General Motors Corp. v. Pappas
| Decision Date | 24 June 2009 |
| Docket Number | No. 1-08-0609.,No. 1-08-3322.,No. 1-08-2237.,No. 1-07-2708.,No. 1-07-1948.,No. 1-08-3357.,No. 1-08-0596.,No. 1-08-0518.,No. 1-08-1932.,No. 1-07-2706.,No. 1-08-2231.,No. 1-08-0502.,No. 1-08-0531.,No. 1-08-0516.,No. 1-08-3046.,1-07-1948.,1-07-2706.,1-07-2708.,1-08-0502.,1-08-0516.,1-08-0518.,1-08-0531.,1-08-0596.,1-08-0609.,1-08-1932.,1-08-2231.,1-08-2237.,1-08-3046.,1-08-3322.,1-08-3357. |
| Citation | 911 N.E.2d 504 |
| Parties | GENERAL MOTORS CORPORATION, Plaintiff-Appellee and Cross-Appellant, v. Maria PAPPAS, Treasurer and ex officio County Collector of Cook County, Defendant-Appellant and Cross-Appellee. SBC, Plaintiff-Appellee and Cross-Appellant, v. Maria Pappas, Treasurer and ex officio County Collector of Cook County, Defendant-Appellant and Cross-Appellee. SBC, Plaintiff-Appellee, v. Maria Pappas, Treasurer and ex officio County Collector of Cook County, Defendant-Appellant. Newcastle Properties, LLC, Plaintiff-Appellee, v. Maria Pappas, Treasurer and Ex Officio County Collector of Cook County, Illinois, Defendant-Appellant. Charles Yetto et al., Plaintiffs-Appellees, v. Maria Pappas, Treasurer and ex officio County Collector of Cook County, Illinois, Defendant-Appellant. |
| Court | United States Appellate Court of Illinois |
Anita Alvarez, State's Atty. of Cook County, Patrick T. Driscoll, Jr., Deputy State's Atty., Margarett Zilligen, Taitia Gibbons, Asst. State's Attorneys, Chicago, IL, for Appellant.
Mark R. Davis, O'Keefe, Lyons & Hynes, LLC, Chicago, IL, for General Motors.
Christopher B. Kaczynski, Smith, Hemmesch, Burke, Brannigan & Guerin, Chicago, IL, for SBC and Newcastle Properties.
James A. Rooney, Chicago, IL, for Charles Yetto, et al.
Oral arguments on these consolidated appeals, identified under General Motors Corp. v. Pappas, No. 1-07-1948, and Yetto v. Pappas, No. 1-08-0502, were heard concurrently. On the court's own motion, these cases have been consolidated for the purposes of this opinion because they involve resolution of the same primary issues and the same defendant, Maria Pappas, Treasurer and Ex Officio County Collector of Cook County (Treasurer). General Motors involves four consolidated appeals in which plaintiff taxpayers General Motors Corporation (GM), SBC, and Newcastle Properties, L.L.C. (Newcastle), received court-ordered real estate tax refunds based on plaintiffs' objections to the assessment and taxes on their properties for various tax years. Yetto involves 39 consolidated cases involving tax rate objections, with 37 additional appeals resulting from the issuance of a second refund due to an error by the Treasurer excluding an amount from the Chicago Board of Education taxing district. The core issues are the same for all appeals—the correct interest to be paid on property tax refunds pursuant to section 23-20 of the Property Tax Code (Code) (35 ILCS 200/23-20 (West 2006)) and the propriety of judgment interest on a sum determined from interest owed pursuant to the Code.
The Code was amended, effective January 1, 2006, to change the interest rate on tax refunds from a flat 5% rate to a rate based on the consumer price index (CPI). In each of the cases, the trial court entered judgment orders granting plaintiffs 5% interest from the time the taxes were paid until January 1, 2006, and the lower rate based on the CPI for the time after January 1, 2006. The Treasurer filed these appeals arguing that the terms of the Code require payment of refunds made after January 1, 2006, at the lower interest rate. The Treasurer also argues that the trial court erred in ordering the payment of judgment interest on the amount stayed in the Yetto case and for SBC and Newcastle. The General Motors plaintiffs filed cross-appeals, seeking review of the trial court's decision to grant the 5% interest rate only for the time period before January 1, 2006, arguing that the 5% rate should be paid for the entirety of the refund period. For the following reasons, the orders of the trial court are affirmed.
Final orders were entered on these cases in 2007 and 2008 and contain similar uncontested facts. Although the cases are based on different tax years, each case involved an objection to real estate tax assessments or tax rates that was filed in the circuit court pursuant to the Code. 35 ILCS 200/23-10, 23-15 (West 2006). All of the complaints were filed before January 1, 2006, and all were settled without trial pursuant to section 23-30 of the Code. 35 ILCS 200/23-30 (West 2006). Agreed judgment orders were entered after January 1, 2006, requiring the Treasurer to pay interest or "statutory interest" on the refund amounts.
