Parmar v. Madigan , 106 N.E.3d 1004 ( 2018 )

2018 IL 122265
IN THE
SUPREME COURT
OF
THE STATE OF ILLINOIS
(Docket No. 122265)
PAMINDER S. PARMAR, Appellee, v.
LISA MADIGAN, Attorney General, et al., Appellants.
Opinion filed May 24, 2018.
JUSTICE THEIS delivered the judgment of the court, with opinion.
Chief Justice Karmeier and Justices Freeman, Thomas, Kilbride, Garman, and
Burke concurred in the judgment and opinion.
OPINION
¶1 Plaintiff, Paminder S. Parmar, individually and as executor of the estate of
Surinder K. Parmar, filed a complaint in the circuit court of Du Page County
against defendants, the Attorney General and the Treasurer of the State of Illinois,
challenging the application and constitutionality of an amendment to the Illinois
Estate and Generation-Skipping Transfer Tax Act (Estate Tax Act) (35 ILCS 405/1
et seq. (West 2014)) and seeking a refund of all moneys paid to the Treasurer
pursuant to the Estate Tax Act. The circuit court dismissed the complaint for lack of
jurisdiction, pursuant to the State Lawsuit Immunity Act (745 ILCS 5/0.01 et seq.
(West 2014)). The appellate court reversed and remanded for further proceedings.
2017 IL App (2d) 160286.
¶2 We now reverse the judgment of the appellate court and affirm the judgment of
the circuit court.
¶3 BACKGROUND
¶4 On January 9, 2011, Dr. Surinder Parmar, a resident of Du Page County, died,
leaving an estate valued at more than $5 million. Her son, plaintiff here, was
appointed executor of the estate. At the time of Dr. Parmar’s death, the estate was
not subject to taxation under the Estate Tax Act. Two days after Dr. Parmar’s death,
however, the General Assembly adopted a bill that revived the tax for the estates of
persons who, like Dr. Parmar, died after December 31, 2010. On January 13, 2011,
the Governor signed the bill, and the new law went into effect immediately. See
Pub. Act 96-1496 (eff. Jan. 13, 2011).
¶5 In September 2012, plaintiff paid $400,000 to the Illinois Treasurer toward the
estate’s tax liability. The following month, plaintiff filed the estate’s Illinois estate
tax return and paid an additional sum of almost $160,000 to the Treasurer for late
filing and late payment penalties, as well as interest. In April 2013, plaintiff
requested a waiver of penalties, which the Illinois Attorney General granted in
September 2013.
¶6 In July 2015, after a downward adjustment in the estate’s federal tax liability,
plaintiff filed an amended Illinois estate tax return. The “Certificate of Discharge
and Determination of Tax” issued by the Attorney General on July 24, 2015, states
that the estate’s tax liability, including interest and penalties, had been paid and that
the certificate was evidence of the complete release of all estate property from lien
imposed by the Estate Tax Act and the discharge from personal liability of the
executor for the estate tax, penalties, and interest.
¶7 Shortly thereafter, plaintiff filed another amended return, based on his belief
that the amendment to the Estate Tax Act did not apply to his mother’s estate and
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no tax was due. The disposition of this amended return is not evident in the record,
but on October 1, 2015, plaintiff filed a complaint challenging the retroactivity and
constitutionality of the Estate Tax Act. 1
¶8 Plaintiff claimed that retroactive application of the statutory amendment to the
estates of persons who, like his mother, died after December 31, 2010, but before
January 13, 2011 (the effective date of the amendment), was contrary to section 4
of the Statute on Statutes (5 ILCS 70/4 (West 2014)) and would violate the due
process and takings clauses of the Illinois and United States Constitutions, as well
as the ex post facto clause of the Illinois Constitution. U.S. Const., amends. V,
XIV; Ill. Const. 1970, art. I, §§ 2, 15, 16. Plaintiff also claimed that the amendment
was adopted in violation of the three readings clause of the Illinois Constitution (Ill.
Const. 1970, art. IV, § 8(d)) and that the vote on the amendment was invalid
because the General Assembly was given inaccurate information about the estate
tax scheme. Plaintiff requested a declaration that the Estate Tax Act applies only to
the estates of persons who died on or after the effective date of the amendment or
that the Estate Tax Act is unconstitutional for the reasons identified in his
complaint. Plaintiff expressly stated that he brought his declaratory judgment
action to “recover his payments” made pursuant to the Estate Tax Act and
requested a full refund of all moneys he paid to the Treasurer, along with interest
and “loss of use.” Finally, plaintiff sought certification of a class of all similarly
situated persons damaged by application of the Estate Tax Act.
