September 6, 2012
IN THE MATTER OF THE REAL AND PERSONAL PROPERTY OF CARL BEKYSEWYCZ, DECEASED.
On appeal from Superior Court of New Jersey, Chancery Division, Mercer County, Docket No. C-86-0141.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 31, 2012
Before Judges Payne and Hayden.
On December 11, 1987, an order was entered by Chancery Judge Paul Levy providing for the escheat to the State of funds constituting the estate of Carl Bekysewycz if no next-of-kin were discovered or came forward within three years of decedent's death, which had occurred on May 30, 1986. On April 18, 2008, Philip B. Papier, Jr., was appointed administrator of the Estate of Carl Bekysewycz, following an ex parte application to the Hunterdon County Surrogate. In this matter, Papier appeals from the April 16, 2010 order denying his motion, pursuant to Rules 4:49-2 and 4:50-1, to amend Judge Levy's 1987 order to provide for payment of the escheated funds either to the Administrator of Unclaimed Funds to hold for the benefit of the heirs of Carl Bekysewycz or directly to the estate of Carl Bekysewycz, deceased, Philip B. Papier, Jr. Administrator. We affirm.
As stated, Bekysewycz died intestate on May 30, 1986. On July 3, 1986, the State filed a verified complaint for escheat pursuant to N.J.S.A. 2A:37-1 (pertaining to real property) and N.J.S.A. 2A:37-12 (pertaining to personal property) in the Chancery Division, Mercer County. In the first count of that complaint, the State sought the appointment of a conservator to take possession of decedent's real and personal property, to provide notice by publication requiring any next-of-kin to come forward to lay claim to the estate and any unsatisfied creditor to file a claim with the conservator, and if no next-of-kin comes forward, to permit entry of a judgment escheating the property of decedent to the State. The second count recited:
Notice of the death of Carl Bekysewycz was given to the Attorney General by Robert Konopka, Esquire, an individual who knew of the State's role in this type of situation. Upon the receipt of notice, an impartial inquiry was initiated by a State Investigator. The initial phase of this investigation included an examination of the decedent's home, property, personal papers, and personal effects and interviews with individuals who had information concerning the decedent. No sufficient information about any next-of-kin developed through this process.
The count continued by stating that, as a consequence, the Attorney General made appropriate funeral and burial arrangements with the Hannon Brother's Funeral Home, and now sought payment of the funeral home's preferred claim against the estate for the costs incurred.
On July 3, 1986, Patricia Scott-Buzzi was appointed as conservator of all of the real and personal property of decedent, authorized to marshal the estate's assets and preserve and maintain his residence, and directed to give notice by publication in two successive weeks of decedent's death to any next-of-kin and creditors in the form approved by Judge Levy. The notice was printed in the Hunterdon County Democrat on July 17, 1986 and again in the following week. The notice commenced in the following manner:
NOTICE OF APPOINTMENT OF CONSERVATOR AND NOTICE TO CREDITORS ______________________________________
TO ANY NEXT-OF-KIN, HEIRS-AT-LAW, DEVISEES, OR LEGATEES OF Carl Bekysewycz, now deceased.
TO ANY OWNER OR BENEFICIAL OWNER OF, or person entitled to, the real and personal property of Carl Bekysewycz, now deceased.
TO ANY CREDITOR OF Carl Bekysewycz, now deceased.
TAKE NOTICE that Carl Bekysewycz, late of the Township of Readington, County of Hunterdon, and State of New Jersey, died on June 6, 1986 [sic]. The said Carl Bekysewycz, now deceased, having died intestate without any known next-of-kin, The State of New Jersey has instituted an action before the Superior Court of New Jersey, Chancery Division (Mercer County), seeking an adjudication as to the title to the property of the said Carl Bekysewycz, now deceased.
The notice then identified the conservator as Scott-Buzzi and directed that all claims or demands be presented to her within six months or be barred.
On October 21, 1986, following the submission of a first report by the conservator, the court issued an order for payment of claims and authorizing sale of decedent's real property. In a second report, the sale of that real property, on March 9, 1987, for the sum of $150,000 was noted. Following the submission of a third report, on December 11, 1986, the court entered an order approving and confirming the sale of decedent's real property and a final order concluding conservatorship and directing distribution. In the final order, the conservator was directed to turn over remaining funds comprising decedent's estate to the Attorney General, to be administered as a special trust fund for a period of three years - a period one year longer than that required by N.J.S.A. 2A:37-28. If no next-ofkin were discovered or came forward during that period, the order authorized the Attorney General to terminate the trust fund and to pay the proceeds to the State Treasurer as the proceeds of the escheatment of the property of Carl Bekysewycz. In fact, funds in the amount of $251,848.04 were paid to the Department of the Treasury on December 15, 1993.
