Opinion

Sycamore Community Unit School District No. 427 v. Illinois Property Tax Appeal Board

2014 IL App (2d) 130055

Court: Appellate Court of Illinois
Filed: Aug 12, 2014
Status: Published
Cited by: 8 cases
Authority: More cited than 65.1%

the purpose of the Administrative Review Law is to have final decisions of the administrative agency judicially reviewed

How later courts described this case

the purpose of the Administrative Review Law is to have final decisions of the administrative agency judicially reviewed

Written by the judges who cited it.

The opinion

Illinois Official Reports

Appellate Court

Sycamore Community Unit School District No. 427 v.

Illinois Property Tax Appeal Board,

2014 IL App (2d) 130055

Appellate Court SYCAMORE COMMUNITY UNIT SCHOOL DISTRICT NO. 427,

Caption Petitioner, v. ILLINOIS PROPERTY TAX APPEAL BOARD,

AMERICAN NATIONAL BANK TRUST NO. 2567, and KEVIN

DAHL, Respondents.–SYCAMORE COMMUNITY UNIT

SCHOOL DISTRICT NO. 427, Petitioner, v. ILLINOIS PROPERTY

TAX APPEAL BOARD, AMERICAN NATIONAL BANK TRUST

NO. 2567, and KEVIN DAHL, Respondents.–DE KALB COUNTY

BOARD OF REVIEW, Petitioner, v. ILLINOIS PROPERTY TAX

APPEAL BOARD, AMERICAN NATIONAL BANK TRUST NO.

2567, and KEVIN DAHL, Respondents.–DE KALB COUNTY

BOARD OF REVIEW, Petitioner, v. ILLINOIS PROPERTY TAX

APPEAL BOARD, AMERICAN NATIONAL BANK TRUST NO.

2567, and KEVIN DAHL, Respondents.

District & No. Second District

Docket Nos. 2-13-0055, 2-13-0056, 2-13-0077, 2-13-0078 cons.

Filed June 24, 2014

Held Respondent Property Tax Appeal Board erred in applying the

(Note: This syllabus developer’s relief provision of the Property Tax Code to allow

constitutes no part of the respondent developer’s property to enjoy a farmland classification

opinion of the court but with a reduced assessed value for real estate tax purposes pending

has been prepared by the development with a habitable structure, since the developer’s property

Reporter of Decisions in the instant case was reclassified from farmland to nonfarmland with

for the convenience of an increased assessed value in 2006 and although the developer

the reader.) “believed” the plat of the property had been recorded prior to the

change in the classification, the plat showing the subdivision of the

property into lots and streets suitable for development was not

recorded until 2007, after the reclassification, and under those

circumstances, the assessment increase was not caused by the platting

and the developer’s relief provision did not apply.

Decision Under Petition for Review of Order of Illinois Property Tax Appeal Board,

Review Nos. 08-03345.001-C-3, 08-03345.002-C-3, 08-03345.003-C-3,

08-03345.004-C-3, 08-03345.005-C-3, 09-03144.001-C-3,

09-03144.002-C-3, 09-03144.003-C-3, 09-03144.004-C-3,

09-03144.005-C-3.

Judgment Reversed and remanded.

Counsel on Kenneth M. Florey and Scott L. Ginsburg, both of Robbins, Schwartz,

Appeal Nicholas, Lifton & Taylor, Ltd., of Chicago, for petitioner.

Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro,

Solicitor General, and Brian F. Barov, Assistant Attorney General, of

counsel), for respondent Illinois Property Tax Appeal Board.

Kevin P. Burke, of Smith, Hemmesch, Burke & Kaczynski, of

Chicago, for respondents American National Bank Trust No. 2567 and

Kevin Dahl.

Panel JUSTICE JORGENSEN delivered the judgment of the court, with

opinion.

Justices Zenoff and Birkett concurred in the judgment and opinion.

OPINION

¶1 On December 21, 2012, respondent the Illinois Property Tax Appeal Board (PTAB)

issued two separate, yet substantively identical, decisions, reducing the 2008 and 2009

property tax assessments of five vacant parcels in De Kalb County, owned by respondent

Kevin Dahl (through respondent American National Bank Trust No. 2567). Petitioners, the

De Kalb County Board of Review (Board) and Sycamore Community Unit School District

No. 427 (School District), appeal those decisions. Because the PTAB decisions involved an

assessed valuation of greater than $300,000, from which the taxes would be calculated, the

appeal was brought directly to the appellate court. 35 ILCS 200/16-195 (West 2012). The

Board and the School District argue that the PTAB erred in applying section 10-30 of the

Property Tax Code (35 ILCS 200/10-30 (West 2006)), which is known as the developer’s

relief provision. We agree that the developer’s relief provision does not apply to the property,

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because the property was platted after it was reclassified as nonfarmland rather than

farmland. We reverse and remand.

