ Court did not abuse its discretion in balancing the

factors of Rule 213.1.

                                       B.

      Next, Sempra contends that the Allegheny County Orphans’ Court

abused its discretion in granting the Motion to Coordinate because the Butler

County case is not pending. (See Sempra’s Brief, at 24-25).

      Pursuant to Rule 213.1, a party may seek to coordinate actions pending

in different counties to avoid “multiple trials and proceedings” and inconsistent

rulings and orders.      Pa.R.C.P. 213.1, explanatory comment.     A court may

coordinate actions only for pretrial proceedings for a determination of specified

issues of law or fact or for trial.   See id., official comment.     Motions to

coordinate must be filed before a court renders a decision on the alleged

common question of law or fact. See Geiger v. Rouse, 715 A.2d 454, 456-

57 (Pa. Super. 1998).

      In this case, Sempra’s Motion to Enforce remains pending in Butler

County and it goes to the common question underlying this case:              are

Zachary’s rights in the 2005 Settlement Approval Order being protected or

has he been taken advantage of by the various defendants. Judge Yeager

agreed that Sempra’s Motion to Enforce and all other issues arising out of the

                                       29
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2005 Settlement Approval Order should be heard in Allegheny County

Orphans’ Court. This issue lacks merit.

                                       C.

      In its third issue, Sempra argues that the Allegheny County Orphans’

Court abused its discretion in granting the Motion to Coordinate where it lacks

subject matter jurisdiction on the bases of the coordinate jurisdiction doctrine,

and that more than 30 days has passed since the April 18, 2018 Butler County

order approving the sale of Zachary’s annuities by his Father without his

knowledge.

                                       1.

      In making that argument, Sempra first maintains that pursuant to the

coordinate jurisdiction doctrine, the Allegheny Count Orphans’ Court lacks

subject matter jurisdiction to modify or rescind the Butler County April 18,

2018 order. “Pursuant to the coordinate jurisdiction doctrine, judges of equal

jurisdiction sitting in the same case should not overrule each other’s

decisions.” Ario v. Reliance Ins. Co., 980 A.2d 588, 597 (Pa. 2009) (citation

omitted).

      We disagree for several reasons.         First, as previously explained,

Allegheny County Orphans’ Court under 40 Pa.C.S. § 4003 must approve any

changes in the structured settlement before the Butler County court gives

approval. In such a situation, the coordinate jurisdiction rule does not apply

because the court that is hearing the SSPA petition must have obtained
                                       30
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approval by the court that approved the structured settlement.        In other

words, each must exercise its independent judgment of the advisability of the

change in the 2005 Settlement Approval Order.

      Second, and ignoring all that, the Allegheny County Orphans’ Court did

not overrule any decision of the Butler County court. Although the Allegheny

County Orphans’ Court granted the Motion to Coordinate, it did not make any

ruling on the motion’s allegation that the Butler County order should be voided

as improvidently entered.    The Butler County case was transferred to the

Allegheny County Orphans’ Court so that any open matters that related to the

2005 Settlement Approval Order, i.e., Sempra’s Petition to Enforce, and

Zachary’s claim that the approval of the structured settlement sales were

improperly obtained, could be heard together. The coordinate jurisdiction rule

has no application here because the underlying impropriety of the sale was

not at issue in Butler County, only the fairness of the sale.

                                       2.

      Finally, Sempra argues that the passage of time deprives the Allegheny

County Orphans’ Court of jurisdiction to change the April 18, 2018 Butler

County order approving the sale of Zachary’s annuities pursuant to the

language of 42 Pa.C.S. § 5505 (“Except as otherwise provided or prescribed

by law, a court upon notice to the parties may modify or rescind any order

within 30 days after its entry, notwithstanding the prior termination of any

term of court, if no appeal from such order has been taken or allowed.”).
                                       31
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      Again, ignoring whether the April 18, 2018 order was procured by

internal or extrinsic fraud, whether the order should be voided because there

was fraud on the court that prevented it from carrying out its independent

authority to approve the sale, or that the failure to follow the statutory

mandates vitiated any approvals given, the Allegheny County Orphans’ Court’s

June 5, 2020 order neither overruled nor vacated the Butler County order. It

coordinated Sempra’s Butler County case that has a pending Motion to Enforce

in the Allegheny County Orphans’ Court so that any motions arising as a result

of the structured settlement can be decided in Allegheny County, “the situs of

the original Order dated July 6, 2005.” (Orphans’ Ct. Op., at 4). Judge Yeager

also entered his own order in Butler County transferring any litigation that

arose out of the 2005 Settlement Approval Order to Allegheny County

Orphans’ Court.

      Accordingly, for all the foregoing reasons, we affirm the Allegheny

County Orphans’ Court’s order granting Zachary Barber’s Motion to Coordinate

where coordination is “a fair and efficient method of adjudicating the

controversy.” Pennsylvania Manufacturers' Ass'n Ins. Co, supra at 794.

      Order affirmed.

                                     32
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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 05/14/2021

                          33