¶9 Defendants filed a combined motion to dismiss pursuant to section 2-619.1 of
the Code of Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2014)). Defendants
first argued that the complaint should be dismissed under section 2-619(a)(1) of the
Code (id. § 2-619(a)(1)) because the circuit court lacked jurisdiction. Defendants
maintained that, because the complaint seeks a money judgment against the State, it
is barred under sovereign immunity principles embodied in the State Lawsuit
Immunity Act (745 ILCS 5/1 (West 2014)) and the complaint must be filed in the
Illinois Court of Claims. Defendants also argued that the complaint should be
dismissed under section 2-619(a)(9) of the Code (735 ILCS 5/2-619(a)(9) (West
1
In addition to the Attorney General and the Treasurer, plaintiff named as defendants Constance
Beard, as Director of the Illinois Department of Revenue, and Bruce Rauner, as Governor. Plaintiff
voluntarily dismissed Beard and Rauner, and they are not a part of this appeal.
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2014)) because the voluntary payment doctrine bars recovery. Finally, defendants
argued that certain counts of the complaint should be dismissed pursuant to section
2-615 of the Code (id. § 2-615) for failure to state a claim upon which relief may be
granted.
¶ 10 In response, plaintiff argued that his suit was properly brought in the circuit
court because section 15 of the Estate Tax Act (35 ILCS 405/15 (West 2014)) vests
jurisdiction in the circuit court to hear all tax disputes arising under the Estate Tax
Act. Plaintiff also argued that he was not seeking payment from the State because
his claim is not against the General Revenue Fund. Rather, his claim is against the
Estate Tax Refund Fund, a special fund created under section 13 of the Estate Tax
Act (id. § 13(c)). Plaintiff further argued that his complaint was not barred by the
voluntary payment doctrine because he made the tax payments under “implied
duress” created by the threat of penalties imposed by the Estate Tax Act. Plaintiff
also defended the sufficiency of his constitutional claims.
¶ 11 The circuit court agreed with defendants that it lacked jurisdiction and
dismissed the complaint without prejudice to refile in the Illinois Court of Claims.
The court expressly ruled that section 15 of the Estate Tax Act “is not an explicit
waiver of sovereign immunity.”
¶ 12 The appellate court reversed and remanded for further proceedings. 2017 IL
App (2d) 160286, ¶ 42. Relying principally on Leetaru v. Board of Trustees of the
University of Illinois, 2015 IL 117485, the appellate court held that the officer suit
exception to sovereign immunity applied and jurisdiction in the circuit court was
proper. 2017 IL App (2d) 160286, ¶ 27. The appellate court also held that plaintiff’s
claims were not barred by the voluntary payment doctrine. Id. ¶ 40. The court
agreed with plaintiff that the prospect of penalties, interest, and personal liability
under the Estate Tax Act amounted to duress and, therefore, plaintiff’s payment of
taxes was not voluntary. Id. ¶ 35. Finally, the appellate court held that, because
plaintiff paid the taxes involuntarily, he was not required to seek recovery under the
State Officers and Employees Money Disposition Act (Protest Moneys Act) (30
ILCS 230/1 et seq. (West 2014)). 2017 IL App (2d) 160286, ¶ 40. Because the
appellate court concluded that the circuit court erred in dismissing plaintiff’s
complaint on grounds of sovereign immunity, the appellate court did not consider
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whether the legislature waived immunity in section 15 of the Estate Tax Act (35
ILCS 405/15 (West 2014)). 2017 IL App (2d) 160286, ¶ 29.
¶ 13 We allowed defendants’ petition for leave to appeal (Ill. S. Ct. R. 315 (eff. Mar.
15, 2016)) and allowed the Board of Trustees of the University of Illinois to file an
amicus curiae brief in support of defendants (Ill. S. Ct. R. 345 (eff. Sept. 20,
2010)).
¶ 14 ANALYSIS
¶ 15 Defendants urge this court to reverse the appellate court and affirm the circuit
court’s dismissal of plaintiff’s complaint, arguing that the officer suit exception to
sovereign immunity does not apply in this case. Defendants argue in the alternative
that even if sovereign immunity does not apply in this case, dismissal of plaintiff’s
complaint was proper under the voluntary payment doctrine because the mere
threat of statutory penalties for nonpayment of taxes does not constitute duress.
