Examinations Are “Proceedings” Under Michigan’s UUPA, But Do Not Toll the Statute of Limitations; Post‑Examination Duty Question Remanded

Introduction

This consolidated Michigan Supreme Court decision resolves a long-standing ambiguity in the state’s Uniform Unclaimed Property Act (UUPA), MCL 567.221 et seq., over what qualifies as an “action or proceeding” for purposes of the statute of limitations in MCL 567.250(2). The Court holds that an audit-like examination initiated by the State Treasurer is a “proceeding,” but that beginning such an examination does not toll the limitations period, which continues to run unless the Legislature has expressly provided for tolling. The Court also flags, but does not decide, a consequential follow-on issue: whether a holder’s obligation to comply with a post-examination “notice of examination determination” is a distinct legal duty that triggers its own limitations period for enforcement. That question is remanded to the Court of Appeals.

Parties and posture:

• Plaintiffs: The Walt Disney Company and Dine Brands Global, Inc. (Applebee’s/IHOP franchisor), both out-of-state “holders” under the UUPA.
• Defendant: Rachael Eubanks, Michigan State Treasurer (the UUPA “administrator”).
• Context: Multistate unclaimed property examinations (audits) initiated in 2013, conducted by Kelmar Associates, LLC, scrutinizing wages and accounts payable back to 2002. Notices of examination determinations issued in 2021 required remittances. Plaintiffs sued in 2021 for declaratory and injunctive relief, arguing the UUPA limitations period time-barred enforcement.
• Lower courts: Circuit court granted summary disposition to plaintiffs; Court of Appeals initially affirmed (published), then after a Supreme Court remand (with jurisdiction retained) issued an amended, unpublished opinion concluding summary disposition should not have been granted. The Supreme Court ordered argument on the applications and now issues this merits decision in lieu of granting leave.

Court and authorship:

• Court: Supreme Court of Michigan
• Date: March 24, 2025
• Opinion: Unanimous opinion by Justice Welch (Justice Thomas did not participate)
• Consolidated Dockets: 165391 (Dine Brands) and 165392 (Disney)

Summary of the Opinion

• Action vs. proceeding:
  • “Action” in MCL 567.250(2) refers to a judicial lawsuit commenced in court.
  • “Proceeding” is broader and includes formal administrative processes; a UUPA examination conducted under MCL 567.251 and MCL 567.251a qualifies as a “proceeding.”
• No tolling:
  • The initiation of a UUPA examination does not toll the limitations period in MCL 567.250(2); that period continues to run during the examination unless the Legislature expressly provides tolling.
• Duty-centered limitations:
  • The limitations period is measured “with respect to any duty of a holder” and runs from when “the duty arose.” For annual reporting/remittance duties (MCL 567.238, MCL 567.240), the clock runs notwithstanding an ongoing examination.
  • Unresolved: Whether issuance of a notice of examination determination (MCL 567.251a) in combination with UUPA penalty provisions (MCL 567.255) imposes a distinct, post-examination compliance duty that carries its own limitations period, and the scope of property covered by any such duty. This pivotal issue is remanded to the Court of Appeals.
• Dispositions:
  • Reversed: Court of Appeals’ published opinions at 345 Mich App 227 (Dine Brands) and 345 Mich App 213 (Disney) holding examinations are not “actions or proceedings.”
  • Affirmed in part and vacated in part: Court of Appeals’ January 11, 2024, amended unpublished opinion on remand (Disney (On Remand)), consistent with the Supreme Court’s holdings on “proceeding” and tolling, but vacated insofar as it suggested enforcement timing is unconstrained.
  • Remanded: For determination of the existence and scope of any distinct, enforceable post-examination duty and associated limitations analysis.

