958 N.W.2d 894
Mich. Ct. App.2020Background:
- Plaintiffs (Maple Manor facilities) are Medicaid nursing-home providers subject to Michigan’s Quality Assurance Assessment (QAA) tax administered under MCL 333.20161.
- Plaintiffs discovered clerical errors in their cost reports (included assisted‑living and Medicare days), causing QAA overpayments for tax years 2015–2017 and asked DHHS to correct them.
- DHHS corrected the errors prospectively only, citing audit periods and federal‑compliance requirements; plaintiffs did not seek judicial review of DHHS’s denial.
- Plaintiffs then filed a refund petition with the Michigan Department of Treasury under the Revenue Act (MCL 205.30); Treasury declined to process the petition, saying it lacked jurisdiction over the QAA.
- The Court of Claims granted Treasury’s motion for summary disposition for lack of subject‑matter jurisdiction and held the Revenue Act refund procedures do not apply to the QAA because MCL 333.20161 vests administration and refund authority in DHHS. The Court of Appeals affirmed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Treasury’s refusal to process the petition was an appealable adverse decision under the Revenue Act | Treasury’s declination was a de facto denial under MCL 205.30, so plaintiffs could appeal to Court of Claims | Treasury argued it made no adverse decision; DHHS had denied relief and Treasury only informed plaintiffs it lacked authority | Held: No; Treasury did not issue an adverse decision. DHHS’s denial was the operative decision, so Court of Claims lacked jurisdiction over Treasury under the Revenue Act |
| Whether the QAA is subject to the Revenue Act refund procedures (MCL 205.30) because it is defined as a "tax" | QAA is defined as a “tax” (MCL 333.20161(14)); MCL 205.20 makes all taxes subject to Revenue Act procedures absent an express exception | QAA is governed by a specific, comprehensive statutory and federally‑compliant scheme vesting administration, audit, collection, and refund authority in DHHS; Revenue Act should not apply unless Legislature expressly gave Treasury that role | Held: QAA is not subject to the Revenue Act generally; MCL 333.20161’s specific scheme controls and limits Treasury’s role to custody/collection when DHHS refers matters |
| Whether plaintiffs’ alternate claims (e.g., unjust enrichment) could proceed | Plaintiffs alleged unjust enrichment from retention of overpayments | Defendants asserted statutory notice and timeliness requirements barred that claim | Held: Unjust enrichment claim was dismissed as untimely under MCL 600.6431 and MCR 2.116(C)(7) (Court of Claims ruling noted in opinion) |
Key Cases Cited
- Teddy 23 LLC v Michigan Film Office, 313 Mich App 557 (Court lacked jurisdiction where Treasury did not issue the adverse decision)
- K & W Wholesale, LLC v Department of Treasury, 318 Mich App 605 (Revenue Act applies where statute expressly vests administration in Treasury)
- Tyson Foods, Inc v Department of Treasury, 276 Mich App 678 (Revenue Act governs when statute makes SBTA subject to it)
- People v Webb, 458 Mich 265 (statutes in pari materia should be construed harmoniously)
- Mich Deferred Presentment Servs Ass'n v Ross, 287 Mich App 326 (specific statute controls when in conflict with a general one)
- People v Arnold, 502 Mich 438 (particular legislative intent can be an exception to a general rule)