Harris

The unclaimed property law (the UPL, Code Civ. Proc., §§ 1500-1582) protects unknown property owners by reuniting them with their property and giving the state, rather than the holders of the unclaimed property, the benefit of its use until it is claimed. 1 {Harris v. Westly (2004) 116 Cal.App.4th 214, 219 [ 10 Cal.Rptr.3d 343 ].) To these ends, stock held by a corporation escheats to the State of California if the shareholder (owner) has not communicated with the corporation for more than three years and if the owner’s whereabouts are unknown, at which point the corporation must deliver duplicate stock certificates to the State Controller. (§ 1532, subd. (b); Harris v. Westly, supra, 116 Cal.App.4th at p. 219 .) 2 Failure to comply with *576 the escheat requirements subjects a corporation to fines and other penalties. (§§ 1576, 1577.)

Dividends accrued on escheated stock are credited to the owner’s account until the shares are sold (securities listed on an established stock exchange must be sold within two years after receipt by the Controller). (§§ 1562, 1563, subd. (b).) After the sale, the Controller holds the proceeds and presale dividends for the benefit of the…

I dissent.

This case involves the duties of a corporation, defendant GTE Corporation, to plaintiffs, minority shareholders of GTE, before the minority shareholders’ GTE stock was delivered to the State of California under California’s Unclaimed Property Law (UPL) (Code Civ. Proc., § 1500 et seq.). 1 The trial court sustained GTE’s demurrer on the ground that GTE was afforded immunity under the UPL. But, given the claims asserted in the second amended complaint (complaint), the UPL’s immunity provisions cannot reasonably be interpreted to apply to the circumstances here, where plaintiffs allege that GTE breached a fiduciary duty to give them a fair opportunity to prevent the operation of the UPL in the first instance. Imposing a duty on GTE to honor plaintiffs’ rights as stockholders is consistent with one of the purposes of the UPL—“to reunite owners with unclaimed funds or property.” (Bank of America v. Cory (1985) 164 Cal.App.3d 66, 74 [ 210 Cal.Rptr. 351 ].) Accordingly, I conclude that plaintiffs’ claims are not in derogation of any rights of the state or GTE under the UPL and that the demurrer was erroneously sustained because facts are alleged that plaintiffs’ damages arose…

The Unclaimed Property Law (the UPL, Code Civ. Proc., §§ 1500-1582) protects unknown property owners by reuniting them with their property and giving the state, rather than the holders of the unclaimed property, the benefit of its use until it is claimed. [1] ( Harris v. Westly (2004) 116 Cal.App.4th 214, 219 , 10 Cal. Rptr.3d 343 .) To these ends, stock held by a corporation escheats to the State of California if the shareholder (owner) has not communicated with the corporation for more than three years and if the owner's whereabouts are unknown, at which point the corporation must deliver duplicate stock certificates to the State Controller. (§ 1532, subd. (b); Harris v. Westly, supra, 116 Cal.App.4th at p. 219 , 10 Cal. Rptr.3d 343 .) [2] Failure to comply with the escheat requirements subjects a corporation to fines and other penalties. (§§ 1576, 1577.)

Dividends accrued on escheated stock are credited to the owner's account until the shares are sold (securities listed on an established stock exchange must be sold within two years after receipt by the Controller). (§§ 1562, 1563, subd. (b).) After the sale, the Controller holds the proceeds and pre-sale dividends…