In re Rodriguez

488 B.R. 675, 2013 WL 1191199, 2013 Bankr. LEXIS 1187
CourtUnited States Bankruptcy Court, E.D. California
DecidedMarch 19, 2013
DocketNo. 11-60571-B-13
StatusPublished
Cited by8 cases

This text of 488 B.R. 675 (In re Rodriguez) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Rodriguez, 488 B.R. 675, 2013 WL 1191199, 2013 Bankr. LEXIS 1187 (Cal. 2013).

Opinion

MEMORANDUM DECISION REGARDING EX PARTE APPLICATION FOR PAYMENT OF UNCLAIMED FUNDS

W. RICHARD LEE, Bankruptcy Judge.

Before the court is an ex parte application for payment of unclaimed funds filed pursuant to 28 U.S.C. § 2042 on behalf of the debtor’s brother Robert Peterson (“Peterson”). The debtor, Linda Rodriguez (the “Debtor”),1 died shortly after confirmation of her chapter 13 plan, prompting the subsequent dismissal of her bankruptcy case. Upon dismissal, the Debtor was entitled to a refund of monies she had paid into the plan; funds which the chapter 13 trustee subsequently deposited with the clerk of the court. Peterson requests release of the funds on the grounds that he is the Debtor’s sole heir with the right to collect her property. Because Peterson has not yet established that fact in compliance with California law, the application will be denied without prejudice.

This memorandum decision contains the court’s findings of fact and conclusions of law required by Federal Rule of Civil Procedure 52(a), made applicable to this proceeding by Federal Rules of Bankruptcy Procedure 7052 and 9014(c). The court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334 and 2042, 11 U.S.C. § 347, and General Order Nos. 182 and 330 of the U.S. District Court for the Eastern District of California. This is a core proceeding as defined in 28 U.S.C. § 157(b)(2)(A).

BACKGROUND AND FINDINGS OF FACT.

This chapter 13 bankruptcy commenced on September 23, 2011. Michael H. Mey[677]*677er, Esq., was appointed to serve as the trustee (the “Trustee”). The Debtor’s five-year chapter 13 plan was confirmed on January 13, 2012. A few months after confirmation, in May 2012, the Debtor passed away in her home. Due to her death, the Trustee did not receive any more plan payments, leading to dismissal of the case in August 2012.

The Trustee’s final report showed that the Debtor was entitled to a refund of undisbursed funds in the amount of $659.20. When the Trustee’s check to the Debtor went uncashed, he tendered the money to the clerk of the court (the “Unclaimed Funds” or “Funds”). The clerk then deposited the Funds with the United States Treasury, where they remain unclaimed.

In February 2013, the law firm Dilks & Knopik, LLC (“D & K”), acting on behalf of Peterson, submitted an Application for Payment of Unclaimed Funds to the financial administrator of the court (the “Application”).2 The Application included: (1) a power of attorney authorizing D & K to submit the Application on Peterson’s behalf; (2) the Individual Identification Form for Unclaimed Funds,3 providing Peterson’s name, phone number, and address, supported by a copy of his driver’s license; (3) a copy of the Debtor’s death certificate; and (4) an Affidavit of Heirship signed under penalty of perjury by Peterson (the “Affidavit”).

In the Affidavit, Peterson stated, inter alia, that (1) the Debtor had passed away; (2) she left no will; (3) she had no children and was not married at the time of her death; and (4) he is the only sibling and sole surviving heir of her estate. Based on these statements, Peterson contends that he is entitled to the Unclaimed Funds and is requesting release of the Funds. The court has no reason to doubt the facts stated in the Application.

DISCUSSION AND CONCLUSIONS OF LAW.

Pursuant to § 347 of the Bankruptcy Code, a trustee must deposit any unclaimed property of the estate with the clerk of the court, and such property may only be “disposed of under chapter 129 of title 28.” 11 U.S.C. § 347(a). Relevant to this case, chapter 129 includes 28 U.S.C. §§ 2041 and 2042. Section 2041 permits the court to release unclaimed funds to the “rightful owners,”4 while § 2042 directs the court to do so only after an entity claiming a right to the unclaimed funds, on application to the court, shows “full proof of the right thereto.”5

[678]*678The bankruptcy court has a duty to ensure that unclaimed funds are disbursed to the proper party. In re Pena, 456 B.R. 451, 453 (Bankr.E.D.Cal.2011) (citing In re Scott, 346 B.R. 557, 558 (Bankr.N.D.Ga.2006)). Therefore, the burden rests on the applicant to prove that it is presently entitled to the unclaimed funds sought. Id. (citing In re Acker, 275 B.R. 143,144 (Bankr.D.D.C.2002)).

In the Eastern District of California, the procedure for recovering unclaimed funds under 28 U.S.C. § 2042 is prescribed in the Guidelines Pertaining to Applications for Payment of Unclaimed Funds (the “Guidelines”).6 Pursuant to these Guidelines, the request for an order releasing unclaimed funds must be submitted in a written application. The application is typically reviewed by the court on an ex parte basis, and it is generally approved or denied without a hearing. The application for unclaimed funds must be supported by competent evidence, and it must contain, inter alia, the following information designed to show that the applicant is the proper entity to claim the money:

• The exact dollar amount of the dividend check issued by the trustee to the original claimant and the date that the funds were deposited with the court as unclaimed funds;
• The full name, address, and telephone number of the original claimant of the funds;
• A brief history of the claim and the original claimant, which includes, if applicable, any change of address, sale, merger, consolidation, buy-out, dissolution, marriage, or death of the claimant together with any supporting documentation, that addresses why the funds were not deliverable at the time of the initial distribution;
• An affirmative statement as to'why the alleged owner of the requested funds is entitled to receive the funds;
• The alleged owner’s identity and relationship to the original claimant; and
• If the applicant is the agent or representative of the alleged owner of the funds, a statement that the alleged owner has authorized the applicant to collect the funds, supported by an original power of attorney containing the alleged owner’s notarized signature and such a grant of authority.

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Cite This Page — Counsel Stack

Bluebook (online)
488 B.R. 675, 2013 WL 1191199, 2013 Bankr. LEXIS 1187, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-rodriguez-caeb-2013.