Court Opinion

ID: 9298374
Source: CourtListenerOpinion
Date Created: 2022-12-01 21:02:40.323607+00
Date Added: 2024-06-11T17:13:32.949971
License: Public Domain

NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as
     precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).

                                2022 IL App (3d) 210232-U

                           Order filed December 1, 2022
____________________________________________________________________________

                                          IN THE

                           APPELLATE COURT OF ILLINOIS

                                     THIRD DISTRICT

                                            2022

WESLEY ESTATES, INC., an Illinois        )            Appeal from the Circuit Court
Corporation,                             )            of the 9th Judicial Circuit,
                                         )            McDonough County, Illinois.
        Plaintiff,                       )
                                         )
(ALPHA J. BOURN; MARILYN J.              )
BOURN; HELEN J. BRATTAIN a/k/a           )
JACQUIE BRATTAIN; MARY ELLEN             )
CLUGSTON; DOROTHY CHICK; TERRY           )
COLLINS; BARBARA A. COLLINS;             )
JOHN M. COPLAN; JANE C. COPLAN;          )
JACK FAYHEE, as Trustee of the Grace G.  )
Fayhee Irrevocable Trust; WALTER D.      )
FRANKE; NORMA S. FRANKE;                 )
MARY R. GOECKNER; KEN L. HARP;           )
JAN WIEHARDT, as representative of the   )
Estate of George Hermann, deceased; MARY )
N. LAKE-HERMANN; DONNA HUGHES;           )
SUSAN C. JERSEY; JUDITH K. JONES;        )
PEGGY R. MA; DONALD MAPES;               )
JOAN C. MAPES; RICHARD A. MATHERS; )                  Appeal No. 3-21-0232
BLANCHE C. MATHERS; LLOYD B.             )            Circuit No. 18-TX-27
MILLS; ALICE A. MILLS; MILDRED L.        )
MOON, as Trustee of the Mildred L. Moon  )
Trust; JOHN J. MOWERY; JUDITH M.         )
MOWERY; CAROLYN COLVIN; JOHN D. )
PROVINE; SHELIA A. PROVINE; CAROL )
ROBERTS; JACQUELINE R. SEARS;            )
MARGARET SHIFLEY; CLARA DARLENE )
TRONE; CECIL VANCIL; RICHARD VICK; )
      ANNE VICK; and MARJORIE R. WOLF,        )
                                              )
             Plaintiffs-Appellants,           )
                                              )
             v.                               )
                                              )
      ANGELA GRAVES, not Individually, but as )
      the Treasurer/Collector of McDonough    )
      County, Illinois,                       )    The Honorable
                                              )    Heidi A. Benson,
             Defendant-Appellee).             )    Judge, Presiding.
      ____________________________________________________________________________

            JUSTICE McDADE delivered the judgment of the court.
            Justice Hauptman concurred in the judgment.
            Justice Holdridge, dissented.
      ____________________________________________________________________________

                                                  ORDER

¶1          Held: The circuit court erred when it dismissed the plaintiffs’ tax objection complaint.

¶2          The plaintiff, Wesley Estates, Inc., sought homestead and senior-citizen homestead

     exemptions for its members (the individually named plaintiffs) for tax year 2017 in McDonough

     County. Wesley Estates’ property tax assessment did not contain any exemptions, so it appealed

     the assessment to the McDonough County Board of Review, which denied the appeal. Wesley

     Estates paid its 2017 property taxes and filed a tax objection complaint in the circuit court.

     Eventually, the named individual plaintiffs were added as parties and Wesley Estates was

     dismissed as a party. After a hearing, the circuit court granted a motion to dismiss with prejudice

     filed by the defendant, Angela Graves, after finding the membership agreements signed by the

     individually named plaintiffs failed to include certain statutory language that was required by the

     chief county assessment official to appear in lease agreements. On appeal, the plaintiffs argue

     that the circuit court erred when it granted Graves’ motion to dismiss. We reverse and remand

     for further proceedings.

