ROBERT S GRIMM V DEPARTMENT OF TREASURY
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
ROBERT S. GRIMM,
FOR PUBLICATION
December 16, 2010
9:00 a.m.
Petitioner-Appellant,
v
No. 293457
Tax Tribunal
LC No. 00-355519
DEPARTMENT OF TREASURY,
Respondent-Appellee.
Before: M. J. KELLY, P.J., and K. F. KELLY and BORRELLO, JJ.
PER CURIAM.
Petitioner appeals by right the Michigan Tax Tribunal’s order denying the parties’ joint
motion to abey and dismissing his petition contesting a final assessment for $1,707,147 of unpaid
corporate taxes. The tribunal ultimately dismissed the petition because it found that the petition
was untimely filed. We reverse and remand for further proceedings.1
I. BASIC FACTS
Petitioner is a corporate officer of Affiliated Insurance Agency. On July 1, 2008, the
Michigan Department of Treasury assessed petitioner over a million dollars in unpaid corporate
taxes from certain tax periods in 2006 and 2007. These taxes were assessed against petitioner
individually under MCL 205.27a(5), which permits such an assessment against a corporate
officer who has “control or supervision of, or responsibility for” paying the corporation’s taxes.
On August 1, 2008, petitioner’s counsel received notice of the final assessment from the
department in a letter dated July 22, 2008.2 On August 5, 2008, petitioner’s counsel delivered
1
This appeal has been decided without oral argument pursuant to MCR 7.214(E).
2
Apparently, petitioner never received notice of the final assessment until August 1, 2008, and
respondent has not shown otherwise, i.e., there is no proof that the final assessment was mailed
in early July. Notably, respondent’s July 22nd letter suggests that petitioner did have some type
of notice because it states, “We have received and processed your correspondence, dated July 11,
2008, regarding Corporate Officer Liability.” However, it cannot be inferred based on this
statement that petitioner was in possession of the final assessment numbers.
-1-
the petition contesting the final assessment to Federal Express (FedEx) for overnight delivery.
The Tax Tribunal received the petition the next day. Petitioner alleged that he was not
individually liable for the withheld taxes because he did not have control of the corporation’s
financial decisions.
On December 16, 2008, the Tax Tribunal issued an order placing petitioner in default
because proof of service to the opposing party was lacking, as were the assessment numbers
being appealed. On December 31, 2008, petitioner’s counsel provided the required proof of
service. However, petitioner did not provide the Tax Tribunal with the assessment numbers
being appealed, despite efforts to obtain the assessments from respondent. Thus, the Tax
Tribunal entered an order of dismissal against petitioner on January 8, 2009, reasoning that
petitioner had failed to cure the default.
Petitioner finally received copies of the assessments on February 19, 2009. Instead of
moving to set aside the dismissal, petitioner filed the assessment numbers with the Tax Tribunal
on March 9, 2009. Subsequently, on March 12, 2009, the parties filed a joint stipulation
requesting an abeyance pending the outcome of an informal conference to contest the
assessments, consistent with MCL 205.21(2)(c) and (d). On March 26, 2009, the Tax Tribunal
denied the parties’ joint motion to abey, reasoning that because the case had already been
dismissed good cause to grant the motion was lacking. The Tax Tribunal also determined that
the original petition was untimely filed, citing MCL 205.22 and Electronic Data Sys Corp v Flint
Twp, 253 Mich App 538; 656 NW2d 215 (2002), and that it, thus, lacked authority to consider
the petition at the outset. It ordered that the January 8, 2009, order be corrected to indicate that
the untimely filing of the petition resulted in the dismissal of the case. Petitioner moved for a
rehearing, but the Tax Tribunal denied it. This appeal followed.
II. WAS THE PETITION UNTIMELY FILED?
Petitioner first argues that the Tax Tribunal erroneously determined that the original
petition was untimely filed on August 6, 2008, the date it was received, rather than timely filed
on August 5, 2008, the date counsel gave it to FedEx. Resolution of this issue requires the
interpretation and application of a statute to undisputed facts, which present questions of law that
we review de novo. Alvan Motor Freight, Inc v Dep’t of Treasury, 281 Mich App 35, 38; 761
NW2d 269 (2008). This Court’s primary goal in interpreting a statute is to determine and give
effect to the Legislature’s intent. Kmart Mich Prop Servs, LLC v Dep’t of Treasury, 283 Mich
App 647, 650; 770 NW2d 915 (2009). Our analysis begins with an examination of the language
used. “If the statutory language is unambiguous, the Legislature is presumed to have intended
the meaning expressed in the statute and judicial construction is not permissible.” City of Mt
Pleasant v State Tax Comm, 477 Mich 50, 53; 729 NW2d 833 (2007). “[A] provision of the law
is ambiguous only if it ‘irreconcilably conflicts’ with another provision . . . or when it is equally
susceptible to more than a single meaning.” Lansing Mayor v Pub Serv Comm, 470 Mich 154,
166; 680 NW2d 840 (2004) (citation omitted; emphasis in original). However, this Court will
generally defer “to the Tax Tribunal's interpretation of a statute that it is delegated to
administer.” Beznos v Dep’t of Treasury, 224 Mich App 717, 720-721; 569 NW2d 908 (1997).
