Stone Street Partners, LLC v. City of Chicago Department of Administrative Hearings ( 2014 )

Illinois Official Reports
Appellate Court
Stone Street Partners, LLC v. City of Chicago Department of Administrative Hearings,
2014 IL App (1st) 123654
Appellate Court STONE STREET PARTNERS, LLC, Plaintiff-Appellant, v. THE
Caption CITY OF CHICAGO DEPARTMENT OF ADMINISTRATIVE
HEARINGS, Defendant-Appellee.
District & No. First District, First Division
Docket No. 1-12-3654
Filed May 20, 2014
Held In an action arising from a fine imposed on plaintiff by defendant city
(Note: This syllabus for building code violations, the plaintiff’s complaint seeking
constitutes no part of the administrative review of the dismissal of its motion to vacate the
opinion of the court but adjudication was properly dismissed for lack of jurisdiction, since
has been prepared by the plaintiff was never properly served and made a party to the
Reporter of Decisions proceedings and the city ordinances involved did not provide a
for the convenience of mechanism by which such an unserved party could vacate void orders;
the reader.) however, the count of plaintiff’s complaint seeking to quiet title by
declaring the city’s lien void was improperly dismissed because some
relief had to be available to remedy the alleged wrong plaintiff
suffered, although the remedy could not include damages for slander
of title due to the immunity provided by the Tort Immunity Act.
Decision Under Appeal from the Circuit Court of Cook County, No. 12-M1-450026;
Review the Hon. Mark Ballard, Judge, presiding.
Judgment Affirmed in part and reversed in part; cause remanded for further
proceedings.
Counsel on Richard F. Linden, of Law Offices of Richard F. Linden, of Chicago,
Appeal for appellant.
Stephen R. Patton, Corporation Counsel, of Chicago (Benna Ruth
Solomon, Myriam Zreczny Kasper, and Jonathon D. Byrer, Assistant
Corporation Counsel, of counsel), for appellee.
Panel JUSTICE DELORT delivered the judgment of the court, with opinion.
Justice Hoffman concurred in the judgment and opinion.
Presiding Justice Connors concurred in part and dissented in part, with
opinion.
OPINION
¶1 This case involves a relatively small amount of money, but it provides an opportunity to
explore deficiencies in the manner in which the City of Chicago (City) handles in-house
adjudication of ordinance violations. Nearly 14 years ago, a City administrative hearing
officer fined plaintiff Stone Street Partners, LLC (Stone Street), for building code violations.
Stone Street never paid the fine and the City eventually recorded a lien against the subject
property. Stone Street did not, however, challenge the fine until over 11 years after the City
imposed it, allegedly because it had never been notified of the proceedings in the first place.
After an unsuccessful attempt to vacate the fine at the administrative level, Stone Street filed
a complaint in the circuit court for administrative review, equitable relief and monetary
damages. The circuit court dismissed plaintiff’s complaint in full. We affirm in part, reverse
in part, and remand for further proceedings.
¶2 BACKGROUND
¶3 In 1999, a City building inspector found several building code violations in one of
plaintiff’s buildings. Rather than mailing a notice of violation and a summons for the
administrative hearing to plaintiff’s registered agent or to its business address, as required by
City ordinance, the City sent the notice to the property itself. Although the Chicago
Municipal Code does provide for notice to be given to a property owner by posting the
summons on the front door of the property, this method is authorized only if notice by mail to
the owner’s registered agent or primary business address fails. See Chicago Municipal Code
§ 2-14-074(c) (amended Apr. 29, 1998).
¶4 Despite the faulty notice, a person named Keith Johnson appeared at the hearing on Stone
Street’s behalf. The City has destroyed virtually all of the administrative record, but what
remains indicates that Johnson filed a written appearance for Stone Street and presented
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some exhibits to the hearing officer in response to the notice of violation. The evidence was
apparently unpersuasive, as the hearing officer found plaintiff liable for the violations and
fined it $1,050. The final administrative judgment was “registered” with the circuit court in
2004, and in 2009 the City recorded the court’s judgment with the Cook County recorder of
deeds.1
¶5 Stone Street contends that it had no idea that the 1999 order existed until sometime in
2011. In September of that year, its attorney served a Freedom of Information Act (5 ILCS
140/1 et seq. (West 2010)) request on the City and received a copy of the 1999 order. In
October, it filed a motion to vacate and set aside the 1999 order with the City’s department of
administrative hearings (DOAH), contending that it had never received notice of the 1999
violations. The motion claimed, among other things, that Keith Johnson had never been
authorized to represent Stone Street in any capacity, much less a legal one. Stone Street’s
attorney provided an affidavit identifying Johnson as a nonattorney and a caretaker for a
Stone Street manager who had been gravely incapacitated in 1998 and who was no longer
involved in the management of the company. The administrative hearing officer, however,
found that DOAH lacked jurisdiction to vacate the order. The governing ordinance only
allowed it to consider vacating default judgments within 21 days of their entry. Additionally,
Johnson’s participation meant that Stone Street was not defaulted but, rather, lost on the
merits.
¶6 Stone Street then filed a multicount complaint in the circuit court. One count sought
administrative review of the DOAH’s 2011 order. Other counts sought a declaratory
judgment, quiet title and damages for slander of title.2 The City filed a motion to dismiss,
which the circuit court granted with prejudice as to all counts. This appeal followed.
