Untitled Texas Attorney General Opinion ( 1990 )


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  •                       October 3, 1990
    Honorable Ralph R. Wallace, III    opinion No. JM-1228
    Chairman
    Cultural & Historical Resources    Re: Authority of an heir-
    Committee                       finder to receive compen-
    Texas House of Representatives     sation for expenses
    P. 0. Box 2910                     (RQ-1997)
    Austin, Texas   78768-2910
    Dear Representative Wallace:
    You ask whether the Property Code prohibits compensa-
    tion of reasonable expenses for private investigators who
    search for, locate, and assist missing owners in recovering
    unclaimed assets held by the Treasury Department (herein-
    after the department).
    Title 6 of the Property Code governs unclaimed property
    in Texas. See uenerallv Property Code chs. 71 (escheat of
    prw=*y) I 72 (abandonment of personal property), 73 (in-
    active accounts held by banking organizations), 74 (report,
    delivery, and claims process), 75 (Texas minerals).      The
    state treasurer is charged with the administration of this
    title and may adopt rules necessary for its administration
    pursuant to section 74.701 of the code.
    your question focuses on the language of section 74.507
    of the Property Code, which reads:
    A oerson who informs a potential claimant
    that the claimant may be entitled to claim
    property that is reportable to the State
    Treasurer under this chapter, that has been
    reported to the State Treasurer, or that is
    in the possession of the State Treasurer, or
    a person who files a claim under this sub-
    chapter for such property on behalf of a
    claimant, mav not contract for or receive
    from the claimant for services an amount that,
    exceeds 10 oercent of the value of the
    prooertv recovered. If the property involved
    is mineral proceeds, the amount for services
    may not include a portion of the underlying
    p. 6525
    .
    Honorable Ralph R. Wallace, III -   Page   2   (JM-1228)
    minerals or any production payment, over-
    riding royalty,~or similar payment. (Emphasis
    added.)
    A brief submitted in connection with this request suggests
    that the term "services" does not include wexpenses,w and
    that a private investigator may, therefore, receive reason-
    able expenses in addition to ten percent of the value of the
    property recovered. We disagree.
    Section 74.507 was originally enacted in 1961 as
    article 3272a, section 6(b), V.T.C.S., which contained
    essentially the same language and provided in part:
    No person holding a power of attorney from
    a claimant . . . shall     contract for    or
    receive from the claimant for his services an
    amount in excess of ten percent (10%) of  the
    value of the property,recovered.
    Acts 1961, 57th Leg., 1st C.S., ch. 21, 5 1, at 49.     This
    section provided further that when a lawsuit was instituted
    on behalf of a claimant, the person holding the power of
    attorney could receive up to 25 percent of the value of the
    property recovered. ;Lg, Article 3272a was amended in 1965
    without affecting the language of section 6(b). See Acts
    1965, 59th Leg., ch. 565, S 3, at 1233. With the enactment
    of the Property Code in 1983, a nonsubstantive revision of
    the Texas statutes relating to real and personal property,
    article 3272a, V.T.C.S., was repealed, and the provisions of
    section 6(b) were transferred without substantive change to
    section 72.506 of the code.   m   Acts 1983, 68th Leg., ch.
    576, S 1, at 3603.    t
    In 1985, section 72.506 was repealed and replaced     by
    section 74.507, which provided in its entirety:
    A person who informs a potential claim-
    ant that the claimant may be entitled to
    claim property in the possession of the
    State Treasurer or a person who files a
    claim under this subchapter on behalf of a
    claimant may not contract for or receive
    from the claimant for services an    amount
    that exceeds 10 percent of the value of
    the property recovered.
    Acts 1985, 69th beg., ch. 230, 6 17, at 1138. The language
    allowing a person to receive up to 25 percent of the value
    of the property for representing a claimant in a lawsuit was
    p. 6526
    .
    Honorable Ralph R. Wallace, III - Page 3   (JM-1228)
    not carried forward. L     In 1987 further restrictions were
    placed upon the amount an individual may receive for
    services when the property involved is mineral proceeds.
