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Chicago Title & Trust Co. v. Tully





APPEAL from the Circuit Court of Cook County; the Hon. RAYMOND S. SARNOW, Judge, presiding.


Rehearing denied September 25, 1979.

A 1974 real estate assessed valuation of certain property located in the city of Chicago is the focal point of this appeal. Plaintiffs attack that valuation and the resulting assessment as excessive and further assert that: it violates statutory standards; the statute pursuant to which it was made is unconstitutional; and, they have been denied hearings to which they are entitled on these claims. The underlying issue here, however, is whether the circuit court of Cook County erred in granting summary judgment to defendants on the ground that adjudication of the issues asserted by plaintiffs was barred by a prior judgment.

For the reasons stated below, we affirm.

Frank and Lila B. Doss, Harry S. and Jean M. Nachman and Kjell A. and Doris E. Larsen are beneficiaries under a land trust pursuant to which Chicago Title and Trust Company holds title to certain real estate known as 1555-57 East 61st Street in the city of Chicago. In their amended complaint filed in Cook County circuit court these plaintiffs named as defendants Thomas M. Tully, Cook County assessor, Patrick Doody, deputy assessor, and board of appeals commissioners Seymour Zaban and Harry Semrow.

The original complaint in this action was filed on or after December 20, 1974, by Frank G. Doss only, naming as sole defendant Thomas Tully, under which judgment for $24,882 plus costs and interest were sought. The basis of the action was section 322 of the Revenue Act of 1939 (Ill. Rev. Stat. 1977, ch. 120, par. 803), which establishes liability of certain assessment officials who "refuse or knowingly or wilfully neglect any duty" imposed on them by law. Plaintiff alleged malicious and intentional overassessment of the subject property under the 1974 assessment. A first amended complaint was filed on March 31, 1975, and contained two counts, the first substantially similar to the original complaint, the second proceeding on essentially the same basis for the same amount against Zaban and Semrow. On July 14, 1975, a five-count second amended complaint was filed, naming as parties all those involved in the present appeal. Count I of the complaint was dismissed with prejudice and count II was stricken on November 14, 1975. A third amended count II was filed on December 10, 1975.

On April 27, 1977, defendants filed a motion for summary judgment on the counts then pending. That motion, with accompanying affidavits and exhibits, showed that real estate taxes were levied against plaintiffs' property for tax years 1972, 1973, 1974 and 1975, which were unpaid. On the basis of the unpaid taxes for 1974, the subject property was listed in the county collector's 1974 tax judgment, sale, redemption and forfeiture record, and was dealt with in the annual judgment and order of sale entered in Cook County circuit court on December 5, 1975, which included an express finding that proper notice of the proceedings had been given and no sufficient defense or cause why judgment should not be entered had been shown. Subsequently the property was offered for sale, but was forfeited to the State of Illinois for want of a bidder at the sale. On August 22, 1977, defendants' motion was granted, but because plaintiffs had been granted leave to file a first amended Federal complaint, that order was not made appealable. On February 23, 1978, defendants' motion to dismiss plaintiffs' first amended Federal complaint was granted, and on April 4, 1978, plaintiffs' motion to vacate both the adverse summary judgment and the dismissal of their Federal complaint was denied.

On May 2, 1978, plaintiffs filed their notice of appeal from the orders entered on February 23 and April 4 of that year.

We have carefully considered the various counts of plaintiffs' complaint. Because of their length and sweeping terms, however, it would unduly lengthen this opinion to undertake a full exposition of them. The theories on which they are based are expostulated in plaintiffs' arguments on appeal. Plaintiffs' first two contentions on appeal are that sections 97 and 116 of the Revenue Act (Ill. Rev. Stat. 1977, ch. 120, pars. 578, 597), permit unconstitutional delegations of legislative powers. Each of these provisions grants authority to assessment officials to revise assessments as shall appear to them "just." Plaintiffs also contend that section 194 of the same act (Ill. Rev. Stat. 1977, ch. 120, par. 675) is unconstitutional as applied because in order to obtain relief thereunder it is necessary to show fraud, so that taxpayers whose property is overassessed but who cannot prove fraud are denied equal protection. Four of plaintiffs' contentions relate to allegedly improper assessment practices. They assert that defendants should have, but did not, assess their property at a fixed percentage of its fair market value; that the board of appeals improperly considered budgetary needs of police and fire departments in reviewing the assessment of plaintiffs' property; that the fair cash value of the subject property was blatantly disregarded; and that defendants improperly applied a rule-of-thumb property valuation, which used only a gross rent multiple and did not allow for building operation expenses.

