Chicago Health Clubs, Inc. v. Picur
| Decision Date | 07 May 1987 |
| Docket Number | No. 86-0894,86-0894 |
| Citation | 155 Ill.App.3d 482,508 N.E.2d 742 |
| Parties | , 108 Ill.Dec. 431 CHICAGO HEALTH CLUBS, INC., et al., Plaintiffs-Appellees, v. Ronald PICUR, Comptroller of the City of Chicago, et al., Defendants- Appellants. |
| Court | United States Appellate Court of Illinois |
Judson H. Miner, Acting Corp. Counsel, Chicago (Ramsay Laing Klaff, Jennifer A. Keller, of counsel), for defendants-appellants.
Michael L. Sklar, Frances H. Krasnow, Robert Radasevich, William J. Popper, Lurie Sklar & Simon, Ltd., William Goldberg, Holleb & Coff, Chicago, for plaintiffs-appellees.
Plaintiffs, various racquetball, tennis, health and exercise clubs, and one dues-paying member of such a club, brought an action in the circuit court of Cook County against defendants, Ronald Picur, Comptroller of the City of Chicago; Cecil A. Partee, City Treasurer; Charles Sawyer, City Director of Revenue; and the City itself. Plaintiffs alleged that the Chicago Amusement Tax Ordinance (Chicago Municipal Code secs. 104-1 et seq. (1984)), as amended to include health and racquetball clubs within the definition of taxable amusements, was unconstitutional for various reasons.
Plaintiffs sought (1) a declaration that the amusement tax amendment was unconstitutional, and (2) an injunction preventing defendants from enforcing the ordinance. Defendants moved to dismiss the complaint. The trial court denied defendants' motion to dismiss and issued an order declaring the tax amendment unconstutional and enjoining defendants from enforcing the ordinance. Defendants appeal from this order pursuant to Supreme Court Rule 307(a)(1). (87 Ill.2d R. 307(a)(1).) Defendants contend that the trial court erred in (1) denying their motion to dismiss the complaint, and (2) declaring the amusement tax amendment unconstitutional and issuing the injunction.
We reverse.
The Chicago Amusement Tax Ordinance (Chicago Municipal Code §§ 104-1 et seq. (1984)) provides for a tax upon patrons of amusements located within the city. The city taxes the privilege of witnessing, viewing or participating in such amusements. The tax rate is 4% of the admission fee or other charge that the patron pays to participate in the amusement. Chicago Municipal Code, sec. 104-2A (1984).
The ordinance is limited to amusements in the city. When the admission fee entitles the patron to participate in amusements both within and outside of the city, the city taxes only that portion of the admission fee attributable to the right to use city facilities. Additionally, when a patron's total fee includes the right to participate in activities that are not amusements, the non-amusement charges must be separately stated on the patron's bill and be excluded from the tax base. Chicago Municipal Code sec. 104-2A (1984); Chicago Department of Revenue Ruling No. 86-1.
Under the ordinance, owners, managers and operators of amusements are trustees for and on behalf of the city. They are responsible for collecting the tax, keeping accurate records of the monies collected and remitting collected revenues to the city. The ordinance subjects amusement providers to penalties and interest for failing to perform these duties. However, an amusement provider's failure to collect the tax from a patron does not release the patron from his obligation to pay the tax. Chicago Municipal Code sec. 104-3 (1984).
On December 23, 1985, the Chicago City Council amended sections 104-1 and 104-2 of the Amusement Tax Ordinance. According to the ordinance, as amended, an amusement includes, inter alia, "any entertainment or recreational activity offered for the public participation or on a membership or other basis." (Chicago Municipal Code sec. 104-1(2)(1984).) The ordinance clarifies this category of amusements by listing several examples including amusement park rides and games, dancing, bowling and billiards. The December 23, 1985, amendment added "racquetball or health clubs * * *, tennis, racquetball, swimming, weightlifting, body building or similar activities" to the ordinance's list of amusements. Chicago Municipal Code, § 104-1(2)(1984).
The record shows that plaintiffs filed their complaint on January 9, 1986. Plaintiffs alleged that the amusement tax amendment was an impermissible occupation tax generally, or a tax specifically on the occupation of providing health club or similar services, that the classifications contained in the tax amendment were unreasonable, that the tax amendment applied extraterritorially, that the amendment was overly broad, that it was vague and that it violated the constitutional prohibition against special legislation. Plaintiffs sought a declaration that the amusement tax amendment was unconstitutional and an injunction preventing defendants from enforcing the ordinance.
