Perkins v. QuinnPerkins v. Quinn
- Reporters:
- , , ,
- Before:
- Karnezis, Hall, Rochford
(Note: This syllabus constitutes no part of the оpinion of the court but has been prepared by the Reporter of Decisions for the convenience of the reader.)
Defendants, the Governor, Treasurer and Comptroller of the State of Illinois, could not be compelled to refund plaintiff‘s overpayment of his decedent‘s Illinois estate taxes with interest, since no appropriated funds were available to pay the refund, there was no statutory authority for the payment of interest on the refund due, and the trial court had no authority to issue a writ of mandamus against defendants.
¶ 1 Plaintiff Raymond Perkins, Jr., as executor of the estate of Herbert J. Perkins, filed a complaint for issuance of a writ of mandamus against defendants Patrick J. Quinn, Dan Rutherford and Judy Baar Topinka, in their official capacities as Governor, Treasurеr and Comptroller of the State of Illinois, respectively. Plaintiff alleged defendants were improperlywithholding $111,870 he had overpaid in Illinois estate tax. He sought to compel defendants to refund his overpayment and pay 10% interest on the refund. The circuit court dismissed plaintiff‘s motion with prejudice. On appeal, plaintiff argues the court erred in dismissing his complaint because (1) his deposit of monies with the Treasurer to pay estate tax per the directive of the Illinois Attorney General was impressed with a trust of which the Treasurer was the constructive trustee; (2) mandamus is the appropriate remedy to require an officeholder to perform duties imposed on that office by law; (3) plaintiff does not have an adequate remedy at law; and (4) he is entitled to interest on the monies the Treasurer had refused to return. We affirm.
¶ 2 Background
¶ 3 Herbert Perkins died in 2006. In June 2007, as executor of Perkins’ estate, plaintiff filed a 2006 Illinois estate tax and generation-skipping tax return form showing $973,636 due in estate tax. He paid the tax by depositing $973,636 with the office of the Cook County treasurer as required by
“The Attorney General‘s office has acquired a computer program that will make the computation [of Illinois estate tax], rather than the preparer performing numerous trials to obtain a figure. The preparer may cоntact our Office by mail or phone *** or may
access the program at our website.”1
¶ 4 A few days after plaintiff paid the tax, the Attorney General‘s office issued plaintiff a certificate of discharge and determination of tax showing the actual amount of tax due was $846,652. Plaintiff had paid $126,984 more in tax than was due.
¶ 5 Pursuant to
¶ 6 In June 2010, following revaluation of the estate, plaintiff submitted an amended estate tax return showing that the estate tax due was actually $861,776 ($15,114 more than the tax amount stated in the Attorney General‘s certificate of discharge) and his overpayment of $111,870 (rather than $126,984). Plaintiff filed an amended petition fоr refund of the $111,870. The Attorney General issued a supplemental certificate of discharge showing that plaintiff owed an additional $15,114 in tax and had paid that amount.
¶ 7 In February 2011, plaintiff filed a mandamus complaint against the Illinois Governor, Treasurer and Comptroller because he had not received the $111,870 refund of his overpayment. He alleged his attorneys had relied on the Attorney General‘s calculatiоns in preparing the estate‘s tax return and, as a result, he had submitted a tax overpayment; he was due $111,870 for his overpayment; the $111,870 was being wrongfully withheld from him by the Treasurer, either singly or in concert with one or both of the other defendants; defendants were holding the $111,870 in trust for him; and he was entitled to both refund of the $111,870 and 10% interest thereon. Plaintiff sought a mandamus order compelling defendants to refund him the $111,870 overpayment plus 10% annual interest.
¶ 8 Defendants filed a motion to dismiss the complaint pursuant to
¶ 9 Defendants submitted a supporting affidavit from Maureen Lydon, the general counsel
¶ 10 In April 2011, the Treasurer paid plaintiff $32,380.92 toward the tax refund. The balance still to be paid to plaintiff is $79,489.08.
