K & W Wholesale LLC v. Department of Treasury
327107
| Mich. Ct. App. | Feb 7, 2017Background
- Michigan State Police seized 47 cases of tobacco from K & W Wholesale, LLC and owner Visna Mati after an inspection revealed alleged Tobacco Products Tax Act (TPTA) labeling violations.
- At an informal conference, a Department referee concluded the tobacco lacked required identification of the first purchaser and recommended forfeiture; the Department adopted that recommendation in an Order dated September 22, 2014.
- The Order informed interested parties they must commence a circuit-court appeal within 20 days of the Department’s decision; the Department mailed the Order to K & W’s business address and produced a certified-mail receipt and USPS tracking showing delivery on September 24, 2014.
- Plaintiffs filed in circuit court on October 30, 2014, arguing they were not timely served (their attorney had not received the Order) and that labeling created only a rebuttable presumption of violation.
- The trial court initially denied summary disposition for lack of proof of service; on reconsideration it accepted the certified-mail evidence, found plaintiffs’ appeal time-barred, and granted summary disposition.
- The Court of Appeals affirmed, holding the 20-day appeal period is triggered by sending notice to the person(s) claiming an interest (not to an attorney), and the Department proved service on plaintiffs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 20-day circuit-court appeal period was triggered by service on the attorney or the interested party | Mati: appeal period not triggered because plaintiffs’ attorney was not served | Treasury: statute triggers when notice is sent to the person(s) claiming interest; attorney service not required | The 20-day period is triggered by sending notice to the person(s) claiming interest; attorney service not required |
| Whether Department complied with notice/service requirements under TPTA | Plaintiffs: Department’s past practice of sending notices to attorneys shows it must do so; here attorney lacked copy | Treasury: mailed Order to K & W/Visna Mati and produced certified-mail proof of delivery | Service to K & W/Visna Mati was proved (certified mail/USPS tracking); plaintiffs’ suit was untimely |
| Whether plaintiffs created a factual dispute about actual service | Plaintiffs: Mati’s affidavit denied being served | Defendants: offered certified-mail receipt, USPS printout, and plaintiffs’ own letters indicating receipt | Court found plaintiffs’ own submissions undermined their denial; no genuine factual dispute about service |
| Whether labeling violation was merely a rebuttable presumption and would affect outcome | Plaintiffs: labeling presumption rebutted; merits should be reached | Defendants: procedural bar (statute of limitations) precludes merits | Because appeal was time-barred, merits (labeling presumption) were not reached; summary disposition affirmed |
Key Cases Cited
- Durcon Co v. Detroit Edison Co., 250 Mich. App. 553 (review standard for summary disposition)
- Kincaid v. Caldwell, 300 Mich. App. 513 (summary disposition under C(7) and consideration of documentary evidence)
- Rovas v. SBC Mich., 482 Mich. 90 (agency interpretation not binding on courts)
- Fradco, Inc. v. Dep’t of Treasury, 495 Mich. 104 (agency notice to representative required under a different taxing statute)
- Dykes v. William Beaumont Hosp., 246 Mich. App. 471 (affidavit attempts to create factual issues reviewed)