Parmar v. Madigan
2017 IL App (2d) 160286
| Ill. App. Ct. | 2017Background
- Decedent Surinder Parmar died Jan 9, 2011; Illinois estate tax had been effectively repealed for deaths after Jan 1, 2010 but Public Act 96-1496 (eff. Jan 13, 2011) amended 35 ILCS 405/2(b) to revive the tax and applied retroactively to deaths after Dec 31, 2010, capturing Parmar’s estate.
- Executor Paminder S. Parmar filed an October 2015 complaint seeking declaratory relief that the amendment could not be applied retroactively (and was procedurally defective), and seeking refunds of tax, penalties, and interest paid under protest/duress.
- Defendants were Illinois Attorney General Lisa Madigan and Treasurer Michael Frerichs (Director of Revenue and Governor were named initially but later dismissed).
- Defendants moved to dismiss under section 2-619, asserting (1) sovereign immunity (plaintiff must sue in Court of Claims) and (2) the voluntary-payment doctrine (taxes were voluntarily paid). They also argued certain counts failed to state claims.
- Trial court dismissed for lack of jurisdiction (sovereign immunity), without reaching voluntary-payment; Parmar appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether suit is barred by sovereign immunity | Section 15(a) of Estate Tax Act and officer‑suit exception permit suit in circuit court | Immunity Act requires suits against the State to go to Court of Claims; §15(a) is not a clear waiver | Reversed: officer‑suit exception applies — allegations that the statute was void or unconstitutional mean defendants acted unlawfully and sovereign immunity does not bar circuit‑court suit |
| Whether §15(a) waives sovereign immunity | §15(a) authorizes circuit court to resolve tax disputes under the Act | §15(a) is not a clear, unequivocal waiver of immunity | Court did not rely on §15(a) as waiver; officer‑suit exception controlled |
| Whether voluntary‑payment doctrine bars recovery | Payment was made under duress (penalties, interest, and personal liability), so payment was involuntary and recovery is permitted | Payments were voluntary; plaintiff did not follow Protest Fund Act procedures | Payment found to be involuntary as a matter of law given statutory penalties/interest/personal liability; voluntary‑payment doctrine does not bar suit |
| Whether plaintiff had to proceed under Protest Fund Act | Not required where payment was involuntary/under duress | Protest Fund Act is the statutory mechanism to recover voluntarily paid taxes | Protest Fund Act not required here because payment was involuntary; plaintiff may pursue relief in circuit court |
Key Cases Cited
- Smith v. Jones, 113 Ill. 2d 126 (1986) (naming a state official does not evade sovereign immunity absent officer‑suit exception)
- Healy v. Vaupel, 133 Ill. 2d 295 (1990) (officer‑suit exception inapplicable where plaintiff alleges ordinary negligence within scope of duties)
- Geary v. Dominick's Finer Foods, Inc., 129 Ill. 2d 389 (1989) (voluntary‑payment doctrine bars recovery unless payment was involuntary or statute allows recovery)
- Wexler v. Wirtz Corp., 211 Ill. 2d 18 (2004) (Protest Fund Act permits recovery of tax paid under protest if statutory procedures followed)
- Ball v. Village of Streamwood, 281 Ill. App. 3d 679 (1996) (statutory penalties can render tax payment involuntary)
- CGE Ford Heights, L.L.C. v. Miller, 306 Ill. App. 3d 431 (1999) (claims alleging enforcement of an unconstitutional statute fall within officer‑suit exception)
- Goldstein Oil Co. v. County of Cook, 156 Ill. App. 3d 180 (1987) (threats of litigation alone may not suffice to show duress where no immediate statutory penalties existed)