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Sundance Homes, Inc. v. County of Du Page

February 16, 2001


The opinion of the court was delivered by: Chief Justice Harrison

21-September 2000.

On March 23, 1995, this court rendered its opinion in Northern Illinois Home Builders Ass'n v. County of Du Page, 165 Ill. 2d 25 (1995) (hereinafter referred to as NIHBA), holding unconstitutional the first of two state enabling statutes, and Du Page County ordinances enacted pursuant thereto, which, respectively, authorized and imposed transportation impact fees on new development. In the context of that case, this court stated, "monies collected thereunder should be returned." NIHBA, 165 Ill. 2d at 35-36, 50. The appellants in this case, fee payers who were not parties in NIHBA, who waited more than five years after they had paid the impact fees in question to file for a refund, and who indeed filed almost a full year after NIHBA was decided, now seek, by various procedural means legal and equitable, a refund of fees they paid under the invalidated statute and ordinances. Although there are several facets to the issue, their right to a refund is the central question before the court. We set forth hereafter facts necessary to an understanding of our disposition.

In 1987, the Illinois legislature enacted former section 5-608(a) of the Illinois Highway Code (the enabling act) (Ill. Rev. Stat. 1987, ch. 121, par. 5-608(a), repealed by Pub. Act 86-97, §2, eff. July 26, 1989). The 1987 enabling act allowed counties with populations between 400,000 and 1 million inhabitants to establish transportation impact districts and collect transportation impact fees from persons constructing new developments in those districts.

Pursuant to the enabling act, Du Page County passed several ordinances creating transportation impact districts and providing for the collection of road impact fees from builders (Du Page County Ordinances ODT-016-88, ODT-021-89, ODT-21A-89, ODT-021B-89). The plaintiff, Sundance Homes, Inc. (Sundance), is a development company which constructs new residences in Du Page County. Between November 22, 1988, and July 25, 1990, the county collected road impact fees from the plaintiff and other homebuilders. On July 26, 1989, the legislature repealed the enabling act and passed the Road Improvement Impact Fee Law (605 ILCS 5/5-901 et seq. (West 1992)). As a result of that legislation, the county enacted a new ordinance effective July 25, 1990, authorizing the collection of road impact fees pursuant to the new law. The instant case concerns only those impact fees collected by the county prior to July 25, 1990.

Between January 17, 1989, and July 25, 1990, plaintiff paid a total of $63,580 in road impact fees to the county. The plaintiff submitted each payment under protest. In 1988, the plaintiff and several other homebuilders filed a lawsuit against the county in the circuit court of Du Page County. Home Builders Ass'n of Greater Chicago v. County of Du Page, No. 88-MR-683 (Circuit Court of Du Page County). In that case, the plaintiff requested a declaration that the enabling act and the Du Page County ordinances enacted pursuant thereto were unconstitutional. The plaintiff also sought the entry of an order requiring the county to refund all road impact fees paid by the plaintiff and the other named homebuilders. Although the plaintiff moved for judgment on the pleadings in that case on June 15, 1990, no judgment was ever entered on the merits and the case was voluntarily dismissed in November 1990.

The constitutionality of the enabling act of 1987, and the Du Page County implementing ordinances, was again attacked in a separate lawsuit brought by different homebuilders in NIHBA. As previously noted, on March 23, 1995, this court filed an opinion in NIHBA, holding unconstitutional the enabling act of 1987, and the Du Page County implementing ordinances, and stating that "the monies collected thereunder should be returned." NIHBA, 165 Ill. 2d at 35-36, 50. The appellants in the instant case were not parties in NIHBA.

Following this court's holding in NIHBA, the plaintiff requested that the county return the $63,580 in road impact fees it had paid between January 17, 1989, and July 25, 1990. The county refused the plaintiff's request for a refund.

Plaintiff filed the instant class action suit on February 8, 1996, requesting that the county be ordered to return all of the road impact fees paid between November 22, 1998, and July 25, 1990. The plaintiff alleged that, during this period, the county had collected an aggregate amount of $6,194,056.22 in impact fees from the members of the class. As subsequently amended, the plaintiff's complaint consisted of three counts. Count I was entitled "mandamus" and sought an order requiring the county to immediately return the impact fees paid by each class member. Count II was entitled "declaratory judgment" and sought an order declaring that the county was indebted to each class member in an amount equal to the total road impact fees paid by that class member. Count III was entitled "restitution, assumpsit, unjust enrichment, and recovery of payment" and sought an order that the county be required to deposit all of the collected road impact fees into a common fund for the benefit of the members of the class.

On July 10, 1996, the county filed a motion to dismiss pursuant to section 2-619 of the Code of Civil Procedure (the Code) (735 ILCS 5/2-619 (West 1996)). In its motion, the county argued that plaintiff's complaint was time-barred by section 13-205 of the Code, which imposes a five-year limitation period on "all civil actions not otherwise provided for." 735 ILCS 5/13-205 (West 1996). The county argued that the plaintiff had failed to file its complaint within five years from the date its cause of action accrued, according to the county, the date it had actually paid the road impact fees. Alternatively, the county argued that the plaintiff's complaint should be barred under the doctrine of laches.

