Attorney General's Opinion
Attorney General Richard Blumenthal
June 9, 1999
Honorable Denise L. Nappier
Office of the Treasurer
55 Elm Street
Hartford, CT 06106
Dear Ms. Nappier:
Your office recently requested an opinion from this office regarding the following question:
Whether a municipality, pursuant to Conn. Gen. Stat. § 12-162, may pursue and levy against the assets of delinquent municipal taxpayers held in custody by the State Treasurer in the form of abandoned property under the State's Unclaimed Property Laws?
More specifically, it appears that the City of Hartford served an alias tax warrant1 on the Treasurer for unclaimed property held in accordance with Conn. Gen. Stat. § 3-56a et seq.
As discussed below, it is our opinion that the Treasurer is not required to honor the alias tax warrant because the claim is barred by the doctrine of sovereign immunity. In addition, the City failed to comply with the statutory claims process set forth in Conn. Gen. Stat. § 3-70a which is the proper procedure for a party to assert an interest in unclaimed property held by the state.
Sovereign Immunity
In a similar case, the Connecticut Appellate court upheld the denial of an attempt to garnish lottery winnings in the custody of the state. In Herzig v. Horrigan, 34 Conn. App. 816 (1994), the Court affirmed the judgment of the trial court dissolving a garnishment and property execution served on agents of the State of Connecticut. The Court held that the doctrine of sovereign immunity protects the state from having to honor a property execution on a judgment debtor's state lottery winnings.
The plaintiff in Herzig had obtained a judgment in the amount of $13,100 against the defendant Horrigan for his failure to pay rent to the plaintiff. According to the plaintiff, the only asset of the defendant amenable to execution was the $1,093,531.75 Lotto prize won by the defendant in the Connecticut State Lotto drawing in 1986 and payable in twenty annual installments of $54,676.58. The plaintiff attempted to garnish those payments by serving a property execution on the state lottery director, the executive director of special revenue, the state deputy treasurer, one of the associate attorneys general, and an employee of the office of the state comptroller. The five agents served refused to honor the property execution, and the trial court granted the state's motion to dissolve the garnishment on the ground of sovereign immunity.
The Court in Herzig stated that the purpose of the sovereign immunity doctrine is to prevent "serious interference with governmental functions and the imposition of enormous fiscal burdens on the state by subjecting its government to private litigation." 34 Conn. App. at 819. The plaintiff in Herzig argued that a property execution on a state agency is not the "institution of suit," and thus should not be barred by sovereign immunity. Id. at 821. The court cited prior law in concluding that the doctrine of sovereign immunity in Connecticut encompasses "attachments served on an officer of the state, and does not limit the application of the doctrine to suits against the state involving the state's direct pecuniary interest in the outcome." Id. (emphasis added) citing Stillman v. Isham, 11 Conn. 124 (1835). The court articulated the reasons that sovereign immunity should bar attachments of property in the custody of the state:
The number of potential judgment debtors whose funds may be held by the state is immense. There are thousands of state vendors who may be putative judgment debtors and many lesser winners of the state lottery, as well as potential weekly winners of it, and potential daily winners of the various gaming prizes established by the state, each of whom may be a judgment debtor. Until such time as the legislature grants judgment creditors the right to reach such sums held by the state for such winners and vendors, the courts should continue to apply the doctrine of sovereign immunity.
Id. at 815-16. The court concluded that in the absence of a direct legislative mandate, sovereign immunity barred the attachment. "General Statutes §§ 52-350e and 52-350f do not explicitly permit a property execution pursuant to a money judgment to be served on the state or enforced against property of the judgment debtor in possession of the state. The construction of a statute in derogation of the doctrine of sovereign immunity must be strict and when, as here, the statute is silent as to the abrogation of the doctrine, we hold that the doctrine prevents the plaintiff from garnishing the lottery winnings of the defendant while they are in the possession of the state." Id.
The issues of law and policy arising from the City's attempt to levy against unclaimed property are similar to those in Herzig. First, both situations involve property held in custody by the state. Herzig holds that the doctrine of sovereign immunity encompasses "attachments" served on an officer of the state and the property at issue does not need to involve the state's direct pecuniary interest. The service of a "property alias tax warrant" is similar to service of a property execution on the state. Moreover, as in Herzig, the statutes at issue do not explicitly permit the levy of taxes against property held in custody by the state, nor do the statutes explicitly permit attachment by creditors. Accordingly, a tax warrant does not apply to unclaimed property held by the Treasurer.
As discussed below, however, there is a statutory procedure for asserting a claim to abandoned property held by the state.
Unclaimed Property Statutes
The Connecticut General Statutes provide that the state assumes "custody" of unclaimed property and "shall be responsible for all claims thereto." Conn. Gen. Stat. § 3-62g, § 3-67. The statutes also provide for a claims process through which "[a]ny person claiming an interest in [unclaimed] property ... may claim such property, or the proceeds from the sale thereof, at any time thereafter." Conn. Gen. Stat. § 3-70a. Pursuant to the claims process, the Treasurer may hold hearings on any claim and may refer any claim to the "Claims Commissioner" for hearing. "Any person aggrieved by a decision of the Treasurer may appeal therefrom" to the Superior Court pursuant to § 4-183. Conn. Gen. Stat. § 3-70a.
We express no opinion on whether the City may qualify as a "person" with a proper "interest" in unclaimed property for purposes of Conn. Gen. Stat. § 3-70a. Such a decision should await a full and proper presentation by the City. It suffices to say at this point that § 3-70a provides a specific process through which an appropriate party may claim an interest in abandoned property. The rules of statutory construction indicate that the City may not bypass § 3-70a by service of the tax warrants. Specific terms in a statute covering a given subject matter prevail over general language in another statute. State v. Daniels, 207 Conn. 374, 393 (1988). When general and specific statutes conflict they should be harmoniously construed so that the more specific statute controls. Sullivan v. State, 189 Conn. 550, 556 n.7 (1983). Therefore, even absent the bar of sovereign immunity, the claims procedure provided in § 3-70a should prevail over the more general tax statutes.
Based on the foregoing analysis, it is the opinion of this office that the Treasurer should advise the City that it will not honor tax warrants for unclaimed property in the custody of the Treasurer, and if the City wishes to present a claim it should follow the procedure in Conn. Gen. Stat. § 3-70a.
Very truly yours,
RICHARD BLUMENTHAL
ATTORNEY GENERAL
Joan C.G. Grear
Assistant Attorney General
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1 See Conn. Gen. Stat. § 12-162. An alias tax warrant may be issued by the tax collector for the nonpayment of any property tax. The warrant authorizes the sheriff to levy upon the goods and chattels of the defaulting taxpayer.