Twiss v. State, Dept. of Treasury, Office of Financial Management

• Decision Date: 24 June 1991
• Citation: 124 N.J. 461,591 A.2d 913
• Parties: Howard S. TWISS, Plaintiff-Respondent, v. STATE of New Jersey, DEPARTMENT OF the TREASURY, OFFICE OF FINANCIAL MANAGEMENT, Defendant-Appellant.
• Court: New Jersey Supreme Court

Page 461

124 N.J. 461

591 A.2d 913

Howard S. TWISS, Plaintiff-Respondent, v. STATE of New Jersey, DEPARTMENT OF the TREASURY, OFFICE OF FINANCIAL MANAGEMENT, Defendant-Appellant.

Supreme Court of New Jersey.

Argued Feb. 26, 1991.

Decided June 24, 1991.

William Harla, Asst. Atty. Gen., for defendant-appellant (Robert J. Del Tufo, Atty. Gen., attorney; Michael R. Clancy, Asst. Atty. Gen., of counsel; Robert P. Krenkowitz, Deputy Atty. Gen., on the brief).

A. John Falciani, for plaintiff-respondent (Falciani & Fletcher, attorneys; Louis Adler, on the brief), Woodbury.

The opinion of the Court was delivered by

POLLOCK, J.

The issue is whether defendant, New Jersey Department of the Treasury (the Treasury), must disclose to plaintiff, Howard S. Twiss, who is engaged in the business of locating the owners of unclaimed bank accounts, not only the names and addresses of the owners, but also the amount of money in the accounts. On cross-motions for summary judgment, the Law Division granted the Treasury's motion to dismiss the complaint. The Appellate Division reversed. 239 N.J.Super. 342, 571 A.2d 333 (1990). We granted the State's petition for certification, 122 N.J. 395, 585 A.2d 395 (1990), and now reverse the judgment of the Appellate Division and reinstate that of the Law Division. We hold that under the Uniform Unclaimed Property Act, N.J.S.A. 46:30B-1 to -109 (UUPA), the Treasury is not obliged to disclose the amount in an unclaimed bank account to a third party, such as Twiss, who has no beneficial interest in the account. We hold further that the Legislature intended to give retroactive effect to the UUPA, so that it governs the Treasury's obligation to disclose information concerning all such accounts, no matter when created.

-I-

Each year the Treasury takes custody of some thirty million dollars in unclaimed bank accounts, about five million dollars of which it pays to the account owners, leaving a net for the State of some twenty-five million dollars. The affected accounts number several hundred thousand per year.

Twiss pursues his business in several states in addition to New Jersey. He seeks from the Treasury not only the name and address of the account owner, but also the amount in the account. Armed with this information, he then tries to find the owner. Once he locates the owner, Twiss offers to tell the owner about the account in consideration of a fee that varies from ten to thirty percent, plus expenses. Twiss can locate the owner without knowing the amount in the account. Because of the contingent nature of the fee, his incentive in finding the owner increases with the amount.

As the Appellate Division noted, the financial benefit to the State from the escheat of unclaimed accounts injects ambivalence into the State's interest in the discovery of the owners. See 239 N.J.Super. at 354, 571 A.2d 333. When considering the competing interests of the State, the account owner, and a third party such as Twiss, our role is not to strike our own balance but to ascertain the balance that has been struck by the Legislature.

After the Law Division rendered its decision, the Legislature enacted the UUPA. In that statute, which took effect on April 14, 1989, the Legislature declared that only the name and address of the account owner, but not the amount of the account, should be disclosed to someone with no beneficial interest in the account. N.J.S.A. 46:30B-76. Because the UUPA had not been enacted when the Law Division rendered its decision, that court based its decision on the then-existing statutory and regulatory scheme.

At the time of the Law Division decision, N.J.S.A. 17:9-22 and -25(a) governed the disclosure of information pertaining to unclaimed bank deposits. Those statutes, since repealed by the UUPA, N.J.S.A. 46:30B-109, required public disclosure of the name, address, and the amount due on unclaimed bank deposits. A 1963 Treasury regulation, however, permitted only persons with a "legitimate beneficial interest" to examine records of escheated accounts. The Treasury enacted the regulation under the authority granted to it by Executive Order Number 9, promulgated by then-Governor Richard J. Hughes pursuant to the Right to Know Law, which permitted the Governor to except certain records from disclosure under that law. See N.J.S.A. 47:1A-2. The executive order authorized agency heads to exclude certain records from public scrutiny.