Defendants further argue that plaintiff had a simple and complete statutory remedy
under the Protest Moneys Act and plaintiff’s failure to follow this statutory
procedure bars his claim.
¶ 16 Plaintiff argues that the appellate court correctly concluded that this case
presents a “textbook instance of the officer-suit exception” to sovereign immunity
(2017 IL App (2d) 160286, ¶ 27) but that, even if the exception does not apply, the
General Assembly waived sovereign immunity in section 15 of the Estate Tax Act
(35 ILCS 405/15 (West 2014)). Plaintiff also argues that neither the Protest Moneys
Act nor the voluntary payment doctrine bars his complaint where his payment of
estate taxes was made under duress and without knowledge of the facts upon which
to frame a protest.
¶ 17 Because questions related to the circuit court’s subject-matter jurisdiction and
the interpretation of a statute both present issues of law, our review proceeds
de novo. J&J Ventures Gaming, LLC v. Wild, Inc., 2016 IL 119870, ¶ 25; see also
Leetaru, 2015 IL 117485, ¶ 41 (circuit court’s grant of a motion to dismiss for lack
of jurisdiction under section 2-619(a)(1) is reviewed de novo).
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¶ 18 Sovereign Immunity and the Officer Suit Exception
¶ 19 Under the Illinois Constitution of 1870, the State of Illinois enjoyed immunity
from suits of any kind. See Ill. Const. 1870, art. IV, § 26 (“The state of Illinois shall
never be made defendant in any court of law or equity.”); see also Coleman v. East
Joliet Fire Protection District, 2016 IL 117952, ¶¶ 24-28 (discussing the origins
and development of the sovereign immunity doctrine). With the adoption of the
Illinois Constitution of 1970, however, sovereign immunity was abolished in this
State “[e]xcept as the General Assembly may provide by law.” Ill. Const. 1970, art.
XIII, § 4. In accordance with this constitutional grant of authority, the General
Assembly adopted the State Lawsuit Immunity Act, reinstituting the doctrine of
sovereign immunity. See Pub. Act 77-1776 (eff. Jan. 1, 1972); Leetaru, 2015 IL
117485, ¶ 42. This statute provides:
“Except as provided in the Illinois Public Labor Relations Act, the Court of
Claims Act, the State Officials and Employees Ethics Act, and Section 1.5 of
this Act, the State of Illinois shall not be made a defendant or party in any
court.” 745 ILCS 5/1 (West 2014).
¶ 20 The Court of Claims Act (705 ILCS 505/1 et seq. (West 2014)) creates a forum
for actions against the State. Healy v. Vaupel, 133 Ill. 2d 295, 307 (1990). With
some limited exceptions, the Illinois Court of Claims “shall have exclusive
jurisdiction to hear and determine *** [a]ll claims against the State founded upon
any law of the State of Illinois.” 705 ILCS 505/8(a) (West 2014).
¶ 21 In the present case, plaintiff filed suit against Lisa Madigan, as Attorney
General of the State of Illinois, and Michael Frerichs, as Treasurer of the State of
Illinois. The complaint states that each defendant is sued in his or her “official
capacity only.” A suit against a State official in his or her official capacity is a suit
against the official’s office and is therefore no different than a suit against the State.
Magna Trust Co. v. Department of Transportation, 234 Ill. App. 3d 1068, 1070
(1992) (citing Will v. Michigan Department of State Police, 491 U.S. 58 (1989));
see also Smith v. Jones, 113 Ill. 2d 126, 131 (1986) (“ ‘official acts of State officers
are in effect acts of the State itself’ ” (quoting Sass v. Kramer, 72 Ill. 2d 485, 492
(1978))); Schwing v. Miles, 367 Ill. 436, 441 (1937) (suit against a governmental
agency is a suit against the State). Thus, the bar of sovereign immunity would
seemingly apply in this case.
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¶ 22 This court, however, has long held that the determination of whether an action
is one against the State depends upon the issues involved and the relief sought and
not simply the formal identification of the parties. Leetaru, 2015 IL 117485,
¶¶ 44-45; People v. Phillip Morris, Inc., 198 Ill. 2d 87, 97 (2001); Smith, 113 Ill. 2d
at 131; Sass, 72 Ill. 2d at 490-91. Where, for example, a plaintiff alleges that the
State officer’s conduct violates statutory or constitutional law or is in excess of his
or her authority, such conduct is not regarded as the conduct of the State. The
underlying principle is that conduct taken by a State officer without legal authority
strips the officer of his or her official status. Leetaru, 2015 IL 117485, ¶¶ 45-46.
