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State can’t keep interest earned on unclaimed property

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The 7th Circuit Court of Appeals agreed Thursday with an Indiana woman acting as guardian for a relative that the state can’t retain the interest earned on unclaimed property once the owner files a valid claim to the property. Katherine Cerajeski argued that action by the state is a taking that violates the takings clause in the Constitution because the owner is paid nothing for his lost interest.

Cerajeski’s ward had a small, interest-bearing bank account, of which the value is considered property in Indiana. She learned about the bank account in 2011; it had been considered abandoned in 2006. She filed this lawsuit, seeking a declaration that she is entitled on behalf of her ward to the interest. The District Court dismissed her lawsuit, Katherine Cerajeski, guardian for Walter Cerajeski v. Greg Zoeller, Attorney General of the State of Indiana, et al., 12-3766, that challenged part of the Indiana Unclaimed Property Act.

Under Indiana statute, property owners have 25 years to claim property.

Judge Richard Posner, writing for the court, held that interest on interest-bearing unclaimed property is unclaimed property too, so the owner can claim it upon proving title.

“There is no basis for the state’s confiscating the interest in Cerajeski’s account. There is no articulated basis for fixing a 25-year term for escheat of principal and only 3 years for escheat of interest—a period so short as to present a serious question whether it is consistent with the requirement in the Fourteenth Amendment that property not be taken without due process of law, implying adequate notice and opportunity to contest.”

“And so if before then the state takes either principal or interest it must render just compensation to the owner if as in this case the owner’s identity is known. The state can charge a fee for custodianship and for searching for the owner, but the interest on the principal in a bank account is not a fee for those services.”

The case is remanded for further proceedings, including a determination of the compensation to Cerajeski when she files her claim.

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  1. All the lawyers involved in this don't add up to a hill of beans; mostly yes-men punching their tickets for future advancement. REMF types. Window dressing. Who in this mess was a real hero? the whistleblower that let the public know about the torture, whom the US sent to Jail. John Kyriakou. http://www.nytimes.com/2013/01/26/us/ex-officer-for-cia-is-sentenced-in-leak-case.html?_r=0 Now, considering that Torture is Illegal, considering that during Vietnam a soldier was court-martialed and imprisoned for waterboarding, why has the whistleblower gone to jail but none of the torturers have been held to account? It's amazing that Uncle Sam's sunk lower than Vietnam. But that's where we're at. An even more unjust and pointless war conducted in an even more bogus manner. this from npr: "On Jan. 21, 1968, The Washington Post ran a front-page photo of a U.S. soldier supervising the waterboarding of a captured North Vietnamese soldier. The caption said the technique induced "a flooding sense of suffocation and drowning, meant to make him talk." The picture led to an Army investigation and, two months later, the court martial of the soldier." Today, the US itself has become lawless.

  2. "Brain Damage" alright.... The lunatic is on the grass/ The lunatic is on the grass/ Remembering games and daisy chains and laughs/ Got to keep the loonies on the path.... The lunatic is in the hall/ The lunatics are in my hall/ The paper holds their folded faces to the floor/ And every day the paper boy brings more/ And if the dam breaks open many years too soon/ And if there is no room upon the hill/ And if your head explodes with dark forbodings too/ I'll see you on the dark side of the moon!!!

  3. It is amazing how selectively courts can read cases and how two very similar factpatterns can result in quite different renderings. I cited this very same argument in Brown v. Bowman, lost. I guess it is panel, panel, panel when one is on appeal. Sad thing is, I had Sykes. Same argument, she went the opposite. Her Rooker-Feldman jurisprudence is now decidedly unintelligible.

  4. November, 2014, I was charged with OWI/Endangering a person. I was not given a Breathalyzer test and the arresting officer did not believe that alcohol was in any way involved. I was self-overmedicated with prescription medications. I was taken to local hospital for blood draw to be sent to State Tox Lab. My attorney gave me a cookie-cutter plea which amounts to an ALCOHOL-related charge. Totally unacceptable!! HOW can I get my TOX report from the state lab???

  5. My mother got temporary guardianship of my children in 2012. my husband and I got divorced 2015 the judge ordered me to have full custody of all my children. Does this mean the temporary guardianship is over? I'm confused because my divorce papers say I have custody and he gets visits and i get to claim the kids every year on my taxes. So just wondered since I have in black and white that I have custody if I can go get my kids from my moms and not go to jail?

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