MADISON TWO ASSOCIATES et al., Appellants, v. MARIA PAPPAS, Treasurer and ex officio Collector of Cook County, Appellant (The City of Chicago et al., Appellees).
Nos. 104321, 104322, 104333 cons.
Supreme Court of Illinois
February 22, 2008
227 Ill. 2d 474
Richard A. Devine, State‘s Attorney, of Chicago (Patrick T. Driscoll, Jr., Michael C. Prinzi, Marie E. Smuda and Tatia Gibbons, Assistant State‘s Attorneys, of counsel), for appellant Maria Pappas, Cook County Treasurer.
Mark R. Davis, of O‘Keefe, Lyons & Hynes, LLC, of Chicago, for appellants Madison Two Associates et al.
Vincent J. Getzendanner, Jr., and Glenn E. Schreiber,
Patrick J. Rocks and Lee Ann Lowder, of Chicago, for appellee Board of Education of the City of Chicago.
Mara S. Georges, Corporation Counsel, of Chicago (Benna Ruth Solomon, Myriam Zreczny Kasper and Julian N. Henriques, Jr., of counsel), for appellee City of Chicago.
Ares G. Dalianis, Michael J. Hernandez and Kory A. Atkinson, of Franczek Sullivan P.C., of Chicago, for amici curiae Palatine Community Consolidated School District No. 15 et al.
JUSTICE KARMEIER delivered the judgment of the court, with opinion.
Chief Justice Thomas and Justices Freeman, Fitzgerald, and Garman concurred in the judgment and opinion.
Justice Kilbride dissented, with opinion.
Justice Burke took no part in the decision.
OPINION
The issue in this case is whether taxing districts have the right to petition for leave to intervene in real estate tax objection cases filed by taxpayers in the circuit court of Cook County pursuant to the Property Tax Code (
The circumstances giving rise to the appeal are straightforward. Petitioner Madison Two Associates (Madison Two) holds an interest in certain real property located at 70 West Madison Street, in the City of Chicago, which is located in Cook County. The Cook County assessor‘s office determined that the property had a certain market value for the year 2001. Believing that this assessed value was too high, Madison Two filed a complaint with the Cook County board of review under section 16-95 of the Property Tax Code (
After the board of review rendered its decision on Madison Two‘s complaint, Madison Two believed that the value at which its property was assessed for 2001 remained too high. Under the Property Tax Code, it had two options for challenging the board of review‘s decision: (1) it could have filed an appeal with the Property Tax Appeal Board (Board) (see
As with a challenge to the assessor‘s valuation in the board of review, the right to seek review of the board of review‘s decision through the Property Tax Appeal Board or by means of a tax objection suit is not limited to taxpayers with an interest in the property. Appeals to the Board may also be brought by “any taxing body that has an interest” in the board of review‘s decision (
Proceedings before the Property Tax Appeal Board are governed by rules of practice and procedure promulgated by that body. See
While the Board‘s rules and regulations apply to proceedings before that body, the procedures followed in circuit court on tax objection complaints are governed by the Property Tax Code itself and, where it is silent, by article II of the Code of Civil Procedure (
“[a]ll persons may join in one action as plaintiffs, in whom any right to relief in respect of or arising out of the same transaction or series of transactions is alleged to exist, whether jointly, severally or in the alternative, whenever if those persons had brought separate actions any common question of law or fact would arise.”
735 ILCS 5/2-404 (West 2002).
Unlike joinder, the Property Tax Code does not specify when intervention is permissible. As we have indicated and as has long been established, when the Property Tax Code is silent on a matter of procedure, the procedures specified by article II of the Code of Civil Procedure and the rules of our court apply instead.
“(a) Upon timely application anyone shall be permitted as of right to intervene in an action: (1) when a statute confers an unconditional right to intervene; or (2) when the representation of the applicant‘s interest by existing parties is or may be inadequate and the applicant will or may be bound by an order or judgment in the action; or (3) when the applicant is so situated as to be adversely affected by a distribution or other disposition of property in the custody or subject to the control or disposition of the court or a court officer.
(b) Upon timely application anyone may in the discretion of the court be permitted to intervene in an action: (1) when a statute confers a conditional right to intervene; or (2) when an applicant‘s claim or defense and the main action have a question of law or fact in common.
