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July 20, 1994




The opinion of the court was delivered by: Scariano

JUSTICE SCARIANO delivered the opinion of the court:

Plaintiff Soo Line Railroad Co. filed a complaint in circuit court, seeking to enjoin defendant Cook County Assessor Thomas C. Hynes from assessing four parcels of real estate it owned which were situated in Cook County, maintaining that they were subject to being assessed only by the State Department of Revenue. It joined other county officials as defendants, namely the county clerk and the county treasurer as well, in order to prevent them from collecting the taxes which it argued would be unlawfully levied pursuant to the illegal assessments.

It grounded its alleged entitlement to injunctive relief in what was then sections 79 through 90 of the Revenue Act of 1939, which was repealed and reenacted as sections 11-70 through 11-125 of the Property Tax Code (Ill. Rev. Stat. 1987, ch. 120, pars. 560-571 now codified at 35 ILCS 200/11-70-200/11-125 (West Supp. 1993)), and which governs the assessment of the property owned or controlled by a railroad company. Under the Act, any realty which qualifies as "operating property" is to be assessed by the Illinois Department of Revenue, which in turn distributes the equalized assessed value of the taxable property of every railroad to the respective taxing districts entitled to it "in the proportion that the length of all the track owned or used in such taxing district bears to the whole length of all the track owned or used" in Illinois, except for buildings having an original cost exceeding $1000. Ill. Rev. Stat. 1987, ch. 120, pars. 560(2), 567 now codified at 35 ILCS 200/11-70(b), 11-110 (West Supp. 1993).

The Act distinguishes between the operating property which is to be assessed by the State, and "non-carrier real estate" which is simply realty owned by a railroad but which is not used for the purpose of operating a train, nor held by it for such a use in the future; non-carrier realty is to be locally assessed. (Ill. Rev. Stat. 1987, ch. 120, pars. 560(2) & (4) now codified at 35 ILCS 200/11-70(b) & (d) (West Supp. 1993).) The Act obligates the railroad to provide to the Department each year a schedule of all of the realty it holds for right-of-way, either owned or leased, the size of the parcels, any improvements made thereupon, and its original purchase price. (Ill. Rev. Stat. 1987, ch. 120, par. 562 now codified at 35 ILCS 200/11-85 (West Supp. 1993).) The railroad must also provide the department with a list of all of its non-carrier real estate, including therewith its current assessed value, as well as its estimated true value, and this information is required to be forwarded by the department to the assessing official in the county where the realty is situated in order that the non-carrier realty may be assessed "in the manner as similar locally assessed property belonging to individuals * * *." Ill. Rev. Stat. 1987, ch. 120, par. 564 now codified at 35 ILCS 200/11-95 (West Supp. 1993).

In order to facilitate the goals of the Act, it authorizes the department to promulgate rules and regulations, which have the same force and effect as the statute so long as they are not inconsistent with it. (Ill. Rev. Stat. 1987, ch. 120, par. 561 now codified at 35 ILCS 200/11-125 (West Supp. 1993).) Pursuant to this authority, the department adopted the regulations contained in sections 110.105 and 110.145 of title 86 of the Illinois Administrative Code. (86 Ill. Admin. Code §§ 110.105, 110.145 (1986).) Section 110.105 provides that once the railroad submits its annual schedule of non-carrier property to the department, it will transmit copies of the forms to the clerk of the county in which the property is situated. The regulation then directs that official to send the forms to his or her county's assessing official. *fn1 That office is granted 30 days from the date of transmittal by the department to verify that the list contains all of the railroad-owned realty in the county which fits within the rubric of "non-carrier real estate," and if it does not, to register its objections with the department regarding the mischaracterization of the disputed properties. Section 110.145 sets forth the procedure by which the department is to determine whether the railroad has properly identified its real estate either as State-assessed operating property or locally-assessed non-carrier real estate.

Prior to 1987, the Assessor's office in Cook County had never challenged a railroad's characterization of its owned or controlled property. In 1987, however, because his office grew concerned with a loss of potential revenue for the county, the Assessor created a Railroad Task Force to scrutinize more closely the railroad companies' classification of the realty they owned or controlled in Cook County. The task force was responsible for ensuring that the property which railroads had described as operating property in their submitted schedules to the department did not actually fall within the category of non-carrier real estate. It attempted to coordinate its efforts with the department in order to establish a double layer of auditing of the schedules, thereby securing accurate taxation of railroad property situated in Cook County.

