Identity Theft Victim Beneficiary of Excess Proceeds

The decision in a recent California Court of Appeals case provided an identity theft victim with an unusual bonus. The thief had bought and mortgaged real estate using the victim's name and information. A foreclosure sale resulted in an unexpected surplus of $51,000. The only claimant to the surplus was the victim whose information had been used to obtain the real estate. The lower court ruled that the victim was not entitled to the surplus since he had never owned the property. However, the appellate court reversed, holding that the victim was entitled to the surplus on a theory of restitution. The court recognized the victim's information as a valuable asset, and that the victim had the right to restitution for the theft of the asset, and anything acquired with the asset, in this case, the real estate. While many states have criminalized identity theft, few have provided a means of recovery for the time and effort expended by the victim to correct his credit record, or for damages incurred arising out of the theft. This case provides an opening for such a recovery. (CTC Real Estate Services v. Lepe, 44 Cal. Rptr. 3d 823 (Ct. App. 2006)).