## Facts

- John Kaufman resolved a wrongful death lawsuit through a structured settlement that provided him a stream of monthly payments funded by an annuity.
- The settlement documents expressly stated that Kaufman had no power to “sell, mortgage, encumber or anticipate the future payments by assignment or otherwise.”
- Despite that restriction, Kaufman entered into an agreement with J.G. Wentworth S.S.C., Limited Partnership (Wentworth) to transfer (sell) 60 monthly annuity payments in exchange for a lump-sum payment.
- For a period of time after the transaction, Wentworth received payments, but within about a year the payment stream to Wentworth stopped.
- Kaufman filed for bankruptcy a few months after the payments ceased and scheduled Wentworth’s claim as unsecured.
- Wentworth asked the bankruptcy court to lift the automatic stay so it could pursue the annuity payments.
- Kaufman opposed the request, arguing that the Wentworth purchase/assignment agreement was invalid because the structured settlement contract prohibited any assignment of the future payments.
- The bankruptcy court certified questions of Oklahoma law to the Supreme Court of Oklahoma to determine the effect of the anti-assignment language on Wentworth’s claimed rights.

## Issues

1. Whether a structured settlement agreement that clearly forbids assignment of future payments prevents the payee from transferring the payment stream to a third party, making the attempted transfer ineffective against the payment obligor.
2. Whether a purchaser of structured settlement payments obtained enforceable rights to the annuity payments when the underlying settlement contract expressly denies the payee any power to assign or otherwise transfer the future payments.

## Decision

- The Supreme Court of Oklahoma answered the certified questions by enforcing the structured settlement’s anti-assignment provisions.
- The court concluded that Kaufman lacked contractual authority to transfer the future payment stream because the settlement agreement expressly withheld the power to assign or otherwise dispose of the payments.
- As a result, Wentworth did not obtain a right to collect the annuity payments from the annuity issuer or other payor despite the purchase agreement with Kaufman.
- Wentworth’s interest, if any, was not an ownership interest in the payment stream itself but a claim against Kaufman based on the parties’ transaction.

## Legal Principles

- Clear anti-assignment language in a structured settlement agreement may be enforced according to its terms, particularly where the agreement states the payee has no power to assign or anticipate future payments.
- A party who purchases structured settlement payments takes subject to the settlement’s transfer restrictions and generally cannot compel the payor to redirect payments contrary to those restrictions.
- When an attempted transfer violates an enforceable no-assignment clause, the purchaser’s remedies are typically limited to contractual or restitutionary claims against the seller, not enforcement against the payment obligor.
- In bankruptcy, a purchaser who lacks a valid right in the payment stream cannot treat the payments as its collateral or property; the purchaser is left to assert a claim in the bankruptcy case consistent with its legal rights against the debtor.

## Conclusion

In *In re Kaufman*, the Supreme Court of Oklahoma enforced a structured settlement’s express prohibition on assigning future payments and determined that Kaufman’s attempted sale of 60 monthly annuity payments to Wentworth did not give Wentworth enforceable rights to seize or collect the payment stream from the payor, leaving Wentworth with, at most, a claim against Kaufman rather than control of the annuity payments.


In re Kaufman, 37 P.3d 845 (2001)