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1411 North State Condominium Association v. Illinois Property Tax Appeal Board

Court of Appeals of Illinois, First District, First Division

December 29, 2016


         Petition for Review of an Order of the Illinois Property Tax Appeal Board Property Tax Appeal Board Nos. 09-28335.001-R-3 to 09-28335.029-R-3

          JUSTICE MIKVA delivered the judgment of the court, with opinion. Presiding Justice Connors and Justice Harris concurred in the judgment and opinion.

          OPINION [1]

          MIKVA, JUSTICE

         ¶ 1 This is a direct appeal from a final decision of the Illinois Property Tax Appeal Board (Appeal Board) ordering no change to the 2009 taxes assessed by the Cook County assessor and certified by the Cook County board of review (board of review) for a 14-unit condominium property located at 1411 North State Parkway in Chicago (Association property). The 1411 North State Condominium Association (Association or taxpayer) challenged the assessment, which was based on a market value of over $20 million, contending that the true market value of the property in 2009 was only $13 million. The Association's appraiser, however, passed away before a hearing in this matter was held.

         ¶ 2 At the hearing, the hearing officer overruled the board of review's objection that, since the appraiser could not be cross-examined, the appraisal was inadmissible hearsay, and stated that the appraisal would be considered and given "the appropriate weight." However, in its written ruling issued after the hearing, the Appeal Board ruled that the death of the appraiser rendered the appraisal inadmissible. Without the appraisal, the Association lacked any admissible evidence to support its valuation of the property. Since the burden is on the taxpayer to prove by a preponderance of the evidence that an assessment should be reduced, the Appeal Board sustained the assessment certified by the board of review. For the reasons that follow, we reverse and remand this matter to the Appeal Board for a new hearing.

         ¶ 3 BACKGROUND

         ¶ 4 A. Appeal Board Policies and Procedures

         ¶ 5 In Illinois counties with 3 million or more inhabitants, a general assessment of real property is made once every three years. 35 ILCS 200/9-220(b) (West 2008); 86 Ill. Adm. Code 1910.5(b)(12) (2007). Property taxes are determined based on an assessment of the fair cash value of the property, defined as "[t]he amount for which [the] property can be sold in the due course of business and trade, not under duress, between a willing buyer and a willing seller." 86 Ill. Adm. Code 1910.5(b)(5) (2007). In Cook County, a taxpayer or other interested party seeking to challenge a property valuation initially set by the Cook County assessor must appeal to the board of review, a quasi-judicial agency that conducts first-level reviews. Decisions of the board of review may then be challenged before the Appeal Board or, if the tax is paid under protest, in the circuit court. 35 ILCS 200/23-5 (West 2010); 86 Ill. Adm. Code 1910.50(f)-(g) (2007).

         ¶ 6 The Property Tax Code charges the Appeal Board with establishing through its own rules an "informal procedure" for determining the correct assessment of property that is the subject of an appeal. 35 ILCS 200/16-180 (West 2010). "The procedure, to the extent that the [Appeal] Board considers practicable, shall eliminate formal rules of pleading, practice and evidence ***" Id. The Appeal Board's policies and procedures are set forth in title 86, part 1910 of the Administrative Code (Code). 86 Ill. Adm. Code 1910. According to its "Statement of Policy, " the Appeal Board "shall determine the correct assessment *** of any parcel of real property which is the subject of an appeal, based upon facts, evidence, exhibits and briefs submitted to or elicited by the [Appeal] Board" (86 Ill. Adm. Code 1910.10(b) (1997)) and "revise the assessment of any particular parcel of real property when it finds such assessment to be in error" (86 Ill. Adm. Code 1910.10(d) (1997)).

         ¶ 7 A contesting party must set forth in its petition the assessment for the subject property that it considers to be correct, along with any supporting written or documentary evidence. 86 Ill. Adm. Code 1910.30(h), (k) (2007). Upon the filing of a petition, the county board of review then files its "Board of Review Notes on Appeal and all written and documentary evidence supporting the board of review's position." 86 Ill. Adm. Code 1910.40(a) (2007). The contesting party is given 30 days to submit rebuttal evidence. 86 Ill. Adm. Code 1910.66(a) (2007).