Thus, a complaint seeking to prospectively enjoin such unlawful conduct may be
brought in the circuit court without offending sovereign immunity principles. Id.
¶ 48; see also Ellis v. Board of Governors of State Colleges & Universities, 102 Ill.
2d 387, 395 (1984) (recognizing that if a plaintiff is not attempting to enforce a
present claim, which has the potential to subject the State to liability, but instead
“seeks to enjoin a State officer from taking future actions in excess of his delegated
authority, then the immunity prohibition does not obtain”). This exception to
sovereign immunity has been called the “prospective injunctive relief exception”
(Rockford Memorial Hospital v. Department of Human Rights, 272 Ill. App. 3d
751, 755 (1995)), but it is most often referred to as the “officer suit exception”
(PHL, Inc. v. Pullman Bank & Trust Co., 216 Ill. 2d 250, 260 (2005)).
¶ 23 Here, the appellate court, on the basis of our decision in Leetaru, held that
plaintiff’s suit against the Attorney General and the Treasurer fell within the officer
suit exception and, therefore, the circuit court had jurisdiction over plaintiff’s
complaint. We agree with defendants that the appellate court misconstrued Leetaru
and the officer suit exception does not apply in this case.
¶ 24 In Leetaru, the plaintiff sued the Board of Trustees of the University of Illinois
and one of the university’s associate vice chancellors seeking to enjoin them from
proceeding with their investigation into alleged misconduct by the plaintiff with
respect to his research as a graduate student. The plaintiff did not question the right
of the defendants to investigate research misconduct. Rather, the plaintiff alleged
that the defendants’ conduct failed to comply with the university’s rules and
regulations governing discipline of students. We rejected the defendants’ argument
that, under principles of sovereign immunity, exclusive jurisdiction over the
plaintiff’s complaint lay in the Illinois Court of Claims. Leetaru, 2015 IL 114785,
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¶ 49. We explained: “Because sovereign immunity affords no protection when
agents of the State have acted in violation of statutory or constitutional law or in
excess of their authority, which is precisely what [the plaintiff] has alleged, Illinois
precedent compels the conclusion that he was entitled to proceed in circuit court.”
Id. ¶ 50. We did not end our analysis there. We noted that the plaintiff did “not seek
redress for some past wrong.” Id. ¶ 51. The plaintiff sought “only to prohibit future
conduct (proceeding with the disciplinary process) undertaken by agents of the
State in violation of statutory or constitutional law or in excess of their authority.
Claims of this type are not claims against the State at all and do not threaten the
State’s sovereign immunity.” Id.
¶ 25 In contrast to the facts in Leetaru, plaintiff here does not allege that defendants
acted in excess of their authority. The Estate Tax Act, on its face, is applicable to
the estates of persons who, like Dr. Parmar, died after December 31, 2010. See 35
ILCS 405/2(b) (West 2014). And, as stated in the complaint, the Attorney General
is responsible for administering and enforcing the Estate Tax Act, and the Treasurer
is responsible for receiving and refunding moneys collected pursuant to the Estate
Tax Act. See id. § 16(a) (“It is the duty of the Attorney General to exercise general
supervision over the assessment and collection of the tax ***.”); id. § 6(e)(3) (taxes
“shall be paid directly to the State Treasurer”); id. § 13(c) (“Treasurer shall order
payment of refunds resulting from overpayment of tax liability”). Plaintiff does not
allege any conduct by defendants that was outside of or contrary to their authority
under the Estate Tax Act.
¶ 26 Plaintiff does allege that defendants’ conduct was unlawful because defendants
acted pursuant to an unconstitutional statute. But unlike the plaintiff in Leetaru who
sought to enjoin future conduct by the defendants that was contrary to law, plaintiff
here seeks damages—a refund of all moneys paid under the Estate Tax Act,
together with interest and loss of use—for a past wrong. Leetaru makes plain that a
complaint seeking damages for a past wrong does not fall within the officer suit
exception to sovereign immunity. Leetaru, 2015 IL 117485, ¶ 51.
¶ 27 The appellate court erred in holding that the officer suit exception to sovereign
immunity applies in this case.
