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02/07/97 APPLICATION EDWARD J. ROSEWELL v. J.C.

February 7, 1997

IN RE APPLICATION OF EDWARD J. ROSEWELL, AS COUNTY TREASURER AND EX-OFFICIO COUNTY COLLECTOR OF COOK COUNTY, ILLINOIS, FOR JUDGMENT AND ORDER OF SALE AGAINST REAL ESTATE RETURNED DELINQUENT FOR THE NON-PAYMENT OF GENERAL TAXES FOR THE YEAR 1985 (EDWARD J. ROSEWELL, APPLICANT-APPELLEE,
v.
J.C. PENNEY COMPANY, INC., OBJECTOR-APPELLANT.)



Appeal from the Circuit Court of Cook County. Misc. No. 86-34. 1985 Objection No. 721. The Honorable Michael J. Murphy, Judge Presiding.

Rehearing Denied March 18, 1997. Released for Publication March 31, 1997.

The Honorable Justice Hourihane delivered the opinion of the court. McNULTY, P.j., and Cousins, J., concur.

The opinion of the court was delivered by: Hourihane

JUSTICE HOURIHANE delivered the opinion of the court:

This is an appeal by J.C. Penney Company, Inc. (Penney) from an order of the circuit court denying Penney's request for a reduction in the assessed valuation of certain real property and partial refund of taxes paid in full under protest.

The Cook County assessor (assessor) proposed an assessed valuation of $6,014,504 for tax year 1985 on Penney's North Riverside retail store. On Penney's complaint, the assessed valuation was reduced to $4,357,919. Thereafter, Penney filed a complaint with the Cook County Board of Tax Appeals, which denied any relief. Penney paid the corresponding tax of $587,866.94 in full under protest and subsequently filed an objection to the application of the Cook County collector (collector) for judgment and order of sale. The trial court ruled that Penney had failed to demonstrate actual or constructive fraud by the taxing authority and denied Penney's objection. In its post-trial motion for reconsideration, Penney argued that the trial court misapprehended the law as to Penney's burden to establish fraud by the taxing authority. Penney also argued that, in any event, pursuant to a 1994 amendment to the Property Tax Code (Pub. Act 88-642, § 5, eff. September 9, 1994 (amending 35 ILCS 200/23-15) (West Supp. 1993))) which became effective three months after trial in this matter, Penney need not demonstrate constructive fraud. The trial court denied Penney's motion to reconsider, finding that the 1994 amendment did not apply (and even if applicable, was unconstitutional). Penney sought immediate appeal before the Illinois Supreme Court (134 Ill. 2d R. 302(a)), which remanded the matter to this court for disposition (155 Ill. 2d R. 365).

On appeal, Penney argues that a 1995 amendment to the Property Tax Code (Pub. Act 89-126, § 5, eff. July 11, 1995 (amending 35 ILCS 200/23-15 (West 1994))) applies to the instant case and eliminates the burden of proving constructive fraud. In the alternative, Penney argues that the 1994 amendment controls and similarly removes the requirement of demonstrating fraud. Finally, Penney contends that even if the statutory amendments are inapplicable, it made an adequate showing of fraud and the judgment of the trial court should be reversed.

The collector counters that either amendment may only be applied prospectively and that the trial court correctly applied the doctrine of constructive fraud to the evidence presented at trial.

For the reasons set forth below, we affirm.

I

At the time of trial in this matter, it was settled law, and the parties so stipulated, that an objecting taxpayer must demonstrate actual or constructive fraud on the part of the taxing authority:

"The taxation of property is a legislative rather than a judicial function [citation], and *** in the absence of fraud, the courts have no power to review the valuation of property fixed for taxation purposes by the appropriate assessing officers [citations].

A taxpayer may challenge an assessment on the basis of either actual or *** constructive fraud. [citation] A presumption exists that a tax is just and that the officers levying it have honestly discharged their duties [citation]; the burden is on the taxpayer to establish, by clear and convincing evidence, that the taxing authorities have not exercised their honest judgment and that the assessment is constructively fraudulent." In re Application of County Treasurer, 131 Ill. 2d 541, 550-51, 137 Ill. Dec. 561, 546 N.E.2d 506 (1989) (hereafter Ford Motor Company).

On June 15, 1994, one day after the trial court issued its Memorandum Decision denying Penney's objection to the collector's application, Senate Bill 1336 was passed by the Illinois General Assembly. The bill, which was subsequently signed into law on September 9, 1994, amended section 23-15 of the Property Tax Act. Pub. Act 88-642, § 5, eff. September 9, 1994 (amending 35 ILCS 200/23-15) (West Supp. 1993)) (hereafter "1994 amendment"). Section 23-15 governs ...


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