Court Opinion

ID: 9705083
Source: CourtListenerOpinion
Date Created: 2023-08-26 00:56:08.403966+00
Date Added: 2024-06-11T18:22:07.820026
License: Public Domain

JUSTICE O’MALLEY, specially concurring: I agree with the majority that LPFC’s claim to a tax exemption as an agent or instrumentality of the Village founders on the plain text of section 2 — 5(11) of the Retailers’ Tax Act. What I question is the necessity, and even the propriety, of the nearly eight pages of analysis that follow the majority’s statutory construction, which I consider dispositive of the exemption issue. I also doubt the soundness of a crucial segment of the majority’s surplus analysis. In construing section 2 — 5(11), the majority employs the dictum that “[wjhere the meaning of a statute is unclear, courts may look beyond the language of the statute.” 378 Ill. App. 3d at 929. The majority finds the relevant language of section 2 — 5(11) “unambiguous” and concludes that the statute “clearly applies only to government bodies, and not agents or instrumentalities thereof.” 378 Ill. App. 3d at 930. The majority proceeds, however, to address whether LPFC “was eligible for the exemption as an agent or instrumentality of the Village even though the statute does not express that agents or instrumentalities of governmental bodies are exempt.” (Emphasis added.) 378 Ill. App. 3d at 930. I am unsure why the majority chooses to address this question. If, as is undisputed here, section 2 — 5(11) is the only possible authority for the exemption, and, as the majority rightly concludes, the unambiguous thrust of the text forecloses an exemption on these facts, then further discussion is needless. In fact, the majority’s protraction appears to clash with norms of statutory construction. The converse of the maxim that “[w]here the meaning of a statute is unclear, courts may look beyond the language of the statute” (378 Ill. App. 3d at 929) is: “a court may not look beyond the plain language of a statute if its meaning is unambiguous” (emphasis added) (People v. Ward, 194 Ill. App. 3d 229, 234 (1990)), lest it “create exceptions or limitations which are not contained in the statute” (Darwish v. Nationwide Mutual Insurance Co., 246 Ill. App. 3d 903, 907 (1993)). Although the majority did not ultimately create an exception or limitation to the plain language of the statute, its extratextual analysis was expressly undertaken to determine whether it would make such an amendment. That analysis involves a discussion of several cases, but the only one that has relevance to the interpretation of section 2 — 5(11), and the only one that warrants anything beyond a mention by the majority, is Berwyn Lumber. There, the supreme court construed a prior version of section 2 — 5, which exempted “sales to any governmental body or any agency or instrumentality thereof ’ (emphasis added) (Ill. Rev. Stat. 1963, ch. 120, par. 441). The court refused to broaden the exemption beyond its plain language and so rejected a lumberyard’s claim that it was entitled to an exemption for sales to entities that the court determined were not agents or instrumentalities of a governmental body. Berwyn Lumber, 34 Ill. 2d at 323. Berwyn Lumber supports the majority’s strict construction of the “governmental body” exemption in its current state.2 The majority should have incorporated its discussion of Berwyn Lumber into the statutory analysis rather than place it in the later regions of the opinion where its relevance is not fully appreciated. The majority defends its excess analysis by asserting that its construction of section 2 — 5(11) was but “the first step” of its review. 378 Ill. App. 3d at 930. The next step, claims the majority, is to determine “whether the reasoning set forth in Southern Illinois [is] applicable to LPFC such that it was eligible for the exemption as an agent or instrumentality of the Village even though the statute does not express that agents or instrumentalities of governmental bodies are exempt.” 378 Ill. App. 3d at 930. I disagree. The only legitimate step left was to determine whether LFPC was a governmental body proper — and that was easily decided, since LFPC conceded the issue. The majority’s second step effectively defeats the conclusions of the first step. If it is a legitimate question for the majority whether LPFC was an agent or instrumentality of the Village, then the majority must consider its reliance on the plain text of the statute inconclusive, for otherwise it would find the question of agency clearly mooted. I do not understand why the majority draws what appears to be a definitive conclusion only to impliedly disregard it almost immediately. Southern Rlinois is simply inapplicable here and does not warrant the considerable attention the majority devotes to it. In discussing the case, the majority observes that section 1 of the Retailers’ Tax Act, which defines “purchaser” as one who acquires property “for valuable consideration,” does not recognize