Albach v. Kennedy

• Decision Date: 06 August 2001
• Docket Number: No. 2000 CA 0636.,2000 CA 0636.
• Citation: 801 So.2d 476
• Parties: William J. ALBACH and Richard J. Dodson v. John KENNEDY, in his capacity as Secretary of the Louisiana Department of Revenue and Administrator of Unclaimed Property Pursuant to R.S. 9:152 and the Uniform Disposition of Unclaimed Property.
• Court: Court of Appeal of Louisiana — District of US

801 So.2d 476

William J. ALBACH and Richard J. Dodson v. John KENNEDY, in his capacity as Secretary of the Louisiana Department of Revenue and Administrator of Unclaimed Property Pursuant to R.S. 9:152 and the Uniform Disposition of Unclaimed Property.

No. 2000 CA 0636.

Court of Appeal of Louisiana, First Circuit.

August 6, 2001.

Writ Denied October 12, 2001.

W. Steven Mannear, Kenneth H. Hooks, III, Baton Rouge, Louisiana, for William J. Albach and Richard J. Dodson, plaintiffs/appellees.

Tammy D. Weaver, Brace B. Godfrey, Jr., Baton Rouge, Louisiana, for Louisiana Department of Revenue, defendant/appellant.

BEFORE: PARRO, FITZSIMMONS, and GUIDRY, JJ.

GUIDRY, Judge.

In this class action litigation, the State appeals a partial summary judgment holding it obligated to pay the owners of unclaimed property 5% interest pursuant to Louisiana's Uniform Unclaimed Property Act of 1997, La.R.S. 9:151, et seq. (the UPA).¹ After a thorough review of the record and applicable law, we affirm.

Procedural Background

The plaintiffs, William J. Albach and Richard J. Dodson, individually and on behalf of a class of similarly situated individual owners of unclaimed property in the state's possession, filed suit against John Kennedy, in his capacity as Secretary of the Louisiana Department of Revenue and Administrator of unclaimed property² (the State), alleging it failed to pay them 5% annual interest on their unclaimed property while it was in the state's possession, in violation of the UPA. The class was certified by the trial court pursuant to La. C.C.P. art. 591(A) and (B)(1)(b) and (3) by way of judgment dated January 28, 1999. Pursuant to that judgment, the class consists of all persons who were owners of property that was surrendered to the State prior to July 10, 1986 (the effective date of the UPA), if (a) the property was interest-bearing to the owners on the date of surrender by the holder to the administrator of unclaimed property, and (b) the property was recovered by the owner but the state failed to pay or accrue interest thereon, including, but not limited to, owners of interest-bearing savings accounts, matured certificates of deposit, matured savings certificates, Christmas club accounts and utility deposits. The class also includes all owners of property which was surrendered to the administrator after the effective date of the UPA when that property was interest-bearing at the time of surrender to the state. This portion of the class includes owners who have yet to make a claim for the return of their property which is currently in the possession of the state.

During extensive discovery, plaintiffs moved for a partial summary judgment on the issue of liability only. The motion was granted and the judgment was certified by the trial court as a final judgment for purposes of appeal. The state has appealed that judgment.

Applicable Law

Louisiana's Uniform Unclaimed Property Act derives from the uniform law proposed initially in 1954, revised in 1966 and again in 1981. In Act 146 of 1972, the Louisiana legislature enacted an adaptation of the 1954 Uniform Law; in Act 829 of 1986, Louisiana adopted the 1981 revision. Louisiana Health Service and Indemnity Company v. Tarver, 93-2449, p. 3 (La.4/11/94), 635 So.2d 1090, 1092. The most common modern form of unclaimed property legislation is exemplified by the 1954 and 1981 versions of the uniform Act. These are escheat laws: holders of property that is deemed abandoned by virtue of its having been unclaimed for a certain period of time are required to report its existence to the state. If the owners are not found, the property is turned over to the state, which holds it in perpetual custody for the missing owners. The primary rationale behind the legislation is its use as a revenue raising device. Pending a claim by the missing owner, the state receives the use of the property as well as any income that it may provide. The law reflects a policy that unclaimed property should benefit the general public rather than the holders of the property. Louisiana Health Service and Indemnity Company v. McNamara, 561 So.2d 712, 716 (La.1990).

