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12/15/88 Concordia Association, v. Sally A. Ward

December 15, 1988





532 N.E.2d 411, 177 Ill. App. 3d 438, 126 Ill. Dec. 726 1988.IL.1807

Appeal from the Circuit Court of Cook County; the Hon. Marilyn Rozmarek Komosa, Judge, presiding.


PRESIDING JUSTICE JIGANTI delivered the opinion of the court. JOHNSON and LINN, JJ., concur.


The plaintiff, Concordia Association, appeals from the circuit court's affirmance of a determination made by the defendant, the Illinois Department of Employment Security (Department), that Concordia is not exempt from paying employer's contributions under the Illinois Unemployment Insurance Act (Ill. Rev. Stat. 1987, ch. 48, par. 300 et seq.). Section 211.3(2) of the Illinois Unemployment Insurance Act grants an exemption from participation in the unemployment insurance program for any organization which: (1) is operated primarily for religious purposes and (2) is operated, supervised, controlled or principally supported by a church or convention or association of churches. Ill. Rev. Stat. 1987, ch. 48, par. 321.3(2).

The Department found that while Concordia satisfied the second requirement, it was not entitled to an exemption because it failed to satisfy the first requirement. Because this appeal involves a review of an administrative agency's decision, the issue is whether the Department's finding that Concordia is not operated primarily for religious purposes is contrary to the manifest weight of the evidence. Burke v. Board of Review (1985), 132 Ill. App. 3d 1094, 477 N.E.2d 1351.

Concordia Association is an Illinois corporation which was established in the late 1800s by several Chicago-area Lutheran churches. The purpose of the association as stated in the bylaws is to "operate and maintain a cemetery." The articles of incorporation state that the association was formed "to acquire or receive . . . real and personal property for cemetery, charitable, educational or such other corporate purposes generally."

Concordia is made up of 36 delegates, six delegates from each of the six Lutheran churches which currently form the corporation. It is run by a board of directors composed of one delegate from each of the congregations. There is no requirement that either delegates or ministers must be board members, but at various times there have been ministers as delegates or board members.

In order to be buried in Concordia's cemetery, one must be of the Lutheran faith or a family member of a Lutheran. Free burials are provided for ministers and teachers. Lutheran burial services can be held at a funeral home, church, grave site or chapel. Most burials are conducted with the services of a Lutheran minister although Concordia, which does provide a chapel on the cemetery grounds, neither offers nor performs any religious services. Any service performed for a burial must be Christian and is arranged by the family of the deceased.

Concordia exists financially through sales of cemetery merchandise such as lots, caskets and flowers and through sales of services to the lot owners such as watering, grass cutting and planting. Any monies in excess of what is needed to operate the cemetery and maintain a reserve fund for perpetual care of the lots goes to the individual member churches comprising the association. These six Lutheran churches do not contribute financially to Concordia. However, when the association was originally founded, the churches would assist Concordia financially if necessary.

At the administrative hearing the current manager of the cemetery testified that the congregations of Lutheran churches originally formed Concordia so that they would always have a cemetery large enough to accommodate all the members of their particular congregation because each congregation had a limited amount of land surrounding the premises on which that particular church was located. Testimony was also presented that the Lutheran faith considers the act of burial as the third part of one religious service, with the first part consisting of the wake of the deceased member at the funeral home and the second part being the religious service at the funeral home or church.

An attorney for Concordia also testified that the bylaws have recently been amended to state that the purpose and object of the corporation is to operate and maintain a cemetery which provides Christian burials for Lutherans and members of their families. However, no amended bylaws were ever presented at the administrative hearing nor does Concordia point to where they would be found in the record on appeal.

Concordia argues, and we agree, that the starting point in construing the phrase "operated primarily for religious purposes" is Community Renewal Society v. Department of Labor ...

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