Plaintiffs also maintain that the hearings they were granted on this complaint for revision of their assessment were so unfair as to deny them their statutory and constitutional rights to a hearing, thereby rendering invalid the assessment of the subject property. Plaintiffs also contend that a prior hearing on their complaint before deputy assessor Patrick Doody was unfair and insufficient.

Plaintiffs' last three points are directed to adverse rulings in the circuit court. They assert that the facts were construed against them when the court granted defendants' motion for summary judgment, and that the court denied them equal protection in refusing them the remedy they sought. Their final argument amplifies the latter point in insisting that plaintiffs should not have been compelled to pursue the remedy provided by statute (Ill. Rev. Stat. 1977, ch. 120, pars. 675, 716 and 751) to attack the assessment of their property because such a procedure would require them to waive the defects of which they complain: that the assessment was unlawful because it was arrived at in violation of mandatory and jurisdictional requirements, particularly the requirement of a fair hearing.

• 1 The threshold issue, raised by defendants, is whether plaintiffs' present attack on the 1974 assessment of their property is a collateral action barred by either public policy or by the doctrine of res judicata pursuant to the annual judgment and order of sale entered on December 5, 1974, with respect to this assessment of plaintiffs' property. The history of Illinois law regarding collateral attacks on assessments of real property was explicated in Clarendon Associates v. Korzen (1973), 56 Ill.2d 101, 106-08, 306 N.E.2d 299. There, the supreme court observed that, prior to 1933, taxpayers could obtain no refund of taxes paid free of duress, so that challenges to taxes were made in the courts> without prior payment of the disputed sums, a situation that resulted in impairment of tax collection and of the functions of government. Amendments to sections 162 and 191 of the Revenue Act authorized payments under protest of the tax challenged and required such prior payment as a condition precedent to filing objections to the county collector's application for judgment. Under this procedure, a taxpayer could obtain a judicial determination of the validity of a tax, or its underlying assessment, and if successful obtain a refund of any excess amounts paid. Subsequently the courts> have held that, except where the tax in question is unauthorized by law or levied on exempt property, no relief from allegedly improper taxation may be obtained except by pursuing the statutory remedy. A further exception is recognized where the taxpayer can establish that the tax is constructively or actually fraudulent and that the statutory remedy is inadequate.

• 2 The exclusivity of the statutory remedy of paying the tax and filing objections to the collector's application for judgment was again emphasized in Chicago Sheraton Corp. v. Zaban (1978), 71 Ill.2d 85, 373 N.E.2d 1318. There a taxpayer's attempt to maintain a separate action to recover damages under section 323 of the Revenue Act (Ill. Rev. Stat. 1977, ch. 120, par. 804), which subjects certain assessment officials to liability for double damages caused by their refusal or knowing neglect to perform their duty, was held barred by the taxpayer's failure to file objections under the statutory remedy. The supreme court reasoned that since the taxpayer would be required to prove an overassessment of his property in order to prevail under section 323, permitting a separate action for damages under section 323 where no objection had been filed would provide a means of evading the statutory remedy and give the taxpayer a second chance to litigate an issue that ought to have been litigated by pursuing the statutory remedy. In the present case, plaintiffs proceeded under section 322, which provides damages, but not double damages; nevertheless, Sheraton is clearly controlling because permitting a separate action under section 322 would have the same effect as permitting a separate action under section 323.

Plaintiffs argue that their action falls within an exception to the general rule established by these cases barring collateral actions where a taxpayer has not pursued the statutory remedy, in that the tax here in question was "unauthorized by law." This conclusion is based upon the theory that the statutes pursuant to which it was imposed are unconstitutional, ...

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