Cook County Record

Sunday, March 29, 2020

Appeals panel: School districts can't undo property tax settlements simply because they don't like the results

By Scott Holland | Oct 27, 2015


A divided state appeals panel has reinstated a settlement agreement which had ended a dispute over how much a number of Will County property taxpayers actually should have paid in 2010, with a majority on the court saying the school districts can't undo the deal simply because they didn't like the result.

A three-justice panel of the Illinois Third District Appellate Court in Ottawa overturned the decision of Will County Circuit Judge Barbara N. Petrungaro, who had sided with public school districts in tossing the settlement deal over tax objections for the 2010 tax year.

Dozens of named plaintiffs, including such big taxpayers as Target, ComEd and Walmart and developers and others owning prime commercial and industrial properties throughout the southwest suburban county, had initially brought the action against Will County Treasurer Steve Weber, challenging the property tax rates levied against them. The taxpayers and the county reached a settlement in early 2013. The court documents did not disclose how much the settlement agreement cost the county or awarded to the taxpayers. However, the circuit court approved the deal.

Five months later, however, six public school districts - Homer Community Consolidated School District No. 33-C; Will County School District No. 92; Lockport Township High School District No. 205; Laraway Community Consolidated School District No. 70-C; Frankfort Community Consolidated School District No. 157-C; and Lincoln-Way Community High School District No. 210 - filed motions to intervene and vacate the settlement. After oral arguments, but without an evidentiary hearing, Petrungaro agreed to vacate the settlement.

The taxpayers then appealed that decision, saying the judge had no legal basis for changing her mind on the settlement, as it represented a voluntary agreement, approved by the court, between the empowered legal representatives of the county’s public bodies and the taxpayers.

In an opinion issued Oct. 22, the appellate court, in a 2-1 decision, said the taxpayers are correct.

Justice Daniel L. Schmidt wrote the majority opinion, with Justice William E. Holdridge concurring. Justice Robert L. Carter dissented.

According to the background in Schmidt’s opinion, the districts contended the state’s attorney’s office had not adequately represented them, as the districts said they did not get proper notice of tax objections from the county clerk and, more importantly, the state’s attorney did not use correct data when calculating the settlement amount during negotiations.

In his dissent, Carter said he believed such claims are more than just sour grapes over the deal, and should be sufficient to reject what he and the districts characterized as a flawed and unfair settlement agreement.

In trying to determine if “tax levies were potentially excessive for the purpose of conducting his settlement negotiations, the numbers that were used substantially overstated the total amounts that were available in the challenged funds for the fiscal year,” Carter said.

However, the other two justices on the panel said they believe the districts’ arguments are rooted simply in a dissatisfaction with the deal reached by the office empowered by law to represent them in such tax rate disputes.

“Broad discretion is given to the state’s attorney when settling a tax objection case,” Schmidt wrote. “The state’s attorney is not required to notify the taxing bodies of a proposed settlement agreement, or to seek their approval and has the final say in the settlement negotiations with the taxpayers.”

Although precedent states such a settlement cannot be invalidated on grounds a better result should have been reached, “that is exactly what happened here,” Schmidt said. “The school districts did not allege fraud or bad faith.”

Schmidt said the lower court’s decision to vacate appears based on the state’s attorney admission he used incorrect figures to compute the formula used in the settlement. But Schmidt said that mistake — which the state’s attorney admitted, albeit in an unsworn statement — “is legally insufficient” to negate the settlement.

Both the state’s attorney and the taxpayers had said they used figures the county clerk had on file during settlement negotiations. If the state’s attorney later found he used incorrect numbers, that is not the taxpayers’ fault, the majority said.

“Had the taxpayers received a less than optimum deal due to their attorney’s use of the wrong numbers, would they be allowed to bring a section 2-1401 petition to vacate the settlement agreement? We think not,” Schmidt wrote.

According to online Will County Circuit Court records, taxpayers in the case were represented by attorney John Powers, of Karnes Law, of Chicago.

The school districts were represented by attorneys of the firms of Rathbun, Cservenyak & Kozol, of Mokena; Hauser, Izzo, Detella and Patrarca, of Flossmoor; and Whitt Law, of Aurora.

Want to get notified whenever we write about any of these organizations ?

Sign-up Next time we write about any of these organizations, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

Rathbun, Cservenyak & Kozol. LLCWhitt Law LLCHauser Izzo LLCKarnes Law Chartered