Update:
The Michigan Court of Appeals once again has addressed the unclaimed property statute of limitations through the Dine Brands/Disney v. Eubanks cases. The cases involve when the Treasurer may enforce the unclaimed property laws against a holder. We will not reiterate the backgrounds of the cases, but if you are interested in learning more, you can see prior alerts regarding the cases.1
In its most recent decision, issued August 18, 2025, the court considered whether issuance of a Notice of Determination at the end of an audit creates a new obligation to remit property that should have been reported under the Act. Specifically, the Court of Appeals found that the Notice of Determination exists as a “distinct legal duty” to pay particular unclaimed property (distinguishable from the Act’s duty to report) and that the statute of limitations on the state’s right to enforce that distinct duty (the Notice of Determination) begins to run upon issuance of the notice. As support for its decision, the court noted that Michigan law imposes penalties for failure to remit property that the Treasurer demands, and that such penalties exceed those penalties for failure to remit in accordance with the routine reporting cycle. As it relates to Dine Brands and Disney parties in particular, the decision means that the Treasurer is not barred from filing an action to enforce its Notice of Determination because the statute of limitations has not yet expired. Perplexingly, that is true even where the right to enforce the original statutory obligation to remit that same property has expired.
Our Analysis:
Upon initial review, the decision appears to render the statute of limitations nearly meaningless and is the functional equivalent of holding (as the Supreme Court refused to do previously) that the audit itself tolls the statute of limitations. As now defined by the Michigan courts, the Treasurer has 10 years from holder’s initial duty of reporting to commence an audit. That audit, thereafter, can seemingly proceed for an indefinite period, and the Treasurer can “resurrect” claims for such property (even 19 years later) through the expedient of issuing a Notice of Determination that restarts the clock. There is no boundary or time limit on a holder’s obligations (nor on its duty to defend against such a demand).
However, there is a ray of hope. The Court of Appeals took pains to distinguish the Treasurer’s right to seek enforcement from her right to succeed in that action. This distinction is notable in that the court expressly declined to decide how far back a Notice of Determination could reach or whether the Treasurer is entitled to payment of the amounts that the Notice demands. In footnote 11, the court clarified, “We emphasize that the sole issue in the present cases is whether the Treasurer is time-barred from filing a future enforcement action. The merits of any such future enforcement action are, of course, not at issue here and would be the subject of any future litigation.” In other words, the Treasurer may have her day in court, but she may not win.
Still, the decision highlights some high risks of refusing to pay a Notice of Determination. Such a refusal could invoke penalties and, potentially, criminal exposure. Whether penalties would be appropriate even were the Treasurer to succeed on a future enforcement action is ambiguous. The Court of Appeals explained, “This analysis does not hinge on whether a criminal penalty would be appropriate in these cases” and explained that the existence of the penalty simply indicated a separate duty to pay. It is unclear whether a court would impose any such penalties, especially where the holder had a reasonable basis to dispute the Notice and provided such notice to the Treasurer.
As a reminder, the holders here filed for an injunction against the Treasurer bringing an action to enforce payment of her findings. This decision would lift that bar so the Treasurer may bring such an action. Whether the Treasurer is entitled to payment of such old amounts remains an open question. Similarly, the court did not address what happens if the Treasurer does not bring such an action within the limitations period. The holders have until September 29th to appeal the decision to the Michigan Supreme Court. Alternatively, the holders may do nothing, leaving the Treasurer to decide whether to bring an action to enforce her Notice.
- For more information, see our April 10, 2025, October 14, 2024, January 12, 2024, November 13, 2023 and April 6, 2023 alerts.
Client Alert 2025-223
