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Cundiff v. Verizon Wireless (Cal. Ct. App. - Oct. 16, 2008)

By Shaun Martin

You're killing me. The second straight day of no published opinions from the Ninth Circuit. And from the California appellate courts, here -- in toto -- is the entirety of what's been published today: "It is ordered that the opinion filed herein on September 30, 2008, be modified as follows: 'On page 8, the last sentence of the opinion is modified to read: ?Respondents to receive costs on appeal.?'" Not much to wax poetic about, eh?

Late yesterday the First District did issue this opinion, which involves whether uncashed settlement checks (obtained after claim forms were filed) reverted to the defendant -- here, Verizon -- or instead get distributed to charities pursuant to CCP 384. I think that the plaintiffs have the better of the argument here, which is what Justice Klein also concludes.

But let me say that I also had the reaction that this dispute may also reflect a partial problem with the adversary system here. Because as I was reading the case, my intuitive reaction was -- and somewhat remains (albeit without much research) -- that neither party may be entirely correct here. Verizon argued that it got to keep the uncashed checks and plaintiffs wanted them to go to charity, but my sense was instead that they remained -- or at least should remain -- the property of the individuals to whom these checks were sent, and that the property should thus revert to the state under the unclaimed property laws and remain there until the relevant individual requests them (which they can do forever, and the Controller is under a statutory duty to find and notify them). That seems not only required by the California unclaimed property statute, but would also, I think, be preferable as a policy matter to simply giving the funds -- which, again, were claimed by the individual class members -- to charity.

Justice Klein doesn't talk about this possibility, I imagine, because neither of the parties here had an incentive to raise the issue -- and they didn't (I checked out their briefs). It seems to me that if you have a reasonable shot at getting the half-million here to the rightful owners, that should be preferred to simply letting a charity cash their checks and deprive them forever of this cash. So I understand why Justice Klein -- as well as Section 384 -- might prefer giving the cash to charity rather than reverting back to Verizon. But given the ambiguous nature of Section 384, as well as the statutory text and policy bases behind the unclaimed property laws, I might add a sentence to the opinion that says (at a minimum) that the Court of Appeal expresses no opinion as to whether Section 384 trumps the unclaimed property laws, and would hope that on remand, the trial court would interpret these statutes to give the money to its rightful recipients.

I think there's a difference between an "unclaimed residue" in a fluid recovery class action or otherwise and checks that are affirmatively requested by a class member who files a claim form and who merely fails to cash (or doesn't timely receive) the resulting check. I agree that Section 384 sends the residue to charity in the former case, but I think that the recipients get to continue to receive the funds as unclaimed property in the latter.

That's my take from the outside, anyway.

Full post as published by California Appellate Report on October 17, 2008 (boomark / email).