Opinion ID: 1758555
Heading Depth: 1
Heading Rank: 3

Heading: statutory provisions and interpretive standards

Text: The 1972 McNamara law did not fully achieve its stated purpose of being a uniform law. Our current law, Act 829 of 1986, which in each section tracks the sections in the 1981 revision of the uniform act, is truly the uniform law. Defining and regulating with particularity, the reporting and disposition of abandoned property, the 1986 law should be interpreted as its stated purpose provides: This Chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to [its] subject ... among the states enacting it. La.R.S. 9:151. The law in La.R.S. 9:151-192 is not ambiguous and should be given effect so as to accomplish, rather than defeat, its evident object and purpose. La.R.S. 1:3-15; La.C.C. Arts. 9-13; Pepsodent Co. v. Krauss Co., 200 La. 959, 9 So.2d 303 (1942); Smith v. Lyon Cypress Co., 140 La. 507, 73 So. 312 (1916). The construction need not be extreme, either liberal or strict. A fair and genuine construction is what the law requires. State Dept. of Social Services v. Parker, 595 So.2d 815 (La.App.2d Cir.1992). A reasonable construction in light of the statute's purpose is what is required. J.M. Brown Const. Co. v. D & M Mechanical Con., Inc., 275 So.2d 401 (La.1973). A substantial majority of all intangible personal property claims are probably governed by the statutes of limitations applicable to contract claims. Frequently, this period of limitations is six years or less. The 1954 Uniform Act, and its 1966 Revision, provide that the general period of presumed abandonment is seven years. Thus, a statute of limitations shorter than the abandonment period would wipe out most state intangible property claims prior to the time of any duty to surrender the property to the state. (A different question is raised by a state's claim to abandoned property on which the statute of limitations had run prior to adoption of the unclaimed property law.... The Uniform Act recognizes this problem and in Section 16 of the 1954 Act suspends the running of the statutes of limitation ... Most states adopting the Uniform Act or other abandoned property laws have adopted this or similar anti-limitations provisions (see Section 29 of the 1981 Uniform Act), declaring that the running of a statute of limitations on the owner's claim does not defeat the state's right to escheat or take custody of abandoned property. § 3.03, Epstein, McThenia & Forslund, supra. Citations and footnotes omitted. Blue Cross is an insurance company providing health [and] hospitalization insurance coverage within the meaning of § 152(8) of the statute. The statute clearly contemplates that Blue Cross might at sometime be obligated on checks ((10)(a)) or for amounts due and payable under the terms of [its] insurance policies ((10)(e)) that remain unpresented, uncashed or unclaimed for more than five years. § 153. These terms and provisions are included among the definitions of intangible personal property which may be presumed abandoned and which Blue Cross is obligated to periodically report and to pay or deliver to the State. See § 152(10)(a) and (e); §§ 153, 170. These terms and provisions [now in Sections 152(8) and (10)(a) and (e)] in the 1986 act were not included in the 1954 uniform law or in the 1966 revised uniform law or in the 1972 Louisiana act. The terms owner, apparent owner, and holder are distinctive terms also included in the definitions section 152 of the 1986 law. The definition of owner, among other things, is one who is a depositor in the case of a deposit, or a creditor, claimant, or payee in the case of other intangible personal property. § 152(12). A holder within the meaning of the statute is one who is indebted to another on an obligation. § 152(7)(c). The obligation to periodically report and to pay or deliver presumed abandoned property to the state (§§ 168-170) is imposed on a variety of creditors such as those who may owe rents, royalties, or wages represented by unpresented payroll checks which remain unclaimed by the owner for more than two years after becoming payable (§ 166); who may be indebted to another on a gift certificate or credit memo unclaimed by the owner for more than five years after becoming payable (§ 165); or who may owe another under any life or endowment insurance policy or annuity contract that has been unclaimed for a period of either two or five years after becoming payable (§ 158). Our emphasis. Similarly, banking and financial organizations which are directly liable to another on a check, draft or similar instrument such as a cashier's or certified check which remains outstanding for more than five years after it was payable (§ 156), may also be obligated under the 1986 law to periodically report and to pay or deliver such abandoned property to the State. See generally §§ 155-167. The 1986 law is more comprehensive than the 1972 law and addresses a contrary view of an insured-payee's prescribed claim. The 1986 statute must be construed in its entirety as legislation on a particular subject [what property may be presumed abandoned, when, and what disposition must be made to whom of that property by its holder.] Part B of § 153 clearly contemplates distinct substantive and procedural rights for the State and for the owner or apparent owner. [P]roperty is payable or distributable for the purposes of this