Approximately twenty-two years after decedent's death and fifteen years after the final escheat of his estate to the State, on April 28, 2008, Papier was granted a letter of administration in connection with decedent's estate. Sixteen months later, Papier moved, through counsel, to amend the court's final order of December 10, 1987 in order to pay the proceeds of decedent's estate to him as administrator, with interest. In accompanying briefing, counsel argued that the State failed to conduct a diligent inquiry for next-of-kin following decedent's death and argued additionally as a matter of law that, although at the time of decedent's death the State's laws permitted an absolute escheat to occur, by the time the funds were transferred, the State's laws had changed to authorize only a custodial escheat. As a consequence, the estate remained available for distribution to heirs located by Papier or his agent.
The matter was argued before Judge Mary Jacobson, who denied Papier's application. Accepting the State's position with respect to the law, she ruled that the State did not enact a custodial escheat statute applicable to estates such as that left by decedent until 1995, and that the law enacted at that time should not be applied retroactively to undo an escheat that had occurred prior to that date. Additionally, she found that the notice provided by the conservator met due process standards. Addressing Papier's argument that the State's inquiry had been inadequate, the judge noted the fact that the file of the Deputy Attorney General handling the matter had been destroyed, as well as the original court file. As a consequence, she declined to find significant the fact that an affidavit of inquiry had not been located, and she concluded that other evidence suggested that the inquiry that had been conducted was sufficient. She concluded by stating, "based upon what we have I'm satisfied, and based upon what the escheat law was at the time, I'm satisfied that Judge Levy's orders should stand and that the escheat should not be undone at this late date."
This appeal followed.
On appeal, Papier states that his claim "is grounded on the State's failure to perform an In Re: Volkmar, 183 N.J. Super. 512 (Ch. Div. 1982), search for heirs, supported by the State's failure to file an Affidavit of Inquiry as required by R. 4:4-4(e) ." Had such a search been conducted, Papier alleges, the State would have found (1) decedent's application for a social security number while a resident of Somerville, which included the names of his parents, John Bekysewycz and Helen Hladycz; (2) a 1920 U.S. census document for the Town of Raritan, listing John Bekysewycz, his year of immigration as 1913, and his place of birth as the Ukraine; and (3) a November 21, 1913 manifest of alien passengers on the ship Kaiserin Auguste Victoria, sailing from Hamburg, Germany and arriving at the Port of New York on December 2, 1913, containing the name of Jan Bekeswiewicz, whose last permanent residence was in Toki, Austria (in 1918, a part of the West Ukrainian People's Republic, but in 1920, a part of Poland) and whose destination, as recorded by the U.S. Immigration Officer at the port of arrival, was Brooklyn, New York. Papier does not disclose how this information came to his attention or how it would have been discovered by reasonable investigation in a time before the development of extensive genealogical databases and the use of computers as a tool for heir hunting.
We do not accept Papier's position for several reasons. First, we find no authority for Papier's assertion that Rule 4:4-4(e) (1987) applies to this case and requires the filing of an affidavit of diligent inquiry. That rule pertained to substituted service of process, which is not a direct concern in this case. Papier has pointed to no statute or rule requiring that an affidavit of diligent inquiry be filed in connection with an escheat action to demonstrate efforts undertaken to identify and locate next-of-kin.
Further, even if such a requirement existed, we decline to hold that, to meet that requirement, the State was required to undertake a search equivalent to those that occurred in Volkmar. In that case, Judge Dreier observed:
Concurrent with the Attorney General's initiation of escheat proceedings, extensive kinship inquiries are usually undertaken. In each of these three cases the State not only conducted document searches but also pursued through correspondence and personal contacts all sources of potential information about the existence and whereabouts of the intestates' presumptive heirs throughout the United States and, in one case, Germany. In each of the cases at bar the intestate beneficiaries were located through these exhaustive efforts of the State's investigators. [Id. at 514.]
While the judge expressed approval of the State's efforts, and utilized the evidence presented as a basis for an award of fees and expenses to the State from the estates' assets, id. at 518, the judge did not hold that such efforts were legally required in order to establish diligent inquiry. Rather, he noted that the conduct of such investigations was a duty that the State had "taken upon itself." Id. at 517. Nor did the judge discuss what information was available to permit the State's investigations in Volkmar to proceed, or the accessibility of such information, thereby precluding effective comparison of Volkmar and the present matter.
Additionally, the state of the record makes it impossible to determine what investigation in fact occurred in this matter and what evidence of that investigation was presented to Judge Levy. As we have noted, the State's file in the matter has been destroyed in the normal course. The conservator is deceased, and any transcriptions of court proceedings are no longer available. Although a microfilm copy of contents of the court's file exists, the original file has been destroyed, and we cannot determine whether the copy constitutes the entire record in the matter. What evidence exists in the State's verified complaint and Scott-Buzzi's first report suggests that an investigation was conducted. However, without access either to the records in the matter or to the conservator, we cannot reasonably evaluate the nature or depth of the inquiry conducted. As Judge Jacobson noted, such considerations support the principle of the finality of judgments. We concur with her observations in that regard.
