Alvarez v. Pappas

• Decision Date: 17 April 2008
• Docket Number: No. 104922.,104922.
• Citation: 890 N.E.2d 434,229 Ill.2d 217
• Parties: Santos ALVAREZ et al., Indiv. and on Behalf of All Others Similarly Situated, Appellants, v. Maria PAPPAS, Treasurer and ex-officio Collector of Cook County, Illinois, Appellee.
• Court: Illinois Supreme Court

890 N.E.2d 434

229 Ill.2d 217

Santos ALVAREZ et al., Indiv. and on Behalf of All Others Similarly Situated, Appellants, v. Maria PAPPAS, Treasurer and ex-officio Collector of Cook County, Illinois, Appellee.

No. 104922.

Supreme Court of Illinois.

April 17, 2008.

Rehearing Denied May 27, 2008.

Michael W. Rathsack, Chicago (Richard A. Ginsburg, Theodore J. Schmidt, Steven A. Salzman and Timothy E. Moran, of counsel), for appellants.

Richard A. Devine, State's Attorney, Chicago (Patrick T. Driscoll, Jr., Michael C. Prinzi and Paul A. Castiglione, Assistant State's Attorneys, of counsel), for appellee.

OPINION

Justice GARMAN delivered the judgment of the court, with opinion:

Plaintiffs are the owners of various parcels of real estate in Cook County. In 2005, they filed a class action complaint against defendant treasurer, alleging that they had made duplicate payments of their real estate taxes and seeking a return of their money. Most of the plaintiffs had paid taxes in escrow to their respective lenders. When plaintiffs received their tax bills, they paid them, apparently unaware that their lenders were also paying the same bills, resulting in the taxes being paid twice. The earliest duplicate payments were made in 1990. Defendant filed a motion to dismiss under section 2-619(a)(5) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(5) (West 2006)), alleging that the five-year statute of limitations contained in section 20-175 of the Property Tax Code (Code) (35 ILCS 200/20-175 (West 2006)) had expired and that plaintiffs' request for a refund was, therefore, untimely. The circuit court of Cook County agreed and dismissed plaintiffs' complaint. The appellate court affirmed the circuit court's judgment. 374 Ill.App.3d 39, 312 Ill.Dec. 409, 870 N.E.2d 853.

BACKGROUND

A complete statement of the facts in this case is contained in the appellate court's opinion. Briefly, plaintiffs filed their complaint in September 2005, alleging that they had overpaid their taxes and seeking a refund. The complaint contained six counts, alleging causes of action for (1) conversion; (2) violation of equal protection and due process; (3) unlawful taking without just compensation; (4) unjust enrichment; (5) violation of the Uniform Disposition of Unclaimed Property Act (Unclaimed Property Act) (765 ILCS 1025/1 et seq. (West 2006)); and (6) violation of state pensioners' rights.

In their complaint, plaintiffs alleged that defendant was the only county treasurer in the state who refused to refund duplicate tax payments when the refunds were requested more than five years after the payment had been made. Plaintiffs alleged that defendant lacked authority to collect the duplicate taxes or to disburse them to taxing districts. They further alleged that defendant had knowledge at the time plaintiffs made their payments that no taxes were then due and owing. As stated, defendant filed a motion to dismiss the complaint on the grounds that the five-year statute of limitations contained in section 20-175 of the Code had expired. The circuit court agreed and dismissed the complaint. The appellate court affirmed. 374 Ill.App.3d 39, 312 Ill.Dec. 409, 870 N.E.2d 853.

In the appellate court, plaintiffs argued that their overpayments were not tax payments and were thus not subject to section 20-175. They further argued that their request for a return of the payments were not claims for a "refund." They also argued that the payments constituted tangible property subject to the Unclaimed Property Act. The appellate court rejected all of these contentions. The court also found that a reading of the language of section 20-175, together with the legislative history of the statute, demonstrates that plaintiffs' tax payments were overpayments of their taxes and were therefore subject to the statute of limitations contained therein. 374 Ill.App.3d at 48, 312 Ill.Dec. 409, 870 N.E.2d 853. This court granted plaintiffs' petition for leave to appeal (210 Ill.2d R. 315(a)). We now affirm the judgment of the appellate court.

ANALYSIS

I. Standard of Review

The question of whether a cause of action was properly dismissed under section 2-619(a)(5) of the Code of Civil Procedure is reviewed de novo. Ferguson v. City of Chicago, 213 Ill.2d 94, 99, 289 Ill.Dec. 679, 820 N.E.2d 455 (2004). We are also called upon in this case to interpret section 20-175 of the Code. The interpretation of a statute is a question of law that is subject to de novo review. Wisniewski v. Kownacki, 221 Ill.2d 453, 460, 303 Ill.Dec. 818, 851 N.E.2d 1243 (2006).

