ABANDONED AND LOST PROPERTY -- County Sheriff (disposition of unclaimed county prisoners' property)
MUNICIPAL FUNDS -- Trust and Agency Funds (transfer of abandoned property to)
STATUTE OF LIMITATIONS -- Unclaimed Funds (county prisoners)
ABANDONED PROPERTY LAW, §§600, 1310; CIVIL PRACTICE LAW AND RULES, §§208, 210, 213; CORRECTION LAW, §350 et seq; ESTATES, POWERS AND TRUSTS LAW, §11-3.1; SOCIAL SERVICES LAW, §152-b; STATE FINANCE LAW, §128; SURROGATES COURT PROCEDURE ACT, §§1219, 1310, 2222, 2223, 2224: Unclaimed property held by a sheriff for a county prisoner should be placed in the county's trust and agency fund for six years, subject to claim, and then transferred to the general fund. The county may report the money to the State Comptroller as abandoned property, after two years.
You have asked whether Opn No 72-233, reported at 28 Opns St Comp, 1972, p 97, still represents the views of this Office. That opinion concluded that unclaimed moneys belonging to a deceased county prisoner and held by a sheriff may be transferred to and held in a special account in the county's trust and agency fund and that, after six years, such money may be deemed abandoned property and disposed of pursuant to section 1310 of the Abandoned Property Law, or paid into the general fund of the county. The opinion also states that when such amounts are nominal, they may be paid immediately into the county's general fund even though the county may subsequently have to pay them out upon audit and approval of a proper claim. While the conclusions reached in Opn No. 72-233 are generally correct, we believe that the opinion should be clarified in the following respects.
Initially, we note that there is no statutory provision which specifically pertains to the disposal of unclaimed funds or other property held by a county sheriff. However, Abandoned Property Law, §1310, cited in Opn No. 72-233, continues to be applicable, although this section was amended by chapter 572 of the Laws of 1981 to reduce the time required before property is eligible to be declared abandoned from six years to two years. Accordingly, the statute currently provides that any person who holds property belonging to another person may apply to the Supreme Court for an order declaring the property abandoned and directing payment of the property to the State Comptroller after it has remained unclaimed for a period of two years. We note, however, that the procedures of section 1310 are permissive and that the Comptroller must elect to receive the unclaimed property before payment can be ordered.
As an alternative to transferring unclaimed funds to the Comptroller pursuant to Abandoned Property Law, §1310, the funds may be paid into or continued to be held in a trust and agency account for the benefit of the person or persons entitled thereto (1981 Opns St Comp, No. 81-277 p. 297). When unclaimed money is so held by a county, the county acts as the bailee of such funds and, unless the statute of limitations has been tolled or extended, the lawful owner, as bailor, has six years within which to bring a claim to obtain the funds before such claim is barred by the statute of limitations applicable to bailments (CPLR 213; see, Baratta v Kozlowski, 94 AD2d 454, 464 NYS2d 803). After a period of six years, the money should be placed in the general fund since it may then be presumed that any claim to the money is barred.
Both the Surrogate's Court Procedure Act (SCPA) and the Estates, Powers and Trust Law (EPTL) set forth procedures for administering estates of decedents. These procedures are not altered by the fact that the decedent was incarcerated at the time of his or her death or died following release. Therefore, additional considerations arise when the unclaimed funds held by a sheriff are part of a decedent's estate.
Generally speaking, the property of a decedent is disposed of pursuant to the terms of the decedent's will, or where there is no will, the property passes according to the laws of intestacy. There is a comprehensive statutory scheme in New York State which provides that when an estate is administered in New York, and the decedent dies intestate with unknown heirs, or with known heirs whose whereabouts are unknown, payment of the estate is made to the State Comptroller for the benefit of unknown distributees or to the county treasurer for the benefit of unlocatable distributees, respectively (see SCPA, §§2222, 2223 and 2224; Abandoned Property Law, §600[b]). Before payment of a decedent's property is made to the State Comptroller or to the county treasurer, however, an estate representative must be appointed and, as noted, the estate must be administered.
