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12/12/97 PALUMBO BROS. v. RAYMOND T. WAGNER

December 12, 1997

PALUMBO BROS., INC., AN ILLINOIS CORPORATION, PLAINTIFF-APPELLANT,
v.
RAYMOND T. WAGNER, JR., DIRECTOR OF THE ILLINOIS DEPARTMENT OF REVENUE, DEFENDANT-APPELLEE.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE EARL ARKISS, ALEXANDER P. WHITE, JUDGES PRESIDING.

Released for Publication January 22, 1998.

Presiding Justice Campbell delivered the opinion of the court. Buckley, J., and Gallagher, J., concur.

The opinion of the court was delivered by: Campbell

PRESIDING JUSTICE CAMPBELL delivered the opinion of the court:

Plaintiff Palumbo Bros, Inc. (Palumbo) appeals orders of the circuit court of Cook County dismissing a complaint Palumbo filed against defendant Raymond T. Wagner, the Director of the Illinois Department of Revenue (Director) to determine the enforceability of a tax obligation against Palumbo and denying Palumbo's motion to reconsider.

The record on appeal indicates the following facts. On April 7, 1995, Palumbo filed a complaint for declaratory judgment and other relief against the Director. Palumbo alleged that it was a member of a joint venture with a separate, independent Illinois corporation known as Benchmark Construction Company (Benchmark). The Illinois Department of Revenue (Department) assigned the joint venture an Illinois Business Tax (IBT) number that was different from Palumbo's IBT number.

The complaint alleged that on December 12, 1991, the Department issued a Notice of Tax Liability (1991 NTL) numbered "S F 199134385402012" to the joint venture under its own IBT number, proposing to assess $31,849 in use taxes, $3,185 as a penalty and $14,332 in interest, for a total of $49,366. The 1991 NTL, which was attached as an exhibit to the complaint, is addressed to Palumbo at 323 S Center Street in Hillside, Illinois. On June 15, 1992, the Department issued a Notice of Tax Liability (1992 NTL) numbered "S F 9213544903001" to the joint venture proposing to assess motor vehicle use taxes, with a penalty and interest totalling $262,158. The 1992 NTL, which was attached as an exhibit to the complaint, is addressed to "Palumbo Bros. Inc./Benchmark Const. Co." (Palumbo/Benchmark) at 323 S Center Street in Hillside, Illinois.

The complaint alleged that the Department never notified or instituted proceedings against Palumbo individually for these proposed assessments. On November 3, 1993, the Director caused a tax lien to be filed in favor of the Department upon all real and personal property owned or acquired "by the above named taxpayer." The Notices of Tax Lien, which are attached as exhibits to the complaint: refer to both Palumbo and Palumbo/Benchmark; state that they are based on the 1991 NTL and the 1992 NTL; and carry the joint venture's IBT number.

Palumbo sought a declaration that it had no obligation to the Department for the taxes, penalties and interest assessed against the joint venture. Palumbo also sought a declaration that the Department had no valid lien against Palumbo's individual assets, including, but not limited to a particular piece of real property located in South Barrington, Illinois. Palumbo also sought similar relief, including a declaration that the Department had no legal basis to enforce a tax lien against Palumbo by reason of a tax obligation of the joint venture.

On April 12, 1995, Palumbo filed an emergency motion for a temporary restraining order, alleging that the Department was attempting to serve a notice of levy on the Chicago Title Insurance Company, which was holding $169,000 in escrow that represented the net profit on the sale of the property Palumbo named in its complaint. The next day, the parties entered into an agreed preliminary injunction restraining the Director or his agents from levying on the property at issue until the order was vacated or modified by the court or altered by agreement of the parties.

The Director then filed a motion to dismiss Palumbo's complaint pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (1996))(Code). The motion alleged that the Department learned of the joint venture during an audit of Palumbo performed at Palumbo's place of business, causing The Department to assign the joint venture an IBT number. The motion alleged that the 1991 NTL was issued as a result of the audit and that the 1991 NTL and the 1992 NTL were sent to Palumbo's place of business in accordance with statutory requirements.

The Director alleged that Palumbo failed to request a hearing on either NTL issued under the joint venture's IBT number and thus became final after 60 days. The Director asserted that Palumbo was given notice that comported with due process. The motion asked the court to dismiss the complaint for failure to state a claim and to allow the Department to collect the taxes administratively. The Director also attached his notarized sworn statement that he had full knowledge of the facts set forth in the motion and that the matters asserted therein were true.

Palumbo apparently filed a response to the motion to dismiss. However, the parties have failed to identify where this response appears in the record on appeal.

On July 5, 1995, the Department, through an Assistant Attorney General, filed a reply to "its motion to dismiss." Attached to the reply are two exhibits that purport to be domestic return receipts for certified mail. Exhibit A of the reply includes a photocopy of a receipt addressed to Palumbo at the Center Street address that purports to show delivery on December 20, 1991; the space designated as "Signature -- Agent" is signed by a Jim Romano. Exhibit B of the reply includes a photocopy of a receipt addressed to Palumbo/Benchmark at the Center Street address that purports to show delivery on June 18, 1992; the space designated as "Signature -- Agent" is again signed by a Jim Romano. The motion states that Jim Romano is "presumably a Palumbo agent *** ."

The record does not disclose the respective interests of Palumbo and Benchmark in the joint venture. The record does not disclose the identity of the joint venture's officers or directors. The record does not disclose the purpose of the joint venture. The record does not disclose the business or project to be carried on by the joint venture. The record does not disclose when the joint venture commenced or whether it has ceased operation. The record does not disclose any information relevant to Benchmark, aside from the allegation that it is an Illinois corporation. The record does not disclose whether the joint venture had any other address other than that of Palumbo's principal place of business. The 1992 NTL refers to the purchase or sale of a vehicle, aircraft, trailer or mobile home; otherwise, the record does not disclose the transactions that formed the grounds for the Department's assessment. The 1991 NTL states that it is based on an audit ...


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