COA 360002 DENNIS O'CONNOR V STATE OF MICHIGAN Opinion - Authored

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to

revision until final publication in the Michigan Appeals Reports.

-1-

S T A T E O F M I C H I G A N

C O U R T O F A P P E A L S

DENNIS O’CONNOR and ANDREW NAGY and

All Others Similarly Situated,

Plaintiffs,

and

JULIE E. TERHUNE,

Plaintiff-Appellant,

FOR PUBLICATION

March 2, 2023

9:00 a.m.

No. 360002

Court of Claims

STATE OF MICHIGAN, DEPARTMENT OF

TREASURY, and STATE TREASURER,

LC No. 21-000192-MZ

Defendants-Appellees.

Before: JANSEN, P.J., and REDFORD and YATES, JJ.

REDFORD, J.

Plaintiff Julie Terhune

appeals as of right the Court of Claims December 2, 2021 order

granting defendants summary disposition under MCR 2.116(C)(4) (lack of subject-matter

jurisdiction). Because we agree with the trial court that the Uniform Unclaimed Property Act

(UUPA), MCL 567.221 et seq., required plaintiff to first utilize the administrative process set forth

in that statutory construct before seeking judicial relief for her previously unclaimed property, we

affirm.

I. FACTUAL BACKGROUND

Plaintiff brought a claim and delivery action against defendants to recover an alleged asset

valued between $100 and $250 that she asserts Synchrony Bank turned over to the state. Among

other claims, plaintiff alleged that she had the right to recover interest earned on her asset while

Plaintiffs Dennis O’Connor and Andrew Nagy are not parties to this appeal.

-2-

held by the state. The parties do not dispute that plaintiff did not file with the administrator a claim

under the UUPA for return of the alleged asset. Defendants moved for summary disposition on

the ground that the Court of Claims lacked subject-matter jurisdiction because plaintiff failed to

exhaust her administrative remedies provided under the UUPA with the state treasurer. The Court

of Claims concluded that plaintiff’s claims were not ripe because she eschewed the statutory

process for seeking return of the property which left uncertain whether the state owed her any

principal or interest. The Court of Claims also held that it lacked jurisdiction and dismissed the

case in its entirety.

II. STANDARD OF REVIEW

We review de novo a trial court’s ruling on a motion for summary disposition. Braun v

Ann Arbor Charter Twp, 262 Mich App 154, 157; 683 NW2d 755 (2004). “Whether the trial court

had subject-matter jurisdiction is a question of law that this Court reviews de novo.” Council of

Orgs and Others for Educ About Parochiaid v State, 321 Mich App 456, 463; 909 NW2d 449

(2017) (quotation marks and citation omitted). “We review de novo questions of statutory

interpretation, with the fundamental goal of giving effect to the intent of the Legislature.” Id.

at 464 (quotation marks and citation omitted). “That intent is clear if the statutory language is

unambiguous, and the statute must then be enforced as written.” Id. (quotation marks and citation

omitted). “We also review de novo questions regarding the proper interpretation of our 1963

Constitution.” O’Connell v Dir of Elections, 316 Mich App 91, 97; 891 NW2d 240 (2016).

“A summary disposition motion pursuant to MCR 2.116(C)(4) tests the trial court’s

subject-matter jurisdiction.” Braun, 262 Mich App at 157. “Summary disposition for lack of

jurisdiction under MCR 2.116(C)(4) is proper when a plaintiff has failed to exhaust its

administrative remedies.” Citizens for Common Sense in Gov’t v Attorney General, 243 Mich App

43, 50; 620 NW2d 546 (2000). “The burden of establishing jurisdiction is on the plaintiff.” Id.

III. ANALYSIS

When interpreting a statute, the primary goal is to discern and give effect to the intent of

the Legislature. Koontz v Ameritech Servs, Inc, 466 Mich 304, 312; 645 NW2d 34 (2002). This

Court considers statutory provisions within the context of the whole statute and must “give effect

to every word, phrase, and clause . . . [to] avoid an interpretation that would render any part of the

statute surplusage or nugatory.” State Farm Fire & Cas Co v Old Republic Ins Co, 466 Mich 142,

146; 644 NW2d 715 (2002). When statutory terms are undefined, this Court interprets the terms

according to their plain and ordinary meaning, considering the context in which the words are

used, and may consult dictionary definitions if necessary to accomplish this task. Koontz, 466

Mich at 312; Yudashkin v Linzmeyer, 247 Mich App 642, 649-650; 637 NW2d 257 (2001).