         ¶ 8 Proceedings before the Appeal Board are considered de novo; there is no presumption that an assessment certified by a local board of review is correct. 86 Ill. Adm. Code 1910.50(a) (2007). The contesting party has the burden of going forward (86 Ill. Adm. Code 1910.63(a) (2000)) and "must provide substantive, documentary evidence or legal argument sufficient to challenge the correctness of the assessment of the subject property" (86 Ill. Adm. Code 1910.63(b) (2000)). Upon such a showing, the burden shifts to the county board of review to support its assessment. 86 Ill. Adm. Code 1910.63(c) (2000). The Appeal Board considers "only the evidence, exhibits and briefs submitted to it, and will not give any weight or consideration to *** submissions not timely filed or not specifically made a part of the record." 86 Ill. Adm. Code 1910.50(a) (2007).

         ¶ 9 "When market value is the basis of the appeal, the value of the subject property must be proved by a preponderance of the evidence." 86 Ill. Adm. Code 1910.63(e) (2000). Evidence of market value may consist of an appraisal or recent sale of the subject property; the cost of land and construction, if the date of construction is proximate to the assessment date; or documentation regarding three or more recent sales of comparable properties. 86 Ill. Adm. Code 1910.65(c)(1)-(4) (1997). When appraisal testimony is used to support the valuation asserted, it must "be given by a preparer of the documented appraisal whose signature appears thereon." 86 Ill. Adm. Code 1910.67(1) (2006).

         ¶ 10 Property tax challenges before the Appeal Board may be decided either based solely on the parties' written submissions or after an evidentiary hearing. 86 Ill. Adm. Code 1910.50(b) (2007); 86 Ill. Adm. Code 1910.67(a) (2006). "The [Appeal Board] may accept into the record all evidence, exhibits and briefs submitted by all interested parties and render a decision without holding a hearing." 86 Ill. Adm. Code 1910.50(b) (2007). On its own motion the Appeal Board may alternatively "order a hearing to be held at any time and place" and "shall" do so at the request of any party. 86 Ill. Adm. Code 1910.50(b) (2007); 86 Ill. Adm. Code 1910.67(b) (2006).

         ¶ 11 "Hearings may [be conducted by] less than a majority of the Members of the Board, and the Chairman may assign Members or Hearing Officers to hold hearings." 86 Ill. Adm. Code 1910.67(e) (2006). In any hearing, the Board or any of its designated Hearing officers "have full authority over the conduct of a hearing, " including the power to administer oaths, examine witnesses under oath, admit or exclude evidence, and ensure that the hearing is conducted in a fair and impartial manner. 86 Ill. Adm. Code 1910.67(h) (2006). The Appeal Board rules provide that "[e]ach hearing shall be conducted in a manner best calculated to conform to substantial justice." 86 Ill. Adm. Code 1910.92(a) (2006).

         ¶ 12 A party participating in a hearing before the Appeal Board "is entitled to introduce evidence that is otherwise proper and admissible without regard to whether that evidence has previously been introduced at a hearing before the board of review of the county." 86 Ill. Adm. Code 1910.50(a) (2014); 35 ILCS 200/16-180 (West 2014). However, documentary evidence may be introduced at a hearing only if it was timely submitted prior to the hearing, unless the Appeal Board waives the filing requirement or the hearing officer or Appeal Board specifically orders the evidence to be submitted. 86 Ill. Adm. Code 1910.67(k) (2006). The Appeal Board or its designated hearing officer "may exclude inadmissible evidence upon its own motion" and "will receive evidence that is material and relevant, and that would be commonly relied upon by reasonably prudent persons in the conduct of their affairs." 86 Ill. Adm. Code 1910.90(g) (2014); 86 Ill. Adm. Cod 1910.92(b) (2006). "[A]s witnesses complete their testimony, they are subject to cross-examination by the Hearing Officer and the other parties to the appeal" (86 Ill. Adm. Code 1910.90(c)(3) (2014)) and, if evidence is ruled inadmissible, the offering party may, upon a motion made at the hearing, make an offer of proof (86 Ill. Adm. Code 1910.90(f)(3) (2014)).

         ¶ 13 The rules regarding evidentiary objections at Appeal Board hearings are as follows. "When an objection is made to the admissibility of evidence or testimony during the hearing, the Hearing Officer may either sustain or overrule the objection *** or may reserve the ruling and permit the testimony and/or evidence into the record subject to the ruling of the [Appeal Board] on the objection in its decision for the appeal." 86 Ill. Adm. Code 1910.90(f)(2) (2014).

         ¶ 14 The Appeal Board "may take official notice of decisions it has rendered, matters within its specialized knowledge and expertise, and all matters of which the Circuit Courts of this State may take ...

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