Circuit Court LC No. 2014-004213-AA
Before: Gadola, P.J., and Wilder and Meter, JJ.
K & W Wholesale, LLC, and Visna Mati appeal as of right
an order granting defendants' motion for reconsideration
and their motion for summary disposition in this case
involving the interpretation of the Tobacco Products Tax Act
(TPTA), MCL 205.421 et seq. We affirm.
August 18, 2014, the Michigan State Police, acting on behalf
of defendant Department of Transportation ("the
Department"), conducted an inspection of plaintiffs'
facility in Sterling Heights. After observing various
purported violations of the TPTA, the officers seized 47
cases of tobacco from plaintiffs. On September 11, 2014, a
referee at the Department conducted an informal conference
concerning whether the Department legally seized
plaintiffs' tobacco and whether the tobacco should be
forfeited to the state. The Department argued, in part, that
plaintiffs violated MCL 205.426(6) by possessing tobacco
shipping cases that failed to identify the first purchaser of
the tobacco. The Department argued that the officers properly
seized the tobacco and that it should be forfeited.
Plaintiffs argued that they purchased the tobacco from a
licensed wholesaler, that they had invoices to prove that the
purchases were made legally, and that the product should be
returned to them.
the hearing, the referee issued an informal conference
recommendation. The referee concluded that the Department
properly seized the tobacco. The referee reasoned that, on
the date of the seizure, plaintiffs possessed cases of
tobacco with labels that did not bear the name of the first
purchaser of the tobacco. The referee noted that possession
of tobacco without proper identification of the first
purchaser was sufficient in itself to violate the TPTA and
was grounds for seizure and forfeiture.
September 22, 2014, defendant Kevin Clinton, on behalf of the
Department, adopted the referee's recommendation in a
Decision and Order of Determination ("the Order").
The Order stated that if plaintiffs disagreed with the
decision, they could file a written appeal in the circuit
court of the county where the seizure occurred. The Order
stated that the appeal "must be commenced in circuit
court within 20 days of this decision in accordance with . .
. MCL 205.429." Defendants submitted evidence that a
copy of the Order was received at the address of K & W
Wholesale on September 24, 2014.
October 30, 2014, plaintiffs filed a complaint in the circuit
court, attempting to appeal the Order. In the complaint,
plaintiffs argued that they were not able to file an appeal
with the circuit court within 20 days of the Order because
their attorney had not been timely served with a copy of it.
Plaintiffs also argued that any deficiency in the labeling of
the tobacco created only a presumption of a violation under
the TPTA, which they adequately rebutted. Plaintiffs
requested that the court vacate the Order.
December 1, 2014, defendants moved for summary disposition
under MCR 2.116(C)(4) (lack of subject-matter jurisdiction)
and (7) (violation of the statute of limitations). Defendants
argued that the court lacked subject-matter jurisdiction
because the 20-day limitations period had run. In response to
plaintiffs' argument that their attorney had not been
served with a copy of the Order, defendants argued that they
complied with the TPTA by notifying the person claiming an
interest in the seized property. The circuit court initially
denied defendants' motion for summary disposition in a
ruling dated February 5, 2015, stating that defendants had
"failed to provide the [c]ourt with substantively
admissible evidence to demonstrate that [plaintiffs] were
served with the decision that is the subject of this
appeal." Defendants filed a motion for reconsideration,
arguing that the trial court erred in finding no proper proof
of service. Defendants argued that counsel for plaintiffs had
admitted in his response to defendants' motion for
summary disposition that plaintiffs received a copy of the
Order on September 29, 2014. Defendants also pointed out that
they had presented a United States Postal Service (USPS)
tracking document showing delivery to plaintiffs' address
on September 24, 2014. Finally, defendant attached to their
motion for reconsideration an actual certified mail receipt
showing service at plaintiffs' address on September 24,
April 6, 2015, the trial court, relying on the certified mail
receipt, granted defendants' motion for reconsideration
and their motion for summary disposition. Plaintiffs now take
issue with this decision.
Court reviews decisions on motions for summary disposition de
novo." Durcon Co v Detroit Edison Co, 250
Mich.App. 553, 556; 655 N.W.2d 304 (2002). "When viewing
a motion under MCR 2.116(C)(4), this Court must determine
whether the pleadings demonstrate that the defendant was
entitled to judgment as a matter of law, or whether the
affidavits and other proofs show that there was no genuine
issue of material fact." Weishuhn v Catholic Diocese
of Lansing, 279 Mich.App. 150, 155; 756 N.W.2d 483
(2008) (citation and quotation marks omitted). "Summary
disposition under MCR 2.116(C)(7) is appropriate when the
undisputed facts establish that the plaintiff's claim is
barred under the applicable statute of limitations."
Kincaid v Caldwell, 300 Mich.App. 513, 522; 834
N.W.2d 122 (2013). "[A] party moving for summary
disposition under MCR 2.116(C)(7) may support the motion with
affidavits, depositions, admissions, or other admissible
documentary evidence, which the reviewing court must
Court reviews for an abuse of discretion a trial court's
decision regarding a motion for reconsideration.
Churchman v Rickerson, 240 Mich.App. 223, 233; 611
N.W.2d 333 (2000). In addition, "[i]ssues of statutory
interpretation are reviewed de novo." City of
Riverview v Sibley Limestone, 270 Mich.App. 627, 630;
716 N.W.2d 615 (2006).
TPTA "is at its heart a revenue statute, designed to
assure that tobacco taxes levied in support of Michigan
schools are not evaded." People v Beydoun, 283
Mich.App. 314, 327; 770 N.W.2d 54 (2009) (citation and
quotation marks omitted). If a person possesses tobacco in a
manner that violates the TPTA, the tobacco "may be
seized and confiscated" by the Department. MCL
205.429(1). After the tobacco has been seized, the person who
conducted the seizure must serve an inventory statement of
the seized property upon the person from whom it was taken.
MCL 205.429(3). Within 10 days of receiving the inventory
statement, the person from whom the property was seized may
demand a hearing before the state treasurer to determine
"whether the property was lawfully subject to seizure
and forfeiture." Id.
Department is then required to hold a hearing within 15 days
of the demand. Id. If, after the hearing, the
Department determines that the property was lawfully seized
and is subject to forfeiture, the person from whom the
property was seized, or any person with an interest in the
property, may file an appeal in the circuit court of the
county in which the property was seized. MCL 205.429(3) &
(4). The statute states that the suit "shall be
commenced within 20 days after notice of the ...