In response to the motion, the plaintiff argued that its cause of action did not accrue until this court filed its opinion in NIHBA on March 23, 1995. The plaintiff contended that, prior to the ruling in NIHBA, it had no right to a refund of the impact fees. The plaintiff therefore concluded that the instant class action was a timely attempt to "enforce" this court's ruling in NIHBA that the monies collected pursuant to the invalidated ordinances "be returned." On November 5, 1996, the trial court denied the county's motion to dismiss.

On March 4, 1997, the circuit court entered an order certifying as a class "[a]ll persons or entities who paid impact fees to the [County] and/or claim a refund pursuant to *** Ordinance Nos. [ODT]-016-88; ODT-021-89; ODT-021A-89; and ODT-021B-89 during the period of the effective enforcement of said ordinance[s] which was from November 22, 1988, through July 25, 1990, which ordinance[s] w[ere] declared to be unconstitutional by the Illinois Supreme Court." The trial court also identified as a subclass those homebuyers who were entitled to a refund because their developer/builder had incorporated the charge for the road impact fees into the purchase price of their homes.

On September 22, 1997, the plaintiff filed a motion for summary judgment as to each count of its complaint. The plaintiff argued that there existed no genuine issue as to the county's obligation to return the road impact fees and as to the amount of the refund due. The plaintiff therefore concluded that it was entitled to judgment as a matter of law. On November 24, 1997, the trial court entered an order granting the motion for summary judgment. The county filed a notice of appeal from that order, but the appellate court dismissed the appeal. Sundance Homes, Inc. v. County of Du Page, No. 2-97-1232 (February 6, 1998) (unpublished order of dismissal).

On March 13, 1998, the circuit court entered an order creating a common fund for the benefit of the class and directing the Du Page County treasurer to transfer $6,194,056.22 into the fund. Also in March of 1998, the court-approved "Notice of Class Action and Hearing on Attorneys' Fees" was sent to all ascertainable members of the class by first class mail and was published in certain newspapers. Accompanying the notice was a copy of the plaintiff's petition for attorney fees. The notice advised the class members that they could either register their claims for a refund out of the common fund or "opt-out" of the class. By the end of the registration period, class members representing claims totaling $68,000 had chosen to "opt-out" of the class. Class and subclass members representing claims totaling $2,406,745 registered to participate in the distribution of the common fund. Of those claims, there were several dual registrations by homebuilders and home buyers claiming a refund to the same $37,800 in impact fees.

On September 3, 1998, the circuit court entered various orders providing that (1) the county had no standing to be heard on the plaintiff's petition for attorney fees; (2) attorney fees would be calculated based upon the entire common fund and not just the claimed portion of the fund; (3) attorney fees would be paid from the unclaimed portion of the fund; (4) an additional $37,800 would be paid out of the unclaimed fund in order to satisfy all of the dual claims; and (5) the class would receive prejudgment interest at a rate of 5% from the date the action was filed.

On June 8, 1998, Fifield Companies, Inc., Cambridge Homes, Inc., Cambridge Properties, Lexington Homes, L.L.C., Prentiss Properties Acquisition Partners, L.P., Kingsport Development, Inc., Strategic Realty Advisors, Inc., Catellus Development Corporation, Plitt Theatres, Inc., and Toys "R" Us, Inc. (collectively referred to as the intervenors), filed motions pursuant to section 2-804(a) of the Code (735 ILCS 5/2-804(a) (West 1998)) to intervene in the class action in order to challenge the class certification and the plaintiff's petition for attorney fees. Each of these entities had paid road impact fees under the invalidated ordinances and were members of the class. Although the circuit court did not rule on the motions to intervene, the movants did participate in all aspects of the lawsuit after June 8, 1998.

On November 4, 1998, the circuit court conducted a hearing on the plaintiff's petition for attorney fees. At the hearing, plaintiff's counsel presented a detailed summary of the legal services performed on behalf of the class and the expenses incurred in prosecuting the case. Plaintiff's counsel also provided the testimony of two expert witnesses who had experience in class action litigation. Both witnesses outlined the benefits and results achieved for the class and concluded that an award of attorney fees in an amount equal to one-third of the common fund would be appropriate.

On January 15, 1999, the circuit court entered an order awarding 21.289% of the common fund as attorney fees. The common fund, including prejudgment interest, totaled $7,045,720. Applying the trial court's percentage award to the common fund resulted in a fee award of $1.5 million.

