UNITED LEGAL FOUNDATION et al., Plaintiffs-Appellees, v. THE DEPARTMENT OF REVENUE et al., Defendants (Oak Park Investments, Inc., Defendant-Appellant).
No. 1-94-0879
First District (5th Division)
March 31, 1995
Rehearing denied May 26, 1995
272 Ill. App. 3d 666
Joyce found that the present value of Lerner and Breen‘s offer of $4.7 million to be paid over 10 years equalled or exceeded the sum of the present values of Daniel‘s DIA shares, his derivative claim, and his right of appeal. Especially in light of Daniel‘s admitted inability to support his children, the court ordered the sale of the assets in the best interests of the children. The court‘s findings are not contrary to the manifest weight of the evidence and the court did not abuse its discretion by ordering the sale. We affirm the order of March 2, 1994, in docket number 1-94-0829.
Affirmed.
GORDON and T. O‘BRIEN, JJ., concur.
Jonathan L. Smith, of Balin, Smith & Associates, Inc., of Chicago, for appellant.
Rufus Cook, of Cook Partners Law Offices, Ltd., of Chicago, for appellees United Legal Foundation and Elijah Muhammad Foundation.
Roland W. Burris, Attorney General, of Chicago (Barbara E. Pitts, Assistant Attorney General, of counsel), for appellee Department of Revenue.
JUSTICE T. O‘BRIEN delivered the opinion of the court:
Plaintiffs, the United Legal Foundation and the Elijah Muhammad Foundation (collectively, the Foundations), obtained a preliminary injunction against defendant Oak Park Investments, Inc. (Oak Park). The circuit court enjoined Oak Park from proceeding on its petition for the issuance of a tax deed. Oak Park challenges the propriety of the injunction. We reverse.
BACKGROUND
The Foundations acquired certain properties in 1989. In January 1991, the Foundations filed applications for tax exemptions for the property for the year 1990. The Cook County Board of Appeals (Board of Appeals) denied the applications, and the Foundations sought a hearing from the Department. The Department conducted a hearing and affirmed the Board of Appeals’ denial on January 13, 1993. The Foundations filed a complaint for administrative review of the Department‘s decision on February 17, 1993. In addition to naming the Department as a defendant, the Foundations also named Thomas C. Hynes, Cook County assessor; Edward Rosewell, Cook County treasurer; and David Orr, Cook County clerk (collectively, County defendants), as defendants. The Foundations alleged that the County defendants illegally had assessed the property during the time the exemption applications were under consideration. They further
Eleven months passed without any significant action in the case. On January 25, 1994, the Foundations moved for summary judgment and a preliminary injunction. In the motion, the Foundations claimed several of the parcels subject to administrative review had been sold, with the redemption period to expire on February 14, 1994. They also asserted they were without funds to redeem any of the property. The Foundations maintained they were entitled to injunctive relief because they were without a remedy at law and would suffer irreparable injury in losing the property. The Foundations identified Oak Park as one of the tax buyers.
The circuit court permitted the Foundations to amend their complaint to include as defendants the various tax buyers who had purchased the back taxes of the lots at issue. The Foundations again sought administrative review against the Department and requested injunctive relief against the County defendants and the tax buyers. Ultimately, the Foundations filed a three-count second amended complaint. In count I, the Foundations sought administrative review of the Department‘s decision regarding the tax-exempt status of the property. Count II sought injunctive relief against the County defendants, and count III sought injunctive relief against Oak Park and various other tax buyers.
In its motion to dismiss, Oak Park maintained that it had purchased the property at the annual tax sale held on February 24, 1993. The sale was conducted pursuant to a circuit court order of judgment and sale. Oak Park argued the Foundations’ injunctive action constituted an improper collateral attack on the judgment and sale proceedings. Oak Park claimed it had filed a tax deed petition on July 1, 1993, of which the Foundations had notice. The Foundations did not deny receiving notice.
The circuit court indicated that it would hear and decide the administrative review portion of the second amended complaint at a later date. However, the court stayed the effect of the Department‘s denial of the Foundations’ applications for tax exemption.1
As to Oak Park and the County defendants, the circuit court
ANALYSIS
Both the Department and Oak Park maintain the circuit court improperly granted the preliminary injunction because the court only had jurisdiction to review the propriety of the Department‘s exemption decision. We disagree.
Although
Oak Park next challenges the issuance of the injunction. It asserts the Foundations used the injunction action to improperly mount a collateral attack upon the separate tax delinquency proceedings
A party seeking an injunction must establish that it (a) possesses a certain and clearly ascertainable right which requires protection, (b) will suffer irreparable injury if the injunctive relief is denied, and (c) lacks an adequate remedy at law. (Local 1894 v. Holsapple (1990), 201 Ill. App. 3d 1040, 1045, 559 N.E.2d 577.) Another factor often cited is the balancing of the relative convenience and injuries to the parties. (Board of Trustees of Community College District No. 508 v. Bakalis (1978), 64 Ill. App. 3d 967, 382 N.E.2d 26.) The granting of injunctive relief is within the discretion of the circuit court. (Regional Transportation Authority v. Burlington Northern Inc. (1981), 100 Ill. App. 3d 779, 784, 426 N.E.2d 1143.) Upon review, this court must determine whether the court correctly exercised its broad discretionary powers. (Wessel Co. v. Busa (1975), 28 Ill. App. 3d 686, 690, 329 N.E.2d 414Jefco Laboratories, Inc. v. Carroo (1985), 136 Ill. App. 3d 793, 483 N.E.2d 999.
