Just a few months ago in December, we wrote about Weingarten Realty Investors v. Chiang. In that case, the Court of Appeals for California’s Fourth Appellate District decided any person who claims an interest in unclaimed property, such as an assignee, may apply for and recover property under Code of Civil Procedure Section 1540. The phrase any person includes an assignee judgment creditor seeking to recover unclaimed property which escheated to the state prior to the assignment.
In that case, Weingarten Realty Investors was a judgment creditor of Novadyne Computer Systems, Inc. Property belonging to Novadyne, including cash in various accounts and stock holdings, escheated to the state and was being held by the Controller’s Office (Chiang).
We recently learned Assemblymember Ed Chau (District 49) has introduced proposed changes to the unclaimed property statute that would preclude assignee creditors from making claims against a debtor’s interest in the debtor’s unclaimed funds held by the state.
If this legislation is passed, it will further hamstring creditors seeking assets to apply to a debtor’s rightful obligations.
The hearing on the proposed amendment is set for next Tuesday, April 16, 2013.
It goes without saying that every person or business whose rights to seek repayment of lawful debts may be limited by the amendment should call Assemblymember Chau’s office or an assemblymember in your district and voice your opinion.
The full text of Section 1540 of California’s Code of Civil Procedure and the proposed changes are set forth below:
(a) Any person, excluding another state, who claims an interest in to have been the owner, as defined in subdivision (d), of property paid or delivered to the Controller under this chapter may file a claim to the property or to the net proceeds from its sale. The claim shall be on a form prescribed by the Controller and shall be verified by the claimant.
(b) The Controller shall consider each claim within 180 days after it is filed to determine if the claimant is the owner, as defined in subdivision (d), and may hold a hearing and receive evidence. The Controller shall give written notice to the claimant if he or she denies the claim in whole or in part. The notice may be given by mailing it to the address, if any, stated in the claim as the address to which notices are to be sent. If no address is stated in the claim, the notice may be mailed to the address, if any, of the claimant as stated in the claim. No A notice of denial need not be given if the claim fails to state either an address to which notices are to be sent or an address of the claimant.
(c) No interest Interest shall not be payable on any claim paid under this chapter.
(d) For the Notwithstanding subdivision (g) of Section 1501, for purposes of filing a claim pursuant to this section, “owner” means the person who had legal right to the property prior to its escheat, his or her heirs, heirs or estate representative, his or her legal representative, guardian or conservator, or a public administrator acting pursuant to the authority granted in Sections 7660 and 7661 of the Probate Code. Only an owner, as defined in this subdivision, may file a claim with the Controller pursuant to this article.
(e) Following a public hearing, the Controller shall adopt guidelines and forms that shall provide specific instructions to assist owners in filing claims pursuant to this article.
If you have any questions about applying for property under Section 1540 or objecting to the proposed changes, call us. The attorneys at Glass & Goldberg are committed to helping you minimize risk and manage uncertainty while moving forward to meet your goals. Call us at (818) 888-2220, email us at email@example.com, or visit us on the web at www.glassgoldberg.com to learn more about the firm and to sign up for future newsletters.
 Weingarten Realty Investors v. Chiang, (Cal. App. 4th, December 19, 2012).
 Code of Civil Procedure Section 1540 subsection (a) currently states: “Any person, excluding another state, who claims an interest in property paid or delivered to the controller under this chapter may file a claim to the property or to the net proceeds from its sale.” Subsection (d) provides that “Owner” means any person having a legal or equitable interest in property subject to the (Unclaimed Property Law) prior to its escheat.