The Aronoff Law Blog

WAS THIS VICTIM OF IDENTITY THEFT UNJUSTLY ENRICHED?

Aurora Lepe was the victim of identity theft.  The unknown perpetrator used her identity and forged her signature to obtain two loans used to purchase a property.  The loans were secured by the property.  Ms. Lepe did not discover the fact until the loans were delinquent and the property was in foreclosure.

Amazingly, after the foreclosure and the loans had been fully satisfied, there was a $51,333.87 surplus.  The foreclosure Trustee, CTC Real Estate Services, deposit the funds with the Los Angeles Superior Court and alleged in an interpleader action “that the equitable and fair result would be to have Ms. Lepe receive the funds.”  Even though no other claims for money were made, the Superior Court disagreed and ordered that the surplus be paid to the Los Angeles County General Fund.

The Court of Appeal in the case of CTC Real Estate Services v. Lepe, 140 Cal. App. 4th 856 (2006) reversed the decision and ordered that the surplus be paid to Ms. Lepe.  The Court of Appeal said that “the mere fortuity that the wrongdoer has disappeared without receiving the surplus and is not subject to legal action should not, as a matter of equity, preclude Ms. Lepe from being able to recover the funds not in possession of the identity theft.”  If the identify thief had been apprehended and convicted, Ms. Lepe might have been entitled to restitution or to claim assets from the “criminal profiteering activity.”  According to the Court, Ms. Lepe should not be penalized because the thief was not apprehended.

Ms. Lepe suffered much damage clearing her credit as result of the theft of her identity.  The thief even filed bankruptcy in her name.   She hardly feels that she came out ahead.

Ms. Lepe’s case reminds us the man who told us that a thief had stolen his wife’s credit cards.  However, he never reported the crime because the thief was spending less than his wife.

September 15th, 2006 Posted by aronofflaw | General Interest | one comment