the concept of equitable ownership that the court in Southern Illinois found implied in the property tax statute. The majority reasons that, because the Village provided no “valuable consideration” for the personal property sold here, it cannot be considered the “purchaser.” The significance of this conclusion for the exemption issue is not apparent, for the majority never places “purchaser” in context, leaving unexplained how the term operates in the Retailers’ Tax Act to determine exemptions. The majority protracts and complicates what ought to have been a straightforward application of section 2 — 5(11), the controlling provision here. The majority, interestingly, cites the dissent from the denial of rehearing in Pooh Bah Enterprises to justify its forging ahead to address Southern Illinois and the agency question. Aside from the fact that a dissent “has no precedential value” (People v. Williams, 368 Ill. App. 3d 616, 621 (2006)), the intracourt dispute in Pooh Bah scarcely resembles my differences with the majority here. In Pooh Bah, bar owners argued that a Chicago ordinance banning the sale of alcohol in establishments that feature nude dancing violated the first and fourteenth amendments to the United States Constitution (U.S. Const., amends. I, XIV). The majority declined to apply the standard of strict scrutiny to the ordinance, opting instead for intermediate scrutiny. Pooh Bah, 224 Ill. 2d at 415 n.12. The dissent accused the majority of ignoring the authorities that the bar owners cited for strict scrutiny review. The dissent said: “The opinion of this court overlooks both of [the] recent United States Supreme Court free speech cases on which the defendants strongly rely for their strict scrutiny argument. Rather than directly address a central argument debated at length by the parties in this case and engage in a thorough analysis of these contentions, the court simply relegates this important debate to a brief footnote in the opinion. *** í¡; ;-i I am deeply troubled by the court’s out-of-hand dismissal of Pooh Bah’s strict scrutiny argument for several additional reasons. *** [S]uch conduct on the part of this court denies the parties to this action the reassurance that we have carefully considered and deliberated their arguments. What message does this court send to litigants when it does not even bother to address the central arguments raised in their appeals, especially when they are issues of constitutional magnitude? I venture to say that it creates the perception that this court has predetermined the outcome of the appeal and does not deem it necessary to bother with arguments that may cut in the opposite direction. In addition, by failing to address and fully analyze an issue such as whether strict scrutiny applies to the ordinance challenged in this case, this court fails to provide the bench and bar with the guidance needed to deal with similar issues in future cases.” (Emphasis added.) Pooh Bah, 224 Ill. 2d at 452-54 (Freeman, J., dissenting upon denial of reh’g). The majority believes it is doing the service that the majority in Pooh Bah shirked. Lifting language from the Pooh Bah dissent, the majority claims that “it is appropriate to address the parties’ central arguments as litigated to this court” and that its discussion will provide “guidance” to those “at the administrative level” (378 Ill. App. 3d at 930). However contorted, the dissent’s accusations in Pooh Bah will not fit here. The issue of whether strict scrutiny applied was “central” in Pooh Bah because it was a threshold question for reviewing the Chicago ordinance under the first amendment. The supreme court disposed of the issue, not by rendering it logically immaterial in light of a separate holding (e.g., deciding that the first amendment did not apply at all), but by finding that a different standard, intermediate scrutiny, applied. Here, the majority’s holding that the plain language of section 2 — 5(11) excludes a tax exemption for agents or instrumentalities of governmental bodies extinguishes the separate question of whether LFPC was the agent of the Village. The subjective feelings of appellate litigants that an issue is “central” does not make it so. For various reasons, not all arguments “litigated to this court” are decided by this court. The particular, and compelling, reason for the majority to dispense with the agency question is that the plain language of section 2 — 5(11) forecloses the issue. Thus, I am unable to appreciate what “guidance” the majority could hope to give those “at the administrative level” on what makes an agent or instrumentality of a governmental body for purposes of an exemption under section 2 — 5(11). There is no useful guidance for the majority to give on an issue that its construction of section 2 — 5(11) altogether strips of vitality in this court. Perhaps the majority wishes to provide general illumination in the realm of agency law. I believe the majority errs in its