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05/04/88 the People Ex Rel. Board v. Edward J. Rosewell

May 4, 1988

CHICAGO, PLAINTIFF-APPELLANT

v.

EDWARD J. ROSEWELL, INDIV. AND AS COUNTY TREASURER AND EX-OFFICIO COUNTY COLLECTOR OF COOK COUNTY, ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, THIRD DIVISION

THE PEOPLE ex rel. BOARD OF EDUCATION OF THE CITY OF

523 N.E.2d 1132, 169 Ill. App. 3d 765, 120 Ill. Dec. 221 1988.IL.667

Appeal from the Circuit Court of Cook County; the Hon. Richard L. Curry, Judge, presiding.

APPELLATE Judges:

JUSTICE RIZZI delivered the opinion of the court. WHITE, P.J., and McNAMARA, J. concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE RIZZI

Plaintiff, board of education (Board), appeals from a motion to strike and dismiss granted by the circuit court of Cook County in favor of defendants Edward J. Rosewell, Allen Kwit, County of Cook and John Doe (County). We affirm.

Plaintiff's action arose out of a decision made by the County regarding distribution of the proceeds of a lawsuit involving the State of Illinois and Illinois Bell Telephone Company. (People v. Illinois Bell Telephone Co., No. 80 -- L -- 60002.) In that case, the State sued Illinois Bell alleging that Illinois Bell had failed to pay its Cook County personal property tax for 1978. On October 25, 1982, the court ordered Illinois Bell to deposit $26,311,934.90 ( $18,146,162 in principal and $8, 165,772.90 in interest) into an interest-bearing account to be established and maintained by the Cook County collector (Collector). The court directed that the monies be invested as fully as possible in obligations of the United States government with maturities not to exceed 90 days. The court further ordered that if the State prevailed, the entire amount in the accounts would be paid to the County in full payment and satisfaction of any past-due taxes, interest and penalties of Illinois Bell.

Pursuant to the court's order, the Collector invested the tax principal of $18,146,162 in 90-day investments. On June 3, 1983, the court entered judgment in favor of the State and against Illinois Bell in the amount of $26,311,934.90. The judgment order provided that "[the] Cook County Collector may disburse the monies held pursuant to this Court's order of October 25, 1982 to the appropriate recipients pursuant to the applicable provision of the Revenue Act."

When the court entered judgment against Illinois Bell, the monies were invested in 90-day investments that were due to mature on July 28, 1983. On or about October 4, 1983, the Board received approximately $4,915,980, which represented its share of the taxes owed by Illinois Bell.

On November 18, 1983, the Board filed a complaint alleging that the County's failure to pay over to the Board the $4,915,980 on June 30, 1983, was because the County had invested the money in certificates of deposit that did not mature until a later date. The Board further alleged that the decision not to redeem the certificates of deposit, and not to distribute the principal due to the taxing bodies, was a decision solely designed to benefit the County and completely disregard the impact of the loss of revenue to the taxing bodies.

The County filed a motion to dismiss the original complaint which was granted. Thereafter, the Board filed an amended five-count complaint. However, the Board later voluntarily dismissed counts I through IV of its amended complaint. In the remaining count, count V, the Board alleged that (1) the County willfully failed to pay the Board its pro rata share of the monies in the escrow when they were due and owing; (2) the collection was subject to a penalty of one-tenth or 10% per day of the taxes collected; and (3) the surety of the County's bond must pay into the County treasury $594,834 pursuant to section 280 of the Illinois Revenue Act of 1939 (Ill. Rev. Stat. 1985, ch. 120, par. 761). Following oral argument on the County's motion to dismiss count V, the court granted the County's motion. This appeal followed.

The issue before this court is whether count V of the Board's amended complaint states a cause of action for willful failure to disburse taxes under section 280 of the Illinois Revenue Act of 1939 (Ill. Rev. Stat. 1985, ch. 120, par. 761). Section 280 provides in part,

"[The] county collector . . . shall on the first day of June and the first day of each and every month thereafter, pay over to the other proper authorities or persons the amounts in his or her possession and ...


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