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¶3                                             I. BACKGROUND

               Wesley Estates is an Illinois corporation “that provides independent residential living

     units to persons, most of whom are over age 65.” Wesley Estates owned improved property in

     Macomb containing a number of residential duplexes. Pursuant to contracts titled “Wesley

     Estates Membership Agreement” (the Agreements), individuals over age 55 were permitted to

     live in the duplexes in exchange for a “Membership Fee.” More specifically, the Agreements

     stated:

                      “In consideration of the execution of this Agreement by MEMBER and

                      the payment of the Membership Fee, WESLEY ESTATES shall provide

                      to MEMBER a duplex unit for use only during the life of MEMBER

                      (including the natural life of the survivor in the event of a Joint

                      Membership), subject to the terms and conditions of this Agreement.”

¶4             Among those terms and conditions was that

                      “MEMBER agrees that this Agreement does not create any legal or record

                      ownership interest in the real estate and property owned by WESLEY

                      ESTATES and that this Agreement creates only an equitable interest in

                      WESLEY ESTATES, subject to all the terms and conditions of this

                      Contract.”

     Additionally, the Agreements required members of Wesley Estates to pay the property taxes on

     their respective duplexes.

¶5             The property tax assessment Wesley Estates received for tax year 2017 did not include

     any exemptions. Wesley Estates appealed the assessment on November 15, 2017, specifically

     seeking homestead and senior-citizen homestead exemptions. On November 21, 2017, the

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     McDonough County Board of Review issued a letter denying the appeal but did not state any

     reasons for the denial. Subsequently, Wesley Estates paid their 2017 property tax bill and filed a

     tax objection complaint in the circuit court on November 20, 2018. The complaint alleged that

     the residents of approximately 29 of the duplexes on Wesley Estates’ property were improperly

     denied homestead and senior-citizen homestead exemptions from property taxes. The complaint

     referred to the Agreements as “contractual/lease arrangement[s].”

¶6          Graves filed a motion to dismiss the complaint, alleging that because it was a corporation,

     Wesley Estates lacked standing to claim entitlement to homestead and senior-citizen homestead

     exemptions. Graves’ motion also noted that none of Wesley Estates’ allegedly eligible members

     were included as plaintiffs. The circuit court agreed with Graves and granted her motion to

     dismiss without prejudice.

¶7          On August 7, 2019, Wesley Estates filed its first amended complaint, this time including

     the names of its members it alleged were entitled to the exemptions and setting each claim out in

     29 total counts. Wesley Estates joined in the request for relief in each count.

¶8          Graves filed a motion to dismiss the first amended complaint, alleging once again that

     Wesley Estates lacked standing because it was a corporation. Additionally, the motion alleged

     that each of the individually named plaintiffs lacked standing because (1) they did not pay the

     property taxes due on the property, (2) the Agreement did not create leasehold interests in the

     property, and (3) even if it did, the duplexes were not single-family residences. Lastly, the

     motion alleged that even if the Agreements constituted leases, they did not contain certain

     language required by section 15-175(e)(4) of the Property Tax Code (the Code) (35 ILCS

     200/15-175(e)(4) (West 2016)) to be included in leases.

                                                      4
¶9            After a hearing, the circuit court found that (1) Wesley Estates lacked standing and was

       dismissed as a plaintiff, (2) the individually named plaintiffs would not be dismissed because the

       Agreements required them to pay the property taxes on their duplexes, (3) whether a duplex was

       a single-family residence was a question of fact that was not appropriate for consideration on a

       motion to dismiss, and (4) although the Agreements in fact failed to include the requisite

       language from section 15-175(e)(4) of the Code, whether the Agreements constituted leases

       required clarification. Accordingly, the court dismissed the first amended complaint without

       prejudice.

¶ 10          On February 1, 2021, the circuit court granted the plaintiffs’ motion for leave to file a

       second amended complaint instanter. The second amended complaint once again set forth 29

       counts. Notably, the Agreements were referred to as “contractual arrangement[s]” rather than

       “contractual/lease arrangement[s].” The second amended complaint also cited an Internet

       dictionary definition of “lease” and argued that the Agreements had “the same form and

       function” as leases.

¶ 11          Graves filed a motion to dismiss the second amended complaint, alleging that even if the

       Agreements were leases, they failed to include the requisite statutory language and therefore

       could not provide a basis for claiming homestead or senior-citizen homestead exemptions.

