Evangelical Alliance Mission v. Department of Revenue

• Decision Date: 31 December 1987
• Docket Number: No. 2-87-0215,2-87-0215
• Citation: 517 N.E.2d 1178,164 Ill.App.3d 431
• Parties: , 115 Ill.Dec. 492 The EVANGELICAL ALLIANCE MISSION, Plaintiff-Appellee, v. The DEPARTMENT OF REVENUE, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 1178

517 N.E.2d 1178

164 Ill.App.3d 431, 115 Ill.Dec. 492

The EVANGELICAL ALLIANCE MISSION, Plaintiff-Appellee, v. The DEPARTMENT OF REVENUE, Defendant-Appellant.

No. 2-87-0215.

Appellate Court of Illinois,

Second District.

Dec. 31, 1987.

Neil F. Hartigan, Atty. Gen., Bret A. Rappaport (argued), Asst. Atty. Gen., Roma Jones-Stewart, Chicago, Sol. Gen., and Shawn W. Denny, Asst. Atty. Gen., Springfield, for Illinois Dept. of Revenue.

Craig O. Larson, Itasca, for Evangelical Alliance Mission.

Presiding Justice LINDBERG delivered the opinion of the court:

Defendant, the Illinois Department of Revenue (the Department), appeals from two orders entered by the circuit court of Du Page County on February 11, 1987. One order consolidated two administrative cases brought by plaintiff, the Evangelical Alliance Mission (TEAM), seeking a property tax exemption for 1982 and 1983 and granted TEAM leave to file an amended and supplemental complaint. The other order reversed the Department's administrative decisions holding that certain real estate owned by TEAM was subject to taxation and so would remain on the tax rolls for the calendar years 1982 and 1983.

The Department raises two issues on appeal. First, the Department contends that the circuit court did not have jurisdiction over the administrative decision in the 1983 case because TEAM did not file a complaint and have summons issued within 35 days from the date that a copy of the decision in that case was served upon TEAM. (See Ill.Rev.Stat.1983, ch. 110, par. 3-103.) Second, the Department contends that the trial court erred in holding that the real estate at issue was tax exempt and in reversing the Department's administrative decisions to the contrary. We reverse the order consolidating the 1982 and 1983 cases and granting TEAM leave to file its amended and supplemental complaint. We, therefore, also vacate that portion of the other order relating to the administrative decision in the 1983 case. We affirm the portion of the order relating to the administrative decision in the 1982 case.

TEAM is a not-for-profit corporation which was founded in 1890 and was first incorporated in Illinois in 1897 as the Scandinavian Alliance Mission of North America (its name until 1949). TEAM's articles of incorporation provide:

"Its objective shall be religious, philanthropic, and educational, designed to form a missionary agency representing churches, societies, and individuals for spreading the Gospel of our Lord and Saviour Jesus Christ and establishing, developing, and promoting all phases of church work and missionary activity in foreign lands.

The organization shall never develop into or become an ecclesiastical organization or denomination for the purpose of founding churches in the homeland, but shall remain a missionary agency for the fullest cooperation in foreign missionary effort."

TEAM is controlled by its members, who are its missionaries and those individuals, churches, and other organizations that have contributed $100 or more in a calendar year.

About 96% of TEAM's revenue comes from contributions, about 58% of which are from churches. Member churches include the Evangelical Free Churches of America and churches that are independent, conservative Baptist, Methodist, and Presbyterian.

TEAM owns two adjacent parcels of real estate in Carol Stream, Illinois. TEAM's administrative headquarters building stands on one parcel. There is no dispute that this parcel is exempt from real estate taxation, as the Department's administrative decision in the 1982 case held that it was exempt and no attempt was made to collect taxes for it for the 1983 calendar year. A three-story, 16-unit, apartment building stands on the other parcel. Whether this parcel was exempt from taxation is very much in dispute.

The apartment building contains efficiency, one-, two-, and three-bedroom apartments. The units are fully furnished and rented exclusively to TEAM missionaries while on furlough in the United States. The rents charged (ranging from $147 per month for an efficiency to $347 per month for a three-bedroom apartment) were below both the market rental value of the apartments and TEAM's costs in providing them.

