Factoring company DRB Capital, LLC (“DRB Capital”) filed a complaint in the Circuit Court of Broward County, Florida, against rival factoring company Jacob Joseph & Associates, LLC (“JJ&A”), and its employee and principal (“JJ&A employee”) (JJ&A and JJ&A employee are referred to collectively as “Defendants”). In its complaint, DRB Capital asserts claims against Defendants for tortious interference and violation of Florida’s Deceptive and Unfair Trade Practice Act and seeks injunctive relief, money damages, and attorneys’ fees and costs.
This lawsuit involves the dispute over business practices used between two factoring companies competing on the secondary market when acquiring structured settlement payment rights. In short, DRB Capital entered into a transfer agreement with a payee (the “Agreement”) and filed a transfer petition (the “DRB Capital Petition”) seeking court approval of the Agreement. DRB Capital alleges that Defendants became aware of the DRB Capital Petition by “trolling” the public court docket, and subsequently approached DRB Capital’s customer to breach the Agreement and sign a separate transfer agreement with Defendants for the transfer of the same structured settlement payment rights. Defendants then filed their own petition to purchase the same payments, appeared at the hearing on DRB Capital’s Petition and, without first consulting with the payee or obtaining the payee’s consent, Defendants’ attorney informed the court that the payee objected to DRB Capital’s Petition and requested a continuance. (DRB Capital filed a motion to intervene in the petition filed by Defendants and requested the consolidation of the two petitions. The parties have since agreed to consolidate both petitions, and the joint motion for an agreed order of consolidation is still pending).
DRB Capital asserts that Defendants “intentionally and unjustifiably sought to interfere” with DRB Capital’s business relationship with the payee and that Defendants utilized “unethical” tactics in attempting to “induce” the payee to do business with Defendants. In addition, DRB Capital asserts that Defendants’ actions constitute “unfair trade practices” as their “conduct offends established public policy, is immoral, unethical, oppressive and/or substantially injurious to consumers” and “their misrepresentations, omissions, or practices are likely to mislead consumers” to the “consumers’ detriment.”
DRB Capital’s complaint illustrates the dramatic increase in competition among factoring companies over the last few years. As such, structured settlement obligors and annuity issuers must avoid unnecessary involvement in disputes that arise between factoring companies and payees, and ensure that factoring companies do not obtain conflicting orders involving the same structured settlement payment rights.
If you have any questions regarding structured settlement issues, or would like to discuss this matter in greater detail, please do not hesitate to contact one of the lawyers listed below.