PROPERTY
Lucy Marsh
Spring 2013
Colorado Beneficiary Agreement
Community Property
v Community Property States
Ø Sometimes Alaska
Ø Arizona
Ø California
Ø Idaho
Ø Louisiana
Ø New Mexico
Ø Nevada
Ø Texas
Ø Washington
Ø Wisconsin
v The basic concept of community property is that during the marriage each spouse immediately owns HALF of any paycheck earned by either spouse
v Each spouse may own separate property, which is basically the property the spouse owned prior to the marriage, or possibly gifts made during the marriage to just one spouse
Ø Whether the income from the separate property becomes community property depends on various situations and varies from state to state
§ Usually community property
v Stepped up basis
Ø Not paying tax on capital gains if the husband dies and then the wife sells it, but she pays capital gains tax
§ Only one spouse gets stepped up basis in Colorado (or other separate property states)
Ø In a community property state, they get a stepped up basis on BOTH parts of the property and she pays NO capital gains on her share either!
v SEE HANDOUT
Personal Property
Lost & Found Property
v Under the common law, there are four categories of found property:
Ø Abandoned property
Ø Lost property
Ø Mislaid property
Ø Treasure Trove
Abandoned Property
v Property is abandoned when the owner no longer wants to possess it
Ø Abandonment is shown by proof that the owner intends to abandon the property and has voluntarily relinquished all right, title, and interest in the property
v Abandoned property belongs to the finder of the property against all others, including the former owner (no right of ownership in the former owner, even if they change their mind)
Lost Property
v Property is lost when the owner unintentionally and involuntarily parts with its possession and does NOT know where it is
Ø Stolen property found by someone who did NOT participate in the theft is lost property
v Under Chapter 644, lost property becomes the property of the finder once the statutory procedures are followed and the owner makes no claim within twelve months
Mislaid Property
v Mislaid property is voluntarily put in a certain place by the owner who then overlooks and forgets where the property is
Ø It differs from lost property in that the owner voluntarily and intentionally places mislaid property in the location where it is eventually found by another
§ In contrast, property is NOT considered lost unless the owner parts with it involuntarily
v The finder of mislaid property acquires no rights to the property
Ø 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
Treasure Trove
v Treasure trove consists of coins or currency concealed by the owner
Ø Metal ONLY – NOT paper money
Ø It includes an element of antiquity
Ø To be classified as treasure trove, the property must have been hidden or concealed for such a length of time that the owner is probably dead or undiscoverable
v Treasure trove belongs to the finder as against all but the true owner
v The rights of a finder of property depend on how the found property is classified
Ø The location where the money was found and the manner in which it was hidden are factors in determining whether the money was lost property
§ Classification is a fact question
v Chapter 644 does not abolish the common law classifications of found property
Ø Chapter 644 only applies if the property discovered can be categorized as lost property
v ONLY the finder of “lost goods, money, bank notes, and other things” is rewarded with a finder’s fee under Chapter 644
Ø Property is NOT considered lost unless considering the place where and the conditions under which the property is found, there is an inference that the property was left their unintentionally
v Court will not presume that an owner has abandoned his property when his conduct is consistent with a continued claim to the property (there is no presumption of abandonment)
v Locus in quo – the place
Ø The owner of the locus in quo gets the property
Benjamin v. Lindner Aviation, Inc. (p. 38) money in the airplane wing
v Because the money discovered in this case was properly found to be mislaid property, it belongs to the owner of the premises where it was found (i.e., the airplane hanger owner)
v Benjamin was NOT entitled to a finder’s fee because the property was NOT lost
Sunken Property
Which to apply? Salvage Law or Finds Law
v When sunken ships or their cargo are rescued from the bottom of the ocean by those other than the owners, courts favor applying the law of salvage over the law of finds
Ø Finds law should be applied in situations where the previous owners are found to have abandoned their property
§ Such abandonment must be shown by clear and convincing evidence, such as an owner’s express declaration abandoning title
Ø Should the property encompass an ancient and longlost shipwreck, a court may infer an abandonment
§ Such an inference would be improper should a previous owner appear and assert his ownership interest; in such case the normal presumptions would apply and an abandonment would have to be proved by strong and convincing evidence
· When a previous owner claims long lost property that was involuntarily taken from his control, the law is hesitant to find an abandonment and such must be proved by clear and convincing evidence
v Salvage law specifies the circumstances under which a party may be said to have acquired, not title, but the right to take possession of property (e.g., vessels, equipment, and cargo) for the purpose of saving it from destruction, damage, or loss, and to retain it until proper compensation has been paid
v The law of salvage, like the law of finds, requires a salvor to establish possession over property before obtaining the right to exclude others
Ø “Possession” means something less in salvage law than in finds law
§ In the salvage context, only the right to compensation for service, NOT the right to title, usually results
· “Possession” is therefore more readily found than under the law of finds
v The salvor receives a payment, depending on the value of the service rendered, that may go beyond quantum meruit (what one has earned)
v Finds law is applied to previously owed sunken property only when that property has been abandoned by its previous owners
Ø Abandonment in this sense means much more than merely leaving the property – when articles are lost at sea the title of the owner in them remains
§ Lapse of time and nonuser are not sufficient, in and of themselves, to constitute an abandonment
v In the lost property at sea context, there is also a strong actus element required to prove the necessary intent
Ø Abandonment is said to be a voluntary act which must be proved by a cl
“public use” in the context of the Takings Clause (5th Amendment)
v Court did not have jurisdiction to hear this claim
Ø This Court does not have jurisdiction to hear claims contesting the lawfulness of a search and seizure because due process and Fourth Amendment claims are reserved to the District Court
Ø This Court only possesses jurisdiction to consider takings claims that arise “as the direct, natural, or probably result of an authorized activity” by Government officials
Ø Generally, this Court (U.S. Court of Federal Claims) possesses jurisdiction to entertain monetary claims founded upon the Takings Clause of the U.S. Constitution, statutes, regulations, or contracts
§ The statutory or constitutional claims a plaintiff asserts must be “money-mandating” to come within the jurisdiction of this Court
· The plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence
Bailment Continued Re: Bankruptcy
Administrative Expenses In Return for a Bailment
v To be entitled to priority [in the distribution of the assets of a bankruptcy estate to administrative expenses], the claim must arise from a transaction with the Trustee post-petition which was beneficial to the estate
Ø To qualify as actual and necessary expenses, expenditures must benefit the estate as a whole
§ Claims pursuant to the bankruptcy code shall be measured by the benefit received by the estate, rather than the costs incurred by the claimant
v Even if the court were willing to grant administrative expense priority, it would want to limit such claim to a percentage of the actual proceeds that the estate received from the disposition of the property
Constructive Bailment
v A constructive bailment, or a bailment implied in law, may be found where the property of one person is voluntarily received by another for some purpose other than that of obtaining ownership
Ø The law implies a contract for the keeping of the property until it shall be restored to the owner or his agent, and the holder is bound to take care of, keep, and preserve the property, not for the sake of any benefit to himself or upon any expectation of compensation for his services, but solely for the convenience and accommodation of the owner
v To recover under a bailment theory, the plaintiff must allege:
1. An express of implied agreement to create a bailment
2. Delivery of the property in good condition
3. The bailee’s acceptance of the property
4. The bailee’s failure to return the property or the bailee’s redelivery of the property in a damaged condition
v When a prima facie case of bailment is established, there is a presumption of the defendant’s negligence
Ø The defendant must then present sufficient evidence to support a finding that the presumed fact did not exist and that the defendant was free from fault
