IN THE MATTER OF OFRED TAVAREZ (L-4041-16, BERGEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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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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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