We note that in those situations in which the county establishes that the deceased inmate died without heirs, as distinguished from "unknown" heirs, the personalty left by such inmate becomes the property of the State, as the ultimate heir. The State's right to take in this instance derives from its sovereignty and supersedes any rights claimed by the county (see In re Menschefrend's Estate, 1954, 283 App Div 463, 128 NYS2d 738, affd 8 NY2d 1093, 208 NYS2d 453, cert den 365 US 842, 81 SCt 801, 5 LEd2d 808, for a full discussion of this sovereign power, known as bona vacantia).
Upon appointment, an estate representative succeeds to the rights and liabilities of his decedent (see, e.g., EPTL, §11-3.1 which provides in part that, "any action, other than an action for injury to person or property, may be maintained by and against a personal representative [of an estate] in all cases and in such manner as such action might have been maintained by or against his decedent"). Accordingly, in making a claim for the abandoned funds of a deceased former prisoner, an estate representative could also be barred by the statute of limitations.
We note, however, that the statute of limitations may be tolled by the death of a claimant pursuant to CPLR, §210(a). Under this provision, the applicable statutory time allowance is extended one year if necessary to preserve the claim. In other words, if a former prisoner dies with less than one year remaining of the six year period of limitations applicable to his claim for funds, an action may nonetheless be commenced by his representative within one year of the former prisoner's death (Barnes v County of Onondaga, 103 AD2d 624, 481 NYS2d 539, affd 65 NY2d 664, 491 NYS2d 613, 481 NE2d 245). In addition, where the estate representative is an official of the county (see SCPA, §1219) who has neglected to collect all of the assets of the deceased, a question may arise as to whether the county is estopped from raising the statute of limitations as a defense, on the grounds that the county should not be allowed to profit from its own wrongdoing (see General Obligations Law, §17-103[b]; General Stencils, Inc. v Chiappa, 18 NY2d 125, 272 NYS2d 337). In this connection, we also note that in our opinion the county has a duty to make reasonable efforts to inform the estate representative or known distributees that the county is holding assets of the decedent (see 32 Opns St Comp 1976, p 89).
While the six-year statute of limitations that ordinarily applies to claims for prisoner funds held by a county may, in limited circumstances, be extended or tolled, or deemed inapplicable (see also CPLR, §208 extending the time for commencement of an action in situations involving infancy and insanity), this possibility does not require that the funds be treated in a manner other than as previously stated. In the rare instance when a claim to prisoner funds is viable after the lapse of six years, a county that has taken possession of such moneys may pay a valid claim to the same out of its general fund.
Finally, we note that there are circumstances when moneys of a prisoner are not held by a sheriff. Article 14 of the Correction Law allows a county prisoner incarcerated for longer than one year to appoint a trustee for his property. Under the provisions of this Article, upon the prisoner's release or death, the trustee is responsible for delivering to the prisoner or his heirs all property held by the trustee, after deducting lawful expenses and commissions (see §§350 et seq.). Additionally, the Department of Corrections has promulgated regulations which provide for the disposition of contraband property of prisoners confined in both State and local correctional facilities (see 9 NYCRR §7002.4, which authorizes both the confiscation of property and the designation, by the prisoner, of persons who may receive such property in lieu of its confiscation).
Also, it is necessary to distinguish between county prisoners and those confined under the jurisdiction of the Department of Corrections and other State agencies. Under the provision of Abandoned Property Law, §1304 and State Finance Law §128, unclaimed property belonging to inmates in institutions under the jurisdiction of the Department of Corrections and other State agencies is deemed abandoned property and is transferred to the Comptroller by the superintendent of the institution for deposit in the Abandoned Property Fund. There is no authority to make any other disposition and, unlike the requirements of Abandoned Property Law, §1310, a court order is not required in order to make payment.
In summary, then, unclaimed funds held by a sheriff for a county prisoner, subject to the considerations discussed above for deceased prisoners, should be placed in the county's trust and agency fund. After the money has remained unclaimed for two years, the county may pay the same to the State Comptroller as abandoned property pursuant to Abandoned Property Law, §1310. However, since the procedures of section 1310 are permissive, the county may continue to hold the money subject to claim in its trust and agency fund. After the property has remained unclaimed for six years, the statute of limitations will generally have run and the county may then transfer the money to the general fund.
March 15, 1988