After holders report unclaimed property to the states, it becomes the states' responsibility to return the property to the rightful owner. Each state has a process by which the owners or their heirs can come forward to make a claim. If you don't follow these rules, the likelihood of recovery is near zero. A case out of Utah reaffirms that claimants must follow the statutory and regulatory process set out by the unclaimed property law to claim money from the state administrators.
In Olsen v. Utah, the claimant was a judgment creditor, originating from a county tax sale. After satisfying the county taxes, the County properly reported the excess amounts to the state unclaimed property department (approximately $275,000). Meanwhile, the homeowners association assigned their rights to past due amounts to Olsen, who obtained a default judgment against the property owner (approximately $10,000). Olsen then used this default judgment as the basis for an execution sale, whereby a constable sold the rights to the unclaimed property (the excess sales proceeds) held by the state. Olsen then attempted to make a claim for the full amount of the excess sales proceeds. The Utah administrator denied the claim, stating that as judgment creditor, he was not the sole owner and was only entitled to the amount of his judgment.
Both the district court and the appellate court concluded that the Utah Unclaimed Property Act does permit a creditor to claim as the owner of unclaimed property, but the creditor may only claim and receive the principal amount of the debt owed to the creditor. Furthermore, the Act's claims procedure is the exclusive remedy to obtain the debtor's unclaimed property.
Since the Unclaimed Property Fund is administered by a government, a writ of execution is prohibited. Olsen argued that he did not proceed with a writ of execution against the administrator or the department but rather against the property. The Court rejected this since the government possessed the property. The Court also rejected Olsen's contention that he stands in the same shoes as an assignee since no assignment was made.
In ruling for the state, the administrator's decision that only the default judgment amounts are owed stands. The Unclaimed Property Fund will continue to hold the balance of the tax sale proceeds until the owner, an heir, or another judgment creditor comes forward.