    &=;zzz   1987, 70th Leg., ch. 426, S 5, at 1985 (lOamountfor
    may not include a portion of the underlying
    minerals or any production payment, overriding royalty, or
    similar payment").
    The department asserts that the public policy pro-
    nounced by the legislature and the "basic underpinning" of
    the unclaimed property statutes is the complete preservation
    of the corpus of unclaimed property until it is reunited
    with the rightful owners.   Indeed, the emergency clause to
    the 1961 act adding article 3272a, V.T.C.S., stated:
    The fact that the present laws m
    for the Drotection of a&&oned    DroDertv. the
    *0   *                                       8
    and thm escheat ofmev       and Dersonal Dro-
    pertv belonaina to the State are inadeouate,
    and that there are large amounts of money and
    personal property to which the State is
    entitled, and which DroDertv    is subiect to
    &ass and diSsiDatiOn, create an emergency.
    Acts 1961, 57th Leg., 1st C.S., ch. 21, 5 5, at 58 (emphasis
    added). Resides indicating the legislature#s desire to
    preserve unclaimed    property for    private owners,    the
    emergency clause also reflects the legislature's intent to
    protect its interests in such property. In 1961, the state
    could only take control of abandoned property through
    judicial proceedings, a rather costly and cumbersome way to
    accomplish the purposes of the statute. Recognizing that
    "in many instances the cost of citation by publication,
    court costs and travel expenses would exceed the value of
    the property reported as abandoned," the 59th Legislature
    amended the statute. Acts 1965, 59th Leg., ch. 565, 0 8, at
    1235. We think the legislature‘s actions to preserve the
    corpus of the property were motivated by a desire to protect
    the interest of both the state and any unknown owners.
    Stnte,v.zLiauidatinu ru tees of ReD lit Petroleum Co,, 
    510 S.W.2d 311
    , 313-14 (zex: 1974) (altE:ugh article 3272a is
    commonly referred to as an escheat law. it is custodial in
    nature, and anyone may file a claim for such property with
    the state treasurer): Attorney General Opinion MW-186 (1980)
    ("the state never actually takes title to the property,
    since the owner may claim the property or its value at any
    time"); see also Uniform Unclaimed Property Act prefatory
    note, 8A U.L.A. 216 (1981) ("Not only does the custodial
    type of statute more adequately preserve the         owner's
    p:6527
    Honorable Ralph R. Wallace, III - Page 4 (JM-1228)
    interests, but, in addition, it makes possible a substantial
    simplification of procedure").
    Since at least one purpose of the unclaimed property
    laws of Texas includes protection of unknown         owners'
    interests, we must evaluate how that purpose is best
    accomplished. We have been provided samples of various
    "heirfinder" contracts that attempt to obtain up to 60
    percent of the value of the property received by the
    claimant.1 If we were to read the statute as authorizing a
    private investigator or other person to receive ten percent
    of the value of the property plus expenses, there is no
    mechanism in place for determining the reasonableness of
    expenses.   Therefore, we think that a construction of
    Property Code section 74.507 that would allow a private
    investigator or "heirfinder" to contract for expenses,
    potentially in excess of the value of the property, would be
    contrary to the enunciated public policy and intent of the
    legislature to preserve the unclaimed property for its
    owner.
    The department, as the state agency charged with the
    administration of the Texas unclaimed property laws, has
    interpreted section 74.507 to mean that ten percent of the
    property'value is the total amount an individual may receive
    for assisting a claimant in recovering assets held by the
    department. The department argues in its brief on this
    matter that "services" is a broad and comprehensive term,
    which encompasses not only one's personal services in
    completing an objective but also includes activities of
    others enlisted to accomplish the goal.      See.   a    Van
    es,
    Zandt v.                     359 S.W.Zd 893, 895e96- ' (Tex,
    1962); Co.
    Mathews Constr                          Constr. co.,
    528 S.W.Zd 323, 326-27 (Tex. Civ. App. - Beaumont 1975, writ
    ref'd n.r.e.) (distinction between %ervices" and "personal
    servi.cesl').It is the department#s position that the charge
