Appeal from the Circuit Court of Wayne County. No. 90-P-38 Honorable Charles L. Quindry, Judge, presiding.
The opinion of the court was delivered by: Justice Kuehn
IN THE COURT OF APPEALS OF THE STATE OF ILLINOIS
This is a case where the circuit court rejected a request to assign a future structured-settlement payment in exchange for a lump-sum payment. We are asked to decide whether the trial judge erred in doing so.
In early 1988, William Powless (Powless ) sustained injuries when he was accidently struck in the eye with a chain by a childhood friend. Powless was nine years old. His parent and natural guardian brought a claim and settled it under a homeowner's policy issued by Pekin Insurance Company (Pekin). Pursuant to the settlement agreement, a structured-payment plan was set up on behalf of Powless.
The structured-settlement agreement provided that Powless would receive a lump-sum payment of $30,000. In addition, he was to receive the following payments upon reaching majority age: $20,000 on January 14, 1998; $20,000 on January 14, 2000; $20,000 on January 14, 2005; $20,000 on January 14, 2010; $20,000 on January 14, 2015; and $20,000 on January 14, 2020. The settlement agreement also provided that Pekin would "purchase an Annuity Contract through or with SAFECO Life Insurance Company."
Pekin complied and purchased the annuity contract through Safeco Life Insurance Company (Safeco). Under the annuity contract, Powless was the named beneficiary, but Pekin was the owner of the annuity. The annuity contract contained a provision that provided, "[b]enefit payments may not be advanced, accelerated, or commuted."
On December 15, 1998, Powless entered into an agreement to assign his January 14, 2000, structured-settlement payment to J.G. Wentworth (Wentworth) in exchange for a lump-sum payment at that time and an additional lump-sum payment upon Wentworth's receipt of the full $20,000 on January 14, 2000.
Shortly after entering into the agreement to assign, Powless petitioned the trial court for its approval of the assignment. His request was made pursuant to section 155.34(b) of the Illinois Insurance Code, a provision that reads as follows:
"No person who is the beneficiary of a structured settlement of a claim for personal injury may assign in any manner the payments of the settlement without prior approval of the circuit court of the county where an action was or could have been maintained." 215 ILCS 5/155.34(b) (West 1998).
Initially, the trial court was not troubled with the request. On January 20, 1999, Powless received court approval to assign his January 14, 2000, payment. However, shortly thereafter, Safeco filed a motion for relief from the court order approving the assignment and for leave to file objections to the petition to assign. Next, Wentworth petitioned to intervene and to participate in the hearing on the petition to approve the assignment.
On June 9, 1999, the trial court held a hearing on the pending motion. During the hearing, the trial court learned the reason behind Powless's decision to assign the future payment. Powless had a six-month-old child. He intended to marry the child's mother and support the two of them with his full-time job, at which he earned $11.34 per hour. He needed to assign the structured-settlement payment due in the year 2000 in order to pay bills associated with the birth of his child. The trial court also learned that Powless consulted with the attorney who originally represented him and his mother on the personal injury suit. His attorney advised him of the ramifications of such an assignment. The attorney also informed the court that he believed that Powless's need for the immediate cash was legitimate.
Finally, the trial court heard that in exchange for the assignment of the one payment, Wentworth would initially pay Powless $10,012.25, and upon receipt of the full $20,000, Wentworth would pay Powless an additional $7,174.34. Wentworth would actually receive $2,813.41 of the structured-settlement payment.
On June 16, 1999, the trial court granted Wentworth's petition to intervene, granted Safeco's motion for relief from its January 20, 1999, order, and sustained Safeco's objections to the petition for assignment. We do not know what convinced the trial court to reverse itself and to sustain Safeco's objections. It did not explain the reasons for its decision. Therefore, we will address all of the arguments that Safeco advanced in its objections to the assignment.
Before we address the issues raised in this appeal, we note that the date on which Safeco would have been required to make its next payment to Powless-January 14, 2000- has passed. The briefing schedule in this court extended beyond that date. No ...