The record further shows that on January 29, 1986, defendants moved to dismiss the complaint for failing to state a cause of action. The trial court granted plaintiffs leave to file an amended complaint. Defendants allowed their motion to dismiss plaintiffs' complaint to stand as their motion to dismiss the amended complaint.
On March 31, 1986, the trial court issued an order denying defendants' motion to dismiss the complaint. In the same order, the trial court declared the tax amendment unconstitutional and granted plaintiffs an injunction preventing defendants from enforcing the ordinance. The trial court found the statute unconstitutional because (1) the tax was an impermissible occupation tax and (2) because the term "recreational activities" was unconstitutionally vague. It is from this order that defendants appeal.
Defendants first claim that the trial court erred in denying their motion to dismiss the amended complaint. They contend that our review of the injunction properly includes a review of the sufficiency of the complaint. Plaintiffs, however, claim that we cannot review that part of the trial court's order denying defendants' motion to dismiss because it was not final and appealable. Thus, plaintiffs argue, the only issue before us is whether the trial court erred in issuing the injunction. They ask us to dismiss that portion of this appeal challenging the denial of defendants' motion to dismiss.
Plaintiffs are correct that we have jurisdiction over only final orders of the trial court and that the denial of a motion to strike and dismiss is an interlocutory order that does not finally dispose of the proceeding so as to give us jurisdiction on appeal. (Jursich v. Arlington Heights Federal Savings & Loan Association (1980), 83 Ill.App.3d 352, 38 Ill.Dec. 656 403 N.E.2d 1260.) Plaintiffs are also correct that the order to dismiss in the instant case does not fall within the two exceptions to this rule contained in Supreme Court Rules 307 and 308. (87 Ill.2d Rules 307, 308.) Thus, under these circumstances alone, we would dismiss the appeal from the trial court's denial of the motion to dismiss the complaint. 83 Ill.App.3d 352, 38 Ill.Dec. 656, 403 N.E.2d 1260.
However, in the absence of an answer, it is appropriate for a reviewing court to consider whether a complaint for injunctive relief was sufficient. (Whitaker v. Pierce (1976), 44 Ill.App.3d 148, 150, 3 Ill.Dec. 61, 63, 358 N.E.2d 61, 63.) Although a court will take all well-pleaded facts as true, the complaint must clearly show that the relief sought is warranted. (McErlean v. Harvey Area Community Organization (1972), 9 Ill.App.3d 527, 529, 292 N.E.2d 479, 481.) If the face of the complaint does not show sufficient grounds for a court to interfere in the matter, then it is error to grant injunctive relief. Biehn v. Tess (1950), 340 Ill.App. 140, 145, 91 N.E.2d 160, 162.
In the case at bar, defendants did not answer the amended complaint. We conclude, therefore, that we may review its sufficiency. We deny plaintiffs' motion to dismiss that portion of this appeal challenging the trial court's denial of defendants' motion to dismiss the amended complaint.
After reviewing the record, we find that the December 23, 1985 amusement tax amendment is constitutional in all respects. Consequently, we conclude that the amended complaint failed to show sufficient grounds for the trial court to interfere in the matter or that the relief sought was warranted. We hold, therefore, that the trial court should have dismissed the amended complaint.
II-A
The trial court found that the amusement tax amendment was an occupation tax and, therefore, invalid under article VII, section 6(e) of the 1970 Illinois Constitution. That provision states in pertinent part:
"(e) A home rule unit shall have only the power that the General Assembly may provide by law * * * (2) to license for revenue or impose taxes upon or measured by income or earnings or upon occupations." Ill. Const. 1970, art. VII, § 6(e).
We hold that the amusement tax amendment does not violate article VII, section 6(e) of the 1970 Illinois Constitution. Defendants first argue that the threshold question presented here is whether the amusement tax amendment is an occupation tax. Defendants contend that they do not impose the tax with regard to plaintiffs' occupational status. Therefore, relying on Town of Cicero v. Fox Valley Trotting Club, Inc. (1976), 65 Ill.2d 10, 2 Ill.Dec. 675, 357 N.E.2d 1118, defendants argue that the tax is not an occupation tax; it is constitutional and the inquiry is at an end. (65 Ill.2d 10, 24, 2 Ill.Dec. 675, 681, 357 N.E.2d 1118, 1124.) Plaintiffs contend, in response, that the amusement tax amendment is an occupation tax, relying, inter alia, on Commercial National Bank of Chicago v. City of Chicago (1982), 89 Ill.2d 45, 59 Ill.Dec. 643, 432 N.E.2d 227.
The definition of an occupation tax was clear from cases such as Town of Cicero v. Fox Valley Trotting Club,...
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