       Attached to Graves’ motion was the affidavit of Tammy Camp, the McDonough County

       Supervisor of Assessments and the Clerk of the McDonough County Board of Review. In

       relevant part, Camp stated in her affidavit that she did not believe the Agreements constituted

       leases. Even if they were, she still would have denied the homestead exemption requests:

                              “I require that any leaseholder applicant seeking the grant of a

                      homestead exemption produce a written lease agreement containing the

                                                        5
                      statutory language that is set forth in 35 ILCS 200/15-175(e)(4), and, if

                      that statutory language is not present I always determine that the

                      residential property is ineligible to receive a homestead exemption. The

                      required statutory language was not present in any of Plaintiffs’

                      Membership Agreements, and, therefore, I believe that they are ineligible

                      to receive any of the homestead exemptions being requested in this case.”

¶ 12          In their response, the plaintiffs alleged that “Camp *** does not indicate that the named

       Plaintiffs were ever informed of such a requirement and fails to indicate that such a requirement

       was made known, published or in any way discoverable by Plaintiffs, at the time of filing the

       appeal with the McDonough County Board of Review or any time before.” Further, an affidavit

       filed by the plaintiffs’ attorney stated, inter alia, that (1) he initially contacted the McDonough

       County Assessor’s Office and the Department of Revenue in 2014 and 2015 when he submitted a

       representative copy of the Agreements for review as to whether any exemptions were available;

       (2) he was told by Camp that no exemptions would be given; (3) after the McDonough County

       Board of Review denied the 2017 appeal, he requested an in-person hearing with the Board; (4)

       he submitted a memorandum to the Board in conjunction with the hearing, which explained the

       reasons why he believed Wesley Estates’ residents should receive homestead and senior-citizen

       exemptions; (5) the Board made no mention of the section 15-175(e) requirements at the hearing;

       (6) the McDonough County Assessor’s website does not contain any mention of the section 15-

       175(e) requirements and does not even state that a leasehold can qualify a taxpayer for

       homestead exemptions. Attached to the attorney’s affidavit were several documents, including

       one titled “Board of Review Rules” that the attorney downloaded from the assessor’s website.

       That document contained no information regarding the reasons for denying assessment appeals.

                                                         6
¶ 13          The circuit court held a hearing on Graves’ motion to dismiss on April 26, 2021. After

       arguments, the court granted Graves’ motion because the language from section 15-175(e)(4)

       was not included in the Agreements. Notably, the court specifically found that neither the

       reasons why Graves denied the application for exemptions nor whether the Agreements

       constituted leases was dispositive.

¶ 14          The court issued its written order granting the motion to dismiss with prejudice on May 6,

       2021. The plaintiffs appealed.

¶ 15                                             II. ANALYSIS

¶ 16          On appeal, the plaintiffs argue that the circuit court erred when it dismissed their second

       amended complaint with prejudice.

¶ 17          “A motion to dismiss, pursuant to section 2-619 of the Code, admits the legal sufficiency

       of the plaintiffs’ complaint, but asserts an affirmative defense or other matter that avoids or

       defeats the plaintiffs’ claim.” DeLuna v. Burciaga, 223 Ill. 2d 49, 59 (2006). When deciding a

       section 2-619 motion to dismiss, a court is required to “ ‘interpret all pleadings and supporting

       documents in the light most favorable to the nonmoving party.’ ” Van Meter v. Darien Park

       District, 207 Ill. 2d 359, 367-68 (2003) (quoting In re Chicago Flood Litigation, 176 Ill. 2d 179,

       189 (1997)). Our supreme court has also stated that the court “must accept as true all well-pled

       facts in the plaintiff’s complaint and any reasonable inferences that arise from those facts.”

       Hernandez v. LifeLine Ambulance LLC, 2020 IL 124610, ¶ 14. “The relevant question in

       assessing whether dismissal is proper under section 2-619 is whether a genuine issue of material

       fact exists that precludes dismissal or, in the absence of such an issue of fact, whether dismissal

       is proper as a matter of law.” Arbogast v. Chicago Cubs Baseball Club, LLC, 2021 IL App (1st)

                                                         7
       210526, ¶ 16. We review a circuit court’s decision on a section 2-619 motion to dismiss de novo.

