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Village of Itasca v. Village of Lisle

October 12, 2004

THE VILLAGE OF ITASCA, PLAINTIFF-APPELLANT,
v.
THE VILLAGE OF LISLE AND ENVIRONETX, LLC, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Du Page County. No. 02-CH-1506. Honorable Thomas J. Riggs, Judge, Presiding.

The opinion of the court was delivered by: Presiding Justice O'malley

PUBLISHED

Plaintiff, the Village of Itasca appeals the trial court's dismissal with prejudice of its complaint against defendants, the Village of Lisle (Lisle) and Environetx, LLC (Environetx), under the Code of Civil Procedure (Code) (735 ILCS 5/2--615, 2--619 (West 2002)) and its denial of plaintiff's motion for reconsideration and motion for leave to file an amended complaint. Plaintiff argues that (1) it has standing to bring its claims; (2) the trial court has subject matter jurisdiction over its claims; (3) the trial court's denial of its motion for leave to file an amended complaint was an abuse of discretion; (4) the trial court's denial of its motion for reconsideration was an abuse of discretion; (5) it adequately alleged a claim for imposition of a constructive trust; and (6) the trial court improperly dismissed its claim for tortious interference. We affirm in part and reverse in part.

I. FACTS

Plaintiff and Lisle are municipal corporations located in Du Page County; Environetx is an Illinois limited liability company that sells office products within the State of Illinois. While it was located in Itasca, Environetx generated substantial tax income for the municipality, which received percentages of the company's state sales tax payments under the Service Occupation Tax Act (35 ILCS 115/1 et seq. (West 2002)) and the Retailers' Occupation Tax Act (35 ILCS 120/1 et seq. (West 2002)). In August and September 2000, Environetx agreed to move its sales operations from Itasca to Lisle so that Lisle could benefit from Environetx's state sales tax revenues. Lisle, in turn, offered Environetx a sales tax rebate projected to be worth approximately $1.7 million of the estimated $3 million Lisle would receive from sales tax revenues generated by Environetx over the next 10 years. Thereafter, Environetx began listing Lisle as the site of its sales for state sales tax purposes in its filings with the Illinois Department of Revenue (IDOR). The parties dispute whether Environetx actually moved the site of its sales operations to Lisle.

On October 8, 2002, plaintiff filed a complaint against defendants, for a declaratory judgment invalidating the agreement between defendants, the imposition of a constructive trust on all sales tax revenues retained by Lisle and generated by Environetx, and tortious interference with prospective economic expectation or advantage. In its complaint, plaintiff alleged that the findings of fact Lisle used to support the tax rebate agreement were false (see 65 ILCS 5/8--11--20 (West 2002) (listing statutorily required findings of fact for such tax rebate programs)) and also that Environetx in fact never moved its offices out of Itasca as it claimed. Defendants filed motions to dismiss plaintiff's complaint under sections 2--615 and 2--619 of the Code (735 ILCS 5/2--615, 2--619 (West 2002)). The trial court dismissed plaintiff's complaint, holding that (1) plaintiff did not have standing to seek a declaratory judgment nullifying defendants' agreement; (2) the court lacked subject matter jurisdiction to determine whether Environetx was falsely reporting to IDOR the origin municipality of its sales; and (3) Lisle had no duty toward plaintiff sufficient to support a tortious-interference-with-a-business-relationship claim and, in any event, Lisle was immune from liability for tortious interference. The trial court subsequently denied plaintiff's motion for reconsideration and motion for leave to file an amended complaint. Plaintiff timely appeals.

II. DISCUSSION

Plaintiff's first issue on appeal is whether the trial court improperly dismissed its action for lack of standing. Our standard of review is de novo. Glisson v. City of Marion, 188 Ill. 2d 211, 220-21 (1999).