¶ 11 On October 7, 2011, the court granted defendants’ motion and dismissed the complaint with prejudiсe. It held that it did not have the authority to compel the performance of an act that the Treasurer had already undertaken to perform. It stated a writ of mandamus would issue if the Treasurer was refusing to perform its duties but the Treasurer was not refusing to perform its duties. Rather, the Treasurer had agreed and wanted to perform its duties but was unable to due to the lack of approрriations. The court held that the Act did not require a lump-sum payment of an estate tax refund and the court could not impose such a requirement on the Treasurer. It found no statutory provision allowing for payment of interest.
¶ 12 Plaintiff timely filed a notice of appeal on October 24, 2011.
¶ 13 Analysis
¶ 14 1. Standard of Review
¶ 15 The court granted defendants’ motion to dismiss as to all counts of the complaint pursuant to
¶ 16 2. Writ of Mandamus
¶ 17 The court dismissed plaintiff‘s mandamus complaint for lack of subject matter jurisdiction pursuant to
¶ 18 Mandamus is an extrеme remedy, used to enforce, as a matter of right, a public officer‘s performance of his or her official duties where no exercise of discretion on the officer‘s part is involved. Burris v. White, 232 Ill. 2d 1, 7 (2009). In order to obtain a writ of mandamus, the requesting party must establish “a clear right to relief, a clear duty of the public official to act, and a clear authority in the public official to comply with the writ.” Burris, 232 Ill. 2d at 7. In this case, рlaintiff asserts he has the right to immediate refund of his overpayment and defendants have the duty and authority to issue that refund.
¶ 19
¶ 20 Estate tax is paid to the treasurer of the county in which the estate has the most holdings.
¶ 21 The Illinois Constitution provides that, once monies are deposited into the general revenue fund, only the General Assembly is authorized to make appropriations for State expenditures of those funds. American Federation of State, County & Municipal Employees v. Netsch, 216 Ill. App. 3d 566, 567 (1991);
“No money belonging to or left for the use of the State shall be expended or applied except in consequence of an appropriation made by law and upon warrant of the State comptroller. [Citation.] The comptroller is authorized, and indeed required, to refuse to draw a warrant if she determines that no appropriation or expenditure authority other than by appropriation is available to incur the obligation.” Netsch, 216 Ill. App. 3d at 567 (citing Ill. Rev. Stat. 1989, ch. 127, ¶ 171(a)).
¶ 22 A specific appropriation bill passed by the legislature is necessary in any instance where state funds are to be disbursed. Netsch, 216 Ill. App. 3d at 568 (following Quinn v. Donnewald, 107 Ill. 2d 179, 191 (1985)). The comptroller cannot issue funds in the absence of an appropriation bill signed into law. Netsch, 216 Ill. App. 3d at 568; Board оf Trustees of Community College District No. 508 v. Burris, 118 Ill. 2d 465, 477-79 (1987) (the Comptroller found to have properly refused to reimburse City Colleges of Chicago for funds City Colleges had to expend in providing statutorily mandated scholarships to veterans when the appropriation for the scholarship program proved to be underfunded; the Comptroller was not authorized to “override” the legislature‘s aсtion in making reductions in the appropriations bill). Once state money has been received by the Treasurer and deposited into the general fund, “the constitution prevents its withdrawal except in pursuance of an appropriation made by law.” Netsch, 216 Ill. App. 3d at 568.
¶ 23 Here, the legislature made appropriations for repayment of overpaid estate taxes in both 2010 and 2011 but, as defendants assert and plaintiff does not contest, those appropriations have been exhausted. The legislature made no 2012 appropriation for repayment of estate taxes. There are, therefore, no appropriation funds available for estate tax refunds.
¶ 24 Defendants agree that plaintiff is due a refund and state that the Treasurer fully intends to рay him that refund. They explain, however, that the Treasurer will pay the refund in installments as appropriation funds become available because there are no funds available from which to pay him in full. Given the number of other estates that are due a refund on their taxes and that requested their refunds before plaintiff, plaintiff might have to wait several years before he reсeives the full amount of his refund.
¶ 25 Plaintiff asks for a writ of mandamus ordering the Treasurer and/or Comptroller to issue the refund in one payment immediately. But, it being clear that the appropriations for estate tax refunds have been exhausted, a writ of mandamus cannot operate against these appropriations. People ex rel. Henry Marble Co. v. Nudelman, 374 Ill. 280, 285 (1940).