¶2 I. BACKGROUND

¶3 This case turns on the application of the developer’s relief provision, which states:

“(a) In counties with less than 3,000,000 inhabitants, the platting and subdivision

of property into separate lots and the development of the subdivided property with

streets, sidewalks, curbs, gutters, sewer, water and utility lines shall not increase the

assessed valuation of all or any part of the property, if:

(1) The property is platted and subdivided in accordance with the Plat Act;

(2) The platting occurs after January 1, 1978;

(3) At the time of platting the property is in excess of 10 acres; and

(4) At the time of platting the property is vacant or used as a farm as defined in

Section 1-60.

(b) Except as provided in subsection (c) of this Section, the assessed valuation of

property so platted and subdivided shall be determined each year based on the

estimated price the property would bring at a fair voluntary sale for use by the buyer

for the same purposes for which the property was used when last assessed prior to its

platting.

upon the use of any lot, either alone or in conjunction with any contiguous property,

for any business, commercial or residential purpose, or upon the initial sale of any

platted lot, including a platted lot which is vacant: (i) the provisions of subsection (b)

of this Section shall no longer apply in determining the assessed valuation of the lot,

(ii) each lot shall be assessed without regard to any provision of this Section, and (iii)

the assessed valuation of the remaining property, when next determined, shall be

reduced proportionately to reflect the exclusion of the property that no longer

qualifies for valuation under this Section. Holding or offering a platted lot for initial

sale shall not constitute a use of the lot for business, commercial or residential

purposes unless a habitable structure is situated on the lot or unless the lot is

otherwise used for a business, commercial or residential purpose.” (Emphases added.)

Id.

See Pub. Act 95-135, § 5 (eff. Jan. 1, 2008) (amending the size requirement in subsection

(a)(3) from 10 acres to 5 acres).

¶4 For the most part, the parties agree on the facts, as recounted in the PTAB decision and

contained in the record. Dahl, an individual real estate developer, owns the subject property.

The property consists of 5 vacant parcels, 1 which total 26.81 acres. It is located in a

commercial subdivision known as Townsend Woods, on Route 23, a few blocks north of

downtown Sycamore. It is bordered on two sides by a residential subdivision and on the

Initially, the property consisted of two parcels (Nos. 06-29-426-008 and 009). However,

subsequent platting in 2007 caused the two parcels to become five parcels (Nos. 06-29-427-001, 002,

003, 004, and 06-29-477-002).

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remaining side by a public soccer field. A School District “property” is across the street. In

recent years, Dahl’s property has been listed for sale with an asking price of over $6 million.

¶5 From 2001 to 2004, Dahl contracted with two local farmers to use the property as

farmland. The farmers reported to Dahl that the land was “difficult to farm” and they would

prefer not to farm it. In 2005, Dahl received several letters of intent to buy the property, so

Dahl ceased farming and began development, such as installing piping. Dahl believed that, in

accordance with the developer’s relief provision, he had recorded a platting and subdivision

of the property, but, as he would find out two years later, he had not. Between 2001 and

2005, the property was classified as farmland and taxed at the preferential rate given to

farmland that has been used as such for the preceding two years. 35 ILCS 200/10-110 et seq.

(West 2006). The tax assessment value, or assessed value, which is different from market

value, was $18,743,2 and the taxes derived from this figure were comparatively negligible

(i.e., well under $1,000).

¶6 In 2006, the assessor reclassified the property as vacant nonfarmland and assessed the

parcels at “the next highest and best use,” that being market value for commercial land. The

reclassification was based on there having been no farming on the property in 2005 or 2006

and the marketing of the property as commercial land. The reclassification led to a new

assessed value of $1,424,969, and the taxes derived from this figure were over $100,000 per

year.

¶7 In late 2006, Dahl received notice of the reclassification. In response, he planted winter

wheat on the land in an effort to “address the farming deal of it.” He also thought that winter

wheat would increase the marketability of the property, because it was a visually attractive

crop. The crop was never able to be harvested, however, because the cold came too soon

after planting. Dahl did not attempt to farm the property again until 2009.