***
(f) An intervenor shall have all the rights of an original party, except that the court may in its order allowing intervention, whether discretionary or a matter of right, provide that the applicant shall be bound by orders or judgments, theretofore entered or by evidence theretofore
received, that the applicant shall not raise issues which might more properly have been raised at an earlier stage of the proceeding, that the applicant shall not raise new issues or add new parties, or that in other respects the applicant shall not interfere with the control of the litigation, as justice and the avoidance of undue delay may require.” 735 ILCS 5/2-408 (West 2002).
Madison Two elected not to challenge the board of review‘s assessment decision through an appeal to PTAB. Instead, it chose to pay the tax due on the subject property and then file a tax objection complaint in circuit court. In accordance with section 23-15 of the Property Tax Code (
During the same period Madison Two filed its tax objection complaint, numerous other taxpayers, including petitioner Shorenstein Realty Advisors, filed similar tax objection complaints in the circuit court of Cook County challenging decisions by the Cook County board of review with respect to the valuation of property in which they held interests. In 30 of these cases, including Madison Two‘s, the City of Chicago (the City) and the Chicago Board of Education (the Board of Education) filed joint petitions pursuant to section 2-408 of the Code of Civil Procedure (
All 30 cases in which intervention was requested involved major commercial buildings in downtown Chicago. The properties included the Sears Tower, the Aon Building, the John Hancock Center, Bank One Plaza (now known as Chase Tower), One and Two Prudential Plaza, 900 N. Michigan Ave., Three First National Plaza, The Emporis Building, the Sheraton Chicago Hotel and Towers, the United Building, Madison Plaza, Two Illinois Center, 321 North Clark Street (formerly known as the Quaker Tower), the Hyatt Regency Chicago, the Heller International Building, the Chicago Title Tower, the Chicago Mercantile Exchange, One IBM Plaza/330 N. Wabash, the Hilton Chicago, the Palmer House Hilton and Water Tower Place. The reason the City and the Board of Education sought to participate in these particular cases is the magnitude of the assessment reductions and corresponding property tax refunds they requested. If full relief were granted, tax refunds averaging over $1 million per property would be necessary.
The various petitions for intervention filed by the City and the Board of Education were all similar in form and content. They alleged, inter alia, that the City and the Board of Education should be permitted to join in the proceedings because: (1) the City and the Board of Education are taxing districts whose revenues would be adversely affected if the court allowed the various objections and reduced the assessed valuations (see
The Cook County collector, represented by the Cook County State‘s Attorney, filed written responses to the intervention petitions. Although the collector denied the intervenors’ claims that the State‘s Attorney lacked sufficient resources to adequately defend the County‘s interests, she advised the court that intervention by the City and the Board of Education “may assist in the expeditious resolution of this matter by affording additional resources, including providing appraisals in addition to those appraisals obtained by the Collector.” The collector further stated that the position of the City and the Board of Education with respect to these cases presented “a situation unique among the tax objections cases that are generally pending in [the circuit court of Cook County]” because the subject property was of “a singular type and class *** that comprises a disproportionately large part of the overall assessed value of the real estate tax base” of those taxing districts. The collector likewise acknowledged that the reductions in the assessed valuations and the tax refunds such reductions would require would have a considerable impact on both the City and the Board of Education.
