2021 IL App (3d) 200192-U
Ill. App. Ct.2021Background
- Plaintiffs (MB Financial Bank, New West, New Bluff, Burnham Management) operated Evergreen Terrace I & II (Section 8 housing); Joliet filed condemnation on October 7, 2005.
- Final condemnation judgment entered August 25, 2017, vesting fee simple in Joliet retroactive to October 7, 2005.
- Plaintiffs paid $6,350,472.61 in property taxes after October 7, 2005 and sued the Will County Treasurer in 2018 seeking a refund under 35 ILCS 200/20-175(a), plus declaratory relief and mandamus.
- Defendants (treasurer and multiple taxing bodies) moved to dismiss under sections 2-619 and 2-619.1, arguing plaintiffs lacked standing, failed to file tax objections, payments were voluntary, and no overpayment occurred.
- Trial court dismissed with prejudice, concluding plaintiffs lacked standing under section 20-175(a) and that declaratory/mandamus relief was barred; plaintiffs appealed.
- Appellate court reversed dismissal of the 20-175(a) refund claim (allowing it to proceed), affirmed dismissal of declaratory judgment and mandamus claims, and remanded for further proceedings including consideration of 2-615 arguments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing under 35 ILCS 200/20-175(a) | Plaintiffs can seek refund under 20-175(a) for taxes overpaid because title vested in Joliet retroactive to filing; no exemption application required | Plaintiffs lack standing because they never sought tax-exempt status | Plaintiffs have standing to pursue a 20-175(a) refund; lack of exemption filing is not a bar |
| Who was liable for taxes during condemnation pendency | Once judgment vested title retroactively to filing date, Joliet (not plaintiffs) was owner and liable for taxes from filing date | Defendants: Joliet only became liable from the taking judgment date, not retroactively | Court held Illinois law treats condemnor’s ownership as retroactive to filing for tax liability; plaintiffs may seek reimbursement |
| Availability and timeliness of refund under 20-175(a) | Taxes paid after filing were overpayments; refund claim arises when right to refund becomes clear (upon 2017 judgment), so 2018 suit is timely | Defendants: five-year limit or voluntary-payment doctrine bars recovery | 20-175(a) provides an exception to voluntary-payment rule; claim arose in 2017 so 2018 filing is timely |
| Declaratory judgment / mandamus and tax-objection requirement | Plaintiffs alternatively sought declaratory/mandamus relief and argued objection procedures were not ripe when taxes were paid | Defendants: plaintiffs should have paid under protest and filed tax objections under sections 23-5/23-15; declaratory/mandamus improper | Declaratory and mandamus claims dismissed: taxes were not shown to be "unauthorized by law" or exempt; objection/protest procedures were not required for 20-175(a) refund and tax-objection was not ripe when taxes were paid |
Key Cases Cited
- Patrick Engineering, Inc. v. City of Naperville, 2012 IL 113148 (procedural standards for section 2-619 motions)
- Van Meter v. Darien Park District, 207 Ill. 2d 359 (2003) (pleading-construction and standard of review on dismissal)
- Glisson v. City of Marion, 188 Ill. 2d 211 (1999) (standing reviewed de novo)
- Board of Junior College, Dist. 504 v. Carey, 43 Ill. 2d 82 (1969) (condemnee not liable for taxes after filing; statute portion invalidated as unconstitutional)
- Chicago Park District v. Downey Coal Co., 1 Ill. 2d 54 (1953) (condemnation law treating filing date as termination date for tax responsibility)
- City of Chicago v. McCausland, 379 Ill. 602 (1942) (condemnor may abandon action; equities in tax liability during long proceedings)
- Forest Preserve Dist. of Du Page County v. West Suburban Bank, 161 Ill. 2d 448 (1994) (retroactive vesting of title upon condemnation judgment)
- Forest Preserve Dist. v. First National Bank of Franklin Park, 2011 IL 110759 (2011) (distinguishes valuation date from tax-liability questions)
- Alvarez v. Pappas, 229 Ill. 2d 217 (2008) (definition of "overpayment" and accrual of refund claim)
- U.S. v. Dalm, 494 U.S. 596 (1990) (federal view that tax is overpaid when taxpayer pays more than owed)