¶8 Also in late 2006, Dahl sought to appeal the 2006 reclassification and the resulting

assessed value and taxes. However, rather than first exhausting his administrative remedies,

he simultaneously appealed the reclassification in two separate venues, the Board and the

circuit court. As to Dahl’s administrative action, he argued before the Board that the

developer’s relief provision applied. Dahl argued that, although he had neglected to record

the plats, he had, nevertheless, complied with the Plat Act (765 ILCS 205/1 (West 2006)) and

should, therefore, qualify for tax relief. The Board rejected this argument. The Board

affirmed the property’s reclassification as nonfarmland and the corresponding assessed value

of $1,424,969. The Board based its decision on its determination that the property was not

farmed in 2005. Although Dahl appealed to the PTAB, the PTAB never made a decision on

the merits. Instead, it dismissed the appeal and, on October 23, 2007, denied a request to

reinstate it.

¶9 Meanwhile, the circuit court was willing to consider Dahl’s appeal even though the

administrative case was still pending, because, in its view, Dahl’s case concerned a tax

exemption. The circuit court ruled that the developer’s relief provision acted to exempt the

The tax assessment value for this farmland would later approximate $5,000 (as opposed to

$18,000). However, this is not a critical difference, as even the $18,000 assessed value led to

comparatively minimal taxes. Rather, the critical difference is that between the property’s assessed

value when classified as farmland and when classified as nonfarmland.

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land from an increase in assessed value. The circuit court released its decision in August

2007. The assessor then appealed to this court.

¶ 10 In December 2007, Dahl finally recorded the plat for subdivision, as he thought he had

done in 2005. Upon recording the plat, the county recorder transmitted notice of the plat to

the assessor’s office.

¶ 11 On September 22, 2008, this court vacated the circuit court’s August 2007 decision.

American National Bank Trust No. 2456 v. Whitwell, Nos. 2-07-0889, 2-07-0908 cons. (2008)

(unpublished order under Supreme Court Rule 23). We disagreed with the circuit court that

Dahl’s case concerned a tax exemption. Id. at 7. Therefore, an exemption was not available

as a basis by which to excuse Dahl from exhausting his administrative remedies before

seeking review in the courts. Id. We held that no other exception applied to the requirement

that Dahl exhaust his administrative remedies. Id. at 7-11. Because the circuit court never had

jurisdiction to consider the application of the developer’s relief provision, we did not review

its decision on the merits. Id. at 12.

¶ 12 This court’s ruling had the effect of reversing the circuit court’s ruling as to the

property’s assessed value for 2006. Therefore, the 2006 taxes returned as originally issued.

Again, in 2006, the property had a nonfarmland classification, a tax assessment value of

$1,424,969, and taxes, derived from this figure, of over $100,000 per year.

¶ 13 However, because the parties did not timely appeal the 2007 taxes, which the assessor had

rolled over from 2006 in order to be consistent with the later vacated circuit court ruling, the

2007 taxes remained in effect. In 2007, the property had a nonfarmland classification

(because the property had not been farmed since 2005) but an assessed value of $4,918, as

though the property were farmland (because the circuit court had determined that the 2005

“platting” was sufficient to invoke the developer’s relief provision), and the taxes derived

from the assessed value were approximately $300. Neither party seems to dispute that, had

the 2007 taxes been timely appealed, the practical result would have been the issuance of

taxes consistent with the reissued 2006 taxes, i.e., based on a nonfarmland classification and

an assessed value of approximately $1,424,969, taxes of over $100,000.

¶ 14 In October 2008, the assessor again classified the property as nonfarmland. However,

because this court had, in September 2008, vacated the circuit court’s ruling that the

developer’s relief provision applied, it no longer assessed the property as though it were

farmland but instead assessed it according to its true classification. The assessor reasoned

that, because the 2007 platting had occurred when the property was classified as

nonfarmland, the use prior to platting was as nonfarmland, and, therefore, the property was to

be assessed as nonfarmland (“[because] *** of [this court’s] decision, the 2008 assessment

was changed to [the] market value of the property prior to platting”). This led to a tax

assessment value of $1,580,197, and the taxes derived from this figure were again over

$100,000. In 2009, the assessor classified and taxed the property as it had in 2008.

¶ 15 Dahl separately appealed the 2008 and the 2009 assessments to the Board. With little

explanation, the Board affirmed the assessor’s nonfarmland classification and agreed that the

assessed value should be based on that classification. It did, however, slightly reduce the

assessed value of the property due to decreased market rates. For example, the 2008 assessed

value was decreased from $1,580,197 to $1,521,468.

¶ 16 Dahl then separately appealed the 2008 and the 2009 assessments to the PTAB. In each

appeal, Dahl argued that the developer’s relief provision required that his assessment not be

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altered subsequent to platting. In Dahl’s view, because he received the preferential farmland

assessment the year that the property was platted (in 2007), he should continue to receive the

preferential farmland assessment in 2008 and 2009 and until the conditions of subsection (c)

of the developer’s relief provision are met, such as by building a habitable structure on the

property. Dahl urged that the controlling case was Paciga v. Property Tax Appeal Board, 322

Ill. App. 3d 157 (2001). Alternatively, although not relevant to this appeal, Dahl argued that

the open space provisions of the Property Tax Code (35 ILCS 200/10-155 (West 2006))

applied to the property.

