SOGG, EXR., APPELLANT, v. ZURZ, DIR., APPELLEE.
No. 2007-1452
Supreme Court of Ohio
Submitted September 16, 2008-Decided April 8, 2009.
[Cite as Sogg v. Zurz, 121 Ohio St.3d 449, 2009-Ohio-1526.]
PFEIFER, J.
{11} The issue before this court is whether the first sentence of
Background
{12} Appellee, the director of commerce of the state of Ohio, now Kimberly Zurz, supervises and administers the Division of Unclaimed Funds pursuant to
{13} Appellant, Wilton S. Sogg, the executor of his mother‘s estate, filed a claim with the division for the return of two separate amounts: an insurance policy claim payment reported by Blue Cross & Blue Shield Mutual and dividends reported by the Bank of New York. Sogg received a check from the division for $320.72, which represented the total of the two amounts, including interest earned through July 26, 1991, minus a five percent administrative fee.
{14} Sogg was certified as the representative for the class of “[a]ll persons or entities who filed, or will file, claims for unclaimed funds with the Defendant (that is, with the Division of Unclaimed Funds of the Ohio Department of Commerce),
Analysis
{15} We review the granting of summary judgment de novo. Comer v. Risko, 106 Ohio St.3d 185, 2005-Ohio-4559, 833 N.E.2d 712, ¶ 8.
{16} The first sentence of
{17} Much is written in the briefs and lower court opinions about the common-law trust principle that the “[i]nterest follows the principal.” Ohio City v. Cleveland & Toledo RR. Co. (1856), 6 Ohio St. 489, paragraph three of the syllabus. We need not consider it here because that venerable principle applies only “in the absence of a statute or stipulation to the contrary.” Eshelby v. Cincinnati Bd. of Edn. (1902), 66 Ohio St. 71, 74, 63 N.E. 586. See Thompson v. Indus. Comm. (1982), 1 Ohio St.3d 244, 249, 1 OBR 265, 438 N.E.2d 1167.
Unclaimed Funds Are Not Abandoned
{18} Even if the General Assembly may exercise its plenary powers to declare that “[i]nterest is not payable to claimants of unclaimed funds held by the state,” it is an entirely different matter for the state to assume ownership of the interest earned. Nothing in the UFA states that the interest earned on the property held by the state becomes the property of the state. In her brief, Zurz states that the UFA “benefits the public by allowing the State to use the unclaimed funds in its
{19} The court of appeals relied extensively on three cases in other states to conclude that pursuant to the UFA, “unclaimed property is essentially abandoned property.” 2007-Ohio-3219, 2007 WL 1821306, ¶ 28. Smolow v. Hafer (Pa.Commw.2005), 867 A.2d 767; Smyth v. Carter (Ind.App.2006), 845 N.E.2d 219; Hooks v. Kennedy (La.App.2007), 961 So.2d 425. We find this reliance unpersuasive because, as the court of appeals candidly acknowledged, the “UFA does not contain a presumption of abandonment as do the statutes at issue in Indiana, Louisiana, and Pennsylvania.” 2007-Ohio-3219, 2007 WL 1821306, ¶ 28. Zurz quotes Texaco, Inc. v. Short (1982), 454 U.S. 516, 526, 102 S.Ct. 781, 70 L.Ed.2d 738, for the proposition that “[s]tates have the power to permit unused or abandoned interests in property to revert to another after the passage of time.” Although we do not doubt that this is a fair characterization of the law in Texaco, it is irrelevant for present purposes because, as noted above, nothing in the UFA indicates an intent to change the ownership of the unclaimed funds, whether due to the passage of time or any other reason. Furthermore, “[f]orfeitures are not favored by the law. The law requires that we favor individual property rights when interpreting forfeiture statutes.” Ohio Dept. of Liquor Control v. Sons of Italy Lodge 0917 (1992), 65 Ohio St.3d 532, 534, 605 N.E.2d 368; see also State v. Lilliock (1982), 70 Ohio St.2d 23, 25, 24 O.O.3d 64, 434 N.E.2d 723 (forfeitures are not favored in law or equity); Kiser v. Logan Cty. Bd. of Commrs. (1911), 85 Ohio St. 129, 131, 97 N.E. 52 (“Whether or not a proprietor has abandoned his rights or his property, is usually a question of fact for a jury to answer, and the answer must depend primarily upon an intention by the proprietor to abandon. * * * But mere non-user is not ordinarily sufficient to establish the fact of abandonment“). We conclude that the General Assembly has not plainly legislated that unclaimed funds are or can be deemed abandoned property.
***
{110} The parties also agree that unclaimed funds are not abandoned property; otherwise they would not have stipulated the following: “[T]he unclaimed monies are held in trust in perpetuity for the benefit of the owners of the
The State‘s Power to Take Private Property Is Limited by Section 19, Article I, Ohio Constitution
{111}
{112} The question becomes: Does the first sentence of
{14} “It is regrettable that there should be an apparent necessity for restating such familiar principles; but there seems to be a growing disposition to legislate, by ordinance and by general statute, regardless of constitutional limitations, thus imposing upon the courts the odium of declaring them to be unconstitutional.” (Emphasis sic.) Kiser, 85 Ohio St. at 132-133, 97 N.E. 52.
Statute of Limitations
{15}
Conclusion
{16} “Unclaimed funds” are not abandoned; they are the property of their owner. Accordingly, the state may not appropriate for its own use, against the owner of the underlying property, interest earned on that property. The first sentence of
Judgment reversed
and cause remanded.
MOYER, C.J., and LUNDBERG STRATTON, O‘CONNOR, O‘DONNELL, and CUPP, JJ., concur.
LANZINGER, J., concurs in judgment only.
Thompson Hine, L.L.P., and William C. Wilkinson; Futterman, Howard, Watkins, Wylie & Ashley, Chtd., John R. Wylie, and Charles R. Watkins; and Susman, Heffner & Hurst, L.L.P., Glenn L. Hara, and Arthur T. Susman, for appellant.
Richard Cordray, Attorney General, Benjamin C. Mizer, Solicitor General, and William J. Cole and John T. Williams, Assistant Attorneys General, for appellee.