Court Opinion

ID: 9519932
Source: CourtListenerOpinion
Date Created: 2023-08-07 01:27:52.099982+00
Date Added: 2024-06-11T12:45:21.371161
License: Public Domain

JUSTICE BOWMAN, concurring in part and dissenting in part: I agree with the majority that the Village of Long Grove (Village) did not have the statutory authority to impose impact fees for schools and open space and that the ordinances imposing such fees are thus invalid. I respectfully disagree, however, with the majority’s conclusion that Raintree paid the impact fees under duress because there was a business compulsion to pay them. In my opinion, Raintree paid the impact fees voluntarily, which means that the voluntary-payment doctrine precludes recovery of those fees. Under the voluntary-payment doctrine, money voluntarily paid on a claim of right to the payment cannot be recovered on the ground that the claim was illegal absent fraud, mistake of fact, or duress. Ramirez v. Smart Corp., 371 Ill. App. 3d 797, 801 (2007). The voluntary-payment doctrine applies to any cause of action that seeks to recover payment on a claim of right, whether that claim is based on a contractual relationship or a statutory obligation. Ramirez, 371 Ill. App. 3d at 801. Ordinarily, payment under protest is the best evidence of compulsion, and such protest may either be express or appear from the circumstances. West Suburban Hospital Medical Center v. Hynes, 173 Ill. App. 3d 847, 855-56 (1988). In this case, it is undisputed that Raintree built homes in the Village for nearly 10 years. Although Raintree had actual knowledge of the Village’s impact fees, at no time during that 10-year period did it pay the fees under protest. As I explain, I do not believe that a builder can have knowledge of the possible invalidity of fees, pay without protest, continue such a course of action for nearly 10 years, and then claim duress. Cf. West Suburban Hospital Medical Center, 173 Ill. App. 3d at 856 (the hospital’s continued protests and its action of filing suit the very next day constituted overwhelming evidence of protest, which is the best evidence of compulsion). The majority does not find Raintree’s failure to protest the impact fees controlling, and courts have indicated that, although payment under protest is the typical means by which a payor signifies his contention that a charge is improper, the absence of such a protest does not, without more, require the application of the voluntary-payment doctrine. Ramirez, 371 Ill. App. 3d at 801; see also Dreyfus v. Ameritech Mobile Communications, Inc., 298 Ill. App. 3d 933, 938 (1998) (“Protest may also serve as evidence of compulsion and an unwillingness to pay; however, it does not conclusively establish compulsion where compulsion is disproved by other circumstances”). The majority points out that our supreme court in Geary v. Dominick’s Finer Foods, Inc., 129 Ill. 2d 389, 395 (1989), went so far as to say that “whether plaintiffs had to protest the taxes is irrelevant to the issue of duress because the absence of a protest is not enough to establish that a taxpayer made a payment voluntarily.” (Emphasis in original.) I agree that the absence of a protest does not bar recovery in all cases. However, our supreme court in Geary did not abandon the long-standing proposition that “ ‘payment under protest is the typical means by which a taxpayer signifies his contention that a tax or charge was improper.’ ” Geary, 129 Ill. 2d at 393, quoting Getto v. City of Chicago, 86 Ill. 2d 39, 48-49 (1981). Moreover, even though the absence of a protest is not enough to establish that the payment was voluntary, the failure to protest, when combined with the other facts and circumstances of this case, compels a finding that the challenged fees were not paid under duress. See Dreyfus, 298 Ill. App. 3d at 938 (in determining whether the plaintiffs payment was made under duress, the court considers all the facts and circumstances surrounding the transaction). “To defeat the voluntary payment doctrine on the basis of duress, the plaintiff must show that the payment was not voluntary because there was some necessity that amounted to compulsion and that the payment was made under the influence of that compulsion.” Ramirez, 371 Ill. App. 3d at 802. The recoupment of payments made under duress is limited to items that are necessities, and attention must be given to the nature of the asset involved and the consequences of nonpayment. Wermers Floor covering, Inc. v. Santanna Natural Gas Corp., 342 Ill. App. 3d 222, 225 (2003). The existence of a reasonable alternative source precludes any arguments about whether a particular product or service is deemed a necessity. Wermers Floorcovering, Inc., 342 Ill. App. 3d at 225; see also Smith v. Prime Cable of Chicago, 276 Ill. App. 3d 843, 849 (1995) (the real and ultimate fact to be determined in every case is whether the party really had a choice and the freedom to exercise his will; economic duress does not exist when the party had a choice as to whether he would do the thing said to be done under duress). The trial court found that Raintree made the payments under duress because: (1) Raintree did a substantial portion of its business in the Village between 1993 and 1997; (2) constructing a home without a building permit would have subjected Raintree to