In late August or early September 1987, Paul Wiley, the deputy director of the department's Property Tax Administration Bureau held Discussions with Cook County's First Assistant Assessor and the general counsel to the Assessor. At this meeting, the officials informed Wiley that the Assessor planned to object to the characterization of many Cook County-situated parcels which the railroads had described as operating property, but they were not confident that the office could comply with the 30-day deadline provided in section 110.145 of the department's administrative regulations. (86 Ill. Admin. Code § 110.145 (1986).) Wiley instructed them to file their objections, even if belated, and gave assurances that the department would not enforce the deadline; he further advised that the Assessor could locally assess the disputed parcels.

As provided in its regulations, the department transmitted to the Clerk of Cook County the railroads' listings of non-carrier property in the county, but it did so in two batches. The first was sent on August 7, 1987, under cover of a memorandum which was misdated August 7, 1986, and which was time-stamped as having been received by the clerk's office on August 10, 1987. The second delivery of the schedules was sent on a date not apparent from the record, with the same misdated memorandum, but was marked as being received by the clerk as of September 15, 1987. *fn2

On September 10, 1987, 34 days after the department transmitted the first set of schedules to the Cook County Clerk's office, the Assessor registered 409 objections to the classification of over 800 parcels of railroad property in Cook County in order to redesignate those parcels as locally-assessable non-carrier real estate. The department took no action regarding the objections for some time because the official who reviewed such challenges was on leave from the office and was not expected back until after January 1, 1988. Consequently, relying on the representations of Deputy Director Wiley, the Assessor's office proceeded on the assumption that its objections would be sustained. Accordingly, it sent assessment notices to the railroads that owned the disputed parcels, in the belief that those assessments would be subject to later corrections after the department adjudicated the issue.

The department finally scheduled hearings on the Assessor's objections, which were to commence soon after June 1, 1988. The notification of the intent to hold hearings on the matter was met by the railroads' challenges to the validity of the objections on the ground that they were null and void since they were filed beyond the 30-day time limit imposed by the department's rules. Plaintiff, which owned three parcels in Schaumburg Township, as well as one in Leyden Township, all of which had been subjected to the Assessor's objection, raised similar claims with the department. It also refused to pay the local property taxes levied on the property for that year.

On July 1, 1988, Rodger D. Sweet, who was then the director of the department, advised the Assessor that notwithstanding the earlier representations of Deputy Director Wiley, all of its objections filed on September 10, 1987, were untimely; thus, in conformance with department rules, the railroad's realty would be classified for assessment purposes as it was described in the railroad-submitted schedules. Sweet informed the Assessor that it could seek a departmental hearing on this issue by filing a formal request for one within 20 days of the mailing of the director's decision, or until July 21, 1988. The Assessor made a timely request for a hearing on the issue, but the record is silent as to whether such a hearing was held or, if it was held, the result thereof.

For the tax year 1988, the Assessor timely registered the very same objections to the various railroads' classification of realty as it had for the previous tax year, including plaintiff's four parcels. In its response dated October 7, 1988, the department overruled the objections, finding that the parcels in question were properly defined as operating property. The Assessor thereafter asked for a hearing on its objections, but once again, the record is silent as to whether the department actually conducted one, or whether the Assessor pressed any further for such a hearing.

On April 14, 1989, plaintiff filed its complaint in circuit court for a declaration that the 1987 local assessment on the four disputed Cook County parcels was void because the objections were untimely. It also sought to enjoin the county's assessment of those properties in future years, and thereafter moved for summary judgment on both counts, which the court granted.

The court held as a matter of law that the 30-days' post-transmittal time limit for the filing of objections was mandatory and thus could not be ignored by the department; therefore, the Assessor's objections for 1987 were untimely. Next, it held that since this matter dealt with governmental revenue, the department could not be estopped from enforcing the provision, despite the assurances of its former official, Wiley. It also affirmed the department's Conclusion that the parcels at issue were operating property, thereby depriving the Assessor of the authority to assess them locally. Accordingly, the court enjoined the county officials before it from assessing, levying or attempting to collect any taxes on the property for the tax years 1987-1991 and ordered them to clear the title of the property of any tax liens and vacate all tax judgments. The county official defendants filed a timely notice of appeal.