“[B]efore the Auditor of Public Accounts [now the Comptroller] may be directed by mandamus to issue and deliver warrants to anyone claiming payments from the State, it must be clearly shown that a proper appropriation has been made and that there are available funds in the appropriation, against which such warrants may be drawn.” People ex rel. Board of Trustees of the University of Illinois v. Barrett, 382 Ill. 321, 348 (1943).
There are no available funds in the appropriations against which a warrant for plaintiff‘s estate tax refund can be drawn. Therefore, neither the Treasurer nor the Comptroller can be directed by mandamus to issue plaintiff his estate tax refund. Indeed, because there are no appropriation funds available, it would be unlawful for the Comptroller to issue such a warrant for payment of the refund. Barrett, 382 Ill. at 349 (citing
¶ 26 Even if there were funds remaining or available in the appropriations, those funds would not necessarily bе available for payment of plaintiff‘s refund until after the refunds due the other estates that filed for tax refunds before plaintiff filed his had been fulfilled. Nudelman, 374 Ill. at 285-86 (payment from appropriation fund in priority order by request date).
¶ 27 The upshot is that there are no appropriation funds for refund of plaintiff‘s estate tax overpayment and, therefore, because neither the Treasurer nor the Comptroller has the authority for the expenditure of any fund(s) not appropriated to that particular purpose, a writ of mandamus cannot issue to force them to pay plaintiff his refund. See Netsch, 216 Ill. App. 3d at 568; Adams v. Nudelman, 375 Ill. 217, 219-20 (1940).
¶ 28 Notwithstanding plaintiff‘s argument to the contrary, it makes no difference that plaintiff relied on the Attorney General‘s advice in calculating the amount of estate tax. It makes no difference that plaintiff “did not contemplate” that, when he deposited his estate tax payment, the Treasurer would “retain [the overpayment] in the coffers of the State.” No matter what plaintiff thought, how valid his claim or how unfair the situation, there is no way around the fact that, because there are no appropriation funds available, neither the Treasurer nor the Comptroller has the authority to pay plaintiff his refund immediately. As to the Governor, he has neither statutory duty nor authority to pay plaintiff his refund and plaintiff does not suggest otherwise. Accordingly, because no defendant has the authority to issue the requested refund, the circuit court correctly found that it had no authority to issue a writ of mandamus against defendants. We affirm the court‘s dismissal of the plaintiff‘s mandamus complaint for lack of subject matter jurisdiction pursuant to
¶ 29 3. Interest
¶ 30 The court dismissed plaintiff‘s request for interest pursuant to
¶ 31 Plaintiff argues that, had he failed to pay the estate tax due, he would have been subject to a 10% penalty and, therefore, equity demands that he receive 10% annual interest on his refund. A taxpayer is not entitled to interest on a tax refund unless such interest is specifically authоrized by statute. Mannix v. Donnewald, 187 Ill. App. 3d 472, 476 (1989) (citing Lakefront Realty Corp. v. Lorenz, 19 Ill. 2d 415, 423 (1960)). Here, as the circuit court noted, the Act does not provide for payment of interest on estate tax refunds.
¶ 32 Plaintiff asserts the equity of the situation demands that he be compensated with interest on the refund to which he is entitled because the State wrongfully extracted and withheld the refund. There is nothing to show that, as plaintiff asserts, the State engaged in a deliberate course of wrongful conduct. Rather, the Attorney General made an error in calculating the estate tax due and plaintiff overpaid as a result. The Treasurer wants and intends to remedy that error by refunding the overрayment as required by statute, and only the lack of sufficient appropriations to satisfy the approximately $30 million in outstanding estate tax refunds is preventing this. We find no unjust enrichment by the State warranting imposition of a constructive trust or interest. See Mannix, 187 Ill. App. 3d at 483-84. The court properly dismissed plaintiff‘s claim for interest.
¶ 33 Conclusion
¶ 34 For the reasons stated above, we affirm the decision of the circuit court dismissing plaintiff‘s complaint with prejudice.
¶ 35 Affirmed.