Although Papier contends otherwise, we are satisfied that the notice of the State's action, provided by Scott-Buzzi in the Hunterdon County Democrat, was sufficient to satisfy due process under standards established by N.J.S.A. 2A:37-18 and -19 and relevant precedent such as Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314-18, 70 S. Ct. 652, 657-59, 94 L. Ed. 865, 873-75 (1950). Although the notice used the term conservator - a term used by Judge Dreier in Volkmar, e.g., id. at 513 - whereas that term had been replaced by "administrator" in the governing statutes, we have no grounds for concluding that any reader would have been misled. This conclusion is supported by the fact that the very first paragraph of the notice directed it to the attention of "ANY NEXT-OF-KIN, HEIRS-AT-LAW, DEVISEES, OR LEGATEES of Carl Bekysewycz, now deceased." Further, the notice informed the reader that decedent had died intestate, that an action had been filed seeking an adjudication as to the title of decedent's property, it provided the county of venue, it identified the person marshaling the assets of the estate, and it required the presentation of claims to that person within six months. Although the notice did not provide the monetary value of the estate or the date for a final hearing in the action - matters still to be determined at the time the notice was published - such information could have readily been obtained from Scott-Buzzi, public filings or Judge Levy.
Papier also raises procedural objections to the manner in which the escheat proceeding was conducted. However, we decline to consider those objections, lacking a record to determine the basis for various actions by the State and any evidence of prejudice arising from what took place. R. 2:11-3(e)(1)(E).
In briefing filed in this matter, Papier asserted that New Jersey's version of the Uniform Unclaimed Property Act (UUPA), N.J.S.A. 46:30B-1 to -109, is applicable to decedent's estate, thereby rendering the escheat of that estate custodial, not absolute. We disagree.
The issue requires consideration of the interaction between the State's former escheat laws, the UUPA, and the State's probate laws. At the time of decedent's death and following the sale of his house, the distribution of his estate was governed by the personal property escheat statute, N.J.S.A. 2A:37-11 to - 28. As previously stated, N.J.S.A. 2A:37-28 made any escheat to the State absolute two years after the death of the decedent on May 30, 1986.
On April 14, 1989, the Legislature enacted the UUPA, which changed the role of the State from that of a beneficiary to that of a custodian of unclaimed property of various types. At the time of its enactment, the UUPA repealed the personal property escheat statutes applicable to intestate estates without identifiable heirs. See N.J.S.A. 46:30B-109. Thus it would be logical to assume that the handling of such property was encompassed in the UUPA.
However, that was not the case. N.J.S.A. 30B-108 transferred the alternate method escheat trust fund established by N.J.S.A. 2A:37-41, of no relevance here, to the trust fund established by the UUPA. However, nothing in the statute required the transfer of other escheated estate funds. Significantly, N.J.S.A. 46:30B-9, entitled "When property subject to custody," provided:
Unless otherwise provided in this chapter or by other statute of this State, property is subject to the custody of this State as unclaimed property if the conditions raising a presumption of abandonment under Articles 2 and 5 through 16 of this chapter are satisfied and the conditions under R.S.46:30B-10 are satisfied. . . .
However, unclaimed property held by a fiduciary of an intestate estate was not enumerated as a condition raising a presumption of abandonment under any of the referenced Articles.
As a consequence, following the repeal of the escheat laws, the fate of unclaimed estate property was governed by probate law: specifically, N.J.S.A. 3B:5-5, 3B:23-19 and -20. As enacted in 1981, N.J.S.A. 3B:5-5 provided "If there are none who may inherit an intestate estate that estate shall escheat to the State." The statute was not amended to convert the escheat to a custodial one until 1995. See L. 1995, c. 152, § 1.
During the same year of 1995, the UUPA was amended on June 29, 1995 to state, in N.J.S.A. 46:30B-37.1: "Unclaimed property held by a fiduciary of an intestate estate payable to the unknown heirs of an intestate decedent shall be presumed abandoned 90 days after publication by the fiduciary of the notice required in N.J.S. 3B:5-5." That amendment, appearing in Article 12 of the statute, brought the unclaimed assets of an intestate estate within the scope of property subject to custody pursuant to N.J.S.A. 46:30B-9. Because that statutory amendment did not occur until some time after the final escheat of decedent's property in 1993, we agree with Judge Jacobson that Papier has no claim for principal, interest or fees.
In summary, we concur with Judge Jacobson's conclusion that Judge Levy's December 1987 final judgment should remain in effect, finding inadequate legal, factual or procedural grounds for relief under either Rule 4:49-2 or Rule 4:50-1.
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