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¶ 28 Jurisdiction and Venue Provisions in the Estate Tax Act
¶ 29 Plaintiff argues that his complaint may yet proceed in the circuit court because
the General Assembly waived sovereign immunity in section 15 of the Estate Tax
Act. Section 15 states, in relevant part:
“(a) Jurisdiction. Jurisdiction to hear and determine all disputes in relation to a
tax arising under this Act shall be in the circuit court for the county having
venue as determined under subsection (b) of this Section, and the circuit court
first acquiring jurisdiction shall retain jurisdiction to the exclusion of every
other circuit court.
(b) Venue.
(1) Venue for disputes involving Illinois estate tax of a decedent who
was a resident of Illinois at the time of death shall lie in the circuit court for
the county in which the decedent resided at death.” 35 ILCS 405/15 (West
2014). 2
¶ 30 Plaintiff maintains that under the plain language of section 15, the circuit court
possesses subject-matter jurisdiction over “all disputes” relating to a tax under the
Estate Tax Act and, thus, the circuit court, and not the Illinois Court of Claims, has
jurisdiction over his suit. Defendants counter that section 15 does not constitute a
clear and unequivocal waiver of sovereign immunity and, therefore, does not aid
plaintiff. We agree with defendants.
¶ 31 As already discussed, the General Assembly restored immunity to the State
through the State Lawsuit Immunity Act. 745 ILCS 5/0.01 et seq. (West 2014). The
State Lawsuit Immunity Act expressly states that except as provided in certain
statutes identified therein—and the Estate Tax Act is not one of them—the “State
of Illinois shall not be made a defendant or party in any court.” Id. § 1. The General
Assembly may, by statute, consent to liability of the State, but such consent must be
clear and unequivocal. In re Special Education of Walker, 131 Ill. 2d 300, 303
2
Subsection (b)(2) addresses venue for resident trusts, and subsection (b)(3) addresses venue
relating to decedents who were not residents of Illinois at the time of death and nonresident trusts. 35
ILCS 405/15(b)(2), (3) (West 2014).
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(1989). The statute must explicitly indicate, in affirmative language, that the State
waives sovereign immunity. Id. at 304. For example, the Illinois Educational Labor
Relations Act, which is not one of the statutes referenced in the State Lawsuit
Immunity Act, states in clear and unequivocal terms: “For purposes of this Act, the
State of Illinois waives sovereign immunity.” 115 ILCS 5/19 (West 2014).
¶ 32 In contrast, section 15 of the Estate Tax Act does not contain such a clear and
unequivocal waiver of sovereign immunity. Although section 15 refers to “all
disputes” relating to a tax arising under the Estate Tax Act, it does not reference the
State or its immunity. Statutes that use only general terms without an expressed
intent to subject the State to liability will not be construed to impair or negate the
State’s immunity from suit established in the State Lawsuit Immunity Act. City of
Springfield v. Allphin, 82 Ill. 2d 571, 578 (1980).
¶ 33 The absence of affirmative language in section 15 waiving the State’s immunity
from suit leads us to conclude that the General Assembly only intended to fix
jurisdiction and venue for all disputes that do not implicate sovereign immunity.
Although we need not, for purposes of this appeal, identify all of the causes of
action that would fall into that category, we observe that a complaint that seeks to
prospectively enjoin some conduct of the State defendants (as discussed above) is
one such suit, as is a complaint for a writ of mandamus, which seeks to compel a
public official to perform some purely ministerial, nondiscretionary act. People
ex rel. Berlin v. Bakalis, 2018 IL 122435, ¶ 16. As will be discussed below, a
complaint pursuant to the Protest Moneys Act (30 ILCS 230/1 et seq. (West 2014))
could also be filed in the circuit court. The jurisdiction and venue provisions of
section 15 would further apply to enforcement actions filed by the Attorney
General. See 35 ILCS 405/10(d) (West 2014) (“Attorney General shall have the
right to sue for collection of the Illinois transfer tax”); id. § 16(a) (Attorney General
“may institute and prosecute suits and proceedings as may be necessary and
proper”); People ex rel. Madigan v. Kole, 2012 IL App (2d) 110245 (where the
Attorney General filed a complaint under the Estate Tax Act seeking additional tax,
interest, and late filing penalties related to an adjustment in the estate’s federal tax
liability).
