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04/21/88 William Krall, D/B/A v. the Secretary of State

April 21, 1988

WILLIAM KRALL, D/B/A GOLDEN AUTO SALES, PLAINTIFF-APPELLEE

v.

THE SECRETARY OF STATE, DEFENDANT-APPELLANT



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

522 N.E.2d 814, 168 Ill. App. 3d 478, 119 Ill. Dec. 152 1988.IL.580

Appeal from the Circuit Court of Ogle County; the Hon. F. Lawrence Lenz, Judge, presiding.

APPELLATE Judges:

JUSTICE UNVERZAGT delivered the opinion of the court. REINHARD and NASH, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE UNVERZAGT

The defendant, the Secretary of State of the State of Illinois (Secretary), appeals from an order of the circuit court which reinstated the car dealership operator's license of the plaintiff, William Krall. On appeal, the Secretary contends that the circuit court's finding was against the manifest weight of the evidence because plaintiff failed to satisfy the requirement of maintaining an established place of business pursuant to section 5-100 of the Illinois Vehicle Code (Code) (Ill. Rev. Stat., 1986 Supp., ch. 95 1/2, par. 5-100).

Plaintiff had been issued an Illinois Dealer's Certificate of Authority (license) which authorized him to sell or otherwise deal in used cars. For the past eight years, plaintiff owned and operated a used car dealership located in Byron, Illinois. For the past three years, plaintiff has operated his barbershop, rent-a-space business, and used car dealership out of the same two-story frame building.

On the north side of the building, plaintiff had a barbershop which, through an archway, opened up into an adjoining room. The barbershop was also accessible from an outside entry way. The east half of the adjoining room was used to operate plaintiff's used car dealership while the west half was used to operate his rent-a-space business. A lot located on the south side of the building displayed used cars. In the area directly behind that lot, plaintiff rented spaces for $10 per week plus $100 over the price at which a lessee would sell his or her car. The barbershop operated on the largest floor space, yet the used car dealership generated the largest gross income. The building also served as plaintiff's residence, although access to his residence could not be obtained through one of the businesses. Instead, it was necessary to go outside the building and around an eight-foot fence to enter plaintiff's residence.

On April 2, 1985, Investigator Henry (Henry) of the Secretary of State's Department of Police made a routine investigation of plaintiff's premises. After Henry entered the building through its southern door, plaintiff told him that the room they were in was used as an office for plaintiff's used car dealership. Plaintiff then produced the appropriate records for Henry to examine while he tended to a customer in the barbershop.

Henry went outside to investigate the vehicles parked on plaintiff's southern lot. Henry noticed that many of the cars had regular license plates as opposed to dealer plates. When questioned about the cars, plaintiff explained that he operated a rent-a-space business from the same office as his used car dealership. Plaintiff further stated that the west side of the office was used for his rent-a-space business while the east side was used for the used car dealership. It is undisputed that each business had separate desks, records, phone lines, and office equipment.

Upon learning that plaintiff operated his rent-a-space business and used car dealership from the same office, Henry informed plaintiff that the businesses would have to be separated. Henry further stated that the archway connecting the barbershop and the business offices would have to be blocked off. Plaintiff requested that Henry bring his supervisor to the building to survey the premises. On April 23, 1985, Henry returned with his supervisor, Sergeant Juliano. Both investigators again informed plaintiff that the archway would have to be blocked off. Plaintiff then requested verification as to what constituted a blocked-off wall.

On June 5, 1985, Henry returned to plaintiff's building with another investigator, Sergeant Quest, in response to plaintiff's request. Again, plaintiff was advised that he must block off the archway and separate his rent-a-space business and used car dealership. During this meeting, plaintiff stated that he resided in the building. Henry informed plaintiff that he could not operate his used car dealership out of his residence. On October 27, 1985, Henry and Sergeant Juliano returned to inspect plaintiff's building. At this point, plaintiff's only change to the physical condition of the building was the installation of swinging, solid wood doors onto the archway.

On November 20, 1985, a hearing was conducted at which plaintiff was ordered to show cause why his license should not be revoked for failure to maintain an established place of business pursuant to section 5-100 of the Code (Ill. Rev. Stat., 1986 Supp., ch. 95 1/2, par. 5-100). After considering all the evidence, the hearing officer suspended plaintiff's license for 30 days and indicated that plaintiff's license would be revoked unless he permanently separated his barbershop and rent-a-space businesses from his used car dealership and removed his residence from the premises.

On February 14, 1986, plaintiff sought review of the hearing officer's decision. After receiving written memoranda from the parties, the circuit court found that the hearing officer's decision was against the manifest weight ...


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