In light of these considerations, the county collector advised the court that she had no objections to allowing the City and the Board of Education to intervene. Her approval, however, was not unconditional. The collector asserted that if intervention were permitted, it should be subject to the qualification that the State‘s Attorney retained sole authority to control the defense in the case and to compromise objectors’ claims pursuant to section 23-30 of the Property Tax Code (
The tax objectors in the various cases also filed
The City and the Board of Education filed joint replies to the tax objectors’ responses, disputing each of their arguments. A hearing was then conducted during which the court heard lengthy arguments by counsel. At the conclusion of that hearing, the circuit court announced that it would not permit either the City or the Board of Education to intervene. The court based that decision on its belief that, contrary to the authorities cited earlier in this opinion, the Property Tax Code should not be construed as authorizing taxing districts to intervene in tax objection cases, at least where, as here, the objection challenges the assessed valuation of the property, and that section 2-408 of the Code of Civil Procedure (
After announcing his ruling, the circuit judge asked the parties to prepare a written order for his signature. They did so. That order, which the trial judge signed,
As indicated earlier in this opinion, the appellate court reversed and remanded. Rejecting the circuit court‘s analysis, the appellate court concluded that section 2-408 of the Code of Civil Procedure (
The Cook County collector and the two groups of tax objectors led, respectively, by petitioners Madison Two and Shorenstein Realty Advisors, each filed separate petitions in our court seeking leave to appeal from the appellate court‘s judgment. We allowed all three petitions and consolidated the cases for purposes of briefing, argument and disposition. The central issue before us is the same in each case. It is not whether the particular taxing
We consider first the challenge asserted by the county collector, for it is easily resolved. The collector contends that the appellate court‘s decision is fatally infirm because it will have the effect of permitting taxing authorities to usurp the Cook County State‘s Attorney‘s constitutional authority to conduct and control litigation on behalf of the County and its statutory authority to compromise tax objections. That is not so. It will do neither. The effect of the appellate court‘s judgment is simply to confirm that taxing districts have the right to intervene in tax objection cases pending in circuit court, just as they have the right to intervene in proceedings before the board of review and appeals to the Property Tax Appeal Board.
As a constitutional officer whose duties are analogous to and coincident with those of the Attorney General, a State‘s Attorney is the only person empowered to represent a county in matters when the county is the real party in interest. County of Cook ex rel. Rifkin v. Bear Stearns & Co., 215 Ill. 2d 466, 483 (2005). In this case, however, Cook County is clearly not the only real party in interest. Numerous taxing districts, including the City and the Board of Education, also have a legally cognizable interest in the outcome of these proceedings. Under the Illinois Constitution of 1970, these governmen-
That the State‘s Attorney and only the State‘s Attorney has the authority to compromise a tax objection claim is indisputable. See
The county collector has suggested that if we do not reverse the appellate court and bar intervention, tax objection suits will become clogged with taxing districts each insistent on having their own say regarding the challenged assessment. If that were so, however, one would expect to see a similar problem with proceedings in the board of review and the Property Tax Appeal
The matters presently before us today further belie any concern that taxing districts may come cascading into tax objection cases if intervention is permitted. The tax objections in this case involve some of the most valuable property in the entire state, in the state‘s most populous county, where taxing districts are abundant. Yet, in no case was intervention sought by more than two districts. If that is the situation at the high end of the assessment scale, it seems highly unlikely that more routine cases will attract intervenors in any significant numbers, if they attract any at all. In the overwhelming majority of cases, participating in tax objection cases will simply not be worth the taxing districts’ time and expense.
Whenever intervention is at issue, there is, of course, the potential that addition of the new parties may create complications that adversely affect the just and prompt resolution of the matter. No such problems are evident to us in this case, however, and we think that they are unlikely to occur where, as here, intervention is sought by a taxing body. The goal of such taxing districts, after all, will normally be the same as that of the county collector, namely, to defend the assessment and argue against its reduction. Moreover, because the interests of the taxing districts will coincide with those of the county collector in most instances, it seems more likely that the legal and evidentiary resources they bring to bear will help rather than hinder the efforts of the State‘s Attorney in representing the county collector‘s position. This is not idle speculation on our part. It is supported by the county collector, herself, who candidly admitted in her brief that the reason the State‘s Attorney consented to the entry of appearance by counsel for the City and
We note, moreover, that to the extent that the participation of intervenors may threaten to introduce complication or divisiveness into tax objection cases, section 2-408 of the Code of Civil Procedure (
As a practical matter, the only conflict likely to occur between the county collector and intervening taxing districts is if the State‘s Attorney, who represents the collector, believes that the dispute should be compromised for a lower amount than the intervenors would like. Again, however, the statutory scheme provides a complete solution. Under the law, the State‘s Attorney is the designated agent for negotiating compromise agreements with the taxpayers. The State‘s Attorney, not the taxing districts, will therefore have the final say.
The county collector asserts that our decision in People ex rel. Devine v. Murphy, 181 Ill. 2d 522 (1998), supports a contrary conclusion. We disagree. The issue in Murphy was whether section 23-15 of the Property Tax Code (
Nothing in our decision today brings that proposition into question. As we have just discussed, allowing intervention by taxing districts in no way infringes on the authority conferred on State‘s Attorneys by section 23-30.