fines, other penalties, and delay; (3) some of Raintree’s contracts required it to deliver completed homes to the purchasers within a specific time; (4) for other purchasers, Raintree verbally committed to deliver completed homes within six to eight months; (5) in order to deliver the homes within those times, Raintree needed to obtain building permits from the Village, and it would have breached its contracts if it had failed to obtain them; (6) Raintree financed its operations by either taking out mortgages or drawing on lines of credit, and any construction delays would have resulted in substantial financial hardship; and (7) conducting business without proper permits was not feasible and would have resulted in the loss of some or all of the contracts, thereby causing severe financial hardship and damage to Raintree’s business reputation. The trial court concluded that Raintree’s only commercially reasonable course of action was to pay the Village the impact fees. I disagree. In my opinion, the trial court’s finding of duress is against the manifest weight of the evidence. See Wermers Floorcovering, Inc., 342 Ill. App. 3d at 224 (the trial court’s factual findings regarding duress are reviewed under a manifest-weight-of-the-evidence standard, and a decision is against the manifest weight of the evidence if the facts clearly demonstrate that the court should have reached the opposite conclusion). As noted above, Raintree paid the impact fees for almost 10 years before seeking reimbursement.5 Raintree offered no evidence of why it could not have protested the fees or filed suit, except that it would not have been profitable to do so. Brown, Raintree’s president, testified that he did not write “paid under protest” on the checks written to the Village for the fees because he did not believe that the Village would accept the checks if they included that language. However, Brown offered no evidence of why he could not pay under protest in the Village. See Smith, 276 Ill. App. 3d at 855 (the plaintiffs’ allegations of threatened loss was conjecture, speculative, and unsupported by any facts). Brown admitted that he considered filing a lawsuit to challenge the fees, but decided against it because of the time involved in litigating the matter and because he did not think he could be building in the Village while the litigation was pending. Yet, the record shows that Raintree challenged the same fees in Kildeer. The trial court noted that Raintree was paying impact fees to Kildeer while it was paying impact fees in the Village, and Brown conceded that Rain-tree did sue Kildeer to recover those fees. Significantly, the trial court did not find credible Brown’s testimony that he did not believe that he could pay the fees under protest in the Village. In its decision, the court specifically noted that “payments of impact fees to the Village of Kildeer were accompanied by oral protests and written objections demonstrating that [Raintree] was aware of such procedures to reserve their rights to claim a refund again, contrary to their assertions.” Not only did Raintree fail to protest the fees, it failed to establish the necessity of building in the Village. See Geary, 129 Ill. 2d at 393 (it must be shown that there was some necessity amounting to compulsion and that the payment was made under the influence of such compulsion). On this point, I disagree with the trial court’s finding that Raintree did a substantial portion of its business in the Village. Whereas Brown testified that Raintree conducted 90% of its business in the Village, former Raintree president Eckert testified that from 1993 to 1997, the period for which it sought to recover, the majority of Raintree’s business was located in Kildeer, where it had the majority of its property. Eckert also contradicted Brown’s testimony that a two-year delay in building as a result of filing suit would have “probably” put Raintree out of business. According to Eckert, Raintree conducted only one-third of its business in the Village and two-thirds of its business in other communities. Eckert testified that Raintree did business in Barrington, South Barrington, Hawthorn Woods, Kildeer, and Vernon Hills. See Wermers Floorcovering, Inc., 342 Ill. App. 3d at 226 (when a party has alternative sources available and could have opted out of making a disputed payment, then the asset involved is not a necessity, the duress exception does not apply, and the voluntary payments cannot be recouped). As the Village points out, Raintree built approximately four homes per year in the Village from 1988 to 1997, comprising about one-third of Raintree’s business. Raintree asserts that its controlling motive for paying the impact fees was the desire to avoid adverse economic consequences of being unable to build in the Village, but this desire did not make building in the Village a necessity. Given the options available, Raintree’s decision to continue to subject itself to the impact fees in the Village was its own choice. The cases relied upon by the majority to show economic duress are distinguishable in key respects. For example, in three of the cases cited by the majority, the plaintiff either paid under protest or filed suit immediately. See Edward P. Allison Co. v. Village of Dolton, 24 Ill. 2d 233, 234-35 (1962) (the electrical contractor