¶ 34 Limiting the jurisdiction and venue provision in section 15 of the Estate Tax
Act to suits that do not implicate sovereign immunity gives meaning to that
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provision, while also harmonizing it with the provisions of the State Lawsuit
Immunity Act. See People v. Rinehart, 2012 IL 111719, ¶ 26 (statutes concerning
the same subject must be considered together to produce a harmonious whole).
¶ 35 For these reasons, we reject plaintiff’s argument that the General Assembly
waived sovereign immunity in section 15 of the Estate Tax Act.
¶ 36 Estate Tax Refund Fund
¶ 37 Plaintiff maintains that even if section 15 of the Estate Tax Act does not
constitute a waiver of sovereign immunity, a judgment in his favor would not result
in a judgment against the State and, therefore, his complaint does not implicate
sovereign immunity. Plaintiff posits that sovereign immunity is intended to prevent
a judgment payable from public funds, i.e., the State’s General Revenue Fund, but a
judgment in his favor would be payable from a special refund fund created under
section 13(c) of the Estate Tax Act (35 ILCS 405/13(c) (West 2014)).
¶ 38 Defendants do not dispute that if a judgment could be satisfied by moneys in the
refund fund, then plaintiff’s complaint would not implicate principles of sovereign
immunity. Rather, defendants contend that plaintiff’s argument ignores other
provisions of the Estate Tax Act governing the payment of refunds and that plaintiff
does not fall within the class of taxpayers entitled to a refund pursuant to section
13(c).
¶ 39 Section 13(c) requires the Treasurer to deposit into the General Revenue Fund
94% of the taxes, interest, and penalties collected under the Estate Tax Act and to
deposit the remaining 6% into the Estate Tax Refund Fund, a special fund created
in the State treasury. Id. Section 13(c) further provides:
“Moneys in the Estate Tax Refund Fund shall be expended exclusively for
the purpose of paying refunds resulting from overpayment of tax liability under
this Act, except that, whenever the State Treasurer determines that any such
moneys in the Fund exceed the amount required for the purpose of paying
refunds resulting from overpayment of tax liability under this Act, the State
Treasurer may transfer any such excess amounts from the Estate Tax Refund
Fund to the General Revenue Fund.
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The Treasurer shall order payment of refunds resulting from overpayment
of tax liability under this Act from the Estate Tax Refund Fund only to the
extent that amounts have been deposited and retained in the Fund.
This amendatory Act of the 97th General Assembly shall constitute an
irrevocable and continuing appropriation from the Estate Tax Refund Fund for
the purpose of paying refunds upon the order of the Treasurer in accordance
with the provisions of this Act ***.” Id.
¶ 40 Section 13(c) makes plain that moneys from the Estate Tax Refund Fund are
paid on the order of the Treasurer for the exclusive purpose of paying “refunds” as
provided in the Estate Tax Act. The subject of refunds, in turn, is addressed in
section 7(b):
“If the state tax credit[3] is reduced after the filing of the Illinois transfer tax
return, the person who paid the Illinois transfer tax *** shall file an amended
Illinois transfer tax return and shall be entitled to a refund of tax or interest paid
on the Illinois transfer tax.[4] No interest shall be paid on any amount refunded.”
Id. § 7(b).
¶ 41 Section 14 of the Estate Tax Act also addresses “claims for refund,” providing
that:
“In case it appears that the amount paid with respect to any taxable transfer is
more than the amount due under this Act, then the State Treasurer shall refund
the excess to the person entitled to the refund, provided that no amount shall be
refunded unless application for the refund is filed with the State Treasurer no
3
For persons like Dr. Parmar, who died after December 31, 2010, “state tax credit” means “an
amount equal to the full credit calculable under Section 2011 or 2604 of the Internal Revenue Code
as the credit would have been computed and allowed under the Internal Revenue Code as in effect
on December 31, 2001, without the reduction in the State Death Tax Credit as provided in Section
2011(b)(2) or the termination of the State Death Tax Credit as provided in Section 2011(f) as
enacted by the Economic Growth and Tax Relief Reconciliation Act of 2001 but recognizing the
exclusion amount of only (i) $2,000,000 for persons dying prior to January 1, 2014 ***.” 35 ILCS
405/2(b) (West 2014).
4
The “Illinois estate tax” is “the tax due to this State with respect to a taxable transfer.” 35 ILCS
405/2 (West 2014).
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later than one year after the last date allowable under the Internal Revenue Code
for filing a claim for refund of any part of the related federal transfer tax or, if
later, within one year after the date of final determination of the related federal
transfer tax.” Id. § 14.
