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05/25/94 E & E TRUCK LINE v. STATE ILLINOIS

May 25, 1994

E & E TRUCK LINE, INC., ACCOUNT NUMBER 0646433, PLAINTIFF-APPELLEE,
v.
STATE OF ILLINOIS DEPARTMENT OF EMPLOYMENT SECURITY, DEFENDANT-APPELLANT.



Appeal from Circuit Court of Coles County. No. 90MR45. Honorable Paul C. Komada, Judge Presiding.

As Corrected June 27, 1994.

Honorable John T. McCULLOUGH, P.j., Honorable Robert W. Cook, J., Honorable Carl A. Lund, J.

The opinion of the court was delivered by: Mccullough

PRESIDING JUSTICE McCULLOUGH delivered the opinion of the court:

The Illinois Department of Employment Security (Department) conducted an audit of E&E Truck Line, Inc. (E&E), and found E&E liable for unpaid unemployment contributions. The Department concluded certain owner/operator truck drivers (drivers), as well as mechanics and an autobody repairman (nondrivers), were employees of E&E rather than independent contractors, thereby making them nonexempt for unemployment compensation purposes pursuant to the Unemployment Insurance Act (Act) (Ill. Rev. Stat. 1989, ch. 48, par. 300 et seq.). E&E filed a complaint in the circuit court of Coles County seeking judicial review of the Department's decision. The circuit court reversed the decision as being against the manifest weight of the evidence finding all of these individuals were independent contractors pursuant to the Act. For the reasons that follow, we reverse the order of the circuit court and order the Department's decision reinstated.

E&E is a common carrier with authority from the Illinois Commerce Commission which provides trucking services for shippers of goods and commodities. The Department conducted an audit of E&E and on September 22, 1988, the Director of the Department issued a "Notice of Determination and Assessment and Demand for Payment" to E&E for unpaid unemployment contributions and interest for the second quarter of 1984 through the fourth quarter of 1987. E&E filed a protest and petition for an administrative hearing.

The Director of the Department issued her opinion on October 5, 1990. She concluded that under the three-part test found in section 212 of the Act (Ill. Rev. Stat. 1989, ch. 48, par. 322), the drivers were employees of E&E rather than independent contractors. As to the nondrivers, the Director adopted the findings of her representative that the evidence was insufficient to establish that they were not under the general right of control of E&E or were independently established. E&E was therefore required to make unemployment contributions for both the drivers and nondrivers.

On November 8, 1990, E&E filed a complaint for administrative review in the circuit court of Coles County. This complaint only named the "State of Illinois Department of Employment Security" as a defendant. The summons was issued to "Sally A. Jackson, Director, State of Illinois Department of Employment Security." The Director entered her appearance and litigated the case.

The circuit court of Coles County reversed the Director's decision, finding both the drivers and the nondrivers were independent contractors pursuant to the three-part test of section 212 of the Act. Specifically, the circuit court found that the drivers and nondrivers were free from the control and direction of E&E over the performance of their services, both under the contract of service and in fact; and their services were performed outside of all the places of business of E&E. The circuit court also found the drivers and nondrivers were engaged in an independently established trade, occupation, profession, or business. Thus, the circuit court concluded the Director's decision was against the manifest weight of the evidence and reversed.

The Department contends the circuit court lacked jurisdiction to hear the administrative appeal because E&E failed to name the Director in its complaint. E&E only named the Department as a defendant in its complaint and the Department alleges the Director makes the final decision in these types of cases. As such, she was the "administrative agency" contemplated by section 3-107 of the Administrative Review Law (Ill. Rev. Stat. 1989, ch. 110, par. 3-107) and a necessary party in the administrative review action. The Department acknowledges it did not raise this issue before the circuit court.

E&E asserts the circuit court had jurisdiction over this action. It notes the Director was served with summons, entered her appearance in the circuit court, filed her answer and report of proceedings before the Department, and litigated the matter before the circuit court. E&E alleges the failure to name the Director in the caption of the complaint is a "technicality" that should not be deemed to have deprived the circuit court of jurisdiction.

Section 3-107 of the Administrative Review Law states:.

"In any action to review any final decision of an administrative agency, the administrative agency and all persons, other than the plaintiff, who were parties of record to the proceedings before the administrative agency shall be made defendants." Ill. Rev. Stat. 1989, ch. 110, par. 3-107.

This court's recent decision in Kenney Country Lounge & Cafe, Inc. v. Illinois Liquor Control Comm'n (1993), 253 Ill. App. 3d 1013, 625 N.E.2d 880, 192 Ill. Dec. 725, is dispositive of this issue. There, plaintiff filed a complaint for administrative review in the circuit court appealing the order of the Illinois Liquor Control Commission (Commission) which affirmed the revocation of plaintiff's liquor license by the liquor control commissioner for the Village of Kenney. In that complaint, plaintiff only named the Commission as defendant and only asked for service upon the Commission. However, the Village of Kenney entered its appearance. The Commission filed a motion to dismiss, asserting the ...


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