Further, if there is “tension, or even conflict, between sections of a statute, this Court has a duty

to, if reasonably possible, construe them both so as to give meaning to each; that is, to harmonize

them.” O’Connell, 316 Mich App at 98 (quotation marks and citation omitted).

The Michigan Constitution, Const 1963, art 10, § 4, provides: “Procedures relating to

escheats and to the custody and disposition of escheated property shall be prescribed by law.”

(emphasis added). Our Supreme Court has interpreted the term “prescribed by law” as requiring

the Legislature to enact statutory provisions to effectuate the “custody and disposition of escheated

-3-

property.” See House Speaker v Governor, 443 Mich 560, 591; 506 NW2d 190 (1993) (citing

Const 1963, art 10, § 4 as one example “in which the drafters believed that legislative

implementation was necessary to carry out constitutional provisions”). The UUPA is the

Legislature’s enabling statute to effectuate custody and disposition of unclaimed property.

The UUPA applies to both tangible and intangible property and “provides a mechanism by

which the state may hold certain unclaimed property in trust for the benefit of the rightful owner.”

Flint Cold Storage v Dep’t of Treasury, 285 Mich App 483, 492; 776 NW2d 387 (2009). Under

MCL 567.223(1), “all property, including any income or increment derived from the property, less

any lawful charges, that is held, issued, or owing in the ordinary course of a holder’s business and

remains unclaimed by the owner for more than 3 years after it becomes payable or distributable is

presumed abandoned.” “Once property is presumed abandoned under one of these provisions, it

‘is subject to the custody of this state as unclaimed property’ if one or more of the several

conditions listed in MCL 567.224 has been met.” Flint Cold Storage, 285 Mich App at 493,

quoting MCL 567.224. The UUPA then requires the state to deposit the money in the state’s

general fund, or to sell property other than money and then deposit the proceeds in the general

fund. MCL 567.243; MCL 567.244(1). However, these monies do not simply escheat to the state.

Rather, they remain collectible by the listed owner or one who is deemed to have the right to the

property in the owner’s place. The state treasurer, who is the “administrator” within the meaning

of the UUPA, see MCL 567.222(a), must keep in a separate trust fund “an amount not less than

$100,000.00 from which prompt payment of claims allowed under this act shall be made.” MCL

567.244(1). Further, the state treasurer

shall record the name and last known address of each person appearing . . . to be

entitled to the property and the name and last known address of each insured person

or annuitant and beneficiary and with respect to each policy or contract listed in the

report of an insurance company, the number of the policy or contract, the name of

the insurance company, and the amount due. [MCL 567.244(1).]

The UUPA establishes an administrative process for recovery of this property, together

with interest in some cases. MCL 567.245(1) provides: “A person . . . claiming an interest in any

property paid or delivered to the [state treasurer] under this act, may file with the [state treasurer]

a claim on a form prescribed by the [state treasurer] and verified by the claimant.” The state

treasurer then has 90 days to consider the claim and provide written notice to the claimant if the

claim is denied in whole or in part. MCL 567.245(2). If the claim is allowed, the treasurer

shall pay over or deliver to the claimant the property or the amount the

administrator actually received or the net proceeds if it has been sold by the

administrator, plus any additional amount required by [MCL 567.242

]. If the

property claimed was interest bearing to the owner on the date of surrender by the

holder, and if the date of surrender is on or after March 28, 1996, the administrator

The “additional amount required by [MCL 567.242]” applies when property other than money is

at issue, and entitles the owner of such property to receive “any dividends, interest, or other

increments realized or accruing on the property at or before liquidation or conversion of the

property into money.” MCL 567.242.

-4-

also shall pay interest at a rate of 6% a year or any lesser rate the property earned

while in the possession of the holder. Interest begins to accrue when the interest

bearing property is delivered to the administrator and ceases on the earlier of the

expiration of 10 years after delivery or the date on which payment is made to the

owner. No interest on interest bearing property is payable for any period before

March 28, 1996. [MCL 567.245(3).]

