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General Motors Corporation et al., Appellees v. Maria Pappas

May 19, 2011

GENERAL MOTORS CORPORATION ET AL., APPELLEES,
v.
MARIA PAPPAS, TREASURER AND EX OFFICIO COLLECTOR OF COOK COUNTY,
APPELLANT
GENERAL MOTORS CORPORATION,
CROSS-APPELLANT,
v.
MARIA PAPPAS, TREASURER AND EX OFFICIO COLLECTOR OF COOK COUNTY, CROSS- APPELLEE.



The opinion of the court was delivered by: Justice Theis

JUSTICE THEIS delivered the judgment of the court, with opinion.

Chief Justice Kilbride and Justices Freeman, Thomas, Garman, Karmeier, and Burke concurred in the judgment and opinion.

OPINION

The core issue in this appeal is whether plaintiff taxpayers are entitled to judgment interest under section 2--1303 of the Code of Civil Procedure (735 ILCS 5/2--1303 (West 2006)) on fixed judgments of outstanding interest owed under section 23--20 of the Property Tax Code (Code) (35 ILCS 200/23--20 (West 2006)). For the reasons that follow, we hold that judgment interest may be awarded pursuant to section 2--1303 on the set amount of interest that is owed to taxpayers after the county collector of Cook County (collector) made full property tax refunds under section 23--20.

BACKGROUND

The underlying facts in this case are not in dispute. The tax valuation objection cases involve plaintiffs General Motors Corporation (GM), SBC, and Newcastle Properties, LLC (Newcastle). Plaintiff Charles Yetto is a lead objector in one of the consolidated cases involving tax rate objections (hereafter Yetto taxpayers). The tax valuation and tax rate objection cases all involved a dispute as to the correct rate of interest to be paid by the collector on tax refunds after section 23--20 of the Code was amended in 2006. Public Act 94--558 amended this provision of the Code to change the interest rate paid on property tax refunds, following a successful tax protest, from a flat 5% rate to one based on the lesser of 5% or the Consumer Price Index (CPI). Pub. Act 94--558 (eff. Jan. 1, 2006) (amending 35 ILCS 200/23--20). The legislation was signed by the Governor on August 12, 2005, and became effective January 1, 2006. 94th Ill. Gen. Assem., House Bill 504, 2005 Sess.

Tax Valuation Objection Cases

The tax valuation objection cases were all filed under sections 23--10 and 23--15 of the Code, which allow taxpayers to contest the real estate tax assessment placed on their property for any one tax year by exhausting their administrative remedies and filing actions in the circuit court against the collector. 35 ILCS 200/23--10, 23--15 (West 2006). On December 13, 2000, GM filed its complaint objecting to the 1999 tax year assessment on a parcel of property in Cook County. Similarly, on April 25, 2005, Newcastle and SBC filed three separate complaints objecting to the 2003 tax year assessments on three different parcels of property in Cook County.

All four tax valuation cases were settled without trial pursuant to section 23--30 of the Code (35 ILCS 200/23--30 (West 2006)). On June 9, 2006, the trial court entered an agreed judgment order in GM's case which required the collector to refund overpaid and incorrect or illegal taxes in the total amount of $965,021.61, "plus interest." In November 2006, similar agreed judgment orders were entered in the other three tax valuation cases. The collector was required to refund to Newcastle a principal tax refund of $50,394.45, while SBC was entitled to a refund of $16,760.72 on one parcel, and $25,967.11 on the second parcel. The three agreed judgment orders provided for the principal tax refund amounts "plus statutory interest," but they did not specify a percentage rate of interest to be paid. The collector issued refunds to GM, Newcastle, and SBC, paying the entire principal that was owed and statutory interest on the refunds at the lower CPI rate. Thereafter, GM, Newcastle, and SBC, all filed motions to enforce judgment, requesting that the trial court enter orders allowing them to receive interest at a rate of 5% for the entire period the tax payments were held because that was the rate permitted under section 23--20 when plaintiffs paid their respective taxes in protest.*fn1

On April 17, 2007, the circuit court ordered the collector to pay interest to Newcastle and SBC on the refunded taxes at a rate of 5% from the date the taxes were paid through December 31, 2005, and interest based on the lower CPI rate from January 1, 2006, forward. On July 20, 2007, the court denied the collector's motion to reconsider and reverse its ruling of April 17, 2007. On August 13, 2007, the collector filed notices of appeal from the circuit court orders dated April 17, 2007, and July 20, 2007, and also filed motions in the circuit court to stay the payment of the additional statutory interest under the Code pending appeal. The collector requested in her notices of appeal that the court vacate that portion of the trial court's orders which compelled her to pay interest at the higher 5% rate through December 31, 2005. Thereafter, on August 20, 2007, the trial court entered the following identical orders in the Newcastle and SBC cases:

"1. The Motion for Stay is granted. The portion of the Court's order of April 17, 2007, ordering the [collector] to pay interest on the property tax refund ordered in this matter at the rate of 5% from the date the taxes were paid through December 31, 2005 is stayed pending the outcome of any appeal filed in this matter. 2. That Plaintiff is entitled to the payment of judgment interest at the rate of 6% per annum pursuant to [section 2--1301 of the Code of Civil Procedure] on the amount of interest stayed and not paid to Plaintiff pending the outcome of any appeal, from the date of final judgment ordering a property tax refund in this matter, through the date the additional interest is paid to Plaintiff." There is no indication that the collector objected to the award of judgment interest by the trial court, and she did not file any motion to reconsider the orders of August 20, 2007. Additionally, the collector did not amend her notices of appeal dated August 13, 2007, or file additional notices of appeal, to incorporate the issue of the trial court's award of judgment interest to SBC and Newcastle.