TEAM has 1,100 missionaries and 55 staff people to assist them. All TEAM missionaries must have biblical training and also must be either ordained or commissioned as ministers by their own churches. Under TEAM's principles and guiding rules, a volunteer wishing to become a missionary:

"[W]ho, after approval by the Board of Directors and attendance at missionary orientation classes, is accepted as an appointee, may proceed to represent the Mission with the purpose of obtaining the support of his or her ministry, including provision for outgoing needs, looking forward to commissioning as a missionary."

Missionaries ordinarily spend three to five years in the field, after which they are required to take furloughs, which normally last one year and never last more than 18 months.

The purpose of a furlough "is not only for rest and recuperation, but also for preparation for a subsequent term of service." There are accordingly many different activities undertaken by a missionary on furlough. The missionary's physical and emotional well-being are assessed, with a thorough medical examination required and counseling available if necessary. The missionary may update the church the missionary serves regarding the status of the ministry in the field. A part of the furlough (six months or less) may be used for additional theological education. Missionaries on furlough continue as representatives of TEAM, and receive furlough allowances from TEAM. As representatives of TEAM, they serve in local churches and Christian organizations, and may share information with college students who are considering similar ministries.

Of the 1,100 missionaries, about 200 are on furlough at a given time. TEAM's policy is to meet with each missionary at its Carol Stream headquarters at least once during a furlough, and preferably both on arrival from the field and immediately before return to the field. The majority of the missionaries are housed throughout the United States in missionary residences provided by local churches. Some stay with family and friends. When they come to TEAM headquarters, TEAM attempts to house them in the apartment building that is the subject of the instant case. Some stay in non-TEAM housing provided by local churches and TEAM does not require any missionary on furlough to stay at the apartment building.

In August 1984, the Department issued its administrative decision with respect to the tax-exempt status of the two parcels for the 1982 calendar year. The Department held that the headquarters building parcel was exempt from taxation but that the apartment building parcel was subject to taxation. On September 20, 1984, TEAM filed a timely complaint to review this administrative decision in the circuit court. See Ill.Rev.Stat.1983, ch. 110, par. 3-103.

TEAM applied for a real estate tax exemption for the apartment building for calendar year 1983. On June 24, 1985, the Department's hearing officer for the case wrote to TEAM's attorney:

"It was my understanding from our telephone conversation of several weeks ago that you would write me a letter requesting that an office disposition be written using the same facts as appeared in the 1982 record concerning this same property, so that the [1983 case] could be consolidated with that 1982 case on administrative review.

To date, I have not received your letter in this matter. Please send me that letter at your earliest convenience."

On June 27, 1985, TEAM's attorney wrote to the hearing officer in response:

"First let me acknowledge that everything you say in your June 24, 1985 letter is correct and hopefully you will overlook my delay in writing.

Secondly, please let this letter serve as a request on behalf of my client that an office disposition be written for the 1983 case using the same facts as appeared in the 1982 record concerning the same property, and that the captioned 1983 case be consolidated with the 1982 case on administrative review."

In July of 1985, the Department issued its administrative decision denying TEAM's application for a property tax exemption for the apartment building parcel for the 1983 calendar year on the basis of the facts as they appeared in the 1982 case "which is presently on Administrative Review in the Du Page County Circuit Court." The decision did not mention consolidation of the two cases. TEAM did not file a complaint in the circuit court for review within the time provided by the statute. See Ill.Rev.Stat.1983, ch. 110, par. 3-103.

On September 22, 1986, the circuit court issued a memorandum of decision indicating that the Department's denial of the property tax exemption in the 1982 case would be reversed and ordering counsel for TEAM to prepare a written judgment to that effect. TEAM filed, on October 10, 1986, a motion for leave to file amended and supplemental complaint for administrative review. TEAM sought consolidation, or approval of the consolidation, of the 1982 and 1983 cases and reversal of the Department's administrative decision denying property tax exemption for the apartment building parcel for the 1983 calendar year.

On February 11, 1987, the circuit court entered the two aforementioned orders granting TEAM leave to file its amended and supplemental complaint; consolidating the 1982 and 1983 cases; and reversing the Department's denial of property tax exemption for the apartment building parcel for both of those years. This appeal by the Department followed.

The first issue raised by the Department concerns whether the circuit court had jurisdiction over the 1983 case. It is undisputed that the circuit court had jurisdiction over the 1982 case and that the 1982 and 1983 cases presented similar, but not identical, issues. (Compare ...