Because this case was commenced after December 31, 2006, MCL 205.735a, which
governs the Tax Tribunal’s jurisdiction in assessment disputes, is applicable. MCL 205.735a(1).
MCL 205.735a provides in relevant part:
-2-
(6) The jurisdiction of the tribunal in an assessment dispute as to . . .
commercial real property, industrial real property, developmental real property,
commercial personal property, industrial personal property, or utility personal
property is invoked by a party in interest, as petitioner, filing a written petition on
or before May 31 of the tax year involved. The jurisdiction of the tribunal in an
assessment dispute as to . . . agricultural real property, residential real property,
timber-cutover real property, or agricultural personal property is invoked by a
party in interest, as petitioner, filing a written petition on or before July 31 of the
tax year involved. In all other matters, the jurisdiction of the tribunal is invoked
by a party in interest, as petitioner, filing a written petition within 35 days after
the final decision, ruling, or determination. . . .
(7) A petition is considered filed on or before the expiration of the time
period provided in this section or by law if 1 or more of the following occur:
(a) The petition is postmarked by the United States postal service on or
before the expiration of that time period.
(b) The petition is delivered in person on or before the expiration of that
time period.
(c) The petition is given to a designated delivery service for delivery on or
before the expiration of that time period and the petition is delivered by that
designated delivery service or, if the petition is not delivered by that designated
delivery service, the petitioner establishes that the petition was given to that
designated delivery service for delivery on or before the expiration of that time
period. [Emphasis added.]
MCL 205.735a(6) establishes filing deadlines for petitions contesting tax assessments. The first
two sentences of subsection (6) address deadlines for contesting certain types of assessments
related to real or personal property not involved in the present matter. In all other matters, which
would included the assessment at issue here—personal liability for unpaid corporate taxes, MCL
205.27a(5)—the petition must be filed within 35 days of the final assessment. Here, the parties
do not dispute that the petition would have been timely filed within this 35 day time period if it is
considered to have been filed on August 5, 2008. And, it is also clear that the petition was given
to a designated delivery service on August 5, 2008, because the FedEx mailing envelope is
marked, “05AUG08 19:13.”3
3
Under MCL 205.735a(11), “’designated delivery service’ [as used in MCL 205.735a] means a
delivery service provided by a trade or business that is designated by the tribunal for purposes of
this subsection.” Tribunal Notice 2007-6, effective December 31, 2007, includes FedEx, and
specifically FedEx Priority Overnight, as a designated delivery service for purposes of MCL
205.735a.
-3-
Thus, the question becomes, Was the petition, which was given to FedEx on August 5,
2008, timely filed consistent with MCL 205.735a(7)? Because it is undisputed that petitioner
used a designated delivery service, FedEx (Priority Overnight), only subpart (c) of subsection (7)
is applicable. Under this provision, as applicable to the present matter, a petition will be timely
filed if it “is given to a designated delivery service for delivery on or before the expiration of that
time period and the petition is delivered by that designated delivery service . . . .”
In our view, this portion of the provision is unambiguous. It simply means that the
petition must be given to a designated delivery service for delivery on or before the deadline
date—it does not have to be delivered by that date—and it must be delivered by that same
designated delivery service. This interpretation is supported by Tribunal Notice 2006-5, which
provides the following guidance:
Appeals are deemed to be filed by the appropriate deadline date if received
on that date, mailed by first-class mail provided the envelope is postmarked by the
United States Postal Service on or before that date, or delivered by one of the
delivery services designated herein provided the appeal was given to the delivery
service on or before that date. [Emphasis added.]
We find this guidance to be persuasive. Tribunal notices are intended to “provide the public with
an understanding of the Tribunals’ interpretation of the Tax Tribunal Act” and its “internal
processing practices,” and to “assist the Tribunal in clarifying the internal processing practices
for administrative staff and ensure uniform, efficient processing of cases among the Tribunal
members and its administrative staff.” Tribunal Notice 2004-1. Further, the Tax Tribunal’s
interpretation is convincing, inasmuch as it does not clearly conflict with MCL 205.735a(7)(c)
and it is consistent with the treatment of a filing when it is mailed by the United States postal
service, i.e., a petition is timely filed if it is postmarked on the expiration date of a time period,
MCL 205.735a(7)(a). Thus, affording “respectful consideration” to the Tribunal Notice and
absent “cogent reasons” for overruling it, Kmart Mich Prop Servs, 283 Mich App at 651, we
conclude that under MCL 205.735a(7)(c), a petition will be timely filed if a designated delivery
service is given the petition on or before the deadline date and it is subsequently delivered by
that same delivery service.