¶ 17 The Board and the School District (hereinafter, collectively referred to as De Kalb), first

responded that Dahl’s appeal should be dismissed because he did not plead a prima facie

case. On the merits, De Kalb argued that the developer’s relief provision provided that

platting froze the classification, or use, of the property, not the assessment. Because the

property had been classified as nonfarmland when it was platted in 2007 (and was also

classified as nonfarmland in 2006), that classification “froze,” and, per subsection (b), the

assessed value of the property in 2008 and 2009 was to be “based on the estimated price the

property would bring at a fair and voluntary sale for use by the buyer for the same purposes

for which the property was used when last assessed prior to its platting.” (Emphases added.)

35 ILCS 200/10-30 (West 2006). Additionally, De Kalb argued that, even if subsection (b)

froze the assessment and not the use, the 2007 assessment of $4,918 was invalid because it

was based on a circuit court ruling that was vacated (leaving only the earlier Board ruling on

the same issue, which went the opposite way). Therefore, in De Kalb’s view, the 2007

assessment could not provide the basis for the 2008 and 2009 assessments. De Kalb urged

that the controlling case was Mill Creek Development, Inc. v. Property Tax Appeal Board, 345

Ill. App. 3d 790 (2003).

¶ 18 The PTAB denied the motion to dismiss. The case went to hearing, and, thereafter, the

PTAB agreed with Dahl. It reasoned that Dahl had properly platted the property in 2007 and

that therefore the assessment should not be increased until a habitable structure was built on

the property. It quoted Paciga at length:

“ ‘It follows then that subsection 10-30(a) applies to situations like the one at bar,

where a property larger than 10 acres and previously classified as farm property has

been platted and subdivided with streets but no habitable structure has been

completed on any lot nor is any lot used for any business, commercial, or residential

purpose. Further, the language of subsection 10-30(c), interpreted with the aid of the

legislative purpose, reveals that no change in valuation will occur until a habitable

structure is constructed ***. *** Absent such a change in use, subsection 10-30(a)

applies to the entire property and the assessment valuation will not increase.’ ” Dahl,

Ill. Property Tax Appeal Bd. Dec. 09-03144.001-C-3 (Dec. 21, 2012) (quoting

Paciga, 322 Ill. App. 3d at 162-63).

Additionally, the PTAB explained:

“When the [assessor] changed the status (classification) of the subject property in

October 2008 for the 2008 assessment, the subject property had already been platted

and recorded in December 2007. Moreover, the record reveals that the 2007 total

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assessment of the subject property was $4,918 based on a non-farmland

classification.”3 Id.

¶ 19 The PTAB did not address De Kalb’s argument that the 2007 assessment could not be the

basis for the 2008 and 2009 assessment because the 2007 assessment was based on a circuit

court ruling that was vacated.

¶ 20 Having found that the developer’s relief provision applied, the PTAB did not consider

Dahl’s alternative argument that the open space provisions of the Property Tax Code applied

to the property. It effectively found that claim moot, because it found that the developer’s

relief provision provided for the lower assessed value and corresponding taxes. The PTAB’s

ruling resulted in a refund of approximately $240,000 to Dahl for 2008 and 2009. This appeal

followed.

¶ 21 II. ANALYSIS

¶ 22 A. Introduction

¶ 23 De Kalb argues that the PTAB erred in finding that Dahl was entitled to relief pursuant to

the developer’s relief provision. 35 ILCS 200/10-30 (West 2006). De Kalb’s primary

argument is that Dahl should not receive the benefit of a judgment that was subsequently

vacated (citing Willett Co. v. Carpentier, 4 Ill. 2d 407, 412-13 (1954)), i.e., the circuit court’s

judgment that the 2005 “platting” triggered the developer’s relief provision. While we do not

disagree with the broad principle that a party should not receive the benefit of a vacated

ruling, we favor De Kalb’s related, secondary challenge to the PTAB’s ruling. There,

De Kalb directly challenges the PTAB’s application of the developer’s relief provision to the

circumstances in this case.

