(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
Argued January 5, 1999 -- Decided January 28, 1999
PER CURIAM
The issue before the Court is whether unredeemed gift certificates are subject to reporting under the
Uniform Unclaimed Property Act (the Act).
The Act establishes a procedure by which intangible property that is presumed abandoned is
transferred to the State as custodian for the absent owner. In accordance with that procedure, a person
holding property subject to the Act that is presumed abandoned is required to report that property to the
State.
The Hilton at Short Hills (the Hilton) issued gift certificates that were good for one year and were
redeemable only for services or merchandise. Hilton sought a determination from the Department of
Treasury (Treasury) whether the unredeemed gift certificates were among the kinds of intangible property
that are subject to the Act and must be reported to the State when presumed abandoned. In accordance
with advice from the Attorney General, Treasury informed the Hilton, by letter dated November 8, 1996, that
the gift certificates are subject to the Act.
The Hilton appealed to the Appellate Division from the Treasury determination. The Appellate
Division reversed the decision of Treasury, finding that gift certificates are not covered by the Act.
The Appellate Division noted that the Act as codified in New Jersey deviates from the Uniform
Unclaimed Property Act (1981 Model Act) by certain significant omissions. Specifically, the words "gift
certificates," are included in the 1981 Model Act but are expressly omitted from the New Jersey Act. The
court found that the legislative history of the Act demonstrates that this omission was intentional.
The Appellate Division reasoned that all of the categories of intangible personal property expressly
covered by the Act or the 1981 Model Act are, as a practical matter, claims for payment of money.
Furthermore, intangible property not expressly listed in the Act that have been held to fall within its coverage
have also been claims dischargeable by the payment of money. Gift certificates, however, frequently are not
bound by the payment of money. The State cannot obtain funds by escheating obligations that do not bind
the obligor to pay money.
According to the Appellate Division, case law demonstrates that the Act was not intended to impose
an obligation different from the obligation given to the original owner of the intangible property that it
covers. The Hilton gift certificates were redeemable for services or merchandise only. Thus, the Hilton gift
certificates were not intended by the Legislature to be included among the "intangible personal property" that
must be reported and transferred to the State to be converted to cash for the State's use under the Act. This
conclusion is supported by other states that treat gift certificates differently from other intangible property
for escheat purposes.
Treasury argued that it could otherwise collect the unclaimed funds under the common law doctrine
of bona vacantia, defined as personal property that escheats to the State because no owner, heir or next of
kin claims it. The Appellate Division found it unnecessary to determine what, if any, intangible personal
property might pass to the State under the doctrine of bona vacantia and under what circumstances it might
be applicable.
HELD: Judgment of the Appellate Division is AFFIRMED substantially for the reasons expressed in Judge
Brochin's written opinion. Unredeemed gift certificates redeemable only for services and
merchandise are not subject to the Uniform Unclaimed Property Act.
Judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN
and COLEMAN join in this PER CURIAM opinion.
SUPREME COURT OF NEW JERSEY
A-
194 September Term 1997
IN THE MATTER OF NOVEMBER 8, 1996,
DETERMINATION OF THE STATE OF NEW
JERSEY, DEPARTMENT OF THE TREASURY,
UNCLAIMED PROPERTY OFFICE.
Argued January 5, 1999 -- Decided January 28, 1999
On certification to the Superior Court,
Appellate Division, whose opinion is reported
at
309 N.J. Super. 272 (1998).
Michael J. Haas, Assistant Attorney General,
argued the cause for appellant, State of New
Jersey Department of the Treasury (Peter
Verniero, Attorney General of New Jersey,
attorney; Kevin M. Wolfe and Peter M. Ullman
Deputy Attorneys General, on the briefs).
Michael O'B. Boldt argued the cause for
respondent, The Hilton at Short Hills
(Bourne, Noll & Kenyon, attorneys).
Martin S. Ettin submitted a brief on behalf
of amici curiae New Jersey Retail Merchants
Association and The International Mass Retail
Association (Katz, Ettin, Levine, Kurzweil,
Werber & Scialabba, attorneys; Mr. Ettin,
James B. Evans, Jr., and Robert P. Saltzman,
on the brief).
PER CURIAM
The judgment is affirmed, substantially for the reasons
expressed in Judge Brochin's opinion of the Appellate Division,
reported at
309 N.J. Super. 272 (1998).
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN,
GARIBALDI, STEIN, and COLEMAN join in this opinion.
NO. A-194 SEPTEMBER TERM 1997
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
IN THE MATTER OF NOVEMBER 8, 1996,
DETERMINATION OF THE STATE OF
NEW JERSEY, DEPARTMENT OF THE
TREASURY, UNCLAIMED PROPERTY OFFICE.
DECIDED January 28, 1999
Chief Justice Poritz PRESIDING
OPINION BY PER CURIAM
CONCURRING OPINION BY
DISSENTING OPINION BY