Stone St. Partners, LLC v. Chi. Dep't of Admin. Hearings

• Decision Date: 17 February 2017
• Docket Number: Docket No. 117720
• Citation: 2017 IL 117720,88 N.E.3d 699
• Parties: STONE STREET PARTNERS, LLC, Appellee and Cross–Appellant, v. The CITY OF CHICAGO DEPARTMENT OF ADMINISTRATIVE HEARINGS et al., Appellants and Cross–Appellees.
• Court: Illinois Supreme Court

2017 IL 117720
88 N.E.3d 699

STONE STREET PARTNERS, LLC, Appellee and Cross–Appellant,
v.
The CITY OF CHICAGO DEPARTMENT OF ADMINISTRATIVE HEARINGS et al., Appellants and Cross–Appellees.

Docket No. 117720

Supreme Court of Illinois.

Opinion filed February 17, 2017.
Rehearing denied May 22, 2017.

88 N.E.3d 700

Stephen R. Patton, Corporation Counsel, of Chicago (Benna Ruth Solomon, Myriam Zreczny Kasper, and Jonathon D. Byrer, Assistant Corporation Counsel, of counsel), for appellants.

Mitchell B. Katten and Joshua R. Diller, of Katten & Temple LLP, and Richard F. Linden, both of Chicago, for appellee.

CHIEF JUSTICE KARMEIER delivered the judgment of the court, with opinion.

¶ 1 Stone Street Partners, LLC (Stone Street), brought this action in the circuit court of Cook County to obtain administrative review and declaratory and other relief, including an award of damages, after discovering that a judgment had been recorded against one of its properties for failure to pay $1050 in fines and costs imposed by the city of Chicago's department of administrative hearings (the Department) for violation of various provisions of the city's building code more than a decade earlier. Stone Street's complaint, which named as defendants the city of Chicago, the Department and its director, and the city of Chicago's department of buildings and the commissioner of that department (collectively the City), asserted that the original administrative proceedings were a nullity and could not serve as the basis for the judgment subsequently recorded against its property because, inter alia, it had not been given the requisite notice and therefore had no opportunity to contest the violations alleged by the City before judgment was entered against it.

¶ 2 Following a motion filed by the City pursuant to section 2–619 of the Code of Civil Procedure ( 735 ILCS 5/2–619 (West 2012) ), the circuit court rejected Stone

88 N.E.3d 701

Street's cause of action in its entirety. The appellate court, with one justice partially dissenting, subsequently affirmed in part, reversed in part, and remanded for further proceedings. 2014 IL App (1st) 123654, 382 Ill.Dec. 412, 12 N.E.3d 691. We allowed the City's petition for leave to appeal. Ill. S. Ct. R. 315 (eff. July 1, 2013). For the reasons that follow, the judgment of the appellate court is affirmed, and the cause is remanded to the circuit court for further proceedings.

¶ 3 BACKGROUND

¶ 4 The standards governing this appeal are well established. A motion to dismiss under section 2–619 of the Code of Civil Procedure ( 735 ILCS 5/2–619 (West 2012) ) admits the legal sufficiency of the complaint but asserts that some affirmative matter defeats the plaintiff's claim. When reviewing whether a motion to dismiss under section 2–619 should have been granted, we may consider all facts presented in the pleadings, affidavits, and depositions found in the record. Doe A. v. Diocese of Dallas, 234 Ill.2d 393, 396, 334 Ill.Dec. 649, 917 N.E.2d 475 (2009). All well-pleaded facts along with all reasonable inferences that can be drawn from those facts are deemed admitted, and all pleadings and supporting documents must be interpreted in the light most favorable to the nonmoving party. Bjork v. O'Meara, 2013 IL 114044, ¶ 21, 369 Ill.Dec. 313, 986 N.E.2d 626. Because section 2–619 motions present a question of law, we give no deference to the determinations by the lower courts. Our review is de novo. Doe A., 234 Ill.2d at 396, 334 Ill.Dec. 649, 917 N.E.2d 475.

¶ 5 The record before us, when viewed according to the foregoing principles, establishes the following. Stone Street is a limited liability company created in 1998 and duly registered with the Illinois Secretary of State. Its registered agent is and has always been William G. Daluga, Jr. Mr. Daluga's address is 200 W. Adams Street, Suite 2500, Chicago, Illinois 60606. According to state records, Stone Street's principal office is located at 1343 N. Wells Street, ground level, Chicago, Illinois 60610. These addresses have been on file with the Secretary of State since 1998 and have never changed.