¶ 24 In reviewing the PTAB’s application of the developer’s relief provision, we begin by

stabilizing four factors in order to determine whether, even in the scenario most

advantageous to Dahl, the developer’s relief provision applies to this case. First, we

acknowledge that the property was not properly platted in 2005 (although that alleged 2005

platting did provide the basis for the circuit court’s now-vacated decision to apply the

developer’s relief provision to freeze assessments in 2006). Dahl admits this, and he no

longer relies on any alleged 2005 platting as a basis for relief under the developer’s relief

provision. Second, we assume, for purposes of this analysis only, that the property was

properly platted in 2007 (Dahl and the PTAB promote this position, whereas De Kalb asserts

that Dahl did not meet his burden of proof in establishing this point). Third, we recognize

that, in both 2006 and 2007, before it was platted, the property was classified as nonfarmland

and its assessed value corresponding with that classification would have been approximately

$1,424,969. Fourth, and nevertheless, based on the now-vacated circuit court decision, the

property was assessed in 2007 as though it were farmland.

¶ 25 We now turn to the PTAB’s decision that the developer’s relief provision required that

the property continue to be assessed as though it were farmland through 2008 and 2009. We

first set forth the standard of review and the guidelines for statutory interpretation. We then

This statement, of course, appears internally inconsistent. First, the PTAB says that the assessor

reclassified the property as nonfarmland in 2008, when, in fact, the property had been classified as

nonfarmland since 2006. In the very next sentence, the PTAB correctly states that the property was

already classified as nonfarmland in 2007.

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consider the PTAB’s reliance on Paciga. For reasons set forth below, we do not find Paciga

to be controlling, because the statutory-interpretation issue there is not implicated by the facts

of our case. Rather, the Mill Creek court’s interpretation of the provision applies to the facts

here.

¶ 26 B. Standards and Guidelines

¶ 27 The Administrative Review Law provides that judicial review of an administrative

agency’s decision extends to all questions of law and fact presented by the entire record

before the court. 735 ILCS 5/3-110 (West 2006). The standard of review given to an

agency’s decision turns on whether the issue presented is a question of fact, a question of

law, or a mixed question of law and fact. Comprehensive Community Solutions, Inc. v.

Rockford School District No. 205, 216 Ill. 2d 455, 471 (2005). An agency’s conclusion of law

is ordinarily reviewed de novo. Id. Still, we give some deference to the statutory

interpretations of an agency charged with the statute’s administration and enforcement. Bond

County Board of Review v. Property Tax Appeal Board, 343 Ill. App. 3d 289, 291 (2003). The

agency’s interpretations, while not binding on the courts, are an informed source, helpful to

ascertaining the legislative intent, because of the agency’s expertise and experience in

enforcing the statute. Id. An agency’s determination of fact is reviewed according to the

manifest-weight-of-the-evidence standard. Id. When an agency’s decision involves mixed

questions of law and fact, the clearly-erroneous standard applies. City of Belvidere v. Illinois

State Labor Relations Board, 181 Ill. 2d 191, 205 (1998). A decision is deemed “clearly

erroneous” only where the reviewing court, upon consideration of the entire record, is left

with the definite and firm conviction that an error has been made. AFM Messenger Service,

Inc. v. Department of Employment Security, 198 Ill. 2d 380, 395 (2001). Here, the parties

suggest that the clearly-erroneous standard is appropriate because this case presents a

question both of law (the interpretation of the developer’s relief provision) and of fact

(whether Dahl properly platted the property). However, because we interpret the statute to

preclude relief under the facts before us regardless of whether Dahl properly platted the

property, our analysis involves only a question of law and our review is, therefore, de novo.

¶ 28 The primary rule of statutory interpretation is to ascertain and effectuate the legislature’s

intent in enacting the provision. Bond County, 343 Ill. App. 3d at 292. In ascertaining

legislative intent, we first look to the words of the statute. Paciga, 322 Ill. App. 3d at 160. If

the words of the statute are ambiguous or if the meaning is unclear, we may consider the

statute’s legislative history as an aid to interpretation. Id. at 161. A statute is ambiguous if it

is capable of more than one reasonable interpretation. Id. If the statute is capable of more

than one interpretation, the one that best carries out the purpose of the statute will carry the

day. Id. A court should not interpret a statute in a manner that would lead to absurd or unjust

results. Id. Likewise, a court should not interpret a statute in a manner that would render any

portion of it meaningless or void. Id. “Taxing laws are strictly construed and are not to be

extended beyond the clear import of the language used.” Bond County, 343 Ill. App. 3d at

292. Any doubt in the application of tax laws will be construed against the government and

in favor of the taxpayer. Id.

¶ 29 Again, this case turns on the application of the developer’s relief statute, which states:

“(a) In counties with less than 3,000,000 inhabitants, the platting and subdivision

of property into separate lots and the development of the subdivided property with

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