    for services, d&L,      personal services and     incidental
    expenses, may not exceed ten percent of the value of the
    property recovered.
    It is   well established that the construction of a
    statute by   the agency charged with its administration is
    1. In the' past three years, fifty-eight cases in-
    volving heirfinders attempting to charge fees far in excess
    of the statutory ten percent have been referred to the
    Consumer Protection Division of this office.
    p. 6528
    ,
    1   Honorable Ralph R. Wallace, III -   Page   5 (JM-1228)
    :
    .
    entitled to great weight. u    carte Roloff, 510 S.W.2;,,;;3
    (Tex. 1974); Calvert . Ka&~.8 
    427 S.W.2d 605
    (Tex.
    Stanford v. Butler, lzl S.W.2d' 269 (Tex. 1944). It is no:
    required that the agency publish formally adopted rules
    stating such interpretation: policy documents such        as
    letters to affected persons or internal agency memoranda may
    also evince an agency's interpretation of a particular
    matter. Southwest-Airlines Co. v. B llock, 
    784 S.W.2d 563
    ,
    567 (Tex. ADD. - Austin 1990. no wri:). The "Texas Treasurv
    Unclaimed Money Fund Original Owner Claim Fdn~,~,the for+
    the department provides to individuals who wish to file a
    claim with the department, states:
    If someone informs or assists you in
    claiming these funds and asks for payment,
    STATE LAW LIMITS ANY FEE TO NO MORE THAN 10%
    OF THE AMOUNT OFTHE CLAIM.
    The department also provides to interested persons an in-
    formational pamphlet entitled ,,MostCommonly Asked Questions
    on Heirfinding in Texas," which states on the first page:
    PLEASE NOTE: Expenses incurred as well as
    the services provided are limited to one
    fee not to exceed 10 percent of the value
    of the property recovered.
    Another pamphlet distributed by the department, entitled
    "Money Search:   Do You Have Cash in the Texas Treasury
    Unclaimed Money Fund,,' states that "State law limits fees
    charged by these private firms,to no more than 10 percent of
    the claim." We have also been provided with a sample copy
    of the annual list of names of persons having money in the
    Unclaimed Money Fund which is published by the Treasury
    Department for distribution in major Texas newspapers. That
    published listing also states that a person reclaiming
    property "may not be charged more than 10 percent of the
    claim amount by anyone who assists in claiming these funds."
    We think that the department,s interpretation of the
    s+*+utn in question has been widely published and that the
    legislature*s failure to amend the statute is indicative of
    its approval of the department's interpretation.     Direlco,
    I n . v. B llock   711 S.W.Zd 360, 363 (Tex. APP. - Austin
    19E6, wriy ref’ii n.r.e.). Although we have found no Texas
    cases regarding this issue, we note that similar     statutes
    with fee limitations have been upheld in other states.
    See.        Goodman v. Gory 
    191 Cal. Rptr. 272
    (App. 1983).
    We there&e    conclude that' a private investigator or other
    person who assists a claimant in recovering assets held by
    p. 6529
    Honorable Ralph R. Wallace, III -   Page   6   (JM-1228)
    the department pursuant to Property Code section 74.507 may
    not contract for or receive from the claimant an amount that
    exceeds ten percent of the value of the property recovered.
    The term nservices,, as used in this section includes
    expenses. Any other construction of this provision, we
    think, would be contrary to the legislature's enunciated
    public policy, the intent of the legislature, and the
    interpretation of the agency charged with its administra-
    tion.
    SUMMARY
    A person who assists a claimant in re-
    overing assets pursuant to section 74.507 of
    the Property Code may not receive an amount
    for services    (including expenses)     that
    exceeds ten percent of the value of the
    property recovered.
    JIM     MATTOX
    Attorney General of Texas
    NARYKEZLER
    First Assistant Attorney General
    Lou MCCREARY
    Executive Assistant Attorney General
    JUDG6 ZOLLIE STEAKLEY
    Special Assistant Attorney General
    RENEA HICKS
    Special Assistant Attorney'General
    RICK GILPIN
    Chairman, Opinion Committee
    Prepared by Karen C. Gladney
    Assistant Attorney General
    p. 6530
    

Document Info

Docket Number: JM-1228

Judges: Jim Mattox

Filed Date: 7/2/1990

Precedential Status: Precedential

Modified Date: 2/18/2017