       Hernandez, 2020 IL 124610, ¶ 14.

¶ 18          In support of their argument, the plaintiffs make four separate claims. First, the plaintiffs

       argue that the circuit court erred when it found that the language from section 15-175(e)(4) had

       to appear in the Agreements. Notably, Graves does not make any argument that the circuit

       court’s decision was correct based on its ruling on the section 15-175(e)(4) language issue.

       Rather, she asks this court to affirm on an issue left unresolved by the circuit court—namely, that

       the Agreements did not constitute leases.

¶ 19          Section 15-175 of the Code addresses general homestead exemptions. 35 ILCS 200/15-

       175 (West 2016). In relevant part, section 15-175(e)(4) provides:

                             “(e) The chief county assessment officer may, when considering

                      whether to grant a leasehold exemption under this Section, require the

                      following conditions to be met:

                                                     ***

                                     (4) that the lease must include the following language in

                             substantially the following form:

                                     ‘Lessee shall be liable for the payment of real estate taxes

                             with respect to the residence in accordance with the terms and

                             conditions of Section 15-175 of the Property Tax Code (35 ILCS

                             200/15-175). The permanent real estate index number for the

                             premises is (insert number), and, according to the most recent

                             property tax bill, the current amount of real estate taxes associated

                             with the premises is (insert amount) per year. The parties agree that

                                                        8
                                 the monthly rent set forth above shall be increased or decreased

                                 pro rata (effective January 1 of each calendar year) to reflect any

                                 increase or decrease in real estate taxes. Lessee shall be deemed to

                                 be satisfying Lessee’s liability for the above mentioned real estate

                                 taxes with the monthly rent payments as set forth above (or

                                 increased or decreased as set forth herein).’ ” Id. § 15-175(e)(4).

¶ 20           Because subsection (e)(4) clearly states that the chief county assessment officer has the

       discretion to require that language “when considering whether to grant a leasehold exemption”

       (emphasis added) (id. § 15-175(e)), a question is raised as to what procedures, if any, the chief

       county assessment officer must undertake in making his or her decision. In this regard, we note

       part of subsection (i):

                                 “In all counties, the assessor or chief county assessment officer

                       may determine the eligibility of residential property to receive the

                       homestead exemption and the amount of the exemption by application,

                       visual inspection, questionnaire or other reasonable methods. The

                       determination shall be made in accordance with guidelines established by

                       the Department [of Revenue] ***.” 1 (Emphasis added.) Id. § 15-175(i).

¶ 21           In November 2017, the McDonough County Board of Review denied Wesley Estates’

       exemption requests without stating any reasons for the denial. It was not until January 2021 that

       some reasons for the denial were disclosed—namely, in Camps’ affidavit, wherein she stated that

       she did not believe the Agreements were leases and even if they were, she still would have

               1
                  Section 15-170, which addresses senior-citizen homestead exemptions, contains language nearly
       identical to section 15-175(i). 35 ILCS 200/15-170(h) (West 2016).

                                                           9
       denied the requests because the Agreements lacked the section 15-175(e)(4) language that she

       required to appear in lease agreements. Whether the McDonough County Board of Review was

       obligated to disclose its reasons for the denial, or whether Camp was otherwise required to notify

       citizens of the County’s requirements for homestead-exemption applications, is unknown, as is

       whether the onus for discovering those requirements could be placed on the plaintiffs in this

       case. However, interpreting the pleadings and supporting documents in the plaintiffs’ favor, as

       we are required to do (Van Meter, 207 Ill. 2d at 367-68), we find unresolved factual issues in this

       preclude dismissal of the plaintiffs’ complaint with prejudice on the asserted basis. Material

       factual disputes exist where the denial of exemptions was justified by a failure to include

       language claimed to be mandatory even though: (1) the statute described it as discretionary and

       (2) the plaintiffs were given no notice at the time they filed their application, three years before

       the dismissal, that the chief county assessor had made it mandatory, nor had plaintiffs been given

       such notice seven years prior to dismissal when Camp first reviewed a representative copy of the

       Agreements.