Generally, courts will not grant injunctive relief in tax cases because the legislature has created a statutory scheme in which the remedies are contained. (Finn v. Tucker (1980), 81 Ill. App. 3d 1038, 402 N.E.2d 358.) The resolution of the issues raised by the parties requires this court to examine the various procedures of the Revenue Act which were employed in this case in light of the injunctive relief principles cited above.
THE EXEMPTION APPLICATIONS
At the time the Foundations applied for tax-exempt status, the procedure was governed by section 19.7 of the Revenue Act. (
In view of these statutory provisions, the County defendants acted in accordance with the Revenue Act in assessing taxes against the Foundations’ properties during the time in which the exemption applications were under consideration. Thus, the Foundations’ allegations that these assessments were “illegal” are unfounded. The plain language of the statutes indicates that the taxpayer is to pay the taxes while the exemption application process is ongoing. If the property is found to be exempt, refunds are to be made to the taxpayer.3 Our reading of the exemption application provisions is consistent with judicial interpretation of the exemption process. Tax-
DELINQUENCY PROCEEDINGS
At any time after property taxes become delinquent, the Revenue Act allows the collector to publish an advertisement which gives notice of his intended application for judgment and sale of the delinquent property. (See
However, in granting the injunction in this case, the circuit court ruled section 194 (
Our courts have likened the collector‘s application to a complaint which must be answered so as to avoid default. (People ex rel. Reid v. Adkins (1971), 48 Ill. 2d 402, 405, 270 N.E.2d 841.) If a taxpayer fails to object to the application, the judgment and order of sale acts as a default judgment against the property for the year in question. (People v. Hagerty (1982), 104 Ill. App. 3d 240, 432 N.E.2d 908.) As noted above, section 235 provides the procedure a taxpayer must follow in objecting to the collector‘s application for judgment for delinquent taxes. Section 194 requires those taxpayers who object to the suit for reasons other than a claimed exemption to pay the tax under protest. (
Moreover, even if the two sections conflict, which we do not find they do, the terms of the more specific statute must prevail. (Bowes v. City of Chicago (1954), 3 Ill. 2d 175, 120 N.E.2d 15.) In this context,
Parenthetically, we note that, at the time the Foundations filed their initial complaint on February 17, 1993, they had one last statutory remedy at hand: section 2-1301 of the Code of Civil Procedure. (See Clarke, 58 Ill. App. 3d at 229.) Section 2-1301(e) allows a court to set aside a final order or judgment if a motion is brought within 30 days of the judgment‘s entry. (See
EFFECT OF THE JUDICIAL SALE OF THE TAXES
Pursuant to the January 22, 1993, judgment, the property was sold to Oak Park at the February 1993 sale. Once such taxes are sold, the owner of the property may redeem the property pursuant to section 253 of the Revenue Act. (
It was at the redemption stage of the delinquency proceedings that the Foundations sought injunctive relief, seeking, inter alia, to toll the redemption period. However, injunctive relief from the redemption provisions has been condemned. Although our courts look favorably upon redemption from tax sales and give liberal
Furthermore, injunctive relief is unavailable when an adequate
The circuit court also indicated that it granted injunctive relief in this case because, after balancing the interests of both Oak Park and the Foundations, it believed less harm would accrue to Oak Park than the Foundations. The court also cited the public interest expressed “by the [G]eneral [A]ssembly, in permitting tax exemption for properties being used for charitable purposes.” Statutes imposing taxes and providing means for their collection should be strictly construed insofar as they may operate to deprive taxpayers of their property by summary proceedings, or to impose penalties or forfeitures upon them. (People ex rel. Conner v. Burgess-Norton Manufacturing Co. (1971), 49 Ill. 2d 397, 400, 275 N.E.2d 403.) Tax laws, however, must be given a reasonable construction, without bias or prejudice against either the taxpayer or the State, in order to carry out the intention of the legislature and “the long range objective of all tax measures—the accomplishment of good for the social order.” (People ex rel. Conner v. Burgess-Norton Manufacturing Co., 49 Ill. 2d at 400.) In this case, the properties were found to be nonexempt by the Department. Although the Foundations may ultimately prevail in their claims for exemption, the public interest, as established in the tax statutes, is to collect the taxes while the exemption decision is adjudicated. Nevertheless, the Foundations argue and the dissent agrees that injunctive relief is available to those taxpayers in situations where the complained-of tax is unauthorized by law or is on
We are mindful of the harshness of the law‘s application in this case, particularly with regard to the fact that the Foundations are organizations of an alleged charitable nature. We find our supreme court‘s language in Stanley v. Bank of Marion (1961), 23 Ill. 2d 414, 420, 178 N.E.2d 367, to be instructive:
“It is, of course, unfortunate that appellees have suffered the loss of their property because of one year‘s delinquent taxes. It is clear, however, that they were fully informed of the sale and were afforded every opportunity to redeem or defend. Having failed to do so, they are in no position to collaterally attack the original tax proceedings.”
