The Michigan Court of Appeals has resurrected the Michigan Treasurer’s efforts to enforce an unclaimed property examination assessment going back nearly 20 years by holding that the state’s issuance of an exam determination (re)starts a new period of limitations. The decision reverses a trial court’s finding that the statute of limitations had expired when the exam process lasted more than eight years, and the new decision is likely to be further challenged in ongoing appeals.1 In this long-running dispute over unclaimed property exam processes, the issue is how to count the state’s 10-year statute of limitations on state unclaimed property enforcement, and specifically, whether the period is counted from the opening of the exam—allowing the state to review 10 years prior to when the exam started, regardless of how long the exam takes—or whether the period is counted from the completion of the exam, when the state seeks to enforce its exam findings at the conclusion of the review. Because unclaimed property examinations of large companies can last for many years—almost 10 years for the examinations at issue in this case—this timing question impacts almost the entirety of the exam findings in this case. And because Michigan’s rules are based on a model law, the outcome of this case could impact unclaimed property enforcement nationwide.
The “Zombie” Theory of the Statute of Limitations
The core of the dispute is whether Michigan can conduct unclaimed property examinations that go on indefinitely and then assess exam findings on decades-old transactions or whether Michigan’s unclaimed property assessments are time-limited based on when the state completes its exam and enforces its claim to any amounts alleged to be due. In an earlier decision, the Michigan Supreme Court held that the statute of limitations is not tolled while the state conducts its exam, which seemed to suggest that the state must complete its examinations within a time limit. On remand, a three-judge panel of the Court of Appeals has now held that “a distinct legal duty to deliver property arises from a notice-of-examination determination issued by the treasurer,” creating a new statute of limitations period that arises only upon completion of the exam.
The Court of Appeals decision seems to create a zombie theory of statute of limitations, a novel approach under which an otherwise expired period begins anew when the state commences enforcement of the examination findings. This interpretation potentially nullifies any time limits on the exam process; in theory, the state could initiate an examination, allow the exam to drag on indefinitely with no deadline, and then restart the clock by issuing an exam determination and starting post-examination enforcement efforts. Under this unusual interpretation of the limitations period, claims that were already seemingly time-barred are arguably resurrected when the state issues a determination.
The two examinations at issue in this case are typical of multistate unclaimed property examinations in many ways. The examinations, which were conducted separately starting in 2013, focused on the companies’ books and records dating back to 2002, including an extensive and detailed review process that lasted more than eight years. The examinations included many states; Michigan was one of many that retained a third-party audit firm to conduct the exam. In 2021, the Treasurer issued to each company a notice of examination determination demanding remittance of presumptively abandoned property from payroll and other payment checks. The companies both disputed that they actually owed the items, and they filed separate civil lawsuits in the circuit court seeking declaratory and injunctive relief, arguing that the statute of limitations barred state enforcement.
Can Unclaimed Property Examinations Last Forever?
After this recent decision, the law in Michigan—for now—seems to be as follows in simplified form: At the time the state initiates an unclaimed property examination, the state has the authority to review records going back the full 10-year limitation period based on when the exam began. So, for example, for an exam initiated in 2025, the state can review the prior 10 reporting years, back to the 2015 reporting year, which would include transactions back to 2012 for most property types. Then, according to the Michigan Supreme Court, the statute of limitations is not tolled while the exam is ongoing, and the limitations period would therefore expire on the oldest years as the exam proceeds. For example, if an exam starts in 2025 and lasts for seven years (until 2032), then at that time, the state’s authority could reach back only 10 years, to 2022. At that point, by issuing a notice of examination determination and demand for payment, the state creates a “new and distinct legal duty” for the company to pay, even for amounts allegedly owed from a period that otherwise appeared to be time-barred. And the state then has 10 years to file a court action to enforce the resurrected duty.
Further appeals are expected in the case, but unless the law is clarified, these court decisions seem to invite gamesmanship on the time periods and raise the potential for more disputes. More broadly, a practical concern is that under this interpretation, states and their examiners are not incentivized to proceed efficiently in exams because there may be no clear time limit on their processes. For companies facing exams, the process often feels like a never-ending fishing expedition, with examiners employing burdensome exam methods rather than practical approaches. States’ exam periods often cover 10 to 15 years, and for exams that routinely take another five to 10 years to complete, the periods at issue upon closing can stretch decades into the past.
Conclusion
Pending further appeals, the decision represents a victory for the Michigan Treasurer and for other unclaimed property administrators in states that follow the same model law. Even if the statute of limitations appears to have expired on the state’s examination authority, this decision by the Michigan Court of Appeals suggests that the state does not have an enforceable time limit to complete an unclaimed property examination.
1 The Walt Disney Company v. Rachael Eubanks, No. 360291, and Dine Brands Global, Inc. v. Rachael Eubanks, No. 360293 (Mich. Ct. App. Aug. 18, 2025).
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