Analysis

1) Precedents and Authorities Cited and Their Influence

• Dictionaries and statutory context:
  • MCL 8.3a directs courts to apply common usage unless a term has a technical legal meaning.
  • Black’s Law Dictionary and contemporary lay dictionaries support that:
    • “Action” denotes a judicial lawsuit.
    • “Proceeding” is broader—encompassing judicial stages and administrative processes.
• Michigan interpretive canons:
  • State Farm Fire & Casualty Co v Old Republic Ins Co (avoid surplusage) and US Fidelity & Guaranty Co v Michigan Catastrophic Claims Ass’n (different words, different meanings) underpin the Court’s insistence that “action” and “proceeding” must carry distinct meanings when joined by “or.”
  • Mich Public Service Co v Cheboygan clarifies “or” is disjunctive—confirming the Legislature offered alternative routes to beat the limitations clock (commence either an action or a proceeding).
• Meaning of “action”:
  • Epps v 4 Quarters Restoration LLC and CAM Construction v Lake Edgewood Condominium Ass’n confirm “action” in Michigan statutes generally means a lawsuit in court. The UUPA itself uses “action in [court]” repeatedly to describe litigation (e.g., MCL 567.247; 567.251a; 567.253; 567.254). This context fixed “action” as litigation for MCL 567.250(2).
• Meaning of “proceeding”:
  • Meyers v Barlock; People v Bobek (procedural/judicial usage); federal cases like United States v Kirst and United States v Fruchtman (administrative investigations as “proceedings”). Together with dictionary evidence, these supported treating examinations as “proceedings.”
• No implied tolling:
  • Mair v Consumers Power Co is central: tolling is legislative; absent express statutory language, administrative steps do not toll a statute of limitations. The Court analogizes to MCL 600.5856 (tolling occurs upon events tied to court jurisdiction or specific medical malpractice notice) to reinforce that tolling by administration alone is not recognized.
  • Comparative statutes: Delaware (12 Del. C. § 1156(b)) and North Dakota (N.D.C.C. § 47-30.2-39) have explicit tolling tied to unclaimed property examinations or notices. Michigan does not—underscoring the Court’s refusal to infer tolling.
• Model act commentary:
  • 1981 Model Uniform Unclaimed Property Act § 29(b) commentary mentions “commence an action” within 10 years. The Court declines to treat “action or proceeding” as a term of art limited to litigation based solely on commentary, especially given Michigan’s broader statutory phrasing and contextual use of “or.”
• Other Michigan authorities:
  • Flint Cold Storage v Dep’t of Treasury (policy of custodial unclaimed property system) provides background but not determinative rules.
  • Revised UUPA amendments: 2014 PA 423 (adding MCL 567.251a) and 2015 PA 242 (adding MCL 567.251b) regularized the examination process, appeals and reconsideration, confirming its formal administrative character despite being outside the APA contested-case framework.

2) The Court’s Legal Reasoning

• Text and structure of the UUPA:
  • “Action or proceeding” appears repeatedly and disjunctively—signaling two distinct pathways. Given “action” denotes court litigation, “proceeding” must do separate work and therefore includes formal administrative processes, notably the Treasurer’s examinations (MCL 567.251; 567.251a; 567.251b).
  • Harmonization: Reading examinations as “proceedings” coheres with the statute’s enforcement structure:
    • Verified report demands (MCL 567.251(1));
    • Examinations with notice of determination and reconsideration/appeal rights (MCL 567.251a, 567.251b);
    • Court actions to enforce (MCL 567.253).
    The administrative steps are formalized by statute and rulemaking authority, making “proceeding” the natural umbrella term.
  • Record retention alignment: Holders must retain relevant records for 5 or 10 years (MCL 567.252). If examinations were excluded from “proceedings” and no tolling exists, the statutory scheme would function awkwardly. Recognizing exams as “proceedings” allows the Treasurer to commence within the retention window; recognizing no tolling ensures the Legislature’s retention/limitations choices are respected during the (sometimes lengthy) exam.
• No tolling absent statute:
  • Statutes of limitations curb stale claims and incentivize diligence (Wells v Detroit News). The Legislature knows how to toll and where to say so (e.g., MCL 205.27a(3), MCL 500.2833(1)(q)). The UUPA lacks tolling language.
  • Therefore, even though an examination is a “proceeding,” starting one does not pause the limitations clock. The period “with respect to any duty” (MCL 567.250(2)) keeps running.
• Duty-centric measurement and the unresolved issue:
  • MCL 567.250(2) connects the limitations bar to “any duty of a holder” and the date “the duty arose.” For annual reporting and remitting (MCL 567.238; 567.240), the duty arises on the statutory reporting/remittance due dates and then runs 5 or 10 years, depending on the holder and transaction type.
  • After an examination culminates in a “notice of examination determination” (MCL 567.251a), the statute’s penalty structure (MCL 567.255) may create a distinct duty to comply with the determination (e.g., to pay/deliver on demand), which—if legally recognized—could start a new limitations period for enforcing that distinct duty. The Court does not decide this; it remands for the Court of Appeals to determine:
    • Does a separate, post-exam compliance duty exist under MCL 567.251a and 567.255, distinct from the annual reporting/remittance duty?
    • If so, when does that duty arise and what property does it cover?
  • The Court rejects the premise that a mere commencement of an examination creates a new duty to pay/deliver. Any distinct duty, if it exists, would arise only after the notice of examination determination issues.