As noted, August 5, 2008 was the last day of the 35 day period that petitioner had to file
his petition. See MCL 205.735a(6). And, because petitioner gave the petition to FedEx on
August 5, 2008, the petition was timely filed, even though the Tax Tribunal received it the next
day after the expiration of the filing deadline. See MCL 205.735a(7)(c). Accordingly, the Tax
Tribunal’s order of dismissal on the basis that the petition was untimely filed was erroneous.
III. WAS PETITIONER’S FAILURE TO CURE THE DEFAULT GROUNDS FOR
DISMISSAL?
Petitioner also challenges the Tax Tribunal’s January 8, 2009, original order of dismissal
in which the Tax Tribunal dismissed the petition based on petitioner’s failure to timely correct
the default. Specifically, petitioner did not identify the assessment numbers being appealed
within the required 21 days. We agree with petitioner. We review for an abuse of discretion a
decision by the Tax Tribunal to dismiss a petition for failure to comply with its rules or orders.
Prof Plaza, LLC v Detroit, 250 Mich App 473, 475; 647 NW2d 529 (2002). The abuse of
-4-
discretion standard recognizes that there will be circumstances in which there will be more than
one reasonable and principled outcome, and selection of one of these principled outcomes is not
an abuse of discretion. Maldonado v Ford Motor Co, 476 Mich 372, 388; 719 NW2d 809
(2006).
Petitioner contends that this Court’s evaluation of factors analogous to those cited in
Vicencio v Jaime Ramirez, MD, PC, 211 Mich App 501; 536 NW2d 280 (1995), indicate that the
dismissal was an abuse of discretion and urges the adoption of similar factors here. In Vicencio,
this Court summarized the factors that a trial court applying the Michigan Court Rules should
consider before imposing the sanction of dismissal, including:
(1) whether the violation was willful [sic] or accidental; (2) the party's history of
refusing to comply with previous court orders; (3) the prejudice to the opposing
party; (4) whether there exists a history of deliberate delay; (5) the degree of
compliance with other parts of the court's orders; (6) attempts to cure the defect;
and (7) whether a lesser sanction would better serve the interests of justice. [Id. at
507.]
This Court has also evaluated the propriety of Tax Tribunal sanctions by considering similar
factors, albeit in unpublished cases.4 We find the analogy appropriate and adopt the same factors
for the Tax Tribunal to consider before imposing the drastic sanction of dismissal. When
considering the sanction of dismissal, the record should reflect that the Tax Tribunal “gave
careful consideration to the factors involved and considered all its options in determining what
sanction was just and proper in the context of the case before it.” Bass v Combs, 238 Mich App
16, 26; 604 NW2d 727 (1999) rev’d on different grounds 481 Mich 618 (2008).
Here, petitioner failed to comply with the Tax Tribunal’s directive that it provide the
assessment numbers being appealed within 21 days of the December 16, 2008 order. However,
nothing in the record indicates that petitioner’s failure to produce the assessments was willful or
that petitioner had a history of deliberately delaying the proceedings or refusing to abide by court
orders. Nor do we see how respondent would be prejudiced by petitioner’s failure to timely cure
the defect. Indeed, because the petition indicated that the dispute concerned “the full amount of
the Final Assessment, presumably $1,707,147.49, for withholding taxes, for 02/06-10/06, 12/06,
01/07-03/07, 06/07, and 8/07,” and because respondent issued the assessments, it is reasonable to
expect that respondent would have been able to determine the assessment numbers
corresponding to the identified periods. Thus, the degree of noncompliance and lack of resulting
prejudice does not warrant dismissal, see Stevens v Bangor Twp, 150 Mich App 756, 761; 389
NW2d 176 (1986) (concluding that dismissal of petition based on petitioner’s failure to appear at
counsel conference was an abuse of discretion), especially where there is no evidence on the
record that petitioner was in possession of the assessment numbers. Accordingly, we conclude
4
See, e.g., Patmon v Dep’t of Treasury, unpublished opinion per curiam of the Court of Appeals,
issued February 22, 2002 (Docket No. 227050), slip op pp 3-4. While we acknowledge that
unpublished cases are not binding, MCR 7.215(C)(1), this Court may view them as persuasive,
Dyball v Lennox, 260 Mich App 698, 705 n 1; 680 NW2d 522 (2003).
-5-
that the Tax Tribunal abused its discretion by dismissing the petition based on a failure to
provide the assessment numbers within 21 days.
Reversed and remanded for further proceedings not inconsistent with this opinion. We
do not retain jurisdiction.
/s/ Michael J. Kelly
/s/ Kirsten Frank Kelly
/s/ Stephen L. Borrello
-6-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
