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Twiss v. State

Decided: March 14, 1990.

HAROLD S. TWISS, PLAINTIFF-APPELLANT,
v.
STATE OF NEW JERSEY, DEPARTMENT OF THE TREASURY, OFFICE OF FINANCIAL MANAGEMENT, DEFENDANT-RESPONDENT



On appeal from Superior Court, Law Division, Mercer County.

Petrella, O'Brien and Havey. The opinion of the court was delivered by Petrella, P.J.A.D.

Petrella

This appeal presents the latest chapter in the continuing tension between the Right-To-Know Law, N.J.S.A. 47:1A-1 et seq., and requests for information from the State. Directly involved is the validity and effect of a 1963 regulation issued by the State Department of the Treasury, purportedly under the authority of an Executive Order of the then Governor, and the interplay between the Right-To-Know Law and N.J.S.A. 17:9-22 and N.J.S.A. 17:9-25(a). Also involved are successor provisions contained in the Uniform Unclaimed Property Act, N.J.S.A. 46:30B-1 et seq. (sometimes referred to herein as UUPA). We conclude that with respect to custodial property the 1963 regulation violated the Right-To-Know Law and the then extant statute. We also find it inconsistent with the Executive Order and its intent and tenor. Accordingly, we reverse.

Plaintiff Howard S. Twiss instituted an action on May 12, 1987 under the Right-To-Know Law (N.J.S.A. 47:1A-4) to compel the State Treasurer to allow him to inspect records submitted to the State of unclaimed, dormant bank deposits in the protective custody of the State Treasurer under N.J.S.A. 17:9-22 and 17:9-25(a).*fn1 Twiss sought access to the Treasurer's

records under the Right-To-Know Law and the common law right of inspection of public records in order to facilitate his efforts, for a profit, to locate claimants.

The matter came before the trial court on cross-motions for summary judgment. After oral argument on October 14, 1988, the Law Division judge entered judgment in favor of the State and dismissed plaintiff's complaint. Twiss filed his notice of appeal on November 23, 1988.

In denying Twiss's claim of entitlement to inspect the records of unclaimed bank deposits the Treasurer asserted that the records concerning escheat of personal property, including dormant bank deposits, are confidential and protected against indiscriminate public inspection by anyone except the account holder. His justification for refusing to disclose information about the unclaimed bank deposits is premised on a claimed public policy which assertedly disfavors "probate researchers, tracers, genealogists, and heir-hunters," as well as on a claim of privilege between a bank and its customers. He also asserts that the "State has never provided any information concerning unclaimed property to heir-hunters; to do so would only serve as condonation of a violation of the long established public

policy condemning heir-hunting." It is undisputed that Twiss is a private party engaged in the business of locating the owners of unclaimed property. When he succeeds in locating such an owner he exacts a fee, usually a percentage of the amount involved.

Twiss asserts that the clear language of N.J.S.A. 17:9-22 and 17:9-25(a), which specifically made the requested records open to public inspection, provided no basis or option for a head of a department to promulgate a regulation or order to the contrary. He argues that the regulation adopted by the State Treasurer on October 1, 1963 must, therefore, be struck down as clearly contrary to the plain, unambiguous meaning of the cited statutes. Twiss also asserts that the power of the executive branch to regulate under the Right-To-Know Law does not include authority to contravene a clear legislative mandate. He further argues that the Treasurer's regulation violates the separation of powers clause of our Constitution (N.J. Const. (1947), Art. III, para. 1); is arbitrary and capricious; and there has been no proof of compliance with the Executive Order authorizing the regulation.

I

Up until April 14, 1989 N.J.S.A. 17:9-22 dealt with procedures required of financial institutions for handling bank deposits unclaimed or inactive for 10 years. It stated in pertinent part:

Not later than the thirty-first day of January in each year after the year in which this act takes effect and as of December thirty-first of the preceding year, every bank shall make in duplicate a written report to the State Treasurer containing a true and accurate statement of all unclaimed bank deposits held by the bank as of such date.

