Lujerio Cordero v. Transamerica Annuity Service

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[PUBLISH] In the United States Court of Appeals For the Eleventh Circuit ____________________ No. 21-11340 ____________________ LUJERIO CORDERO, Plaintiff-Appellant, versus TRANSAMERICA ANNUITY SERVICE CORPORATION, a.k.a. Wilton Re Annuity Service Corporation,

Defendant-Third-Party Plaintiff-Appellee,

TRANSAMERICA LIFE INSURANCE COMPANY,

Defendant-Cross Claimant-Appellee, USCA11 Case: 21-11340 Document: 57-1 Date Filed: 06/16/2023 Page: 2 of 6

2 Opinion of the Court 21-11340 ALLIANCE ASSET FUNDING, LLC, et al.,

Third-Party Defendants-Cross Defendants.

____________________ Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 1:18-cv-21665-DPG ____________________ Before WILSON, ROSENBAUM, Circuit Judges, and CONWAY,∗ District Judge.

PER CURIAM: Over the course of twenty-two months, plaintiff-appellant Lujerio Cordero—a childhood victim of lead poisoning—assigned his rights to nearly one million dollars in structured settlement pay- ments to factoring companies for pennies on the dollar. Through six transfer agreements that he lacked the capacity to understand, Cordero relinquished his rights to monthly payments with a total aggregate value of $959,834.42 spread over the course of about twenty-six years for a series of immediate lump-sum cash payments that amounted to $268,130.

∗ Honorable Anne C. Conway, United States District Judge for the Middle Dis- trict of Florida, sitting by designation.

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21-11340 Opinion of the Court 3 The six transactions at issue were facilitated under Florida’s Structured Settlement Protection Act (Florida’s “SSPA”), which states that a structured settlement payment rights transfer is only effective if “the transfer is authorized in advance in a final order by a court of competent jurisdiction[.]” Fla. Stat. § 626.99296(3)(a). At hearings where the factoring companies were the only represented parties, Florida state courts approved Cordero’s assignments. For each transfer, the Florida state court concluded—among other things—that the transfer was in Cordero’s best interest. See id. After Cordero exhausted his cash payments, he endeavored to recover the money that he assigned to the factoring companies.

But, instead of suing the factoring companies or attempting to void the transactions, Cordero sued Transamerica Annuity Service Cor- poration and Transamerica Life Insurance Company (collectively, “Transamerica”), the entities that issued and funded his periodic payments before he assigned them. Cordero asserted two claims against Transamerica: one for breach of contract under New York law, and the other for exploitation of a vulnerable adult under Flor- ida’s Adult Protective Services Act (“FAPSA”), Florida Statute § 415.1111.

This appeal followed the district court’s with-prejudice dis- missal of Cordero’s claims. It returns to us after the New York Court of Appeals answered a reformulated version of a question that we certified for its review. See Cordero v. Transamerica Annuity Serv. Corp., 34 F.4th 994 (11th Cir. 2022), certified question answered, No. 21, --- N.E.3d --- (N.Y. Apr. 25, 2023).

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Cordero, 34 F.4th at 1002. In its response, the New York Court of Appeals reformulated our question to read: Does a plaintiff sufficiently allege a breach of the cov- enant of good faith and fair dealing under New York law by pleading that (1) an issuer or obligor failed to object to plaintiff’s sale of periodic payments in an SSPA proceeding, where the underlying agreements contain anti-assignment provisions, and (2) the sale approved by the SSPA court was not in the plaintiff’s best interest?

Cordero v. Transamerica Annuity Serv. Corp., No. 21, --- N.E.3d ---, slip op. at 9 (N.Y. Apr. 25, 2023). The New York Court of Appeals an- swered its reformulated question in the negative, concluding that USCA11 Case: 21-11340 Document: 57-1 Date Filed: 06/16/2023 Page: 5 of 6

21-11340 Opinion of the Court 5 “such allegations do not state a cognizable cause of action for breach of the implied covenant.” Id., slip op. at 2, 9.

We offer the New York Court of Appeals our sincerest thanks for its assistance. Given its guidance, we affirm the district court’s with-prejudice dismissal of Cordero’s breach of contract claim.1 One issue remains: whether Cordero has stated a claim against Transamerica pursuant to FAPSA for exploitation of a vul- nerable adult. We deferred our decision on this claim in our prior opinion. See Cordero, 34 F.4th at 996 n.2.

Under FAPSA, a “vulnerable adult who has been abused, ne- glected, or exploited” may bring a civil lawsuit “against any perpe- trator.” Fla. Stat. § 415.1111. In defining “exploitation,” the statute states that the exploiter must act “with the intent to temporarily or permanently deprive the vulnerable adult of the use, benefit, or possession of [his] funds, assets, or property for the benefit of someone other than the vulnerable adult.” Id. § 415.102(8)(a). Ex- amples of exploitation listed in the statute include “[b]reaches of fiduciary relationships,” “[u]nauthorized taking of personal assets,” “[m]isappropriation, misuse, or transfer of moneys belonging to a vulnerable adult from a personal or joint account,” or “[i]nten- tional or negligent failure to effectively use a vulnerable adult’s USCA11 Case: 21-11340 Document: 57-1 Date Filed: 06/16/2023 Page: 6 of 6

Cordero’s FAPSA claim fails under the plain language of the statute. In his operative complaint, Cordero does not allege that Transamerica intended to deprive him of the use of his funds. See id. § 415.102(8)(a). Instead, Cordero asserts that Transamerica “al- lowed” (or “facilitated”) his exploitation by the factoring compa- nies, which resulted in an unauthorized taking of his assets. Based on the facts that Cordero pleaded, Transamerica’s actions simply do not amount to “exploitation” as that term is defined in FAPSA.

Because Cordero has failed to state a violation of FAPSA, we affirm the district court’s with-prejudice dismissal of his FAPSA claim.2 For the reasons set forth above and in the New York Court of Appeals’ response to our certified question, we affirm the district court’s dismissal of Cordero’s claims.3 AFFIRMED.