Request By:
Mr. O. K. Curry, Jr.
Executive Assistant
External Affairs
Office of State Treasurer
Frankfort, Kentucky 40601
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
The Kentucky Department of Military Affairs which is the disbursing agent for the Flood Victim Relief monies (part federal-part state) received an application from Mr. and Mrs. Lloyd Blankenship of Majestic, Kentucky. In the processing of the application by the Department of Military Affairs the name Lloyd was mistakenly written Floyd. A check for $5,000 was written to Floyd Blankenship, Majestic, Kentucky, and mailed from Frankfort. Thus Floyd Blankenship (not related to Lloyd, nor eligible for flood relief) received the check and cashed it. In talking with Mrs. Lloyd Blankenship, it is your understanding that Floyd Blankenship has bought a new car with the money and has commented that he had no intention of returning the money.
Your question is what action the Treasury Department should take at this time to recover the money.
The Military Affairs Department has informed us that the federal government, after the April, 1977, flood in Eastern Kentucky, established an Individual and Family Grant program with the Department of Military Affairs as flood relief, the federal government putting up all the money initially, but Kentucky having to reimburse the federal government for 25% of the grant money advanced by them. The Department of Military Affairs also told us that a letter and grant form was sent along with the check to Floyd Blankenship. On the back of the check the payee had to certify that he would spend the check proceeds as required by federal law and the terms of the grant. In the meantime, a check to the right person, Lloyd Blankenship, has been delivered to Lloyd.
As it stands, the state has suffered the loss of $5,000. However, as we understand it, the Treasury Department issued a check in conformity with the warrant prepared by the Department for Finance and Administration. We assume the warrant contained the information required by KRS 41.130. The warrant was drawn in favor of Floyd Blankenship as requested by the Department for Military Affairs. Thus the treasurer accepted the warrant and issued subject check, although to the wrong man. KRS 41.150 and 41.160. It is our opinion that the Treasury Department, under the facts given, made proper payment under the statutory procedure mentioned above. Gibony v. Commonwealth, Ky., 91 S.W. 732 (1906). See also KRS 44.010.
It is our opinion, since the Treasury Department has followed the statutory procedure in issuing such check, that it has no duty to take action to recover the money erroneously expended. The Department of Military Affairs has an administrative responsibility to take steps to recover it by voluntary repayment or by arranging for litigation.