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The Georgia Supreme Court on Monday upheld an appeals court decision that said beneficiaries of structured settlements cannot sell or assign their future payments if the settlement agreement forbids it. The case, one of first impression, had been watched closely by companies that buy structured settlements from cash-strapped plaintiffs looking to sell their future income streams for immediate lump sums. Insurance companies routinely include language in the agreements barring such sales because they are concerned that paying the settlements to the buying firms will diminish tax breaks that come from paying the original plaintiffs. On Monday, the high court unanimously rejected a buying company’s arguments that the language was unenforceable. The decision was one of 12 the court issued, including two that disbarred lawyers. The structured settlement case dealt with a 1997 deal intended to compensate Jonathan and Christopher Revill for their mother’s death in a car accident. Under the agreement, Jonathan Revill was to receive from CGU Life Insurance Co. an initial payment of $239,975 and payments of $500.01 a month for 10 years. He also would receive $25,000 in 2007; $50,000 in 2012; $100,000 in 2017; $135,000 in 2022; and $150,000 in 2027. Payments to his brother were similar, except Christopher, a minor at the time of the settlement, was to receive $1,000 a month for 10 years. The agreement stated that payments could not be “accelerated, deferred, increased or decreased … nor shall [the Revills] have the power to sell or mortgage or encumber same, or any part thereof, nor anticipate the same, or any part thereof, by assignment or otherwise.” The Revills sold parts of their future payments to Singer Asset Finance Co., in exchange for lump sum payments. In response, CGU filed a declaratory judgment action in Colquitt Superior Court, seeking to have the sale declared invalid based on the language in the contract. Singer and the Revills counterclaimed, asking the court to find the sale valid and alleging CGU tortiously interfered with the deal. Colquitt Superior Court Judge Frank D. Horkan found the sale valid. But last July, a panel of the Georgia Court of Appeals — Chief Judge G. Alan Blackburn, Presiding Judge Marion T. Pope Jr. and Judge Charles B. Mikell Jr. — found that a transfer of structured settlement rights that is made in violation of a valid contract would be invalid and unenforceable. CGU Life Insurance Co. v. Singer Asset Finance Co., 250 Ga. App. 516 (2001). The high court affirmed the appeals court on Monday in a decision written by Justice Hugh P. Thompson. Lawyers for Singer, Joseph S. Carr and Catrina C. Creswell of Duane, Morris & Heckscher, had argued that a 1991 appeals court decision holding unenforceable a non-assignment clause in a contract for labor and services controlled the outcome of this case. That decision, Mail Concepts v. Foote & Davies, 200 Ga. App. 778, did not apply in the Singer case, Thompson wrote, because the assignment of the settlement in Singer could have reduced the value of the settlement contract for CGU Life Insurance. “By this we mean that, although contracts are generally assignable in this state even when they contain a non-assignment clause … they should not be assigned when that clause was inserted to protect a party from a material reduction in the value of the contract,” Thompson wrote. Singer Asset Finance Co. v. CGU Life Insurance Co., No. S01G1611 (Sup. Ct. Ga. June 10, 2002). Thompson added that the Victims of Terrorism Relief Act of 2001, a post-Sept. 11 law passed by Congress, apparently will eliminate insurance companies’ tax concerns. The legislation says that structured settlements can be assigned without the loss of tax-favored status if the assignment is approved by a court, but in the case at hand, no court approved the settlement sales. But Carr, one of the lawyers for Singer, said the court “overlooked” a portion of that law that eliminated the insurance companies’ tax concerns in cases predating the law’s enactment date — even without a court order. Carr said he’ll point that problem out in a motion for reconsideration. Michael D. Hostetter, a partner at Nall, Miller, Owens, Hocutt & Howard in Atlanta, represented the winning side, CGU Life Insurance Co., and called the high court ruling “a vindication.” “It’s pretty much a straight contract decision,” one stating that the language barring assignments in the settlement agreement should be enforced, he said. GEORGIA HIGH COURT DISBARS TWO The two disbarments came in unanimous decisions as well. The court disbarred Cumming lawyer James William Quinlan for abandoning his client’s case and commingling his client’s funds with his own. Quinlan did not respond to a formal complaint against him, the court said, alleging, among other things, that he accepted a $575 retainer to represent a company in a bankruptcy proceeding but did not complete any of the work. Quinlan also instructed a company officer to give him a $25,000 check she received from a real estate closing, with the understanding that Quinlan would deposit it in his trust account and issue her a new check. “The check Quinlan issued was dishonored, however, for insufficient funds,” the court wrote in its per curiam decision, adding that Quinlan failed to provide an accounting to the company or to its officer, or to return any portion of the funds. The court said Quinlan, admitted to the State Bar of Georgia in 1982, already had been suspended for two prior disciplinary matters. In re Quinlan, No. S02Y1317 (Sup. Ct. Ga. June 10, 2002). Quinlan said he had responded to the complaint and that the person who wrote the $25,000 check that was deposited into his account stopped payment on it. That is why his check to the company had bounced, he said. “The system doesn’t work,” he added. William P. Smith III, the Bar general counsel, said, “I’ll stand by the [Bar] pleadings” against Quinlan. He said if Quinlan had a problem with the court decision, “I suppose he could ask for reconsideration.” The court also disbarred Athens, Ga., attorney Richard L. Dickson for abandoning a client’s legal matter without permission and for not returning his client’s advance fees in such a case. Dickson, a Bar member since 1986, had a clean discipline record until the incidents that led to his disbarment. But citing three instances in which Dickson abandoned a client’s matter and refused to pay back the fees, the court said the cases “suggest a pattern of abandonment and neglect of client matters.” In re Dickson, Nos. S02Y0902, SO02Y0903, SO2Y0904 (Sup. Ct. Ga. June 10, 2002). Dickson could not be reached.

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