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Fredman Bros. Furn. v. Dep't of Rev.

OPINION FILED NOVEMBER 21, 1985.

FREDMAN BROTHERS FURNITURE COMPANY, INC., APPELLANT,

v.

THE DEPARTMENT OF REVENUE, APPELLEE.



Appeal from the Appellate Court for the Third District; heard in that court on appeal from the Circuit JUSTICE RYAN DELIVERED THE OPINION OF THE COURT:

In this case we must determine the effect that a motion for rehearing before an administrative agency had on the requirement of section 4 of the Administrative Review Act (now section 3-103 of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 3-103)) that an action to review a final administrative decision shall be filed within 35 days of the decision. Fredman Brothers Furniture Co., Inc. (Fredman Brothers), filed an action for judicial review of a final tax assessment 87 days after the assessment was issued, but only 35 days after a request for an administrative rehearing was denied by the Department of Revenue (the Department).

This case began with an audit of Fredman Brothers by the Department in March 1979. The Department issued a notice of tax liability to Fredman Brothers on August 30, 1979, for taxes due under the Retailers' Occupation Tax Act (Ill. Rev. Stat. 1979, ch. 120, par. 440 et seq.) from January 1976 through December 1978. Fredman Brothers protested the amount of liability, and an administrative hearing was held to determine the correct figure. The result was the Department's issuance of a "final assessment" of $12,403.78 in taxes, penalties, and interest on August 24, 1981. Pursuant to section 4 of the Retailers' Occupation Tax Act (Ill. Rev. Stat. 1981, ch. 120, par. 443), Fredman Brothers filed a request for a rehearing of the assessment on September 24, 1981. The Department denied the request on October 15, 1981.

On November 19, 1981, 87 days after the "final assessment" was issued but only 35 days after the rehearing request was denied, Fredman Brothers filed an action in the circuit court of Peoria County for judicial review of the assessment. The action was filed pursuant to the provisions of section 12 of the Retailers' Occupation Tax Act (Ill. Rev. Stat. 1981, ch. 120, par. 451). The Department filed a motion to dismiss based on the portion of section 12 of the Retailers' Occupation Tax Act which provided for dismissal and entering of judgment against the taxpayer if he failed to post a sufficient bond within 20 days of filing his action. (Ill. Rev. Stat. 1981, ch. 120, par. 451.) The circuit court found that Fredman Brothers had not complied with this provision as of December 11, 1981, 21 days after the complaint was filed. The court accordingly dismissed the action and entered judgment against Fredman Brothers.

Fredman Brothers appealed, and the appellate court reversed. (Fredman Brothers Furniture Co. v. Department of Revenue (1982) 110 Ill. App.3d 479.) The cause was remanded to the circuit court "with directions that Fredman be granted a review." 110 Ill. App.3d 479, 481.

On remand, the Department filed a motion to dismiss because the complaint for review had not been filed in the circuit court within 35 days after the final tax assessment. Section 12 of the Retailers' Occupation Tax Act (Ill. Rev. Stat. 1981, ch. 120, par. 451) expressly provided that the Administrative Review Act (Ill. Rev. Stat. 1981, ch. 110, par. 264 et seq.) governed all proceedings for judicial review of final tax assessments. Section 4 of the Administrative Review Act in turn provided that "[e]very action to review a final administrative decision shall be commenced by the filing of a complaint and the issuance of summons within 35 days from the date that a copy of the decision sought to be reviewed was served upon the party affected thereby." (Ill. Rev. Stat. 1981, ch. 110, par. 267; now Ill. Rev. Stat. 1983, ch. 110, par. 3-103.) The Department argued that the "final assessment" constituted a final administrative decision, despite Fredman Brothers' request for a rehearing, and that the circuit court lacked subject matter jurisdiction because Fredman Brothers had not filed its action within 35 days of being served with this final administrative decision as required by the Administrative Review Act. The circuit court agreed and again dismissed the case.

Fredman Brothers appealed this second dismissal, arguing that the Department had waived the 35-day provision by not raising the issue on the first appeal. It also argued that the 35-day filing period did not begin to run until the Department denied the request for a rehearing; thus its action was timely filed.

