Monday, June 4, 2012

Court Nixes Homeowner's 'Finders Keepers' Defense In 3-Way Moneygrab; $500K Found In Walls Goes To Ex-Owner's Heirs; Loot Not Abandoned, Only Mislaid

In Phoenix, Arizona, The Associated Press reports:

  • An Arizona court says a man's heirs are entitled to $500,000 cash that was found in the walls of his former home years after he died.

  • The Court of Appeals ruling Thursday upholds a judge's decision that the money, stashed in ammunition cans inside the walls, belongs to Robert Spann's estate.

  • Spann died in 2001. According to the ruling, his daughters found stocks, bonds, cash and gold hidden in his suburban Phoenix home before they sold it seven years later. The couple who bought the home in Paradise Valley claimed the cash after a worker found it in the walls during kitchen and bathroom remodeling.(1)

  • The Court of Appeals said that legally, the money was only mislaid, not abandoned, so it still belonged to Spann's estate.(2)
For the ruling, see Grande v. Jennings, 1 CA-CV 11-0148 (Div. 1, Dept. A, May 31, 2012).

(1) The following background facts of this story have been extracted from the appeals court ruling, which reveals that the owner of the contracting company that found the stash in the walls may have been attempting a greedy moneygrab of his own:

  • ¶4 The house was sold “as is” to Sarina Jennings and Clinton McCallum (“Jennings/McCallum”) in September 2008. They hired Randy Bueghly and his company, Trinidad Builders, Inc., to remodel the dilapidated home. Shortly after the work began, Rafael Cuen, a Trinidad employee, discovered two ammunition cans full of cash in the kitchen wall, went looking, and found two more cash-filled ammo cans inside the framing of an upstairs bathroom.

    ¶5 After Cuen reported the find to his boss, Bueghly took the four ammo cans but did not tell the new owners about the find, and tried to secret the cans. Cuen, however, eventually told the new owners about the discovery and the police were called. The police ultimately took control of $500,000, which Bueghly had kept in a floor safe in his home.

    ¶6 Jennings/McCallum sued Bueghly for fraudulent
    misrepresentation, conversion, and a declaration that Bueghly had no right to the money, and Bueghly later filed a counterclaim for a declaration that he was entitled to the found funds. In the meantime, Grande filed a petition in probate court on behalf of the estate to recover the money. The two cases were consolidated in June 2009.
If Bueghly had sinister motives in keeping the cash, I wonder if he might have filed his counterclaim in an effort to plausibly deny that he was stealing the money, and to establish his good-faith belief that he was entitled to the loot, thereby (possibly) insulating himself from criminal liability.

(2) In rejecting the homeowner's "finders keepers" defense, the appeals court made these observations on the nature of "found" property and the applicability of the "finders keepers" defense:

  • ¶10 Although elementary school children like to say “finders keepers,” the common law generally categorizes found property in one of four ways. E.g., Benjamin v. Lindner Aviation, Inc., 534 N.W.2d 400, 406 (Iowa 1995) (citing Ritz v. Selma United Methodist Church, 467 N.W.2d 266, 269 (Iowa 1991)).

    Found property can be mislaid, lost, abandoned, or treasure trove. Id. (citing Ritz, 467 N.W.2d at 269); 1 Am. Jur. 2d Abandoned, Lost, and Unclaimed Property § 12 (2012).

    Property is “mislaid”
    if the owner intentionally places it in a certain place and later forgets about it. Terry v. Lock, 37 S.W.3d 202, 207 (Ark. 2001).

    “Lost” property includes property the owner unintentionally parts with through either carelessness or neglect. Id. at 206.

    “Abandoned” property has been thrown away, or was voluntarily forsaken by its owner. Id. (citations omitted).

    Property is considered “treasure trove” if it is verifiably antiquated and has been “concealed [for] so long as to indicate that the owner is probably dead or unknown.” 1 Am. Jur. 2d Abandoned, Lost, and Unclaimed Property § 16 (2012).

    ¶11 A finder’s rights depend on how a court classifies the found property. Terry, 37 S.W.3d at 206 (citation omitted); Ritz, 467 N.W.2d at 268-69; Hill v. Schrunk, 292 P.2d 141, 142 (Or. 1956). In characterizing the property, a court should consider all of the particular facts and circumstances of the case. Terry, 37 S.W.3d at 206 (citing Schley v. Couch, 284 S.W.2d 333, 336 (Tex. 1955)); Corliss, 34 P.3d at 1103 (citing 1 Am. Jur. 2d Abandoned, Lost, and Unclaimed Property §§ 1-14 (1994)) (distinctions between categories of found property are determined by “an analysis of the facts and circumstances in an effort to divine the intent of the true owner at the time he or she parted with the property”).

    Under the common law, “the finder of lost or abandoned property and treasure trove acquires a right to possess the property against the entire world but the rightful owner regardless of the place of finding.” Corliss, 34 P.3d at 1104 (citing Terry, 37 S.W.3d at 206).

    A finder of mislaid property, however, must turn the property over to the premises owner, “who has the duty to safeguard the property for the true owner.” Id. (citing Terry, 37 S.W.3d at 206); see also Benjamin, 534 N.W.2d at 406 (citing Ritz, 467 N.W.2d at 269) (“The right of possession of mislaid property belongs to the owner of the premises upon which the property is found, as against all persons other than the true owner.”).

    ¶12 Significantly, among the various categories of found property, “only lost property necessarily involves an element of involuntariness.” Corliss, 34 P.3d at 1104 (citation omitted). The remaining categories entail intentional and voluntary acts by the rightful owner in depositing property in a place where someone else eventually discovers it. Id.

    For example, the Iowa Supreme Court has stated that “[m]islaid property is voluntarily put in a certain place by the owner who then overlooks or forgets where the property is,” and that one who finds mislaid property does not necessarily attain any rights to it because possession “belongs to the owner of the premises upon which the property is found,” absent a claim by the true owner. Benjamin, 534 N.W.2d at 406 (citation omitted). In Benjamin, the court determined that packets of money found in a sealed panel of a wing during an inspection of a repossessed airplane were mislaid property because the money was intentionally placed there by one of the two prior owners. Id. at 403, 407-08.
The Arizona appeals court noted (in footnote 4) the possible existence of another category of found property:
  • At least one court has recognized a fifth category — “embedded property” — which is property that becomes part of the earth. Corliss v. Wenner, 34 P.3d 1100, 1104 (Idaho Ct. App. 2001). Generally, embedded property “belongs to the owner of the soil” unless the true owner claims the property. See Klein v. Unidentified Wrecked & Abandoned Sailing Vessel, 758 F.2d 1511, 1514 (11th Cir. 1985) (citations omitted); see also 1 Am. Jur. 2d Abandoned, Lost, and Unclaimed Property § 17 (2012) (footnote and citations omitted) (“‘Property embedded in the earth’ includes anything other than gold or silver which is so buried, and is distinguished, in this respect, from ‘treasure trove.’”).

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