The Treasurer issued refunds to plaintiffs as ordered, paying the entire principal, but only paying the lower interest rate based on the CPL The interest was computed from the date of final payment of the taxes through the date of the refund. The General Motors plaintiffs filed motions to enforce the agreed judgment orders, arguing that the Treasurer must pay interest at the 5% rate under section 23-20 of the Code for the entire period of the objected taxes. Alternatively, they argued that the interest should be paid at the 5% rate for the period until the amendment to section 23-20 became effective and the lower rate for the remainder. Following briefing and argument in the cases, the trial court ordered the Treasurer to pay 5% interest on the refunds from the date of final payment through December 31 2005. For the period from January 1, 2006, through the final payment date of the refund, the interest rate was to be based on the CPI computation of the amended Code.
In Yetto, the trial court denied the Treasurer's motion for rehearing or clarification. The Treasurer filed a motion for certification of question for interlocutory appeal pursuant to Supreme Court Rule 308 (155 Ill.2d R. 308) seeking resolution of the dispute over the proper interest rate. The Treasurer argued that a failure to accept the issue could result in hardship and wasted governmental resources in reprogramming the county system to calculate interest. This motion was withdrawn and, ultimately, the Treasurer filed these appeals seeking reversal based on her interpretation that the CPI-based rate applied to plaintiffs' entire refunds.
In addition, in the cases involving SBC and Newcastle, the Treasurer filed a written motion to stay payment of the additional interest pending appeal. In Yetto, the Treasurer made an oral motion to stay payment pending appeal. The trial court granted the motions to stay, contingent upon payment of judgment interest pursuant to section 2-1303 of the Code of Civil Procedure. 735 ILCS 5/2-1303 (West 2006). Plaintiffs subsequently filed their cross-appeals, arguing that the 5% rate should be paid for the entire refund payment. SBC and Newcastle also argue that the grant of judgment interest was proper.
Both the obligation to pay taxes and the right to a refund or credit of taxes paid are purely creatures of statutory origin. People ex. Rel Eitel v. Lindheimer, 371 Ill. 367, 371, 21 N.E.2d 318 (1939). Likewise, the right to interest on refunded taxes must be provided by statute. Shapiro v. Barrett, 68 Ill.App.3d 656, 661, 24 Ill.Dec. 872, 386 N.E.2d 76 (1978). In fact, the right to interest on the overpayment of taxes was not provided for by our legislature until January 1, 1982. Shell Oil Co. v. Department of Revenue, 95 Ill.2d 541, 549-50, 70 Ill.Dec. 191, 449 N.E.2d 65 (1983).
In Cook County, a taxpayer may seek a refund by challenging an assessment of its property by first filing a complaint with supporting affidavits with the Cook County assessor's office. 35 ILCS 200/9-85 (West 2006). No hearing is available at this stage and the assessor issues a unilateral decision to either not change the assessment or issue a revised assessment. The taxpayer may continue to object by filing a complaint with the Cook County Board of Review. 35 ILCS 200/16-95 (West 2006). An informal oral hearing including both sides may be held before the board of review issues a decision.
The taxpayer is afforded the statutory remedies of filing either an appeal of an assessment before the Illinois Property Tax Appeal Board (35 ILCS 200/16-160 (West 2006)) or a tax objection complaint in circuit court (35 ILCS 200/23-15 (West 2006)). Section 23-15 also applies to tax rate objections. In order to maintain such a complaint in the circuit court, for both tax rate and assessment objections, the taxpayer is required to pay under protest all of the tax due within 60 days of the first penalty date. 35 ILCS 200/23-5 (West 2006). In addition, all administrative remedies must be exhausted prior to filing the tax objection complaint. 35 ILCS 200/23-10 (West 2006). In a bench trial, the circuit court reviews the objections de novo to determine if the taxpayer has proven by clear and convincing evidence that the tax, assessment or levy was in error. 35 ILCS 200/23-15 (West 2006). If the court determines that the taxpayer has met its burden and grants relief of a refund of taxes paid, it also must order the payment of interest pursuant to section 23-20 of the Code. 35 ILCS 200/23-15, 23-20 (West 2006).
The resolution of the instant appeals revolves around how to calculate interest under section 23-20 of the Code. Specifically, the essential question to be answered is whether the legislature's amendment of section 23-20 in 2005 applies retroactively or prospectively. Section 23-20 reads in pertinent part, with emphasis added to the portion included in the 2005 amendment:
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