Thus, if the property was interest-bearing at the date of surrender, then interest is owed on the

property. If not, no interest is owed under the UUPA.

MCL 567.247 prescribes a procedure for a claimant who is aggrieved by a decision of the

state treasurer, or whose claim has not been acted upon within 90 days of filing. The statute

provides:

A person who is aggrieved by a decision of the administrator or whose claim

has not been acted upon within 90 days after its filing may bring an action to

establish the claim in the circuit court, naming the administrator as a defendant.

The action shall be brought within 90 days after the decision of the administrator

or within 180 days after the filing of the claim if the administrator has failed to act

on it. If the aggrieved person establishes the claim in an action against the

administrator, the court shall award the claimant costs and reasonable attorney’s

fees. [Emphasis added.]

Plaintiff disputes that the UUPA is the exclusive method for asserting an interest in such

property because MCL 567.245(1) uses the word “may.” Plaintiff contends that word choice

establishes that the Legislature did not intend for the UUPA’s comprehensive procedure be the

exclusive method by which a claimant can recover abandoned property. The Court of Claims

disagreed and held that it lacked jurisdiction over plaintiff’s claim for recovery of abandoned

property from the state treasurer because she eschewed the available administrative remedy.

“The Court of Claims is created by statute and the scope of its subject-matter jurisdiction

is explicit.” O’Connell, 316 Mich App at 101 (quotation marks and citation omitted). In particular,

except as provided in MCL 600.6421, which involves the right to a trial by jury, and MCL

600.6440, which involves federal causes of action, neither of which are relevant to this case, “the

jurisdiction of the court of claims, as conferred upon it by [the Court of Claims Act], is exclusive.”

MCL 600.6419(1). The Court of Claims’ “exclusive” jurisdiction includes the power

[t]o hear and determine any claim or demand, statutory or constitutional, liquidated

or unliquidated, ex contractu or ex delicto, or any demand for monetary, equitable,

or declaratory relief or any demand for an extraordinary writ against the state or

any of its departments or officers notwithstanding another law that confers

jurisdiction of the case in the circuit court. [MCL 600.6419(1)(a).]

Thus, “MCL 600.6419 generally vests the Court of Claims with exclusive jurisdiction over claims

against the state or any of its departments.” Prime Time Int’l Distrib, Inc v Dep’t of Treasury, 322

Mich App 46, 55; 910 NW2d 683 (2017).

-5-

Exceptions to the statutory jurisdiction to the Court of Claims exist, however, including

where an administrative agency is granted exclusive jurisdiction over the subject matter.

Generally, a party aggrieved by an administrative agency may not seek relief in the courts until

the party has exhausted all available administrative remedies. See, e.g., W A Foote Mem Hosp v

Dep’t of Pub Health, 210 Mich App 516, 522-523; 534 NW2d 206 (1995). “This Court has not

required the phrase ‘exclusive jurisdiction’ to appear in a statutory provision in order to find that

jurisdiction has been vested exclusively in an administrative agency.” Papas v Michigan Gaming

Control Bd, 257 Mich App 647, 657; 669 NW2d 326 (2003) (citation omitted). “As long as the

statutory language chosen by the Legislature establishes the intent to endow the state agency with

exclusive jurisdiction, courts must decline to exercise jurisdiction until all administrative

proceedings are complete.” Id. (citation omitted).

In this case, the Court of Claims correctly held that the state treasurer, who is the

“administrator” as that term is used in the UUPA, see MCL 567.222(a), has been vested with

exclusive jurisdiction over unclaimed property that has been presumed abandoned. Plaintiff

focuses on only one word in the act, namely, the Legislature’s use of the term “may” in MCL

567.245(1). In so doing, plaintiff ignores the context in which this term is used in MCL 567.245,

and ignores the remaining provisions in the UUPA. Consistent with the directive in Const 1963,

art 10, § 4 which provides that “[p]rocedures relating to escheats and to the custody and disposition

of escheated property shall be prescribed by law,” the UUPA prescribes a comprehensive set of

procedures for abandoned property to be transferred to the state treasurer, and for claimants to

assert an interest in any property paid or delivered to the state treasurer under the act. Notably,

plaintiff is not challenging the portion of the UUPA involving either the payment of funds to the

state or the procedure by which the state treasurer accepts property for it to sell and deposit the

proceeds into the general fund. Likewise, plaintiff does not challenge the language in MCL