On June 15, 2007, the trial court entered an order in GM's case requiring the collector to pay 5% interest from the date of payment of taxes by GM through January 1, 2006. The collector did not seek a stay in GM's case, and no order was entered granting judgment interest under section 2--1301.

Tax Rate Objection Cases

The Yetto taxpayers objected to the real estate tax rate levied by various taxing bodies in connection with year 2000 property taxes. This resulted in court-ordered tax refunds to the Yetto taxpayers in 39 consolidated tax rate objection cases which together involve thousands of separate taxpayers and parcels of property in Cook County. Many of the individual taxpayers under each of the 39 lead objectors, however, were ultimately entitled to tax refunds of less than $10. In June 2006, the Yetto taxpayers filed a motion asking the trial court to declare how interest should be calculated under the amended version of section 23--20. On August 31, 2006, the trial court issued a written order which required the collector to pay interest on any refund at a rate of 5% from the date the taxes were paid under protest through December 31, 2005, and interest based on the lower CPI-derived rate thereafter. Final judgment orders were subsequently entered in each of the tax rate objection cases beginning in January 2008. The orders provided that upon oral motion of the collector, the payment of interest was stayed from the date the taxes were due, through December 31, 2005, which exceeded the CPI rate. Additionally, the orders provided taxpayers judgment interest under section 2--1303 on the portion of interest that was stayed pending appeal. As with the tax valuation cases, the collector paid the principal tax refunds owed to the rate objectors and interest at the lower CPI interest rate for the entire period. The collector appealed all final judgment orders entered in the 39 tax rate objection cases and incorporated in the notices of appeal her contention that the trial court improperly awarded judgment interest to plaintiffs.*fn2

The appellate court consolidated all the tax valuation and tax rate objection cases. 393 Ill. App. 3d 60, 62. The collector's primary contention on appeal was that the amended version of section 23--20 required payment of any tax refund made after January 1, 2006, at the lower CPI interest rate, regardless of when the tax payments were actually made. Id. The appellate court rejected this interpretation of the Code and found that the legislature intended for the amended version of section 23--20 to apply prospectively and, therefore, it was proper for the trial court to split the interest rate calculation and order payment at the CPI rate only for the period the tax payment was held in protest after December 31, 2005, to the date the collector tendered the refund. Id. at 69-70. The appellate court found that the circuit court retained jurisdiction to award judgment interest to SBC and Newcastle after the collector filed her notices of appeal, and that it retained appellate jurisdiction to consider the award of judgment interest which was not incorporated in the collector's notices of appeal in the SBC and Newcastle cases. Id. at 71-73. The appellate court reasoned that while the collector should have filed amended, or additional notices of appeal, the error was one of form, not substance, and did not prejudice SBC and Newcastle as it naturally flowed from the judgment, and the issue was fully briefed by the collector. Id. at 71.

The appellate court also affirmed the trial court's orders granting judgment interest to SBC, Newcastle, and the Yetto taxpayers while the matter was stayed pending appeal. Id. at 75. The court concluded that section 2--1303 of the Code of Civil Procedure governed the issue and that judgment interest was warranted. Id. at 73-75. The appellate court rejected plaintiffs' cross-appeals in the tax valuation cases seeking 5% interest for the entire period the funds were held until the date of refund. Id. at 62, 69-70. The appellate court also concluded that a complete tax refund had been made to GM, which foreclosed its ability to earn additional interest under section 23--20 on any outstanding interest that was owed, and that GM was not entitled to judgment interest under section 2--1303 because it was neither sought nor awarded in GM's case. Id. at 75-76.

We granted the collector's petition for leave to appeal. Ill. S. Ct. R. 315 (eff. Feb. 26, 2010).

ANALYSIS

In this appeal we are asked to consider whether the trial court improperly awarded plaintiffs judgment interest on the fixed amount of outstanding interest that was owed under section 23--20 after they received principal tax refunds from the collector. These fixed judgment amounts constitute the additional interest owed for the period prior to January 1, 2006, when the collector paid interest on the refunded principal utilizing the CPI-derived rate, rather than the higher 5% rate. We note that the collector does not raise any issue before this court concerning the orders which required her to pay plaintiffs 5% interest on the principal refunds from the date of final payment of taxes through December 31, 2005. Similarly, SBC, Newcastle, and the Yetto taxpayers do not contest the trial court's decision to grant 5% interest on the refunds only for the period ...


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