Also on January 15, 1999, the trial court entered a final dispositional order, providing that (1) $2,737,672 (claims of $2,406,745 plus prejudgment interest of $330,927) be paid out of the common fund to satisfy all of the registered claims of the class; (2) $1.5 million be paid out of the remaining unclaimed portion of the common fund to satisfy the award of attorney fees; (3) $68,000 of the unclaimed portion of the common fund be returned to the county to satisfy the potential claims of class members who had "opted-out"; (4) $37,800 be paid out of the unclaimed portion of the common fund to satisfy all of the dual claims made by homebuilders and homeowners; (5) the remainder of the unclaimed portion of the fund be returned to the county's general fund subject to the county's reduction of its next real estate tax levy on all county taxpayers by that amount; and (6) enforcement of the order would be stayed pending an appeal.

At the time the trial court entered its final dispositional order, the intervenors renewed their request for a ruling on their still-pending motions to intervene. The intervenors sought a ruling on their motions for the express purpose of protecting their rights and interests in any appeal from the circuit court's judgment. Over the objection of the attorney representing the class, the circuit court granted the motions to intervene. The county did not object to the intervenors' motions.

Following entry of the circuit court's final dispositional order, the county filed a timely notice of appeal.

The appellate court reversed, rejecting plaintiff's assertion that the instant litigation merely represents an attempt to "enforce" this court's judgment in NIHBA, and holding both that the statute of limitation set forth in section 13-205 of the Code barred this action and that the doctrine of laches would have barred the action in any event. No. 2-99-0125 (unpublished order under Rule 23).

We subsequently allowed timely filed petitions for leave to appeal pursuant to Supreme Court Rule 315 (177 Ill. 2d R. 315), and now affirm the judgment of the appellate court. We begin our analysis with observations on the nature of time limitations applicable to legal and equitable actions by way of statutes of limitation and the equitable doctrine of laches, respectively, focusing specifically on refund litigation.

The purpose of a statute of limitation is to discourage the presentation of stale claims and to encourage diligence in the bringing of actions. Tom Olesker's Exciting World of Fashion, Inc. v. Dun & Bradstreet, Inc., 61 Ill. 2d 129, 137 (1975). Statutes of limitation and repose represent society's recognition that predictability and finality are desirable, indeed indispensable, elements of the orderly administration of justice (Sepmeyer v. Holman, 162 Ill. 2d 249, 256 (1994)) that must be balanced against the right of every citizen to seek redress for a legally recognized wrong. In achieving this accommodation of interests, it is first necessary to determine when a given cause of action "accrues," so as to commence the running of the relevant statutory period.

Courts of this state have held that a statute of limitation begins to run when the party to be barred has the right to invoke the aid of the court to enforce his remedy. Milnes v. Hunt, 311 Ill. App. 3d 977, 980 (2000); Rohter v. Passarella, 246 Ill. App. 3d 860, 869 (1993). Stated another way, a limitation period begins "when facts exist which authorize one party to maintain an action against another." Davis v. Munie, 235 Ill. 620, 622 (1908); Bank of Ravenswood v. City of Chicago, 307 Ill. App. 3d 161, 167 (1999). It has been accurately noted that a limitation period will not await commencement until a plaintiff has assurance of the success of an action. Weger v. Shell Oil Co., 966 F.2d 216, 219 (7th Cir. 1992) citing Nendza v. Board of Review of the Department of Labor, 105 Ill. App. 3d 437, 442 (1982) (discovery rule not applicable where a plaintiff waits to file suit or a claim until he has some assurance he will be successful on the merits of his claim).

Although an impact fee is not a tax (see NIHBA, 165 Ill. 2d at 42), the similarities between payment of a tax, and payment of an impact fee, are sufficient to render instructive tax cases addressing the issue of accrual. One such example in the federal system is the United States Supreme Court's decision in United States v. Dalm, 494 U.S. 596, 108 L. Ed. 2d 548, 110 S. Ct. 1361 (1990). In Dalm, the Supreme Court held that a federal limitation period, applicable to tax refund claims for overpayment, began to run when a taxpayer tendered payment of a tax to the government, not when the taxpayer discovered that the payment was erroneous. In so holding, the Court noted:

"The very purpose of statutes of limitations in the tax context is to bar the assertion of a refund claim after a certain period of time has passed, without regard to whether the claim would otherwise be meritorious. That a taxpayer does not learn until after the limitations period has run that a tax was paid in error, and that he or she has a ground upon which to claim a refund, does not operate to lift the statutory bar." Dalm, 494 U.S. at 609 n.7, 108 L. Ed. 2d at 562 n.7, 110 S. Ct. at 1369 n.7.

Limitation provisions in our state revenue statutes indicate that the time period for a claim runs from either the time a return is filed or the time the tax is paid. Section 911(a) (1) of the Illinois Income Tax Act (35 ILCS 5/911(a)(1) (West 1998)), for example, provides as follows:

"A claim for refund shall be filed not later than 3 years after the date the return was filed (in the case of returns required under Article 7 of this Act respecting any amounts withheld as tax, not later than 3 years after the 15th day of the 4th month following the close of the calendar year in which such withholding ...

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