We turn then to the arguments against intervention advanced by Madison Two and the other remaining tax objectors in this case. Echoing the position of the county collector, they also contend that permitting intervention would be an impermissible infringement of the State‘s Attorney‘s constitutional and statutory powers. For the same reasons set forth above, that argument is untenable.
The tax objectors further argue that individual taxing districts have no legally cognizable interest in the outcome of challenges to assessment valuations and therefore lack standing to participate in tax objection cases. This argument is untenable as well. Taxing districts have a direct and immediate stake in how assessment challenges are decided, for if assessments are ultimately found to be excessive, the portion of the taxes attributable to the overassessment must be refunded, and the tax proceeds available to the taxing districts will necessarily be reduced. While some taxing districts may ultimately be able to make up for the shortfall in subsequent years by increasing their tax rates, the objectors concede that others, including the Chicago Board of Education, are subject to statutory rate limitations and the Property Tax Extension Limitation Law (
That individual taxing districts have a legally cognizable interest in tax assessment proceedings was recognized by the General Assembly itself when it enacted the Property Tax Code. As we have described, the Property Tax Code confers on taxing districts the right to bring the initial challenge to an assessment in the board of review (
In an effort to avoid this problem, the tax objectors attempt to draw a contrast between the way intervention is handled in Board proceedings with the way it is dealt with in tax objection cases and to suggest, thereby, that the legislature‘s true intent was to prohibit intervention. Indeed, they go so far as to argue that under the present statutory scheme, the only proper parties to tax objection cases in Cook County are the particular taxpayers with an interest in the property and the State‘s Attorney, as representative of the county collector.
One can certainly see the practical advantages to such a system from the property owner‘s point of view. The probability is that the only other parties who might be interested in participating in the case will be entities such as taxing districts, whose interests will be adverse to the owners‘. Fewer parties therefore means fewer adversaries and perhaps a correspondingly greater opportunity to persuade the circuit court that their assessments should be lowered. Under the law, however, the tax objectors’ theory cannot be sustained.
An immediate obstacle to their construction of the
The tax objectors’ attempt to distinguish the legislature‘s treatment of the Property Tax Appeal Board appeals from tax objection cases is flawed for another reason as well. The Property Tax Code is not more definite with regard to intervention in Board appeals than it is in tax objection cases. Contrary to the tax objectors’ arguments, the law handles intervention in an analogous fashion under both avenues of recourse. In Board appeals, just as in tax objection cases, there is no specific provision authorizing intervention by taxing districts. The right to intervention in Property Tax Appeal Board proceedings is found in the agency‘s administrative regulations governing the procedures to be fol-
The statutory provisions governing tax objection cases at issue in this case were enacted as part of the current Property Tax Code in 1994. When the General Assembly enacted that law, it did so against the background of an existing legislative scheme that included section 1-108(b) of the Code of Civil Procedure (
Faced with the weight of authority supporting the conclusion that the law does authorize taxing districts to intervene in tax objection cases, the tax objectors in this case advance one final argument. They propose that we construe the governing provisions as permitting intervention only in cases involving objections to the tax levy or rate, and not in cases where, as here, the objection is to the amount of the assessed valuation. This we cannot do. The procedures set forth in the Property Tax Code regulating tax objections in the circuit court govern whenever “any person desires to object to all or any part of a property tax for any year, for any reason” (emphasis added) (
For the foregoing reasons, the circuit court erred when it held that taxing districts have no right to petition for leave to intervene in real estate tax objection cases filed by taxpayers in the circuit court of Cook County pursuant to the Property Tax Code (
Affirmed.
JUSTICE BURKE took no part in the consideration or decision of this case.
JUSTICE KILBRIDE, dissenting:
I respectfully dissent from the majority opinion on the merits of the intervention issue. I write separately for two reasons. First, I agree in general with the majority that the Code of Civil Procedure, rather than the Property Tax Code, applies to intervention petitions in real estate tax objection cases, but for different reasons. Second, I would affirm the circuit court‘s order denying the petitions to intervene because petitioners have failed to state a basis for intervention under section 2-408 of the Code of Civil Procedure (
Unlike the majority, I find no support for intervention in the Property Tax Code. The majority states: “the Property Tax Code permits additional parties to partici-
Nevertheless, section 1-108(b) of the Code of Civil Procedure provides the answer:
“In proceedings in which the procedure is regulated by statutes other than those contained in this Act, such other statutes control to the extent to which they regulate procedure but Article II of this Act applies to matters of procedure not regulated by such other statutes.” (Emphasis added.)
