Lead paint victims sell structured settlements for pennies on the dollar
Lead paint victims in Baltimore are selling their structured settlements for pennies on the dollar, despite a Maryland law intended to regulate such sales.
The Maryland law requires judges to approve such settlements, but it doesn’t require those who are selling their settlements to appear in court, and it doesn’t require the sales to be approved by judges in the sellers’ county of residence, the Washington Post reports. As a result, companies buying the settlements seek approval of judges in counties known for lenience.
Those weaknesses in the Maryland law aren’t present in laws in many other states, according to the Post. The Maryland court system makes it easy for companies purchasing the settlements to find lead-paint plaintiffs because the suits have their own category in the electronic search system.
The Post spoke with lead paint plaintiffs who sold their structured settlements, including “Rose” who didn’t want her full name used in the article. Her settlement paid nearly $1,000 a month, with annual increases, for 35 years. She sold the settlement to Access Funding for less than $63,000, though the present value of her settlement was about $338,000.
Court records say Rose suffered irreversible brain damage as a result of lead paint exposure. She recalls making a deal for some fast money with a man named Brendan who took her out for a steak dinner and promised her a vacation. Rose said she felt better about the deal after speaking with a lawyer on the phone named Charles Smith, who works as an independent adviser for those selling their structured settlements; an independent adviser is required under Maryland’s law.
Rose sued Smith in June, claiming Smith failed to disclose that he had served as an independent adviser in at least 40 other deals for Access Funding. The suit says Smith never met with Rose in person to assess her mental capabilities and he never disclosed any relationship with Access Funding.
Smith is seeking dismissal of the suit. In court papers, he says Rose signed a contact expressing her desire to sell the settlement, and an affidavit saying she had spoken to an independent adviser. A party who signs a contract is presumed to have read and understand the terms, even if that person is functionally illiterate, Smith argues.
Smith tells the Post that his service as an independent adviser is a small part of his practice, he has no business relationships with any company in the structured settlement industry, and in every case he was contacted by the settlement recipient, though he’s not sure how they found him. “My independence is in no way compromised or at risk,” he said.
Access Funding chief executive Michael Borkowski told the Post the company has no records showing that its employee took Rose out for dinner or promised a vacation. Access Funding tries to get the best deals for its clients, he said, and several factors require a purchase price lower than the settlement value. One factor, he said, is a clause that stops structured settlement payments if the holder dies. He also said his company has no contractual or business relationship with Smith.