The first issue presented in this appeal concerns the proper construction of the department's regulation that grants a local assessor 30 days to present its objections to a railroad's designation of its realty as either operating or non-carrier property. The regulation under consideration states that:

"When the railroad returns [the schedule of property as required by regulation listing its 'non-carrier real estate'], the Department shall transmit to the county clerks copies of [those schedules]. * * * The county clerk immediately shall transmit these Schedules to the proper assessment officers for consideration and, if [they] have reason to believe that the items of property set forth in these Schedules do not include all 'non-carrier real estate' of the reporting carrier located within their jurisdiction, they shall, within 30 days from the date of transmittal by the Department, object to the classification adopted by the reporting railroad. (86 Ill. Admin. Code § 110.105 (1986).)

In the case at bar, a copy of the railroads' schedules for the 1987 tax year was sent to the Cook County Clerk's office on August 7, 1987, by the department and the objections of the Assessor were filed on September 10, 1987, 34 days later.

Defendants initially suggest that it actually filed its 1987 objections in a timely fashion. Although the presentation of this argument is somewhat sketchy, they appear to rely on the fact that the county clerk's office stamped the schedules as filed on August 10, 1987; therefore, they argue, the assessor's office had 30 days from that date to file objections, a deadline with which it complied. But for this argument to have any merit, we would be required to equate "transmit" with its antonym "receive," a thoroughly absurd suggestion; therefore, the contention is without warrant.

The clerk's time and date stamp signifies not when the schedules were sent by the department, but rather when they were received by the county clerk. "Transmit," on the other hand, is universally defined as "to send from one person thing or place to another; convey." (American Heritage Dictionary 1288 (2d College ed. 2985).) Since, as evidenced by the cover letter which accompanied them, the schedules here were sent from the department to the clerk on August 7, 1987, under the department's regulation the Assessor had 30 days from that date to retransmit his objections to the department. In the case at bar, the objections were sent 34 days after the schedules were transmitted; thus, those objections were untimely.

Next, defendants maintain that Deputy Director Wiley, by extending the deadline for filing objections and by allowing the Assessor to assess locally, was merely exercising the discretion of the agency to interpret its own regulations. (See Lamar v. Illinois Racing Board (1977), 55 Ill. App. 3d 640, 370 N.E.2d 1241, 13 Ill. Dec. 214 (holding that agencies are necessarily invested with substantial discretion when construing or applying the rules or regulations that they themselves have promulgated).) Although as a general matter, an agency is entitled to latitude in the interpretation of its own rules, a reviewing court may reverse the exercise of this discretion when it constitutes an abuse, such as where the interpretation is plainly wrong or where it is incompatible or irreconcilable with long-settled constructions. ( Phillips v. Hall (1983), 113 Ill. App. 3d 409, 447 N.E.2d 418, 69 Ill. Dec. 201.) Since that certainly is the case here with respect to Deputy Director Wiley's interpretations, the circuit court was correct to disregard his decisions which were favorable to defendants.

The first of his interpretations sub judice was his apparent belief that he was empowered under the rule to extend sua sponte the time limit for the transmission of objections from the assessor to the department. He harbored this belief even though the rule uses the mandatory "shall" as opposed to the permissive "may," while explaining how soon after transmission such objections should be registered with the department. Our supreme court has held that the use of "shall" in an enactment is usually regarded as mandatory, but this is not a fixed meaning to be applied in every case. ( Fumarolo v. Chicago Board of Education (1990), 142 Ill. 2d 54, 566 N.E.2d 1283, 153 Ill. Dec. 177; Pullen v. Mulligan (1990), 138 Ill. 2d 21, 561 N.E.2d 585, 149 Ill. Dec. 215.) Instead, where doubt exists the intended meaning of "shall" is to be drawn from context. People v. Singleton (1984), 103 Ill. 2d 339, 469 N.E.2d 200, 82 Ill. Dec. 666.

Defendants claim that Wiley was free to consider "shall" in this rule as directory rather than mandatory with regard to the deadline for the filing of objections because it served only to "guide the orderly conduct of business" for the department and had no effect on the rights of any party. (See People v. Jennings (1954), 3 Ill. 2d 125, 119 N.E.2d 781 (stating that an enactment which contains "shall" may be deemed permissive so long as it was "clearly designed for the guidance of officers or the maintenance of order, system and dispatch in proceedings[]").) Therefore, according to defendants, Wiley did not abuse his discretion when he relieved the Assessor of the obligation to transmit his objections within 30 days.