Chapter notwithstanding the owner's failure to make demand or to present any instrument or document required to receive payment. Our emphasis. If the claim of the apparent owner is not barred by prescription, the holder is required to send notice to the apparent owner 120 days before the holder is obligated to report the property to the state. §§ 153, 168E(2). Intangible personal property is not presumed abandoned, however, until it has remained unclaimed for more than five years after it became payable or distributable. § 153. Section 168 also requires a health and hospitalization insurer holding property presumed abandoned and subject to custody as unclaimed property to report to the State the details of such property, including the date the property became payable, demandable, or returnable and the date of the last transaction with the apparent owner. Our emphasis. Section 170 states that the insurer, within six months of filing the report as required by § 168, shall pay or deliver to the [State] all abandoned property required to be reported. Our conclusion that Part A of § 180 negates the effect of the five-year liberative prescription against the state is strengthened by the varying dormant periods in other sections of the statute, e.g., the payroll check, if unpresented for two years, under § 166 mentioned above. Sections 153, 168 and 170 contemplate that the claim of the apparent owner shall be barred by a period of prescription as a prerequisite to the property being presumed abandoned. The statute clearly establishes a substantive cause of action in favor of the State to enforce a holder's duty to report and to pay or deliver abandoned property to the State which the State may (procedurally) commence during the 10-year period after the duty arose. The respective holder's duty to the State arises, according to the statute, in some instances before, and sometimes after, conventional or contractual liberative prescription applicable to the respective original obligation of a particular holder would accrue. The expiration, before or after the effective date [of the 1986 law], of any period of time specified by contract, statute or court order, during which a claim for money or property can be made or during which an action or proceeding may be commenced or enforced to obtain payment of a claim for money or to recover property, does not prevent the money or property from being presumed abandoned or affect any duty to file a report or to pay or deliver abandoned property to the [State] as required by this chapter. § 180A. Our emphasis. The State has 10 years from the date the duty arose to commence its action or proceeding. § 180 B. The Commissioners' comments to § 29 of the 1981 Revision of the Uniform Law agree with our interpretation of § 180: Subsection (a) is written to insure that although the owner's claim against the holder may be barred by the statute of limitations prior to the effective date of the Act, the holder is not relieved of his obligation to pay abandoned property to the administrator. The comment to Section 16 of the 1966 Act noted that local law must be consulted in order to ascertain whether legislation constitutionally may be enacted reviving a cause of action barred by the statute of limitations. This issue has been litigated in several states[.] Even though the statute of limitations has run before the effective date of the Act, the holder must report and deliver the property to the state ... Subsection (b) provides that an administrator must commence an action against a holder within 10 years after the time the property was first reportable. Under existing law it is not clear that statutes of limitations apply to the state in compelling a holder to report or deliver unclaimed property. A holder may under the 1966 Act be subject to suit for an indeterminate period. Certain states have argued that Section 16 of the 1966 Act applies to states and thus there is no statute of limitations. The 10-year limitation period will provide a holder with a cut-off date on which it can rely. ULA 8B, § 29 UPA (1981). Citations omitted. A law on the subject of unclaimed or abandoned property that includes a provision such as former La.R.S. 9:168 in 1972 that the liberative prescription applicable to the payee on a check is also applicable to the State, allowed the conclusion in McNamara that the State's claim to abandoned property rested, substantively and procedurally, upon the obligation to the conventional creditor, substantively and procedurally, and was thus defeasible. See McNamara, citing 1 D. Epstein, A. McThenia & C. Forslund, Unclaimed Property Law and Reporting Forms, § 3.02. That same authority, in § 4.01, explains however: In determining just what rights the state derives from the owner, and what rights the state may independently possess, a distinction can be drawn between the owner's property right and his procedural remedies.... [T]he abandoned property laws are generally seen as creating new statutory obligations to the state, which are subject to the defense of a statute of limitations applicable to claims bases on statute. Thus, in bringing suit to recover abandoned property, the state is not enforcing the owner's claim against the holder, but is seeking to enforce its own right based on the statutorily created obligation of the holder to surrender custody of the property to the state.