¶ 42 The foregoing provisions not only set out the procedures that must be followed
for obtaining a refund but also limit the circumstances under which an application
for refund with the Treasurer can be made. Plaintiff’s claim for refund, filed in the
circuit court, does not fit within this statutory framework.
¶ 43 Plaintiff’s claim is not predicated on a reduction of the “state tax credit,” as
provided in section 7(b) of the Estate Tax Act. Nor is plaintiff’s claim based on an
overpayment of taxes with respect to a “taxable transfer,” as provided in section 14.
Indeed, plaintiff’s claim is predicated on the notion that no taxable transfer
occurred. According to plaintiff, the statute under which he paid the taxes should
not apply to his mother’s estate, and he wants the Treasurer to return all the moneys
he paid, with interest. In other words, this is not a case where a downward
adjustment to the estate’s tax liability has occurred, requiring the filing of an
amended return under section 7(b), and the subsequent filing of an application for
refund with the Treasurer, pursuant to section 14. Thus, plaintiff’s claim does not
fall within the limited refund provisions of the Estate Tax Act. Accordingly, the
moneys in the Estate Tax Refund Fund are not available to satisfy any money
judgment in this case.
¶ 44 We note that plaintiff conceded, at oral argument, that satisfaction of his claim
for refund is not limited to the 6% of tax receipts that have been “deposited and
retained in the [Estate Tax Refund] Fund,” as section 13(c) provides. Id. § 13(c).
Plaintiff seeks a full refund of all the moneys he paid to the Treasurer and indicated
that he would look to another source, the General Revenue Fund, to satisfy any
shortfall in the Estate Tax Refund Fund. Additionally, plaintiff expressly requested
in his complaint interest and loss of use on the moneys he paid to the Treasurer. The
Estate Tax Act, however, makes no provision for payment of “loss of use” on
moneys refunded, and section 7 expressly prohibits the payment of interest on any
amount refunded (id. § 7(b)).
¶ 45 The damages that plaintiff seeks go beyond the exclusive purpose and limits of
the Estate Tax Refund Fund and potentially subject the State to liability.
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Accordingly, we reject plaintiff’s argument that his complaint does not implicate
principles of sovereign immunity.
¶ 46 Protest Moneys Act
¶ 47 Plaintiff also argues that he has a constitutional right, pursuant to the due
process clause of the Illinois Constitution, to have his claims considered by the
circuit court. Plaintiff, however, cites no case law or other authority for the
proposition that due process requires that his complaint proceed in the circuit court
notwithstanding the bar of sovereign immunity. Plaintiff’s lack of authority aside,
we note our agreement with defendants that plaintiff could have litigated his claims
in the circuit court had he followed the procedures for paying taxes under protest
pursuant to the Protest Moneys Act (30 ILCS 230/1 et seq. (West 2014)).
¶ 48 The Protest Moneys Act requires various State officers, who are authorized to
receive moneys for and on behalf of the State, to keep detailed books and records of
all such moneys received and, unless otherwise provided by law, to deposit such
moneys into the State treasury. Id. §§ 1, 2(a). Relevant here, the statute makes
express provision for the “[p]ayment of money under protest.” Id. § 2a.1. Where
money is received under protest, the officer receiving the money must notify the
Treasurer, who then places the money in a special fund known as the “protest
fund.” Id. § 2a. The person who has paid the money under protest has 30 days in
which to obtain a temporary restraining order or a preliminary injunction
restraining the transfer of the money into the State treasury or other fund into which
the money would have been transferred absent the protest. If the restraining order
issues, the money is held in the protest fund until the final order or judgment of the
court. Id. If the taxpayer does not prevail, the money held in the protest fund
becomes the property of the State. People v. Roth, Inc., 412 Ill. 446, 451 (1952).
The Protest Moneys Act “affords a complete and adequate remedy in a court of
equity where all questions can be fully and speedily determined.” Montgomery
Ward & Co. v. Stratton, 342 Ill. 472, 477 (1930). Although a complaint filed in
accordance with the Protest Moneys Act would name State officers and or agencies
as defendants, the statutory remedy—determination of questions related to the
“proper disposition of the moneys paid under protest” (30 ILCS 230/2a (West
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2014))—would not constitute a claim against the State and would operate outside
of the bar of sovereign immunity.