exposition. The majority reasons that, as the Village could not have legally issued bonds in the amount necessary for the construction, LPFC could not be acting as the Village’s agent in issuing its own bonds, because under “basic agency[ ]law *** the principal is the only source of an agent’s authority” (378 Ill. App. 3d at 932). The majority cites an Illinois case, Merchants’ National Bank of Peoria v. Nichols & Shepard Co., 223 Ill. 41 (1906), and a section of American Jurisprudence on agency law. I presume the majority is paraphrasing the following italicized statements from American Jurisprudence: “The authority of the agent is the very essence of the principal and agent relationship. Unless otherwise agreed, it includes only authority to act for the benefit of the principal, and the source of the authority is always the principal, never the agent. An agent has no implied or apparent authority to do that which the principal would not be authorized to do personally.” (Emphasis added.) 3 Am. Jur. 2d Agency §68, at 482-83 (2007). Treatises are not binding on our courts (Illinois State Toll Highway Authority v. Amoco Oil Co., 336 Ill. App. 3d 300, 307 (2003)). This aside, I do not believe the italicized principles are appropriate for determining whether an agency relationship exists between the Village and LPFC. The first principle, that “the source of the authority is always the principal, never the agent,” is drawn from two cases: Alar v. Mercy Memorial Hospital, 208 Mich. App. 518, 529 N.W2d 318 (1995), and Kuhn v. P.J. Carlin Construction Co., 274 N.Y. 118, 8 N.E.2d 300 (1937). In Alar, the plaintiff sought to bind a hospital to the acts of a physician who the hospital claimed was not an employee but an independent contractor and whose acts the hospital claimed, alternatively, were not within the scope of the agency. In addressing the question whether, assuming the physician was the agent of the hospital, the particular act sued upon was within the physician’s apparent authority, the court explained that “apparent authority must be traceable to the principal and cannot be established only by the acts and conduct of the agent” {Alar, 208 Mich. App. at 528, 529 N.W.2d at 323) — the proposition paraphrased by American Jurisprudence. In Kuhn, where the plaintiff sought to hold an employer accountable for a particular act of a party who was undisputedly its employee, the court, diminishing the import of the agent’s own insinuations to third parties about his authority, remarked that “the power to act and bind a principal comes from the acts of the principal and not from his agent” {Kuhn, 274 N.Y. at 134, 8 N.E.2d at 306). This, presumably, was the concept that American Jurisprudence sought to encapsulate. Merchants’ National Bank, standing for this same proposition, holds: “The source of authority is the principal, and the power *** can only be proved by tracing it to that source in some word or act of the alleged principal.” Merchants’ National Bank, 223 Ill. at 49. I fail to see what role this concept plays here. LPFC has not tried to base an agency relationship on anything other than the acts of the Village. The second italicized principle, that “an agent has no implied or apparent authority to do that which the principal would not be authorized to do personally,” is also inapplicable here because, by its terms, it restricts only implied or apparent authority, and the authority LPFC relies on is express, conveyed in the unequivocal declarations of the Village. The proper criteria for determining the existence of an agency relationship are “ ‘whether the alleged principal has the right to control the manner and method in which work is carried out by the alleged agent and whether the alleged agent can affect the legal relationships of the principal’ ” {Oliveira-Brooks v. Re/Max International, Inc., 372 Ill. App. 3d 127, 134 (2007), quoting Anderson v. Boy Scouts of America, Inc., 226 Ill. App. 3d 440, 443 (1992)). This idea is perfectly intuitive. One can readily imagine an individual being held accountable for the acts of another who, though committing those acts while exercising a professional or trade license that the former lacked, was nonetheless subject to sufficient control that a principal-agent relationship existed between the two. Therefore, though the Village could not issue bonds in the amount that it created LPFC to issue, this does not preclude LPFC from being the agent of the Village. I express no opinion on whether LPFC was in fact the agent of the Village under these principles, because the issue is immaterial given the plain thrust of the statutory language.  Of course, if extrinsic aids were appropriate here, the most indicative would be the history of section 2 — 5. The words “or any agency or instrumentality thereof’ were deleted in 1965 (1965 Ill. Laws 136) and have not appeared since. The amendment makes plain the intent of the legislature to now limit the exemption to governmental bodies proper.