¶ 6 Stone Street owns real estate located at 44–46 E. Superior Street, Chicago, Illinois 60611.¹ On March 19, 2009, the City recorded a judgment against that property. The judgment so recorded had actually been entered 10 years earlier, on September 9, 1999, following a hearing on that same date, by an administrative law officer in the City's department of administrative hearings. The judgment was in the amount of $1050 and was based on the administrative officer's determination that "Stone Street Partners" was liable for violation of various provisions of the City's building code. One thousand dollars of this sum was a fine. Fifty dollars was for costs.

¶ 7 There is no evidence that Stone Street or anyone with authority to act on behalf of Stone Street had ever been notified of the building code violations that resulted in the 1999 judgment or the judgment itself, at any time prior to 2009. The "communication transmittal form" on which the building inspector had listed the violations to be addressed at the September 9, 1999, hearing showed that during the inspection, the owner was not present. Moreover, the document incorrectly identified

88 N.E.3d 702

the property's owner as "1st Real Estate and Development."

¶ 8 Issuance of the foregoing document apparently resulted after code violations discovered by City inspectors in the previous months remained uncorrected. However, neither that document nor the prior reports of violations were mailed to Stone Street's office or the office of its registered agent, Mr. Daluga. The City destroyed most of the records regarding this matter, but the surviving materials indicate that the notices were actually mailed to Supera Properties, 2001 N. Halsted Street, No. 301, Chicago, IL, 60614. Supera Properties was neither an agent nor a representative of Stone Street. Copies were apparently also sent to this address: Stone Street Partners, 44 E. Superior Street, Chicago, IL 60614. Forty-four E. Superior Street, however, was not Stone Street's principal place of business, and Stone Street Partners is not the company's name. The company is registered as Stone Street Partners, LLC, and its address was on N. Wells Street. The street name and number listed on the notice were actually those of the property where the violations were alleged to be, but even at that, the address was inaccurate. The zip code listed, 60614, was incorrect. The property owned by Stone Street is located in the 60611 zip code area.

¶ 9 While notice was never given to or received by Stone Street or its agents or representatives, a person named Keith Johnson entered a written appearance in the administrative proceeding that culminated in the fine against Stone Street. Johnson represented that he was there on behalf of Stone Street, but the address and phone number he gave corresponded to those of a business called "First Real Estate," not Stone Street, and he left blank the section of the appearance form in which he was asked to state under oath that he was either the respondent/owner, lessee, attorney, or authorized agent/representative of Stone Street.² Although Johnson died before this litigation arose and therefore could not be questioned, the reason he refrained from selecting any of the options seems apparent. He could not do otherwise without committing perjury. Johnson was not employed by Stone Street and had no affiliation of any kind with the company. He did not even live in the subject property. So far as can be ascertained, he was merely the private caretaker for Philip Farley, the father of an attorney named Brian Farley, who was one of the members of Stone Street.

¶ 10 When Johnson was working for Philip in 1999, Philip, who is now also deceased, had suffered a stroke, was in ill health, and lacked the mental capacity to manage his own affairs. Due to his diminished mental capacity, Philip was not involved in the management or affairs of Stone Street and therefore could not have authorized Johnson to act on Stone Street's behalf.³ Moreover, there is no evidence

88 N.E.3d 703

that Stone Street or anyone associated with Stone Street ever took any action or made any representations that would indicate to others that Johnson had any authority to act on Stone Street's behalf with respect to this or any other matter. To the contrary, Brian Farley, Philip's son, stated unequivocally that he served as attorney for the company at the time and that if the company had been sent proper notice, he would have been the one to appear on the company's behalf. According to Brian's uncontested affidavit, Johnson had no authority to represent Stone Street, and the company "would not have sent a caretaker to defend the charges had it been properly provided with notice of this case."

¶ 11 After Stone Street learned that a judgment had been recorded against the company's property in 2009 based on the 1999 administrative judgment imposing the $1050 in fines and costs on "Stone Street Partners," Brian Farley wrote to the City's counsel in his capacity as Stone Street's attorney to request that the judgment be released and that title to the property be cleared. When that effort proved unsuccessful, Stone Street sought relief from the City's department of administrative hearings. Specifically, the company asked the Department to vacate and set aside the September 9, 1999, judgment on the grounds that the company had never received notice of the charges or of any orders entered in the case. The company further contended that the proceedings leading to the 1999 administrative judgment were fatally flawed because regardless of Johnson's relationship (or lack thereof) with Stone Street, he was not a lawyer and could not appear for the company without violating the prohibition against the unauthorized practice of law.

¶ 12 By order dated December 9, 2011, the administrative law officer for the...