What was lost was (almost) found
Jun 07, 2018
Isn't it amazing what you can find if you look hard (or long) enough? Take for example the gentleman recently visited our Indio branch with a very straight forward request (well, as "straight forward" as a legal research question can be, I guess).
Seems he wanted to know if we had anything by "Witkin" dealing with small claims procedures. For those not in the know "Witkin" is a code word for the series of books written by Bernard E. Witkin. The Witkin Series consists of:
- Summary of California Law (TR)
- California Procedure (TR)
- California Evidence (TR)
- California Criminal Law (TR)
Anyway, back to the story. Gentleman noted that his brother-in-law, a lawyer, had advised him to file a claim in small claims court and told him that Witkin held the answers to any questions he may have. I was happy to help him find the volume in Witkin’s CA Procedure and I casually handed him the Nolo Press books Everybody's Guide to Small Claims Court and Representing Yourself in Court that we keep on the reference shelf, just in case he’d like to peruse another resource.
About an hour later, gentleman emerged from one of our desk carrels to report that while Witkin was a not exactly easy reading material, the Nolo Press books were quite helpful. It was then that he shared his quite interesting story.
Gentleman had closed a bank account and received a check for its residual balance. Unfortunately, he forgot to cash the check until it resurfaced among his papers 25 years later. At that point he ran it down to his bank only to be told it was far too late to cash. He went to the originating bank which said they had no record of him whatsoever and were certainly not going to honor a 25-year-old check. That led him to contact his brother-in-law which ultimately led him through our doors at RCLL.
You might wonder, what happens to old checks that are not cashed and old bank account balances not claimed? More importantly, what if I myself happen to remember tens of thousands of dollars I’ve forgotten to collect?
The answer to the un-cashed check question can be found in the Uniform Commercial Code ("UCC"). While UCC article 4-404 tells us that banks are not legally obligated to honor a check more than six months old, it does, rather ambiguously, state that the bank may pay the check if it does so in ‘good faith (i.e. the bank had a reason to believe the payor wanted the check honored or it simply slipped through the cracks). In this case, the check was well outside of that time frame so neither his home bank nor the originator was obligated to honor the check. I mean, they could have, but just chose not to. So much for customer service.
So what about the money left in his bank account? This is where the law gets a bit murky. According to the FDIC, banks are only required to keep banking records for 5 to 7 years depending on the State. So, the bank not having a record of gentleman's account was not unexpected. However, according to CCP § 1513, abandoned bank accounts (based in California) must be turned over to the State (of California) after three years have passed with no activity. The state controller then sends out notices to the last known address of the owner of the property and lists the asset on its website, unclaimedcalifornia.com. There is no time limit in which the property must be claimed but every year all the assets except $50,000 are transferred to the state’s general fund for use.
This gave gentleman, and me, some hope and we both hopped onto the website listing unclaimed monies. Much to his dismay, the proceeds of gentleman's bank account were not listed (probably something to do with his having closed the account 25 years prior). He had been hoping to find his principle and at least 20 years interest since CCP § 1513 stated “No banking organization may discontinue interest or dividends because of inactivity…” and “All unclaimed tangible property, together with all interest and other increments accruing thereto, is subject to delivery to this state if the last known address of the owner is in this state.”
So gentleman was unable to find his money and, unfortunately, I was unable to find anything for myself, either (though I was able to tell my sister she had $8.13 waiting for her courtesy of Pacific Bell).
Oh well, back to the research books for our dear gentleman and, since I am not an undiscovered millionaire, back to work for me.