Defendants' argument, however, misapprehends the purpose of the deadline regulation at issue here. The rule does not serve merely as a guide for department officials, but rather it has all the absolute finality of a statute of repose. Under the rule, when the 30-day period elapses, and absent the assessor's compliance with the deadline, the railroads which submit their schedules to the department are free to assume that the characterization which they give their property will not be disturbed. Without strict enforcement of the 30-day limitation, the railroads could never be confident that they will not be subjected to a potential assessment by the county as well as by the department while the two dispute who actually is authorized to assess the railroad's real estate. Here, since making enforcement of the 30-day limitation optional would create confusion and could prejudice the railroads operating in this State by subjecting them even to the mere possibility of requiring them to pay their taxes twice until the objections are resolved, the provision must be deemed mandatory. (See Village of Park Forest v. Fagan (1976), 64 Ill. 2d 264, 356 N.E.2d 59, 1 Ill. Dec. 59 (stating that a provision which contains "shall" must be construed as mandatory where a disregard of the enactment would harm private rights or the public interest); Farmer v. McClure (1988), 172 Ill. App. 3d 246, 526 N.E.2d 486, 122 Ill. Dec. 227 (holding that an administrative rule with the word "shall" must be construed as mandatory where the rule creates a time period which is provided to safeguard the rights of others).) Nor do we perceive anything in the regulation at issue here that would permit any department official to grant ad hoc or otherwise discretionary exemptions from its clear and unambiguous requirement. Accordingly, the circuit court did not err when it found that Wiley had no authority to disregard the clear language of the rule or to extend the time for filing of the local objections beyond that which the rule expressly provides.

Wiley was also acting beyond his authority when he allowed the Assessor to begin assessing the railroad property which it claimed was non-carrier real estate until the department ruled on its objections. Section 80 of the Revenue Act (Ill. Rev. Stat. 1987, ch. 120, par. 561, repealed, re-enacted and now codified at 35 ILCS 200/11-75 (West Supp. 1994) makes it plain that the assessment of all railroad property is to be made by the department, thus removing the assessment of such property from the purview of the local assessors. The local officials regain their ability to assess the railroad-owned or controlled property only after the department formally determines that the land is properly classified as "non-carrier real estate." In effect, the section creates a presumption that the schedules submitted by the railroads correctly describe their property as either operating realty or not, and the local officials may defeat this presumption only by persuading the department that a parcel was mischaracterized. (See People ex rel. Brenza v. Chicago & Northwestern Ry. Co. (1951), 411 Ill. 85, 103 N.E.2d 85 (holding that the precursor to the department was the sole authority to ascertain whether railroad property is to be assessed by the State or locally).) Here, by authorizing the Cook County Assessor to assess objected-to realty before the department had made its determination, Wiley ignored the statute. As a result of this disregard of its clear mandate, the Cook County Assessor did not and could not gain from him the power to assess the property, nor did the other county officials named as defendants have the authority to seek to collect the levy which resulted from such an assessment on it. In sum, since those officials lacked the ability to act as they did as a matter of law, the circuit court correctly enjoined such unauthorized conduct.


Defendants argue alternatively that because they reasonably relied on the assurances of Wiley, who was a high-ranking official of the Department of Revenue, they could file the objections after the 30-day limit had elapsed, the department should be estopped from its subsequent enforcement of the deadline. They acknowledge the general rule that holds that estoppel usually cannot be applied to the State, but they contend, relying upon Hickey v. Illinois Central R.R. Co. (1966), 35 Ill. 2d 427, 220 N.E.2d 415, that this case falls within the exception to the rule which allows its implementation where necessary to avoid a manifest inJustice or fraud.

We disagree with defendants' belief that the actions of the State official here are equatable with the governmental conduct in Hickey. In that case, the State and the City of Chicago belatedly asserted their ownership rights in property which had been used and controlled by the railroad. They did so despite the fact that in the 50 years preceding the filing of the suit, each had consistently disclaimed any interests in the property and actually treated the land as though the railroad owned it in fee. The court held that under the extraordinary circumstances present there, estoppel was necessary to avoid an impenetrable confusion, affecting the numerous parties which had contracted with the railroad in reliance on its apparent fee simple title to the land, which would no doubt accompany the city's and the State's dilatory assertion of their property interests therein.

