Circuit Court Grants First Petition to Intervene in Tax Objection Complaints

After six years of litigation including an appeal to the Illinois Supreme Court, this week Cook County Circuit Court Judge Alfred Paul entered an order granting a request by two taxing bodies to intervene in property tax assessment challenges filed in Circuit Court. Never before have taxing bodies been allowed to intervene in these cases, known as tax objection complaints ("TOCs"), even though these cases have historically been the largest source of refunds of property tax revenues.

In 2003 the City of Chicago and the Chicago Board of Education petitioned to intervene in 30 TOCs under several provisions of the Illinois Code of Civil Procedure. The cases are collectively known as the Madison Two appeals. The Circuit Court denied the petitions, holding that the Property Tax Code did not allow for intervention. The Appellate Court reversed that ruling. The Illinois Supreme Court accepted the property owners appeal, and relying in part on an amicus curiae or "friend-of-the-court" brief filed by Franczek Radelet on behalf of 41 suburban Cook County school districts, ruled that taxing districts could intervene in TOCs if the requirements for intervention in the Code of Civil Procedure are met. Following the Supreme Court's ruling last year, the cases were remanded to the Circuit Court to determine if the petitions for intervention met the necessary requirements.

The order allowing intervention was preceded by a thorough presentation of the issues in both written and oral arguments. The Court first rejected the argument by the property owners that any refunds issued as a result of assessment challenges are eventually recouped by taxing bodies. The Court stated that any recoupment would take time to accomplish, would not necessarily be allowed under the law, and would have the adverse effect of raising taxes on other property owners. In any event, the test would not be the magnitude of the revenue loss, but only whether the taxing agencies would suffer any adverse effect. The Court then rejected several arguments premised on the theory that property tax refunds are not subject to the disposition of the Court. The Court stated that actual physical control of the property (i.e., the property tax revenue that may be refunded) is not required so long as the Court has the power to specifically direct the disposition of the property tax revenue.

This a positive ruling for Illinois school districts and other taxing agencies interested in preserving their property tax bases and minimizing property tax refunds. The full Circuit Court decision is available here. For further background on this issue, a copy of the Supreme Court's decision in Madison Two is available here. To discuss the ruling or intervention in TOCs, please contact Ares Dalianis, Michael Hernandez or Scott Metcalf.

LINKS:

• Circuit Court decision in Madison Two
  
• Supreme Court's decision in Madison Two
• Amicus curiae brief filed by the firm