567.245(3) that provides for the payment of interest on property that was interest-bearing at the

time it was sent to the state treasurer. It is somewhat incongruous for plaintiff to seek to enforce

the procedure in one portion of MCL 567.245 while maintaining that she need not file a claim to

be entitled to such interest. Further, under MCL 567.245(3), only “[i]f a claim is allowed” shall

the treasurer “pay over or deliver to the claimant the property or the amount the administrator

actually received or the net proceeds [and additional amounts under MCL 567.242] if it has been

sold by the administrator.”

Further, the preamble to the UUPA provides:

AN ACT concerning unclaimed property; to provide for the reporting and

disposition of unclaimed property; to make uniform the law concerning unclaimed

property; to prescribe the powers and duties of certain state agencies and officials;

to prescribe penalties and provide remedies; and to repeal acts and parts of acts.

[29 PA 1995.]

“Although a preamble is not to be considered authority for construing an act, it is useful for

interpreting its purpose and scope.” Malcolm v City of East Detroit, 437 Mich 132, 143; 468

NW2d 479 (1991) (emphasis added); see also King v Ford Motor Credit Co, 257 Mich App 303,

312; 668 NW2d 357 (2003) (“The preamble may be employed to extend the meaning of an

ambiguous statute beyond the limited language of the purview. This rule must be qualified by the

explanation that the result must be consistent with other rules of interpretation.”) (citation omitted).

-6-

Thus, to the extent that the Legislature’s use of the term “may” in MCL 567.245(1) could be said

to render the statute ambiguous, the preamble supports the Court of Claims’ determination that the

UUPA prescribes the exclusive method for a claimant to recover unclaimed property, at least

absent the exception discussed below.

Further, the Legislature’s use of the term “may” in MCL 567.245(1) is not ambiguous, nor

are we persuaded that the Legislature intended to make the UUPA claim procedure discretionary

giving claimants the right to decline following the claim procedure and bring an action against the

state in the Court of Claims. MCL 567.245(1) plainly indicates that persons whose property has

been abandoned and delivered to the state may file a claim if they would like its return. The statute

leaves the decision whether to act to the person who presumably abandoned it in the first place.

Such interpretation supports the apparent legislative intent that the UUPA be the exclusive means

by which a claimant can recover abandoned property. Thus, the choice to file a claim is

discretionary but the means for securing recovery of abandoned property is not. Notably, the

Legislature did not specify that a claimant could opt out of the UUPA’s claim procedure nor did it

grant persons a private right of action against the state that could be filed in the Court of Claims.

Instead, the Legislature specified in MCL 567.247 that, after filing a claim and being dissatisfied

with the administrator’s decision or failure to act, an aggrieved claimant has a right to bring an

action in circuit court. Moreover, not only did the Legislature prescribe an administrative

procedure, but under MCL 567.260, it authorized the state treasurer to promulgate rules to carry

out the provisions of the UUPA under the Administrative Procedures Act, MCL 24.201 et seq.

MCL 567.261 further supports the conclusion that the Legislature intended that the UUPA be the

exclusive means by which a claimant can recover abandoned property. MCL 567.261 provides

that “[t]his act shall be applied and construed as to effectuate its general purpose to make uniform

the law with respect to the subject of this act among states enacting it.” (Emphasis added.)

Uniformity in the law would not occur if persons could opt out of the UUPA claim procedure and

assert common law claims of their choice against the state in the Court of Claims.

To prevent conflict with other statutory schemes, the Legislature enacted MCL 567.262

which provides: “This act shall not apply to unclaimed, lost, or abandoned property, if the loss,

abandonment, or failure to claim the property is the subject of another statute of this state that

specifies to whom ownership of the property shall devolve.” Thus, where another statute addresses

the loss, abandonment, or failure to claim property, and specifies to whom ownership of the

property shall devolve, the UUPA procedure does not apply.