Relying on the Treasury regulation, the Law Division held that because Twiss had no legitimate beneficial interest in the welfare of the owners of the accounts or in the protection of their property rights, he was not entitled to inspect the records of the escheated accounts. The Appellate Division reversed, ruling that the regulation was inconsistent with N.J.S.A. 17:9-22 and -25(a), the Right to Know Law, and Executive Order Number 9. 239 N.J.Super. at 352, 571 A.2d 333. The court concluded that both N.J.S.A. 17:9-22 and -25(a) and the Right to Know Law compelled public disclosure of the name and address of the owners and the amounts due in the unclaimed bank accounts. Id. at 355-56, 571 A.2d 333. It also found that the UUPA does not apply retroactively and, therefore, does not govern this case. Id. at 356-57, 571 A.2d 333. Anticipating that similar issues would arise under the UUPA, however, the court noted that the statute, like N.J.S.A. 17:9-22, requires disclosure of the names and addresses of the owners and the amount in the abandoned accounts. Id. at 360, 571 A.2d 333. We disagree with the Appellate Division in its interpretation of both the meaning and effect of the UUPA. We hold that the UUPA does not require disclosure of the amount in the accounts and that it applies retroactively. Because of that holding, we need not resolve the issue that divided the lower courts, whether the prior law, N.J.S.A. 17:9-22, compelled the disclosure of that information.

-II-

Before addressing the merits of Twiss's claims, we first consider the threshold question whether the UUPA or the prior law governs that claim. "When considering whether a statute should be applied prospectively or retroactively, our quest is to ascertain the intention of the Legislature." State, Dep't of Envtl. Protection v. Ventron Corp., 94 N.J. 473, 498, 468 A.2d 150 (1983).

Generally, courts favor prospective application of statutes. Gibbons v. Gibbons, 86 N.J. 515, 521, 432 A.2d 80 (1981). Fundamental fairness suggests that government give prior notice of a statute so citizens may conform their behavior before its enforcement. Id. at 522, 432 A.2d 80; N. Singer, Sutherland on Statutes and Statutory Construction § 41.02 at 341 (4th ed. 1986) (Sutherland ). Retroactive application also tends to "disturb feelings of security in past transactions." Sutherland, supra, § 41.04 at 348. Moreover, retroactive application of a statute may implicate due process rights. Ventron, supra, 94 N.J. at 498-99, 468 A.2d 150.

The rule favoring prospective application, however, is one only of statutory interpretation. Its purpose is to aid the court in the search for legislative intent. Rothman v. Rothman, 65 N.J. 219, 224, 320 A.2d 496 (1974). Courts should not apply the rule mechanistically. Rather, "[w]here * * * supervening considerations clearly compel a contrary determination, this, like all other rules of statutory construction[,] must give way." Ibid. When the Legislature does not clearly express its intent to give a statute prospective application, a court must determine whether to apply the statute retroactively.

Two questions inhere in the determination whether a court should apply a statute retroactively. The first question is whether the Legislature intended to give the statute retroactive application. Gibbons, supra, 86 N.J. at 522, 432 A.2d 80. If so, the second question is whether retroactive application is an unconstitutional interference with "vested rights" or will result in a "manifest injustice." Ventron, supra, 94 N.J. at 498-99, 468 A.2d 150; Gibbons, supra, 86 N.J. at 523, 432 A.2d 80. Once a court determines that a statute applies retroactively, it should apply the statute in effect at the time of its decision. Kruvant v. Mayor & Council of Cedar Grove, 82 N.J. 435, 440, 414 A.2d 9 (1980).

Courts will apply statutes retroactively when the Legislature has expressed its intent, either explicitly or implicitly, that the statute should be so applied; when the statute is curative; or when the reasonable expectations of those affected by the statute warrant such application. Gibbons, supra, 86 N.J. at 522-23, 432 A.2d 80. Courts have found that the Legislature implicitly intended retroactive application when such an application was "necessary to make the statute workable or to give it the most sensible interpretation." Id. at 522, 432 A.2d 80; see Rothman, supra, 65 N.J. at 223-24, 320 A.2d 496 (court applied equitable distribution statute retroactively because prospective application would confront courts with "difficult if not impossible" task and would mean "full effect of the statute would not be felt for at least a generation").

In the UUPA, the Legislature did not expressly state its intent that the entire statute should apply prospectively. Indeed, two indicia of such an intent, a postponed effective date and a failure to repeal prior law, see Sutherland, supra, § 41.04 at 350, are absent from the UUPA. The statute became effective immediately, L. 1989 c. 58, § 6 at 230, and explicitly repealed the statutory provisions it replaced, N.J.S.A. 46:30B-109. Moreover, the language and spirit of the UUPA indicate that the Legislature intended to give it a retroactive application.

Contrary to the ruling of the Appellate Division, see 239 N.J.Super. at 357, 571 A.2d 333, a close examination of the language of the UUPA reveals that the Legislature intended to include within the UUPA's requirements property "compiled * * * filed * * * [and] turned over to the State under the...