Notices Regarding Offsets Constituted a Decision or Assessment
In Chrysler Financial Services Americas, L.L.C. v. Department of Treasury, Michigan Court of Appeals, No. 302299, March 20, 2012, the Court of Appeals rules the Court of Claims lacked subject matter jurisdiction to grant a refund because notices regarding offsets constituted a "decision" or "assessment" within the meaning of the applicable statutory provision pertaining to an appeal of a contested assessment and the limited liability company (LLC) failed to appeal the offsets within the 90-day statutory period. The LLC, which was a financial services company, filed its complaint more than three years after the notices were sent.
In this case, the Department of Treasury informed the LLC that it seized money owed to the LLC and applied the amount to accounts receivable of a related automotive corporation. The LLC claimed that the Department of Treasury intercepted the funds improperly and without authority and failed to assert a valid defense to the LLC's claim for a refund. The LLC also argued that the notices that the Department of Treasury sent informing the LLC of the offsets did not constitute assessments, decisions, or orders within the meaning of the statutory provision, and, therefore, the 90-day time period did not apply.
Because the statutory provision did not define the terms "assessment","decision", or "order", and because the terms were not legal terms of art, the Michigan Court of Appeals consulted a lay dictionary. The most pertinent definitions of "decision" were "something that was decided" or a "resolution." In accordance with these definitions, the appellate court decided that the notices constituted decisions of the Department within the meaning of the statutory provision. The notices informed the LLC that the Department decided to seize its funds and apply the funds to the tax liability of the automotive corporation. Therefore, according to the appellate court, the notices could properly be characterized as "something that was decided" or a "resolution." Because the LLC failed to timely appeal the offsets, the court of claims was divested of subject matter jurisdiction to decide the LLC's challenge to the offsets.