735 ILCS 5/1-108(b) (West 2002).
Accordingly, absent a regulatory procedure in the Property Tax Code, section 1-108(b) of the Code of Civil Procedure triggers section 2-408 of the Code of Civil Procedure on intervention in real estate tax objection cases.
Despite section 2-408‘s application in real estate tax objection cases, I disagree with the majority that the denial of the petitions to intervene must be reversed and the cause remanded with directions to hold a hearing on the intervention petitions under section 2-408 (
In my view, the petitions to intervene do not adequately allege a basis for intervention under section 2-408(a). Section 2-408(a) of the Code of Civil Procedure states:
“Intervention. (a) Upon timely application anyone shall be permitted as of right to intervene in an action: (1) when a statute confers an unconditional right to intervene; or (2) when the representation of the applicant‘s interest by existing parties is or may be inadequate and the applicant will or may be bound by an order or judgment in the action; or (3) when the applicant is so situated as to be adversely affected by a distribution or other disposition of property in the custody or subject to the control or disposition of the court or a court officer.”
735 ILCS 5/2-408(a) (West 2002).
First, section 2-408(a)(1) is inapplicable here because no statute confers an unconditional right to intervene in real estate tax objection cases. Next, to state a basis for intervention under section 2-408(a)(2), petitioners were required to allege specific facts demonstrating that the State‘s Attorney‘s representation is or may be inadequate and to allege specific facts showing that the petitioners will or may be bound by an order or judgment in the real estate tax objection case. The petitions allege that “[t]he State‘s Attorney‘s Office devotes 17 to 18 assistant [S]tate‘s [A]ttorneys to its Real Estate
The petitions further allege mere conclusions that “[o]n information and belief, the State‘s Attorney‘s Office lacks the financial resources to obtain appraisal reports in defense of the current assessment on all but a small percentage of tax objection complaints filed each year.” The petitions do not allege specific facts to support this contention.
In fact, in its response to the petitions to intervene, the Cook County State‘s Attorney, on behalf of the county collector, denied each allegation offered by the petitioners in support of the petition to intervene “insofar as those allegations aver that the State‘s Attorney lacks the requisite resources, both in terms of professional staffing and evidentiary appraisal resources, to conduct the adequate representation of the several defendant interests in this case.” Without more, petitioners only offered
The petitions also do not sufficiently allege a basis for intervention under section 2-408(a)(3) of the Code of Civil Procedure. Under subsection (a)(3), petitioners were required to allege specific facts showing that they are “so situated as to be adversely affected by a distribution or other disposition of property in the custody or subject to the control or disposition of the court.”
The petitions allege a portion of petitioners’ revenue is generated from real estate taxes collected by the Cook County treasurer and that refunds of property tax revenues are paid by the county treasurer from a taxing district‘s current collections. To the extent the subject properties’ assessed values are reduced, petitioners allege they “will suffer a combined direct revenue loss of $.70 for every dollar refunded to the property owner[s].” Any such loss “directly reduces the revenue that is available to the City to provide City services” and “reduces the programs and educational opportunities the Board of Education is able to offer the children of the City of Chicago.” The petitions conclude, “[t]he petitioners are so situated as to be adversely affected by any settlement or trial of this action that calls for any reduction in the assessed value of the subject property.”
Those allegations are insufficient to satisfy the subsection (a)(3) requirements. If the circuit court ultimately determines that the plaintiffs’ properties are overassessed, it may direct the county collector to distribute a refund to plaintiffs, and any refund “shall be made *** from the next funds collected after entry of the final order until full payment of the refund and interest thereon has been made.”
Additionally, petitioners have failed to present any petition or motion, as required by section 2-408(e). Section 2-408(e) requires a petition for intervention be accompanied by the initial pleading or motion for proposed filing. See
For the foregoing reasons, I would affirm the circuit court‘s order denying the petitions to intervene. I therefore respectfully dissent.