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07/14/88 Hunt Super Service, Inc., v. Jim Edgar

July 14, 1988





526 N.E.2d 1125, 172 Ill. App. 3d 512, 122 Ill. Dec. 586 1988.IL.1095

Appeal from the Circuit Court of Sangamon County; the Hon. Simon L. Friedman, Judge, presiding.


PRESIDING JUSTICE GREEN delivered the opinion of the court. McCULLOUGH and SPITZ, JJ., concur.


On January 18, 1983, plaintiff Hunt Super Service, Inc., filed a complaint against defendant Jim Edgar, Secretary of State, in the circuit court of Sangamon County for administrative review of a decision rendered by defendant concerning plaintiff's liability for registration fees for its fleet of trucks. That court determined defendant had failed to follow its past precedent or to explain its departure therefrom and remanded the case to defendant with directions to do so. On remand, defendant imposed the same assessment of license fees upon plaintiff and explained its reasons why prior precedent was not applicable. On January 28, 1985, plaintiff again filed a complaint for administrative review of defendant's decision. The circuit court reversed defendant's decision in an order dated November 4, 1987. Defendant now appeals from that order. We reverse.

The record showed the State of Illinois had entered into an interstate compact called the International Registration Plan (plan) (92 Ill. Adm. Code 1010 app. B (1985)) whereby fleets of vehicles may operate in various States which are parties to the plan, while the fleet need be registered only in one State, called a base jurisdiction. The base jurisdiction then issues appropriate license plates for the fleets. Fees are required to be paid to the various member States in which the fleet operates based upon the total fee required by that State for operation, reduced by the quotient obtained by dividing the miles traveled in the member State during the previous yearly period by the total miles traveled by the fleet during that same period. (92 Ill. Adm. Code 1010 app. B, art. III, at 13471-72 (1985).) Apparently, under the operation of the plan in Illinois, miles traveled by the fleet in States having a reciprocal agreement with Illinois for free operation of vehicles from member States are not included in the total miles determination.

At the time of application for registration for a particular year, the applicant is required to pay fees based upon the apportionment, as described above, for the preceding year. (92 Ill. Adm. Code 1010 app. B, art. IV, at 13472 (1985).) The plan requires fleet operators to maintain individual vehicles mileage records (IVMR's) for the prior three-year period. (92 Ill. Adm. Code 1010 app. B, art. XIII, at 13475-76 (1985).) A fleet operator has the option of paying the full amount of the registration fee to each State. However, if the operator elects to take advantage of apportionment, failure to maintain records to support the apportionment can, as here, result in an estimation of liability by the plan commissioner, here the defendant, the Secretary of State.

Paul Shute, an auditor for defendant, testified at the hearing that he had visited plaintiff earlier in the year in order to perform an audit of its registration applications under the plan for years 1979 and 1980. To do the audit, Shute said he needed to inspect plaintiff's IVMR's from September 1977 through August 1979. However, the president of plaintiff, James Hunt, informed Shute those records were unavailable. He said the records in question had been taken by an employee of plaintiff during a labor dispute. Shute testified he observed the presence of guards and picketers at plaintiff's place of business and a bullet hole in a window there, all evidence of current labor problems.

James Smith, a witness for plaintiff, testified further regarding the company's labor problems. He said he had been employed by plaintiff since May 1980 and was the person in charge of maintaining and controlling plan records for plaintiff. He testified that, in the spring of 1981, the "Teamsters" tried to organize plaintiff's drivers. The situation became violent and charges were filed against Teamster members. Smith said that, when a National Labor Relations Board representative came to examine plaintiff's records, he discovered IVMR's and other plan records were missing. This labor strife still continued when auditor Shute came to audit plaintiff's books.

Smith further stated he explained the situation to Shute when he arrived. He attempted to provide Shute with the documents he did have available for the years in question, including a large spread sheet containing old mileage reports from log books. According to Smith, Shute responded he could not possibly go by the sheet Smith provided because "the numbers [were] not lined up, [and] they [were] not printed anywhere correct at all."

Shute testified that, after learning the IVMR's he needed were not available, he telephoned his office, and his superior, Arthur Spiegel, told him he should use whatever records were available to perform his audit. According to Shute, he determined the most relevant available IVMR's were those from April 1980 through June 1981. He divided these

Shute further testified that, after making the foregoing computations, he then applied the "Illinois factor" to the full license fee for each year that would have been required of plaintiff, absent the existence of the plan, and determined plaintiff's liability for the 1979 and 1980 years. The amount of the full license fees was shown on the face of plaintiff's application for the years in question. Shute stated Hunt then agreed to have his 1981 registration request similarly audited, and Shute then calculated plaintiff's liability for that period in a similar manner. The computations indicated plaintiff owed defendant additional fees in the following amounts: (1) $3,235.47 and interest of $491.51 for 1979; (2) $4,212.45 and interest of $387.43 for 1980; and (3) $2,978.07 and interest of $104.23 for 1981.

On cross-examination, Shute testified nothing indicated plaintiff's president or other personnel had secreted or destroyed the missing records. He further said the records that did exist since April 1980 were kept properly according to the plan. Shute also stated on cross-examination he thought plaintiff's president had told him its operations had changed over the past few years, although Shute said he could not tell whether a change had occurred. He did not make any inquiries about the mentioned changes or perform any additional investigation. He ...

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