Jackson Park Yacht Club v. Illinois Dept. of Local Government Affairs

Citation49 Ill.Dec. 212,417 N.E.2d 1039,93 Ill.App.3d 542
Decision Date11 February 1981
Docket NumberNos. 80-976,80-978,80-977,s. 80-976
Parties, 49 Ill.Dec. 212 JACKSON PARK YACHT CLUB and the Chicago Park District et al., Plaintiffs- Appellees, v. ILLINOIS DEPARTMENT OF LOCAL GOVERNMENT AFFAIRS and the Board of Appeals of Cook County, Defendants-Appellants.
CourtUnited States Appellate Court of Illinois

Tyrone C. Fahner, Atty. Gen. of Illinois, Chicago, for defendants-appellants; George H. Klumpner, Chicago, of counsel.

Flanagan, Bilton & Brannigan, Chicago, for Yacht Clubs; Dean H. Bilton, Chicago, of counsel.

Joseph A. Power, Chicago, for Chicago Park Dist.; Leslie P. Liss, Chicago, of counsel.

McNAMARA, Justice:

This consolidated appeal arises from administrative review actions filed by plaintiffs, Jackson Park Yacht Club, Chicago Corinthian Yacht Club, Southern Shores Yacht Club, and the Chicago Park District, seeking review of decisions of defendant, Illinois Department of Local Government Affairs, disapproving 1978 real estate tax exemptions granted by the Board of Appeals of Cook County. The trial court reversed the Department's rulings, and the Department appeals.

Plaintiff yacht clubs use certain parcels of real estate belonging to the Chicago Park District. It is undisputed that the subject properties, being owned in fee by the park district, are exempt from taxation. (Ill.Rev.Stat.1979, ch. 120, par. 500.14.) At issue, however, is whether the yacht clubs' interests in these properties are subject to taxation under section 26 of the Revenue Act of 1939. (Ill.Rev.Stat.1979, ch. 120, par. 507.) Section 26 provides, in relevant part:

"(W)hen real estate which is exempt from taxation is leased to another whose property is not exempt, and the leasing of which does not make the real estate taxable, the leasehold estate and the appurtenances shall be listed as the property of the lessee thereof, or his assignee, as real estate."

All three yacht clubs were assessed for the 1978 tax year. Jackson Park and Chicago Corinthian filed petitions before the Board of Appeals in response complaining that the 1978 assessment was void. The petitions alleged that the yacht clubs had possession of certain tax exempt real property pursuant to permits issued by the park district; that they were not lessees; and that in 1976 and 1977, the circuit court of Cook County, finding that the yacht clubs' uses of the properties were not interests in real estate subject to taxation, entered orders sustaining the clubs' objections to 1974 and 1975 taxes respectively. Copies of the circuit court orders and the permit agreements were attached to the petitions. Southern Shores purportedly filed a similar petition. Yet the record does not contain such petition nor does it include a copy of Southern Shores' permit agreement. The record does reflect circuit court orders disposing of Southern Shores' objections to 1974 and 1975 taxes in the same manner as the other clubs.

In June, 1979, the Board of Appeals approved the exemption claimed by each yacht club for year 1978. As provided by statute, these matters were then transferred to the Department for its approval. (Ill.Rev.Stat.1979, ch. 120, par. 600.) Documents forwarded to the Department included: Board of Appeals 1978 real estate exemption complaints; the Board's field investigation reports; the documents granting exemptions by the Board; and the clubs' petitions and supporting exhibits.

Each yacht club later filed a brief and supporting documents with the Department. In their briefs, the yacht club maintained that they had possession pursuant to permits, not leases, and that the Department had no authority to review the decisions of the Board of Appeals in view of three prior judicial determinations finding their interests were not subject to real property taxation. Each club requested a hearing and asked the Department to approve the exemption.

On September 7, 1979, without conducting a hearing, the Department found that the properties were "not in exempt use," and disapproved the decisions of the Board of Appeals declaring such properties exempt. The Department's certification of disapproval further provided that any application for review of the decision was to be filed with the Department within ten days of its ruling.

