Appeal from the Appellate Court for the First District; heard
in that court on appeal from the Circuit Court of Cook County,
the Hon. Joseph M. Wosik, Judge, presiding.
JUSTICE WARD DELIVERED THE OPINION OF THE COURT:
Rehearing denied December 1, 1986.
The defendants, Warren Motors, Inc., and its owner and president, Warren W. Ottinger, obtained reductions in real property tax assessments through a fraudulent scheme involving personnel of the board of appeals of Cook County (the board). The State's Attorney of Cook County filed the action concerned here in the circuit court of Cook County, seeking an accounting and the imposition of a constructive trust upon the benefits realized by the defendants, i.e., the illegally obtained reductions plus interest. The defendants filed a motion to sever any equitable cause of action from any of the law counts (see 87 Ill.2d R. 232(b)) and a motion to dismiss the suit in equity on the ground there was an adequate remedy at law. The defendants filed a jury demand for trial on the remaining legal issues. The court denied both motions and struck the jury demand. At the close of evidence the court entered judgment for the plaintiff. The appellate court affirmed (136 Ill. App.3d 505), and we granted the defendants' petition for leave to appeal under our Rule 315 (94 Ill.2d R. 315(a)).
It is not disputed that from 1974 to 1980 a fraudulent scheme operated at the board of appeals of Cook County and that under the scheme certain employees of the board improperly arranged for reductions in property valuations which resulted in reduced tax assessments for the involved property owners. The pleadings reveal that at least 10 individuals, none of them the defendants here, were convicted on various Federal charges arising from their participation in the scheme.
Seymour Zaban, a commissioner at the board from 1973 to 1982, testified that the function of the board was to provide the property owner an opportunity to challenge the county assessor's valuation of his parcel of land and, consequently, to challenge the real estate tax assessment of the parcel. The procedure is initiated when the property owner files a complaint, Zaban said, and a hearing is scheduled at which the property owner may present information or documentation supporting his theory of an erroneous assessment. Zaban stated that a corporate complainant must be represented by an attorney before the board and said that, legally, there is a presumption that an assessment is correct and that the burden is on the property owner to prove that the assessment is incorrect.
Zaban testified that the two elected commissioners who compose the board must approve a change in the assessment before it will become effective. Zaban, however, explained that, due to the increasing number of complaints filed before the board, the two commissioners have delegated authority to their deputy commissioners to approve assessment changes.
Thomas J. Lavin, who served as a deputy commissioner under Commissioner Harry Semrow from 1973 to 1978, testified to the corrupt scheme. He related that he employed "solicitors" or "runners" who would contact property owners and offer reductions in real estate tax assessments, which ordinarily would be effective for a four-year period, in exchange for one-half of the tax savings for the first year. When a property owner agreed to participate, a complaint, prepared by Lavin or a "runner," would be filed on the owner's behalf with the board. Lavin said that the property owner would be instructed not to appear at the hearing on the complaint. Lavin would insert a fraudulently reduced valuation on the complaint, and then place Semrow's initials on it. The document would be sent to Donald Erskine, the deputy commissioner for Seymour Zaban, and similarly Erskine would subscribe Zaban's initials on it. In due course, the property owner would be notified that the real estate tax assessment had been reduced.
Lavin identified five complaints that he prepared in this manner on behalf of Warren Buick (now Warren Motors) and Ottinger. Four of the complaints related to parcels of real estate near 5701 North Broadway, Chicago, owned by Warren Ottinger and leased to Warren Buick, Inc.; the other complaint concerned Ottinger's condominium at 3470 North Lake Shore Drive, Chicago. Lavin testified that the initials "L.K." on the jackets of the four complaints concerning the dealership indicated they had been solicited by Lawrence Kelly. He said that Kelly gave him $8,000, which he said was his share of the money received from Ottinger for the reductions on the dealership property.
Lavin testified to the circumstances of the reduction of the condominium's assessment. He described a meeting with Ottinger in 1978 at the Warren Buick dealership, and his intention to purchase a car. He told Ottinger that he was starting a tax-consulting business, and he recalled that he asked if Ottinger wanted the real estate tax assessments reduced on his property. Ottinger replied that Kelly had handled reductions for him in the past, but Lavin assured him that he now was arranging the reductions. Lavin testified that Ottinger was interested in a reduction for his condominium and that, though he was no longer employed at the board, he entered the board offices after hours and fraudulently altered records to show a reduction of the real estate tax assessment of the condominium. He received $600 in cash from Ottinger. He also testified that he completed a financial statement while at the dealership in order to obtain financing for the purchase of a car, and that in the statement he disclosed that until January 1978 he was employed as a deputy commissioner at the board.
Warren Ottinger was called by the plaintiff as an adverse witness under section 2-1102 of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2-1102). He said that during a conversation in late 1976 or early 1977 he complained to Lawrence Kelly about his high real estate taxes. Kelly responded that he might be able to help Ottinger in reducing the tax assessments. Although Ottinger had an attorney who handled the affairs of the dealership, Ottinger met Kelly at Warren Buick and gave him the permanent index numbers of the parcels of land that he owned and leased to Warren Motors, Inc. (Parcels of land are given permanent index numbers which, under statute, become a legal description of the parcel (Ill. Rev. Stat. 1983, ch. 120, par. 511).) Ottinger said that they agreed that Ottinger would pay Kelly one-half of the tax savings for the first year of the quadrennial assessment period if Kelly was able to obtain a reduction in the tax assessments for the parcels. Several weeks later, Ottinger said that he received notice of assessment reductions and gave Kelly a check in the amount of $22,300.
Ottinger recalled that, sometime later in 1977, he was notified by the assessor's office that the assessed valuations for the same parcels of land were going to be increased for 1977. He said that he telephoned Kelly to tell him of the proposed increase and was assured by Kelly that the reductions would be reinstated. Ottinger later received notification from the board that the prior reduction approved by the board had been restored.
Ottinger also testified to a meeting in a restaurant with Lavin in 1979. Ottinger said that he told Lavin that he paid $22,300 to Kelly for the assessment reductions, and Lavin informed him that that was twice the amount typically paid. Ottinger admitted that at Kelly's trial on Federal charges he testified that he believed at the time of this meeting in the restaurant that Lavin was involved in the tax-assessment reductions, although, he said, he was aware of Lavin's involvement only through assumptions he made after media accounts of a Federal investigation at the board.
Ottinger corroborated Lavin's testimony that Lavin agreed to arrange a reduction in the assessment of the condominium and that he had ...