Such report shall set forth the name and address of the bank . . . and shall list in alphabetical order the name of each person to whose credit an unclaimed bank deposit stands, the last address of the depositor appearing on the records of the bank, the identification number, if any, of each account and the amount to the credit of each account.

Immediately upon receipt of such reports the State Treasurer shall deliver one duplicate of each report to the Attorney General and the State Treasurer shall

cause the other duplicate reports to be permanently bound with an alphabetical index of the depositors with appropriate references to the bound reports. Such bound reports and indices shall be open for public inspection during usual business hours and under such reasonable regulations as the State Treasurer shall prescribe. [Emphasis added.]

N.J.S.A. 17:9-25 complemented that section and imposed duties on the State Treasurer. It read in pertinent part:

(a) The State Treasurer shall establish and maintain records of all escheated unclaimed bank deposits received by him, which in the case of deposits with a net balance of fifty dollars ($50.00) or more, shall show in alphabetical order the names of the depositors, the amounts received, the name and address of the bank from which the funds were received, the identification numbers of the accounts if any, and shall establish and maintain an index thereto, which records and index shall at all times during the usual business hours be open to public examination. [Emphasis added.]

After any account had been inactive for 10 years Title 17 (N.J.S.A. 17:9-19)*fn2 required the bank to mail a notice of unclaimed deposit to the owner of the account, at the last address appearing in the bank's records, prior to August 15 of the year in which the account was to become "unclaimed". This notice was required to state that because there has been no activity in the account for 10 years the amount on deposit would be turned over to the State Treasurer the following January unless the depositor notified the bank. N.J.S.A. 17:9-21(b). Every bank having such an unclaimed deposit was also required to publish the name of the depositor*fn3 and the name and address of the bank which holds the unclaimed deposit in a newspaper circulating

in each county where the bank has an office.*fn4 This publication was required to appear twice (once in October and once in November). N.J.S.A. 17:9-21(c).*fn5 Although Title 17 did not preclude inclusion of the depositor's address in the publication, inclusion of the amount was precluded by N.J.S.A. 17:9-21(c). If no claim was received by December 31, the monies and all information regarding the account were turned over to the State Treasurer, less publication costs. N.J.S.A. 17:9-21(b) and 22.6.

The State's position relies on the interplay between the Treasurer's regulation and Executive Order No. 9 signed by then Governor Richard J. Hughes. A brief background discussion is necessary to put this aspect in proper perspective. In 1963 Governor Hughes issued a series of three Executive Orders under the authority of the then recently enacted Right-To-Know Law, L.1963, c. 73 (N.J.S.A. 47:1A-1 et seq.).

Executive Order No. 7 was promulgated by the Governor on June 21, 1963 and acknowledged that the act provided that "all records which are required by law to be made, maintained or kept on file by State and local governmental agencies are to be deemed to be public records, subject to inspection and examination and available for copying, pursuant to said law." It went on to acknowledge that the "law provides that records which would otherwise be deemed to be public records . . . may be excluded therefrom by Executive Order of the Governor or by

any regulation promulgated under the authority of any Executive Order of the Governor." That Executive Order then went on to authorize certain agency heads in state and local governments to adopt and promulgate regulations setting forth which records under their jurisdiction shall not be deemed to be public records. It also provided that except for records subject to regulations adopted under the Executive Order, all records required by statute to be made, maintained 0 or kept by any state or local governmental agency were public records.

Because of a perceived need for more time in which to assess the proper implementation of Executive Order No. 7, the Governor promulgated Executive Order No. 8 on August 1, 1963. This Executive Order acknowledged in its preambles: ". . . The public's right to examine and copy public records, which presently exists under the common law and by statute, remains inviolate even without the benefit of the provisions of Chapter 73, P.L.1963; . . ." and provided that regulations promulgated pursuant to Executive Order No. 7 were not to be deemed effective until October 1, 1963. Significantly, section 3 of this Executive Order stated:

This Executive Order and Executive Order No. 7 shall in no way be interpreted to replace or affect the right that the general public has, by common law, judicial decision, statute or otherwise, to examine and copy public records and shall be ...


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