Here, the trial court found that plaintiff lacked standing to seek a declaratory judgment invalidating the agreement between defendants. The doctrine of standing is designed to preclude persons who have no interest in a controversy from bringing suit. Glisson, 188 Ill. 2d at 221. The doctrine assures that issues are raised only by those parties with a real interest in the outcome of the controversy. Glisson, 188 Ill. 2d at 221. Standing requires some injury in fact to a legally cognizable interest. Glisson, 188 Ill. 2d at 221. The claimed injury must be actual or threatened, and it must be (1) distinct and palpable; (2) fairly traceable to the defendant's actions; and (3) substantially likely to be prevented or redressed by the grant of the requested relief. Glisson, 188 Ill. 2d at 221. In the context of an action for declaratory relief, there must be an actual controversy between adverse parties, and the party requesting the declaration must possess some personal claim, status, or right that is capable of being affected by the grant of such relief. Glisson, 188 Ill. 2d at 221.

In this case, plaintiff does not have standing to pursue its claim because the relief it seeks is not substantially likely to provide redress for any harm caused it. Plaintiff's alleged injury is its loss of tax revenue due to the fact that Environetx is now listing its sales site as Lisle instead of Itasca. Plaintiff seeks relief in the form of a declaratory judgment nullifying the rebate agreement between defendants. Even if the court were to grant such relief, plaintiff's injury would not be cured. A declaration that the contract between defendants is null and void would not alter Environetx's tax filings and thus would not remedy plaintiff's alleged injury. The only direct result of the declaratory judgment plaintiff seeks would be a cessation of Environetx's rebate benefits from Lisle.

Plaintiff's assertion that a declaration nullifying defendants' agreement would simultaneously be a declaration that Environetx's tax site never moved out of Itasca is simply not true. The issue of the validity of the rebate agreement centers on whether the statutory requirements for the tax rebate program were actually met; the issue of Environetx's tax site centers on whether Environetx's sales operation actually relocated. The two issues are entirely separate, and a ruling in favor of plaintiff on one would not necessitate a ruling in favor of plaintiff on the other. Thus, we find that plaintiff lacks standing to pursue its declaratory judgment claim.

However, in its proposed amended complaint, plaintiff also sought a declaration that Environetx was falsely reporting the site of its sales. If the court had jurisdiction to find that Itasca, and not Lisle, was the actual site of Environetx's sales, and if the court allowed plaintiff to amend its complaint, then the court would address an issue that, if resolved in plaintiff's favor, would afford plaintiff redress for its alleged injury. Accordingly, we must now consider plaintiff's next two issues on appeal: whether the circuit court has subject matter jurisdiction over plaintiff's false-tax-site claim, and whether the trial court should have allowed plaintiff's amended complaint, which included the false-tax-site claim.

Plaintiff's second issue on appeal is whether the trial court improperly dismissed its action for want of subject matter jurisdiction under section 2--619 of the Code. We will review de novo the trial court's grant of defendants' motion to dismiss. Krilich v. American National Bank & Trust Co. of Chicago, 334 Ill. App. 3d 563, 571 (2002).

The circuit courts of Illinois have original jurisdiction over all justiciable matters. Employers Mutual Cos. v. Skilling, 163 Ill. 2d 284, 287 (1994); Ill. Const. 1970, art. VI, §9. While the legislature generally cannot deprive courts of this jurisdiction, an exception arises in administrative actions. People v. NL Industries, 152 Ill. 2d 82, 96 (1992). Because it establishes administrative agencies and statutorily empowers them, the legislature may vest exclusive jurisdiction in an administrative agency. NL Industries, 152 Ill. 2d at 96-97. However, a legislative enactment divesting the circuit courts of their original jurisdiction through a comprehensive statutory administrative scheme must be explicit. Skilling, 163 Ill. 2d at 287.

Here, the trial court found that it lacked subject matter jurisdiction to rule that Environetx was misrepresenting the origin municipality of its sales. Defendants argue that IDOR has exclusive jurisdiction over administration of sales taxes generated under the Service Occupation Tax Act and the Retailers' Occupation Tax Act, and, therefore, the trial court lacked subject matter jurisdiction. ...


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