paid the fees under protest, filed suit within two years, and did not continue to work in the village); Rosen v. Village of Downers Grove, 19 Ill. 2d 448, 455 (1960) (the large-scale developer paid under protest and wrote a letter reserving its right to a refund); United Private Detective & Security Ass’n v. City of Chicago, 56 Ill. App. 3d 242, 245 (1977) (the detectives filed suit two days after the fees were paid). In various other cases relied upon by the majority, where no protest was made, the good or service constituted a necessity. In Geary, 129 Ill. 2d at 395, for example, the plaintiffs, despite their lack of protest, alleged that tampons and sanitary napkins were necessities, which the supreme court found sufficient to plead duress. In Getto, the plaintiff paid his telephone bills without protest and then challenged the method the defendants used in calculating a tax imposed on telephone service. The supreme court reasoned that the implicit and real threat that phone service would be shut off for nonpayment of charges amounted to compulsion that would forbid application of the voluntary-payment doctrine. Getto, 86 Ill. 2d at 51. Also, in People ex rel. Carpentier v. Treloar Trucking Co., 13 Ill. 2d 596 (1958), the truck operator tried to apply for the appropriate weight classification but was prevented from doing so by the Secretary of State. The evidence showed that the company could not carry on its business without Illinois license plates and that the payment was made under duress. People ex rel. Carpentier, 13 Ill. 2d at 600; see also People ex rel. Carpentier v. Arthur Morgan Trucking Co., 16 Ill. 2d 313, 320 (1959) (same). Finally, the majority cites several cases to support its assertion that necessity (and protest) are not the only bases upon which recoupment is allowed when proving duress. I disagree and believe that necessity is required to establish duress. As previously mentioned, our supreme court stated in Geary that, to show that a payment was not voluntary, it must be shown that “ ‘there was some necessity which amounted to compulsion’ ” and that the payment was made under the influence of such compulsion. (Emphasis added.) Geary, 129 Ill. 2d at 393, quoting Getto, 86 Ill. 2d at 48-49. In this case, for the reasons stated above, Raintree failed to show that building in the Village was a necessity. And, despite knowledge of the possible invalidity of the fees, Raintree elected to do business in the Village for 10 years before filing suit. In my opinion, these facts distinguish this case from the cases relied upon by the majority, where necessity was shown. For instance, in DeBruyn v. Elrod, 84 Ill. 2d 128, 136 (1981), the plaintiffs were confronted with the choice of payment of the sheriffs fees or his refusal to effect the requested sale, execution, or redemption of the real estate under foreclosure. Stating that the plaintiffs in DeBruyn were in the same position as the plaintiffs in Ross v. City of Geneva, 71 Ill. 2d 27 (1978), who paid their electrical bill, for an essential service, under duress, the DeBruyn court found that the plaintiffs, in making the payment, acted with prudence and were not barred from recovering. DeBruyn, 84 Ill. 2d at 136; see also Norton v. City of Chicago, 293 Ill. App. 3d 620, 627-28 (1997) (where the plaintiffs paid a $3 delinquent penalty fee on parking fines, and the demand notices sent to the plaintiffs threatened further legal action, a default judgment, or the maximum fine allowed by law, the notices were coercive enough to render the plaintiffs’ payment involuntary); Ball v. Village of Streamwood, 281 Ill. App. 3d 679, 688 (1996) (duress excused the plaintiffs’ “voluntary” payment of the transfer tax because the plaintiffs’ residences were subject to contracts to sell to third parties and the village code provided civil penalties for failure to pay the tax); Terra-Nova Investments v. Rosewell, 235 Ill. App. 3d 330, 337 (1992) (relying on DeBruyn and Ross, the court held that the tax buyer at a scavenger tax sale had little choice but to pay the fee to the county collector). In sum, the facts in this case are that Raintree paid the Village’s fees without protest for a period of almost 10 years despite knowledge that they might have been invalid; Raintree protested the same fees in Kildeer; Raintree conducted business in several communities besides the Village; and Raintree failed to establish that building in the Village was an economic necessity. See Smith, 276 Ill. App. 3d at 853 (where the plaintiffs did not allege that they had exhausted all options available to them before they made payment; did not allege any attempt at resolution; did not allege that they contacted the cable company to voice their objection to the charge; and did not allege any knowledge by the cable company that a dispute existed, they did not plead duress). Under these facts, I believe that the trial court’s finding of duress is against the manifest weight of the evidence and that the voluntary-payment doctrine precludes recovery of the fees. Because Raintree is not entitled to recoupment, I need not address Raintree’s cross-appeal concerning prejudgment interest.   Although Raintree paid impact fees from 1988 to 1997, it sought reimbursement for fees paid only from 1993 to 1997, due to the statute of limitations.