Schwarzbach v. City of Highland Park

Decision Date03 April 1980
Docket NumberNo. 79-93,79-93
Citation82 Ill.App.3d 807,403 N.E.2d 102,38 Ill.Dec. 87
Parties, 38 Ill.Dec. 87 Ilene SCHWARZBACH, John Stevens, Dona Pagnotta, Herman Wren, Ferdinand Humer, Arthur Bock, Plaintiffs-Appellees, v. CITY OF HIGHLAND PARK, an Illinois Municipal Corporation, Robert M. Buhai, Carmen Rollery and Charles Lens, Defendants-Appellants.
CourtUnited States Appellate Court of Illinois

Audrey Harris, Thomas H. Compere, Berle L. Schwartz, Highland Park, for defendants-appellants.

Russell L. Engber, Highland Park, for plaintiffs-appellees.

SEIDENFELD, Presiding Justice:

The City appeals from a declaratory judgment which found that a Special Service Area (Ill.Rev.Stat. 1977, ch. 120, par. 1301-1311) was properly created, but which enjoined the City from passing ordinances for the issuance of bonds or the levy of annual taxes for special services without holding further hearings. The City has appealed, contending that the trial court erred in raising sua sponte the question of inadequate notice, and in concluding that the notices were inadequate, requiring further hearings.

The City Council adopted an ordinance proposing establishment of the service area for the central business district in Highland Park on November 14, 1977, and scheduled a hearing for December 13, 1977. Notice of the hearing was sent to all persons in whose name the general taxes for the last preceding year were paid on each parcel of land lying within the proposed special service area on December 1, 1977, and newspaper notice of the hearing was published on November 24, 1977.

On December 13, 1977, the plaintiffs appeared at the hearing and objected to the proposal. Their objections were not specifically answered at that meeting but were in effect overruled by the City's subsequent actions.

Within 60 days from the adoption of the ordinance proposing the establishment of the special service area, objections were filed by both electors and property owners, which the City stipulated should be treated as a petition under Section 9 of the Special Services Act (Ill.Rev.Stat. 1977, ch. 120, par. 1309). At least 51 percent of the electors residing within the special service area and at least 51 percent of the owners of record of the land included within the boundaries of the special service area were required to defeat the proposal. Analysis of the objections showed them to be less than the 51 percent required.

On March 13, 1978, the City adopted an ordinance establishing the special service area. Plaintiffs filed suit on March 31, 1978, alleging in general, that the notices were improperly sent, that the form of notice deprived them of due process, that a sufficient number of objections in each category were filed, and that the City erred in determining the number of objections filed by the electors and property owners. The complaint prayed for an injunction to prevent implementation of the ordinance of March 13, 1978.

The trial court upheld the establishment of the special service area, finding that the required legal notice of hearing for the establishment of the area had been given; concluded that the notice did not deprive plaintiffs of due process; and also that plaintiffs had failed to secure the objections of at least 51 percent of the owners of record as required by Section 9 of the Act.

However, the court also found that the ordinances proposing and establishing the special service area included only the maximum amount of bonds which could be issued and only the maximum rates of taxes which could be extended, and that those portions of the ordinance of March 13, 1978, were illegal and invalid for failing to comply with various requirements of the Act. Therefore, the court enjoined the City from issuing bonds or levying taxes to support the special services for the area until compliance with the indicated provisions. The court noted that it found the following errors in the procedure employed by the City: (1) that notice should have gone to all interested persons owning taxable personalty; (2) that the notice, in addition to stating the maximum annual levy and the maximum number of years that the tax will be levied, should also have stated the exact amount of the first year's levy and the purpose to which it will be put; (3) that the notice should also have indicated whether the tax will be levied against real property only, against real property and personalty, or against personal property alone; and (4) that the notice, in addition to stating the maximum amount of the bonds proposed to be issued, the maximum period of time over which they will be retired, and the maximum interest rates the bonds shall bear, should also have stated that the City then proposed to issue a definite number of bonds in a definite amount at a definite interest rate.

The trial court denied the post trial motion of the City and this appeal followed. The plaintiffs have filed no notice of appeal or cross-appeal.

The City first argues that the issues dealing with faulty notice were neither pleaded nor proved, and thus that the trial court had no authority to enjoin it from levying bonds and taxes following the finding that there were less than the 51 percent of the statutory objectors required to veto the project. The pleading makes a general allegation that the notice "was inadequate and insufficient" and therefore deprived plaintiffs of due process. In addition, several objections to the form of the notice were pleaded, although these specific objections were overruled and were not included in those which the court relied upon. However, the proof at the trial did not clearly raise the issue of the sufficiency of the notice for the levy or the bond issue, nor of the need to elect between taxing of personal property and real property, nor whether specific tax and bond plans must be formulated at the time of the hearing. The vast majority of proof at trial contested only the question of the formation of the unit. The issues relied upon by the court were introduced by it on the basis of its reading of the statute, but its findings may be tested on review by applying the statute to the notice which is in the record.

The trial court has a right to render findings on issues which have been formed by the record of the trial even if they are not formally raised in the pleadings. (See, Hemingway v. Skinner Engineering Co., 117 Ill.App.2d 452, 463, 254 N.E.2d 133 (1969).) Further, an objection that an issue was not raised in the pleadings may be waived by the conduct of the parties at trial. (117 Ill.App.2d at 463, 254 N.E.2d 133). In this instance the trial court, after announcing its decision, offered the City ample time to raise legal arguments on the issues. Defendant's counsel, however, indicated that it intended to "go through the procedure again" when it actually levied the taxes or issued the bonds. Although the City has now withdrawn from that position, claiming that it was stated hastily in error and in response to its surprise at the sua sponte action of the judge, its conduct, together with other matters in the record sufficiently sustain the action of the trial court in considering whether the notice complied with due process.

The issue of the sufficiency of a notice is basically one of statutory construction. The statute provides, as applicable:

"Taxes may be levied or imposed by the municipality or county in the special service area at a rate or amount of tax sufficient to produce revenues required to provide such special services: provided, however, that if the tax is upon property, all taxable personal property may be excluded from such taxation at the option of the municipality or county. Prior to the first levy of taxes in such special service area notice shall be given and hearing shall be held pursuant to the provisions of Sections 5 and 6. For purposes of this Section the notice shall include:

(1) The time and place of hearing;

(2) The boundaries of the area by legal description and by street location, where possible;

(3) A notification that all interested persons owning real estate or taxable personalty located within the special service area will be given an opportunity to be heard at the hearing regarding such tax levy and an opportunity to file objections to the amount of the tax levy if the tax is a tax upon such property; and

(4) The maximum rate of taxes to be extended in any year and may include a maximum number of years said taxes will be levied.

After the first levy, taxes may be extended against the special service area for the services specified without additional hearings, provided said taxes shall not exceed the rate specified in the notice and if a maximum number of years is specified in the notice, the taxes shall not be extended for a longer period. * * * " (Ill.Rev.Stat. 1977, ch. 120, par. 1304).

" * * * Notice of the hearing shall be given by publication and mailing. Notice by publication shall be given by publication at least once not less than 15 days prior to the hearing in a newspaper of general circulation within the municipality or county. Notice by mailing shall be given by depositing said notice in the United States mails addressed to the person or persons in whose name the general taxes for the last preceding year were paid on each lot, block, tract or parcel of land lying within the special service area. * * * " (Par. 1305).

" * * * Prior to the issuance of such bonds, notice shall be given and a hearing shall be held pursuant to the provisions of Sections 5 and 6 hereof. For purposes of this Section a notice shall include:

(1) The time and place of hearing;

(2) The boundaries of the...

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