II

Section 20-175 of the Code provides in pertinent part:

"If any property is twice assessed for the same year, or assessed before it becomes taxable, and the erroneously assessed taxes have been paid either at sale or otherwise, or have been overpaid by the same claimant or by different claimants, the County Collector, upon being satisfied of the facts in the case, shall refund the taxes to the proper claimant. * * * A claim for refund shall not be allowed unless a petition is filed within 5 years from the date the right to a refund arose." (Emphasis added.) 35 ILCS 200/20-175 (West 2006).

This section provides an exception to the voluntary payment doctrine. Under that doctrine, a taxpayer may not recover taxes that are voluntarily paid, even if the taxing body imposed or assessed the taxes illegally. Such taxes may be recovered only if the recovery is authorized by statute. Getto v. City of Chicago, 86 Ill.2d 39, 48, 55 Ill.Dec. 519, 426 N.E.2d 844 (1981). This court has explained the doctrine as follows:

"`It has been a universally recognized rule that money voluntarily paid under a claim of right to the payment and with knowledge of the facts by the person making the payment cannot be recovered back on the ground that the claim was illegal. It has been deemed necessary not only to show that the claim asserted was unlawful, but also that the payment was not voluntary; that there was some necessity which amounted to compulsion, and payment was made under the influence of such compulsion.'" Getto, 86 Ill.2d at 48-49, 55 Ill.Dec. 519, 426 N.E.2d 844, quoting Illinois Glass Co. v. Chicago Telephone Co., 234 Ill. 535, 541, 85 N.E. 200 (1908).

It is undisputed that plaintiffs requested a refund of their duplicate payments more than five years after they were paid to defendant. Thus, if section 20-175 applies to plaintiffs' payments, any refund requests are barred.

III

In an effort to remove their duplicate payments from the operation of section 20-175, plaintiffs argue that their payments were not "tax payments." They reason that they were simply mistaken payments of property tax assessments that had already been satisfied. According to plaintiffs, their making duplicate payments was no different than if they had inadvertently given defendant too much money or had left cash on the counter at defendant's office. Such funds belong, not to defendant but to the taxpayer, and the monies should be returned. Thus, plaintiffs reason, such payments would not constitute tax payments and a return of those funds would not be a "refund." The appellate court rejected this argument, declining to characterize plaintiffs' payments as anything other than tax payments. Recognizing that they have cited little authority for their argument, plaintiffs contend that they should not have the burden of showing their right to a return of their duplicate payments. They attempt to shift that burden to defendant, arguing that at the time they made their payments, their taxes had already been paid and defendant was aware of that fact.¹ Thus, they argue, defendant had no authority to accept payments for taxes that were not then due and no authority to transmit those payments to the taxing districts.

Plaintiffs cite this court's decision in Gannaway v. Barricklow, 203 Ill. 410, 67 N.E. 825 (1903), as support for their position. Gannaway, however, is not analogous to plaintiffs' situation. In Gannaway, the plaintiff, who was administrator of an estate, was summoned before the county board of review and informed that the decedent had failed to pay property taxes for the years 1898 to 1901. The total of the taxes allegedly owed was $75.64. Faced with the threat of a 10% penalty if the taxes were not paid by a certain date, the plaintiff paid the taxes. The plaintiff then discovered that no assessment had been entered on the assessor's book and that no taxes had been levied or extended. He filed suit to recover the money he had paid. The county treasurer admitted that he had no claim to the money, but argued that the plaintiff's payment was a voluntary payment of a tax and could not be recovered. A jury rendered a verdict for the plaintiff. This court affirmed, finding that the treasurer had no authority to collect or receive the money from the plaintiff. It was not a tax and did not appear on any book as a tax. In addition, the court concluded that because the taxing districts had not levied the tax, the money could not be distributed to them and, in fact, the money did not belong to them. The voluntary payment doctrine did not apply because the money paid by the plaintiff was not a tax. The court noted that the money was in the treasurer's hands without authority of law; thus, it belonged to the plaintiff and the treasurer was equitably bound to refund it. Gannaway, 203 Ill. at 412-13, 67 N.E. 825.

In the case at bar, there is no claim that the taxes were not levied or extended. Plaintiffs do not contend that the tax bills they received were improper in any way. Their sole claim is that because the taxes had already been paid, nothing was owed on the tax bills and, therefore, the payments were something other than tax payments.

Plaintiffs argue that section 20-170 of the Code (35 ILCS 200/20-170 (West 2006)) supports their description of their payments as inadvertent payments rather than payment of taxes. That section is entitled "Double Payment"...