In this case, plaintiff did not allege below and she does not argue on appeal that her claim

for recovery of property “is the subject of another statute . . . that specifies to whom ownership of

the property shall devolve.” To the contrary, plaintiff’s position is that she is entitled to interest

on all property covered under the UUPA, not only those types of property for which the UUPA

authorizes the payment of interest. She does not assert that she is entitled to such interest under

any other statutory authority. Accordingly, MCL 567.262 does not support plaintiff’s argument

that she was not required to bring her claims under the UUPA. The UUPA does not otherwise

state or suggest that a person asserting an interest in unclaimed property paid or delivered to the

state treasurer may select some other method for making a claim for such property.

For these reasons, the Court of Claims did not err when it determined that plaintiff was

required to first pursue her administrative remedies under the UUPA before resorting to the courts.

-7-

In the UUPA, the Legislature provided the state treasurer with “exclusive jurisdiction” over the

payment of funds or property held by the state after it has been abandoned, despite the absence of

this specific phrase. Further, the Court of Claims did not err by holding that a person aggrieved

by a decision of the state treasurer must seek review of such decision in an action in the circuit

court. The Court of Claims Act does not vest the Court of Claims with jurisdiction over an appeal

from an administrative agency if the circuit court has exclusive jurisdiction over such appeals.

MCL 600.6419(5) states that the Court of Claims Act “does not deprive the circuit court of

exclusive jurisdiction over appeals from the district court and administrative agencies as

authorized by law.” By its plain terms, MCL 600.6419(5) applies when (1) the case is an appeal

from an administrative agency or district court, and (2) the circuit court has “exclusive jurisdiction

as authorized by law.” Under MCL 567.247, a person aggrieved by the state treasurer’s decision

must challenge that decision in an action filed in the circuit court. The Court of Claims, therefore,

correctly held that it lacked jurisdiction over the claims asserted by plaintiff.

We find no merit to plaintiff’s argument that the enactment of legislation to permit a claim

for “claim and delivery” supports her contention that she may bring such a claim in the Court of

Claims. MCL 600.2920(1) provides, in pertinent part, that, with some exceptions, “[a] civil action

may be brought to recover possession of any goods or chattels which have been unlawfully taken

or unlawfully detained and to recover damages sustained by the unlawful taking or unlawful

detention.” (Emphasis added.) Thus, an action for claim and delivery seeks the return of property

wrongfully taken and held, and allows damages for the period of wrongful detention. See also

MCR 3.105(A).

Abandoned property held by the state treasurer pursuant to its statutory authority

under the UUPA cannot be considered and is not property unlawfully taken or unlawfully detained.

Such property is held in trust until such time as the owner files a claim and the state treasurer

determines the claim’s validity.

Further, an action for claim and delivery applies only to tangible “goods or chattels,” MCL

600.2920(1), not intangible property, see Sparling Plastic Indus, Inc v Sparling, 229 Mich App

704, 714; 583 NW2d 232 (1998). In this case, the “property” that plaintiff asserts an interest in is

money, or money proceeds from previously sold property where the proceeds have been deposited

in the general fund subject to future disbursement. Money is fungible. See Lewis Estate v

Rosebrook, 329 Mich App 85, 104; 941 NW2d 74 (2019) (stating that “the funds that make up the

corpus [in a joint financial account] are, as all legal tender is, wholly fungible, thereby defeating

any action to return the precise property taken”). Accordingly, plaintiff cannot maintain an action

for claim and delivery respecting funds deposited in the state’s general fund pursuant to the UUPA.

MCR 3.105(A) provides, in pertinent part:

(A) Nature of Action; Replevin. Claim and delivery is a civil action to

recover

(1) possession of goods or chattels which have been unlawfully taken or

unlawfully detained, and

(2) damages sustained by the unlawful taking or unlawful detention.

(Emphasis added.)

-8-

Likewise, she cannot use such an action to recover interest on such moneys, even if she is able to

establish that she is entitled to such. We hold that the Court of Claims properly interpreted the

UUPA and correctly held that the UUPA provides the exclusive method by which a person may

recover abandoned property.

Affirmed.

/s/ James Robert Redford

/s/ Kathleen Jansen

/s/ Christopher P. Yates