3) Likely Impact

• For the Treasury and its auditors:
  • Timing pressure: Examinations must be initiated within the applicable 5- or 10-year periods measured from when the duty arose for the property at issue. Because there is no tolling, extended examinations risk having older years fall out of reach for enforcement of annual reporting/remittance duties.
  • Process discipline: Expect greater emphasis on triaging older exposure, accelerating fieldwork, and promptly issuing notices of examination determinations.
  • Enforcement posture: If the Court of Appeals recognizes a distinct post-exam compliance duty, Treasury may have an additional window to compel payment/delivery of property specified in a timely notice of determination. If not, Treasury must ensure any court “action” to enforce annual duties is filed within the original limitations period.
• For holders (businesses):
  • Defense leverage: No tolling during examinations means holders can argue that portions of the assessment tied to older reporting cycles are time-barred as to the annual duty. That leverage may affect audit negotiations and settlement dynamics.
  • Compliance incentives: Timely, accurate annual reporting and recordkeeping remain critical. Post-exam compliance risks (including penalties under MCL 567.255) may turn on the remand outcome regarding a distinct duty.
  • Litigation strategy: Holders must continue to monitor the 90-day window for judicial review of notices of examination determinations (MCL 567.251a(1); MCL 567.247) and preserve statutory defenses grounded in limitations.
• For courts:
  • Clarity: “Action” means lawsuits; “proceeding” includes administrative examinations. Courts will apply this framework when evaluating timeliness under MCL 567.250(2).
  • Remand cascade: Trial and appellate courts will now confront whether post-exam compliance is a distinct duty and define the scope of property reachable under any such duty.
• For the Legislature:
  • Policy choice spotlight: Other states (Delaware, North Dakota) expressly toll their unclaimed property limitations when an exam notice issues. Michigan’s omission is now outcome-determinative. The Legislature may consider adding tolling language or otherwise revising the UUPA to calibrate the balance between administrative efficiency and repose.

Complex Concepts Simplified

• UUPA in plain terms:
  • Michigan’s UUPA requires “holders” (businesses or others with property owed to someone else) to report and remit property presumed abandoned after a dormancy period (typically three years; wages one year), so the state can safeguard it and reunite it with the rightful owner.
• Holder and property:
  • A “holder” is anyone in possession of another’s property or owing an obligation (MCL 567.222(i)). “Property” includes tangible and intangible personal property (MCL 567.222(p)).
• Annual duty vs. post-exam duty:
  • Annual duties: File yearly reports by July 1 for the preceding 12 months (MCL 567.238(4)) and pay/deliver reportable property at the time of filing (MCL 567.240(1)).
  • Possible post-exam duty: After the Treasurer issues a “notice of examination determination” (MCL 567.251a), there may be a separate duty to comply with that decision (e.g., to pay/deliver the specified property), potentially enforced with penalties (MCL 567.255). Whether that “duty” is distinct—and thus has its own limitations period—remains to be decided on remand.
• “Action” vs. “proceeding”:
  • Action: A lawsuit in court (e.g., “bring an action in circuit court”).
  • Proceeding: A broader term that includes formal administrative processes, like a UUPA examination culminating in a notice of determination and administrative reconsideration rights.
• Statute of limitations and tolling:
  • Limitations: A deadline by which the Treasurer must commence “an action or proceeding” with respect to a holder’s duty—generally 10 years, or 5 for certain association transactions (MCL 567.250(2)).
  • Tolling: Pausing the clock. In Michigan, tolling exists only where the Legislature says so. Commencing an examination does not toll the UUPA limitations period.
• Timing, by example (simplified):
  • Suppose an uncashed vendor check becomes “abandoned” in Year 0. The holder’s annual duty to report/remit that property arises on the statutory reporting/remittance date (e.g., July 1 of the applicable year). The Treasurer must commence either a court “action” or an administrative “proceeding” (such as an examination) within the applicable 5 or 10 years measured from that duty date. Starting an examination does not pause the clock; if the exam drags on, the window continues to close for enforcing the original annual duty. Whether a later notice of examination determination creates a new enforceable duty—and thus a new window—awaits the remand decision.

Conclusion

This opinion announces two significant rules for Michigan’s unclaimed property regime. First, “action or proceeding” in MCL 567.250(2) is disjunctive and distinct: “action” means a lawsuit, and “proceeding” includes formal administrative examinations under the UUPA. Second, initiating an examination does not toll the statute of limitations; the Legislature did not provide tolling, and courts will not imply it.

At the same time, the Court recognizes that the UUPA’s duty-centered limitations framework may, after an examination, implicate a separate, post-examination compliance duty rooted in MCL 567.251a and MCL 567.255. Whether such a duty exists, when it arises, and what property it encompasses are questions of first importance, especially because holders here obtained prospective injunctions based on limitations defenses. The Court remands for the Court of Appeals to resolve those issues.

Practically, the ruling places a premium on timely commencement and efficient completion of examinations, vigilant recordkeeping by holders, and careful attention to limitations defenses keyed to the specific “duty” at issue. It also invites legislative consideration of whether to add explicit tolling language—like that found in Delaware and North Dakota—if Michigan wishes examinations to suspend limitations during their pendency. Until then, both administrators and holders must plan around the reality that the limitations clock keeps running while an audit proceeds.