The appellate court, reviewing this case for a second time, found, with one justice dissenting, that the circuit court did not err in ordering the second dismissal of Fredman Brothers' complaint. (129 Ill. App.3d 38, 43.) The appellate court noted that its direction in its previous remand to the circuit court to grant a review on the merits, "was, of course, based on the assumption that the circuit court had jurisdiction of the subject matter." (129 Ill. App.3d 38, 40.) The court noted that the 35-day filing period had previously been held to be a jurisdictional requirement. (129 Ill. App.3d 38, 40.) The circuit court's consideration of the dismissal motion was held proper, since "lack of jurisdiction of the * * * subject matter `can be raised at any time, in any court, either directly or collaterally.' [Citations.]" (129 Ill. App.3d 38, 40.) The dissenting justice was of the opinion that the requirement that the complaint for administrative review be filed within 35 days was a statute of limitation which had been waived and not a jurisdictional requirement. The appellate court found Fredman Brothers' action barred by its failure to file its complaint for administrative review within the 35-day jurisdictional limit. (129 Ill. App.3d 38, 42.) We granted Fredman Brothers leave to appeal pursuant to Rule 315(a) (94 Ill.2d R. 315(a)).

Fredman Brothers contends that the 35-day period prescribed in the Administrative Review Act is not jurisdictional but is mandatory and subject to waiver.

In determining whether the 35-day filing provision is jurisdictional, we must recognize that a significant distinction exists between statutes of limitation and statutes that both confer jurisdiction on a court and fix a time within which such jurisdiction may be exercised. Statutes of limitation only fix the time within which the remedy for a particular wrong may be sought. (See Smith v. Toman (1938), 368 Ill. 414, 420.) They "are procedural in nature (see Orlicki v. McCarthy (1954), 4 Ill.2d 342; Hilberg v. Industrial Com. (1942), 380 Ill. 102; see also Kalmich v. Bruno (7th Cir. 1977), 553 F.2d 549, cert. denied (1977), 434 U.S. 940, 54 L.Ed.2d 300, 98 S.Ct. 432) and are not designed to alter substantive rights * * *." Wilson v. Bishop (1980), 82 Ill.2d 364, 373.

On the other hand, "statutes which create a substantive right unknown to the common law and in which time is made an inherent element of the right so created, are not statutes of limitation." (Smith v. Toman (1938), 368 Ill. 414, 420.) Such a time period "is more than an ordinary statute of limitations" (North Side Sash & Door Co. v. Hecht (1920), 295 Ill. 515, 519); it "is a condition of the * * * liability itself and not of the remedy, alone. * * * It goes to the existence of the right itself." 295 Ill. 515, 519-20.) Such a provision is a condition precedent to the plaintiff's right to seek a remedy. (North Side Sash & Door Co. v. Hecht (1920), 295 Ill. 515, 520; Demchuk v. Duplancich (1982), 92 Ill.2d 1, 9.) Such statutes set forth the requirements for bringing the right to seek a remedy into existence. They do not speak of commencing an action after the right to do so has accrued. They are jurisdictional, not mandatory.

Subject matter jurisdiction is conferred on courts by the Constitution or by legislative enactment. (Knaus v. Chicago Title & Trust Co. (1937), 365 Ill. 588, 592.) Article VI, section 9, of the 1970 Constitution provides: "Circuit Courts shall have original jurisdiction of all justiciable matters except when the Supreme Court has original and exclusive jurisdiction * * *. Circuit Courts shall have such power to review administrative action as provided by law." (Emphasis added.) (Ill. Const. 1970, art. VI, sec. 9.) This court has held that when a court is in the exercise of special statutory jurisdiction, that jurisdiction is limited to the language of the act conferring it and the court has no powers from any other source. (Central Illinois Public Service Co. v. Industrial Com. (1920), 293 Ill. 62, 65-66.) In the exercise of special statutory jurisdiction, if the mode of procedure prescribed by statute is not strictly pursued, no jurisdiction is conferred on the circuit court. See Demchuk v. Duplancich (1982), 92 Ill.2d 1, 6-7; Avdich v. Kleinert (1977), 69 Ill. 1, 6; Fitzgerald v. Quinn (1896), 165 Ill. 354, 360.

The Administrative Review Act was "an innovation and departure from the common law, [and] the procedures it establishes must be pursued * * *." (Winston v. Zoning Board of Appeals (1950), 407 Ill. 588, 595.) Section 2 of the Act specifically provides that any other mode of review heretofore available shall not be employed. Section 2 also provides that unless review is sought of an administrative decision within the time and in the manner provided therein, the parties to the proceeding before the administrative agency shall be barred from obtaining a judicial review. Ill. Rev. Stat. 1981, ch. 110, par. 265; now Ill. Rev. Stat. 1983, ch. 110, par. 3-102.

In the present case the circuit court was exercising special jurisdiction conferred upon it by the Administrative Review Act. The provisions of that act referred to above clearly demonstrate that the filing of the complaint for administrative review within the time period specified is a jurisdictional requirement and that judicial review of the ...


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