The General Assembly has established a property tax statutory scheme so that uniformity exists in the levy and collection of those taxes. We believe that any endorsement by this court of the Foundations’ position would result in the contravention of that statutory scheme.
The circuit court‘s injunction order enjoining Oak Park from proceeding on its tax deed petition is reversed.
Reversed.
McNULTY, J., concurs.
PRESIDING JUSTICE COUSINS, concurring in part and dissenting in part:
I concur with the part of the majority opinion which holds that the trial court was empowered to do equity in the case sub judice; however, I dissent from the part of majority opinion which, even so, reverses the trial court‘s grant of injunctive relief in this case.
The granting of injunctive relief is within the discretion of the court. (Regional Transportation Authority v. Burlington Northern Inc. (1981), 100 Ill. App. 3d 779, 784, 426 N.E.2d 1143.) For the reasons which follow, we should hold that the trial court did not abuse its discretion in the instant case.
In reversing the trial court because of disagreement with the
The provisions of section 235 do not require reversal of the trial court‘s order in this case. Also, although the appellant, Oak Park, neither briefed nor argued a section 2-1401 issue, the majority expresses the view that the circuit court improperly granted injunctive relief tolling the statute because, pursuant to section 2-1401 of the Code of Civil Procedure, if the administrative review proves successful, the Foundations have an adequate statutory remedy to challenge any tax deed ultimately issued to Oak Park. Relative to the availability of relief which might be sought in a post-trial proceeding, it is my view that we should not decide issues on appeal which have been neither briefed nor argued. Also, even were the matter properly before us, the majority‘s view that proceedings pursuant to section 2-1401 provide an adequate remedy in the case sub judice is mistaken in my opinion.
Then, too, even assuming arguendo that the Foundations have an adequate remedy at law, we should affirm the trial court‘s injunction because the Illinois Supreme Court has repeatedly decided that the only exceptions to the bar against equitable or declaratory relief where an adequate legal remedy exists are complaints that the tax is unauthorized by law or is exempt property. (See First National Bank & Trust Co. v. Rosewell (1982), 93 Ill. 2d 388, 392, 444 N.E.2d 126.) In the First National Bank case, the Illinois Supreme Court wrote:
“This court has consistently held that independent grounds for equitable jurisdiction in cases involving real estate taxes exist only when an unauthorized tax is levied or when exempt property is taxed ***. [Citations.] In all other situations, equity will assume jurisdiction only when no adequate legal remedy is available.” (Emphasis added.) (First National Bank, 93 Ill. 2d at 392.)
Thus, even the availability of an adequate remedy at law is no basis for denying equitable relief when exempt property is taxed.
Finally, the learned trial court judge issued a comprehensive and proper order, some of the pertinent provisions of which state:
“The court, balancing the interests of the parties, further finds that entry of an injunction will cause substantially less harm to
the Count II and III Defendants than the withholding of injunctive relief will cause to the Plaintiff[s], and that there is a public interest, expressed by the [G]eneral [A]ssembly, in permitting tax exemption for properties being used for charitable purposes. The court further finds that, in the circumstances of this case, no bond is necessary. Plaintiffs’ motion for a preliminary injunction against the Count II and Count III Defendants is therefore hereby granted. It is hereby ordered that Defendants *** be, and they are hereby enjoined and restrained from taking any action whatever (1) to cause or procure the forfeiture of Plaintiffs[‘] rights regarding the tax proceedings which are the subject hereof, or (2) to cause or procure the issuance of a tax deed respecting the subject property or any part thereof, pending and until resolution of this cause. This order tolls and stops the running of Plaintiffs’ period of redemption respecting tax sales of the subject property, pending and until resolution of this cause.”
It is the opinion of the majority in the instant case that the trial court lacked authority to issue this stay order. I disagree. I disagree because the circuit court has the discretionary power to stay the decision of an administrative agency pending final review of that agency pursuant to the provisions of the Administrative Review Law. The Administrative Review Law provides:
Ҥ 3-111. Powers of circuit court. (a) The Circuit Court has power:
(1) with or without requiring bond (except if otherwise provided in the particular statute under authority of which the administrative decision was entered), and before or after answer filed, upon notice to the agency and good cause shown, to stay the decision of the administrative agency in whole or in part pending the final disposition of the case.”735 ILCS 5/3—111 (West 1992) .
Also, see Group Securities, Inc. v. Carpentier (1958), 19 Ill. App. 3d 513, 530-31, 154 N.E.2d 837. Accordingly, I dissent.