¶ 49 This statutory procedure has been utilized to challenge the retroactive
application and constitutionality of an amendment to the Estate Tax Act (McGinley
v. Madigan, 366 Ill. App. 3d 974 (2006)) and to challenge the construction of an
amendment to the Estate Tax Act (Brooker v. Madigan, 388 Ill. App. 3d 410
(2009)). Plaintiff could have availed himself of this statutory procedure and
pursued his constitutional claims in the circuit court but failed to do so. Plaintiff
cannot now complain that due process requires that his complaint proceed in the
circuit court.
¶ 50 Plaintiff makes the related argument that the Illinois Court of Claims does not
possess exclusive jurisdiction under the Court of Claims Act to rule on the
constitutionality of a statute and jurisdiction must lie in the circuit court. Plaintiff’s
argument appears to be that unless his complaint is allowed to proceed in the circuit
court, he will be without a remedy.
¶ 51 The Illinois Constitution provides that “[e]very person shall find a certain
remedy in the laws for all injuries and wrongs.” Ill. Const. 1970, art. I, § 12. This
provision, however, expresses an aspirational goal. It “does not mandate a certain
remedy be provided in any specific form.” Schoeberlein v. Purdue University, 129
Ill. 2d 372, 379 (1989). Limiting plaintiff’s available remedies does not run afoul of
this constitutional provision. Id.
¶ 52 For all of these reasons, we reject plaintiff’s argument that his complaint must
be allowed to proceed in the circuit court.
¶ 53 Voluntary Payment Doctrine
¶ 54 As a final matter, we turn our focus to the voluntary payment doctrine. The
appellate court, after holding that plaintiff’s suit fell within the officer suit
exception to sovereign immunity, rejected defendants’ alternative argument that
dismissal of plaintiff’s complaint was proper pursuant to the voluntary payment
doctrine. 2017 IL App (2d) 160286, ¶¶ 32-40. Under this common law doctrine, “a
taxpayer may not recover taxes voluntarily paid, even if the taxing body assessed or
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imposed the taxes illegally” unless “such recovery is authorized by statute.” Geary
v. Dominick’s Finer Foods, Inc., 129 Ill. 2d 389, 393 (1989). Taxes are not
voluntarily paid where (1) “the taxpayer lacked knowledge of the facts upon which
to protest the taxes at the time they were paid” or (2) “the taxpayer paid the taxes
under duress.” King v. First Capital Financial Services Corp., 215 Ill. 2d 1, 31
(2005) (discussing Geary).
¶ 55 With respect to the concept of “duress,” this court has explained that:
“Illinois law does not require a showing that the taxpayer was actually
threatened by anyone. Implied duress will suffice. Geary, 129 Ill. 2d at 402-03.
Such duress exists where the taxpayer’s refusal to pay the tax would result in
loss of reasonable access to a good or service considered essential. Geary, 129
Ill. 2d at 396-400. Goods or services deemed to be necessities have included
telephone and electrical service ***.” Wexler v. Wirtz Corp., 211 Ill. 2d 18,
23-24 (2004).
¶ 56 The appellate court in the instant case took an expansive view of duress,
agreeing with plaintiff that the prospect of penalties, interest, and personal liability
under the Estate Tax Act amounted to duress, thus making plaintiff’s payment of
taxes involuntary. 2017 IL App (2d) 160286, ¶ 35. Defendants argue that the
appellate court’s view of duress is contrary to case law from this court and, if the
voluntary payment doctrine can be avoided by pointing to a subjective fear of the
mere possibility of incurring penalties and interest, then the doctrine is eroded to
the point of irrelevance.
¶ 57 Resolution of any tension between the appellate court’s view of duress and our
case law, however, must wait for another day. “It is axiomatic that this court will
not consider issues where they are not essential to the disposition of the cause or
where the result will not be affected regardless of how the issues are decided.”
Leetaru, 2015 IL 117485, ¶ 56. Even if we concluded, as the appellate court did,
that plaintiff paid the taxes involuntarily, such conclusion would not allow plaintiff
to avoid the jurisdictional bar of sovereign immunity. In other words, where
sovereign immunity applies, as it does here, the manner in which plaintiff paid the
taxes is irrelevant.
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¶ 58 CONCLUSION
¶ 59 For the reasons set forth above, we reverse the judgment of the appellate court
and affirm the judgment of the circuit court dismissing plaintiff’s complaint for
lack of jurisdiction.
¶ 60 Appellate court judgment reversed.
¶ 61 Circuit court judgment affirmed.
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