Shortly thereafter, plaintiffs, each joined by the park district, filed their respective complaints for administrative review alleging that the Department's orders disapproving the exemptions were illegal and void. In the complaints, plaintiffs urged that the basis of the Department's decisions "not in exempt use" had no relevance to the park district's exemption; that the decisions were against the manifest weight of the evidence; and that the failure to grant plaintiffs a hearing constituted a denial of due process. They again asserted the Department's lack of jurisdiction because of the previous judicial determinations. Copies of the pertinent court orders, Board of Appeals' exemption approval, brief filed before the Department, and Department's certificate of disapproval accompanied each complaint.

Defendants failed to file answers, and each plaintiff requested summary judgment. The Department then filed answers to each complaint. Each answer set forth the record of proceedings under review consisting of the aforementioned documents filed by plaintiffs, the Board of Appeals, and the Department.

On February 28, 1980, after considering the pleadings, exhibits and arguments of counsel, the court concluded that the permit agreements issued to the three clubs were revocable personal licenses, not leases, and that plaintiffs' uses thus were not taxable interests in real estate. The court observed that it was the parties' intention only to give a limited revocable license, not to convey an interest in realty; that the clubs did not have exclusive possession; that they paid no rental; that the agreements were not assignable; and that the park district retained complete control of the properties throughout the duration of the agreements. Accordingly, the trial court set aside the Department's decisions as error and not supported by the evidence, and directed the Department to notify the Assessor and Board of Appeals that the properties were exempt.

We initially shall consider plaintiffs' contention that the Department lacked jurisdiction to review the action of the Board of Appeals because of the prior judicial determinations finding their interests in the properties not subject to taxation.

Section 119 of the Revenue Act of 1939 reads, in relevant part, as follows:

"If the board of appeals in any county containing 1,000,000 or more inhabitants determines that any property claimed to be exempt from taxation is not liable to taxation and the question as to the liability of such property to taxation has not previously been judicially determined, the decision of the board shall not be final unless approved by the Department." Ill.Rev.Stat.1979, ch. 120, par. 600.

When the Department reviewed the Board of Appeals action in the present matter, no judicial determination of plaintiffs' liability for 1978 real estate taxes had been rendered. Plaintiffs cite no authority which lends support to their proposition that the circuit court orders sustaining objections to 1974, 1975 and 1976 taxes were dispositive of their 1978 exemption claims. Because a cause of action for taxes for one year is not identical to a cause of action for taxes in subsequent years, a decision adjudicating tax status for a particular year is not res judicata as to the status of the property in later years. (Turn Verein Lincoln v. Paschen (1960), 20 Ill.2d 229, 170 N.E.2d 111; Hopedale Medical Foundation v. Tazewell County Collector (1978), 59 Ill.App.3d 816, 17 Ill.Dec. 92, 375 N.E.2d 1376, cert. denied, 440 U.S. 916, 99 S.Ct. 1234, 59 L.Ed.2d 466 (1979).) Consequently, even where the ownership and use of the property remain the same, a party may be required to relitigate the issue of its exemption annually. (See People ex rel. Tomlin v. Illinois State Bar Ass'n (1980), 89 Ill.App.3d 1005, 45 Ill.Dec. 65, 412 N.E.2d 198.) The Department was empowered to approve the decision of the Board of Appeal as to the 1978 taxes.

The Department initially contends that the trial court erred in granting plaintiffs' motion for summary judgment since issues of material fact existed. We believe, however, that the trial court had before it all the necessary documentary evidence to enable it to determine whether the contractual agreements amounted to a lease or an agreement.

The Department maintains that the case of People ex rel. Rosewell v. Dee El Garage, Inc. (1977), 51 Ill.App.3d 382, 9 Ill.Dec. 328, 366 N.E.2d 585, sets forth evidentiary criteria pertaining to the tax liability of a user of exempt property which were not developed in the present case. The Dee El Garage decision is inapposite. There, the objector, a lessee of property owned by a tax exempt entity, asserted that the tax was void because the fee interest in the exempt land and building, rather than its leasehold interest, was assessed. As support for its contention, the objector pointed out that none of the following documents expressly indicated that the tax was being levied against a leasehold interest: the property record card, the warrant book, the tax judgment forfeiture and redemption record, the Sidewell maps, and the real estate permanent index numbers. The court rejected the proposition that, unless otherwise indicated, an assessment is presumptively upon the freehold interest. Unlike the present situation where plaintiffs were found to be licensees, the objector in Dee El Garage was a lessee. Moreover, contrary to the Department's suggestion, the various documents listed were not regarded by the court as indicators of a leasehold interest or of tax liability for the use of exempt...

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