¶ 22          Lastly, we disagree with the dissent’s claim that because section 15-175(e)(4) grants the

       chief county assessor the discretion to require certain language in leases, and because “all

       persons are presumed to know the law,” the plaintiffs had adequate notice that they should

       include the section 15-175(e)(4) language in their Agreements. Supra ¶ 31. In fact, the case cited

       by the dissent, McIntosh, is inapposite, as that case involved application of the voluntary-

       payment doctrine, which generally provides that “taxes paid voluntarily though erroneously may

       not be recovered without statutory authorization.” McIntosh v. Walgreens Boots Alliance, Inc.,

       2019 IL 123626, ¶ 25. In this case, there is no question that a statutorily provided process was

       followed that permits plaintiffs to seek relief from a property tax assessment that did not grant

                                                        10
       homestead exemptions. Moreover, as one of the cases cited by McIntosh stated long ago,

       “[e]very man is supposed to know the law, and, if he voluntarily makes a payment which the law

       would not compel him to make, he cannot afterwards assign his ignorance of the law as the

       reason why the state should furnish him with legal remedies to recover it back.” Yates v. Royal

       Insurance Co., 200 Ill. 202, 206 (1902). The axiom that “all persons are presumed to know the

       law” (supra ¶ 31) in this instance means only that the plaintiffs are charged with knowledge of a

       statute that contains a discretionary aspect and not that the discretionary aspect has been made

       mandatory by the appropriate entity.

¶ 23          For the foregoing reasons, we hold that the circuit court erred when it granted Graves’

       motion to dismiss based on the lack of certain statutory language in the Agreements. Because the

       assessment of the relevance and impact of these issues are best addressed by the trial court, we

       remand this case for further proceedings.

¶ 24          Our resolution of the section 15-175(e)(4) issue also obviates the need to address the

       plaintiffs’ remaining arguments on appeal.

¶ 25                                          III. CONCLUSION

¶ 26          The judgment of the circuit court of McDonough County is reversed and the cause is

       remanded for further proceedings.

¶ 27          Reversed and remanded.

¶ 28          JUSTICE HOLDRIDGE, dissenting:

¶ 29          I respectfully dissent. In sum, the majority finds that genuine issues of material fact

       precluded dismissal. It finds that (1) the denial of exemptions was justified by a failure to include

       language that the statute described as discretionary and (2) the plaintiffs were given no notice

                                                        11
       that the chief county assessor made the subject language mandatory. I address each finding in

       turn.

¶ 30           First, Camp’s affidavit provided that she, as the McDonough County Supervisor of

       Assessments, requires the language set forth in section 15-175(e)(4) of the Code (35 ILCS

       200/15-175 (West 2016)) for a homestead exemption by a leaseholder applicant, and if the

       language is not present, the property is ineligible for a homestead exemption. This court has

       previously recognized that this statute “provides the chief county assessment officer with

       discretion to decide whether to impose the additional potential statutory requirements listed, [but

       that] it does not give the chief county assessment officer discretion to impose additional

       requirements that are not contained in the statute.” Shrake v. Rock Island County Treasurer,

       2019 IL App (3d) 180556, ¶ 21. Here, Camp’s affidavit makes clear that the statutory language

       in section 15-175(e)(4) is required for the exemption, which the statute allows. It is discretionary

       as to whether Camp required the language, not whether the plaintiffs included it. Property tax

       exemptions “must be strictly construed because taxation is the rule and tax exemption is the

       exception.” Id. ¶ 17.

¶ 31           Second, the plaintiffs are not entitled to notice that Camp made the language in section

       15-175(e)(4) mandatory. The clear and unambiguous language of the statute provides that the

       language may be required at the discretion of the chief county assessment officer. This is

       sufficient notice as all persons are presumed to know the law. See McIntosh v. Walgreens Boots

       Alliance, Inc., 2019 IL 123626, ¶ 39. Therefore, exemption applicants are presumed to know that

       this language may be required to receive the exemption, and if they decide to exclude the

       language, they do so at their own peril.

                                                        12
¶ 32          For these reasons, I would find that no material fact existed to preclude dismissal and that

       dismissal was proper as a matter of law. Thus, I would affirm the circuit court’s judgment.

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