Here in contrast, we are not faced with repeated overt acts and passive acquiescence of governmental agents over a number of years, thereby leading defendants to trust, as would be reasonable, that the 30-day deadline for the filing of objections would never be enforced. Instead, defendants acted upon the unsubstantiated statements of Wiley, who, it seems, was proceeding without any authority, statutory or otherwise. We have held that "[a] governmental body cannot be estopped by an act of its agents which exceeds the authority conferred on that agent." ( Miller v. Town of Cicero (1992), 225 Ill. App. 3d 105, 113, 590 N.E.2d 490, 496, 168 Ill. Dec. 853.) The reason for this rule was provided in County of Cook v. Patka (1980), 85 Ill. App. 3d 5, 12, 405 N.E.2d 1376, 1381, 40 Ill. Dec. 284, where the court explained that: "anyone dealing with a governmental body takes the risk of accurately ascertaining that he who purports to act for that body stays within the bounds of his authority and this is so even though the agent himself may have been unaware of the limitations on his authority."

We have already determined that Wiley did not have the power to suspend the department's rule that imposed a 30-day time limit on the entry of objections to the classification of railroad realty. Consequently, the circuit court was correct in holding that estoppel cannot be applied to bind the department to his misrepresentations. Were the rule otherwise, the law would be at the mercy of the opinions and misjudgments of the State's employees, a thoroughly unwieldy system of government. Hughes v. Illinois Public Aid Commission (1954), 2 Ill. 2d 374, 379, 118 N.E.2d 14, 17.


Defendants finally argue that the circuit court's implementation of its equitable power in the form of an injunction was improper in light of the fact that an adequate legal remedy, the Administrative Review Act, existed. They also argue that the injunction was erroneously granted since plaintiff did not exhaust all of the remedies available to it through the department.

We find both of these contentions to be groundless considering that plaintiff prevailed in the administrative agency. First, with respect to plaintiff's alleged failure to exhaust its administrative remedies, it is important to recognize that since the department rejected defendants' objections, no additional department-provided avenues of appeal were either necessary or even available to it. Section 110.145 of title 86 of the Illinois Administration Code (86 Ill. Admin. Code § 110.145 (1986)), which grants an intra-agency right of review of an initial determination regarding an Assessor's objection to railroad property, is available to a railroad only when the department affirms an Assessor's objection and redesignates property as non-carrier real estate. Since the department rejected the Assessor's objection here, plaintiff, even assuming it wanted to, could not seek review of that determination under department rules.

It follows from this Conclusion then that since the department rejected the objections in the case at bar, plaintiff was not disadvantaged by any final order of the department. Under the Administrative Review Act, however, a party may bring an action for administrative review only after an agency has issued what amounts to a final order adverse to its interests. (Ill. Rev. Stat. 1987, ch. 110, par. 3-102 now codified at 735 ILCS 5/3-102 (West 1992).) Consequently, that legal remedy was unavailable to plaintiff.

Moreover, injunction has long been recognized as the appropriate method by which an individual or corporation may prevent a public official from performing an act beyond his or her express or implied powers, or from committing an unlawful act. ( Lindsey v. Board of Education of Chicago (1984), 127 Ill. App. 3d 413, 468 N.E.2d 1019, 82 Ill. Dec. 365; Brown v. City of Chicago (1953), 351 Ill. App. 366, 115 N.E.2d 354.) For example, in a case remarkably similar to the one at bar, St. Louis Bridge Co. v. Becker (1939), 372 Ill. 102, 22 N.E.2d 954, the supreme court affirmed the circuit court's entry of an injunction to restrain the St. Claire County clerk from levying a tax based on an illegal assessment of the Eads Bridge across the Mississippi River. As is the case here, the court there found that under the then-controlling statute, the bridge, being a railroad right-of-way, was assessable only by the State Tax Commission, an earlier incarnation of the Department of Revenue. The supreme court found that the railroad could appeal to the equitable jurisdiction of the court in order to prevent an unauthorized local assessment and levy. This case is virtually identical to the facts in St. Louis Bridge; consequently, the court's grant of an injunction to prohibit the unlawful assessment was equally appropriate here.


DiVITO, P.J., and McCORMICK, J., concur.

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