In the 1986 revision, the Louisiana legislature enacted a provision mandating the payment of 5% interest per year on property that was bearing interest on the date it was surrendered to the state, to accrue when the property is delivered to the administrator and ceasing on the earlier of the expiration of ten years after delivery or on the date the property is returned to the owner. By Acts 1997, No. 809 § 1, effective July 10, 1997, the law was amended and reenacted as La.R.S. 9:151 to 9:181, the Uniform Unclaimed Property Act of 1997, and constitutes the law as it exists today. The requirement that the administrator pay interest on previously interest-bearing property is now found in R.S. 9:163 and provides in pertinent part as follows:

If the property was interest bearing to the owner on the date of surrender by the holder, the administrator shall pay interest at a rate of five percent a year or any lesser rate the property earned while in the possession of the holder. Interest begins to accrue when the property is delivered to the administrator and ceases on the earlier of the expiration of ten years after delivery or the date on which payment is made to the owner. Interest on interest bearing property is not payable for any period before the effective date of this Chapter, unless authorized by law superseded by this Chapter.

Based on a clear reading of the statute, the trial court found the class members were entitled to receive the statutorily mandated 5% interest on their unclaimed property.

Notice to Potential Class Members

In its first assignment of error, the State contends the trial court erred in granting plaintiffs' motion for summary judgment by ruling on the common issues of liability prior to notice being given to potential class members as required by La.C.C.P. art. 592(B)(1). The notice requirement of La.C.C.P. art. 592(B), applicable to any class action maintained under article 591(B)(3),³ protects potential class members by affording them notice and a reasonable opportunity to exercise an option to be excluded from the class or to join in the action "as soon as practicable after certification" and in any event, prior to a "commencement of the trial on the merits of the common issues." La.C.C.P. art. 592(B)(1).

Although the record before us is devoid of any evidence whatsoever pertaining to notice, we find it unnecessary to address this issue because we find that the State has no right to appeal based on this alleged infraction. An action can be brought only by a person having a real and actual interest which he asserts. La.C.C.P. art. 681. Insofar as the notice requirement of La.C.C.P. art. 592(B)(1) is designed to protect the due process rights of potential class members, the State has no interest in ensuring that those requirements are met. See generally, Sanders v. Gore, 95-660, p. 16 (La.App. 3rd Cir.7/10/96), 676 So.2d 866, 875, writ denied, 96-2072 (La.11/15/96), 682 So.2d 762. Nor can the State show that it has been prejudiced in any way by the alleged failure to provide notice to potential class members prior to the trial court's ruling on the liability issue. Therefore, the state has no right to appeal the summary judgment on the basis of an alleged violation of the notice requirement. See, Conrad v. Swiss Chalet Picnic Grounds & Catering Service, 96-606, p. 4 (La.App. 5th Cir.12/30/96), 686 So.2d 1055, 1058, writ denied, 97-0299 (La. 3/21/97), 691 So.2d 87. Accordingly, this assignment of error is without merit.

Perempted Claims

In its second assignment of error, the state claims the trial court erred in rendering a judgment which would provide interest payments on perempted claims. The procedure for filing claims to recover unclaimed property from the state is set forth in La.R.S. 9:167 and 168.

La.R.S. 9:167 provides, in pertinent part:

A. A person, excluding another state, claiming an interest in property paid or delivered to the administrator may file a claim on a form prescribed by the administrator and verified by the claimant.

B. Within ninety days after a claim is filed, the administrator shall allow or deny the claim and give written notice of the decision to the claimant. If the claim is denied, the administrator shall inform the claimant of the reasons for the denial and specify what additional evidence is required before the claim will be allowed. The claimant may refile the claim under Subsection A of this

Section or maintain an action under R.S. 9:168.

La.R.S. 9:168 provides:

A person aggrieved by a decision of the administrator or whose claim has not been acted upon within ninety days after its filing may maintain an action de novo to establish the claim in a court of competent jurisdiction in this state, naming the administrator as a defendant. The action shall be brought within ninety days after the decision of the administrator, or, if the administrator has failed to allow or deny the claim, within one hundred eighty days after its filing.

The state maintains this action for the payment of interest, as to the class members who claimed and received their property more than ninety days prior to the filing of this lawsuit, is perempted pursuant to La.R.S. 9:168. In a separate writ application, Dodson v. Crawford, 00-CW-0867 (La.App. 1st Cir.6/29/00) (unpublished writ action), which this court previously referred to the merits in the instant appeal, the state argues specifically that the claim of plaintiff, Albach, filed more than ninety days after his claim for interest on his recovered property was denied by the Administrator, was perempted.

Albach's Claim

With regard to Albach's claim, the record reveals that on January 2, 1998, Albach filed the proper claim forms with the department claiming to be the owner of unclaimed property in the Administrator's possession,...