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05/10/94 BETHANIA ASSOCIATION v. SALLY A. JACKSON

May 10, 1994

BETHANIA ASSOCIATION, AN ILLINOIS NOT-FOR-PROFIT ASSOCIATION, PLAINTIFF-APPELLANT,
v.
SALLY A. JACKSON, DIRECTOR OF THE STATE OF ILLINOIS DEPARTMENT OF EMPLOYMENT SECURITY, BRUCE W. BARNES, CHAIRMAN OF THE BOARD OF REVIEW OF THE DEPARTMENT OF EMPLOYMENT SECURITY AND ELIZABETH A. CHICOLA, DEFENDANTS-APPELLEES.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. THE HONORABLE MARILYN R. KOMOSA, JUDGE PRESIDING.

Petition for Leave to Appeal Denied June 2, 1994.

Scariano, DiVITO, McCORMICK

The opinion of the court was delivered by: Scariano

JUSTICE SCARIANO delivered the opinion of the court:

Plaintiff is a not-for-profit association of fourteen Lutheran churches which owns and operates Bethania Cemetery. For over three years, defendant Elizabeth Chicola worked as a clerk-typist/bookkeeper for plaintiff at Bethania Cemetery until she was discharged on January 13, 1989. Chicola applied for unemployment benefits after her discharge, but plaintiff opposed her application, contending that it was exempt from employer contributions.

Plaintiff incorporated as "Bethania Association" in 1915 and according to its amended by-laws, its purpose is "to acquire or receive directly or indirectly by purchase, gift, grant, donation, devise or bequest, real and personal property for use as a cemetery * * *." Plaintiff's constitution states that membership in the association is limited to Lutheran congregations. Its management is vested in a board of directors composed of a president, vice president, secretary, treasurer and a delegate-director representing each member congregation.

Randall Liese, cemetery superintendent, testified that the cemetery has a business license and derives its income from sales of burial plots, flowers, and monuments and from charges for opening and closing graves. The association does not require that persons buried in the cemetery have any particular religious affiliation.

On January 19, 1989, a claims adjudicator determined that the wages Chicola earned while in plaintiff's employ were excluded from her base period *fn1 pursuant to section 211.3 of the Illinois Unemployment Insurance Act (the Act). Chicola appealed that determination and, after a hearing, the referee modified the claims adjudicator's wage finding to include in Chicola's base period the wages she earned while employed by plaintiff.

Plaintiff appealed the referee's decision to the Illinois Department of Employment Security's Board of Review (the Board) arguing that it was exempt from employer contributions under section 211.3(A)(1) of the Act which excludes from the term "employment" services performed "in the employ of an * * * association of churches." (Ill. Rev. Stat. 1991, ch. 48, par. 321.3(A)(1).) Alternatively, plaintiff argued that it was exempt under section 211.3(A)(2) of the Act which excludes services performed for "an organization * * * which is operated primarily for religious purposes and which is operated, supervised, controlled or principally supported by an * * * association of churches." (Ill. Rev. Stat. 1991, ch. 48, par. 321.3(A)(2).) The Board remanded the case for another hearing due to the inadequacy of the transcript, and at the second hearing, the referee reiterated his determination, reasoning that even though Bethania Cemetery is "operated, supervised or controlled by an association of churches, it is not operated primarily for religious purposes.

On January 31, 1991, the Board affirmed the referee's decision. Plaintiff then filed a complaint for administrative review in the circuit court (Ill. Rev. Stat. 1991, ch. 48, par. 520), contending that the Board's decision was erroneous for one or more of the following reasons: it was contrary to the evidence presented; plaintiff was exempt under the Act; the Board abused its discretion in failing to render a decision consistent with previous decisions in similar fact situations; and the decision was arbitrary and capricious.

On October 4, 1991, the trial Judge remanded the case to the Board for a supplemental decision as to whether plaintiff was exempt under section 211.3(A)(1) of the Act, and the Board issued its "Corrected Supplemental Decision" on November 14, 1991, affirming its prior decision. The Board relied on St. Martin Evangelical Lutheran Church v. South Dakota (1981), 451 U.S. 772, 68 L. Ed. 2d 612, 101 S.Ct. 2142, in reaching its Conclusion that since plaintiff had a "separate legal identity" from the association of churches which formed it, it was not exempt.

Plaintiff argued in the trial court that the issue of separate incorporation was "irrelevant" to the court's determination of whether it was exempt as an association of churches and that the Board's focus on whether it was operated primarily for religious purposes was incorrect. In support of its contention that it was exempt based on its status as an association of churches, plaintiff pointed out that the "Bethania Cemetery Association Constitution and Bylaws" stated that membership in the association "shall be composed of only Lutheran Congregations * * *."

On September 17, 1992, the trial Judge ruled that the Board's findings were not against the manifest weight of the evidence or contrary to the law. She found "no support in the record that the Bethania Association and the association of churches that they have come together to form it (sic) are one and the same"; thus, under St. Martin, plaintiff could be found exempt only under section 211.3(A)(2). The trial Judge found that plaintiff did not qualify for that exemption because it was not operated primarily for religious purposes. Plaintiff appeals from that ruling.

When reviewing the decision of an administrative agency, our function is not to reweigh the evidence; the findings and Conclusions of the agency regarding questions of fact are considered prima facie correct and will not be disturbed unless they are against the manifest weight of the evidence. ( Pesce v. Board of Review (1987), 161 Ill. App. 3d 879, 881, 515 N.E.2d 849, 851, 113 Ill. Dec. 864; Garland v. Department of Labor (1984), 104 Ill. 2d 383, 392, 472 N.E.2d 434, 437, 84 Ill. Dec. 474.) However, reviewing courts are not required to give such deference to an administrative agency's ...


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