1
A bit of explanation is required with respect to the various dates and proceedings involved in this
record. The governing statute (65 ILCS 5/1-2.1-8(b) (West 2010)) provides that a money judgment
entered by a municipal hearing officer “may be enforced in the same manner as a judgment entered by
a court of competent jurisdiction.” Monetary court judgments are valuable because the judgment
creditor may issue garnishment process and attach the debtor’s assets to collect the judgment. 735 ILCS
5/12-701 et seq. (West 2010). When the legislature elevated municipal administrative judgments to the
dignity of court judgments, it neglected to provide a parallel collection mechanism. Accordingly,
municipalities like Chicago have “filed” their own administrative judgments in circuit court and asked
the court to “register” them as court judgments, making them more easily collectible. That is apparently
what the City of Chicago did in 2004–five years after the hearing. On May 3, 2012, after more than the
requisite seven years had passed since that “registration,” the circuit court entered a form order in that
case, numbered 04 M1 612624, “reviving” a judgment of $1,050 plus $350 in attorney fees entered “in
this Court” on September 9, 1999. However, that language in the order is wrong. The 1999 date
corresponds to the administrative judgment, not to any judgment of the circuit court. The order states
that Stone Street was given “due notice” of the 2012 revival proceedings by substitute service.
2
On appeal, plaintiff has abandoned another count alleging the unauthorized practice of law by the
City. This count alleged that the City could not initiate ordinance violation complaints before its own
administrative hearing department unless the complaint was signed by an attorney representing the
City. It did not, in any way, address nonattorney Johnson’s participation at the hearing.
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¶7 ANALYSIS
¶8 Normally, vacating judgments after the passage of years is virtually impossible due to the
presumptions of validity that apply to the judicial process. However, the City of Chicago
made two critical errors in this case which invalidate the judgment. First, the City served the
defendant corporation not through its registered agent, as required by City ordinances, but at
the property address. Second, the City’s administrative hearing officer allowed a nonattorney
to appear and litigate the case on behalf of the corporation.
¶9 The court below dismissed all of Stone Street’s claims on a motion to dismiss filed
pursuant to section 2-619 of the Illinois Code of Civil Procedure (735 ILCS 5/2-619 (West
2010)). A section 2-619 motion to dismiss admits all well-pleaded facts as true, along with
all reasonable inferences that can be gleaned from those facts. Porter v. Decatur Memorial
Hospital, 227 Ill. 2d 343, 352 (2008). When ruling on a section 2-619 motion to dismiss, a
court must interpret all pleadings and supporting documents in the light most favorable to the
nonmoving party. Id. We review section 2-619 dismissals de novo. Id.
¶ 10 Putting the pieces to this puzzle together requires us to review the background of
municipal ordinance adjudications in some depth. Through a series of enactments over the
last 20 years or so, our legislature has facilitated the removal of ordinance enforcement
hearings from the judiciary to the local administrative level. See generally Matthew W.
Beaudet, Adjudication of Ordinance Violations, in Municipal Law § 9.1 (Ill. Inst. for Cont.
Legal Educ. 2012). The underlying statute establishing in-house administrative adjudication,
and raising their judgments to the dignity of court judgments, was the result of Public Act
90-516, sponsored by then-state senator Barack Obama. Pub. Act 90-516 (eff. Jan. 1, 1998).
When discussing the legislation, he declared that its purpose was to “give these
administrative adjudication processes some teeth” and that litigating the cases through
regular courts was “overburden[ing]” them. 90th Ill. Gen. Assem., Senate Proceedings, Mar.
19, 1997, at 114 (statements of Senator Obama). The process has been so successful that the
City of Chicago has established a large central hearing facility that rivals Illinois county
courthouses in its size and case volume. See City of Chicago Administrative Hearings,
available at http://www.cityofchicago.org/city/en/depts/ah/ supp_info/hearing_location.html
(last visited Mar. 5, 2014).
¶ 11 Despite the fact that circuit court judges do not preside, and the rules of evidence may be
relaxed, defendants in these hearings are still entitled to due process of law. It is well settled
that “[a] fair hearing before an administrative agency includes the opportunity to be heard,
the right to cross-examine adverse witnesses, and impartiality in ruling upon the evidence.”
Abrahamson v. Illinois Department of Professional Regulation, 153 Ill. 2d 76, 95 (1992); see
also Waicekauskas v. Burke, 336 Ill. App. 3d 436, 438 (2002) (invalidating municipal
adjudication process on due process grounds).
¶ 12 Section 2-14-074(c) of the Chicago Municipal Code requires that notices to corporate
defendants for administrative hearings against them must be sent to the address of the
corporation’s registered agent. Chicago Municipal Code § 2-14-074(c) (amended Apr. 29,
1998). There is no dispute that, in this case, the City sent the notice to the property address
and not to the registered agent. Accordingly, the service was not accomplished by any of the
various manners authorized by the governing ordinance. To pass constitutional muster, notice
in administrative proceedings need only be “reasonably calculated, under all the
circumstances, to apprise [the respondents] of the pendency of the action and afford them an
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opportunity to present their objections.” (Internal quotation marks omitted.) Horn v. City of
Chicago, 860 F.2d 700, 704 (7th Cir. 1988). However, although administrative proceedings
may relax formalities which apply in courts of record, and notice to a defendant may be
accomplished by many different means, the City has imposed limitations on itself, and it is
required to follow its own ordinances. See 5 Eugene McQuillin et al., The Law of Municipal
Corporations § 15.28, at 174-75 (3d ed., rev. vol. 1996). As an administrative agency created
by ordinance, the DOAH may act only in accordance with the power conferred on it by the
City council. See, e.g., Pearce Hospital Foundation v. Illinois Public Aid Comm’n, 15 Ill. 2d
301, 307 (1958).
¶ 13 Although service of the notice of hearing must be sent to the registered agent, the City
notes that no similar requirement applies to service of the order. Accordingly, the City
claims, its transmission of the 1999 order to Stone Street’s business address was sufficient.
However, it is well established that a “defendant’s actual knowledge that an action is pending
or that service has been attempted is not the equivalent of service of summons and would not
relieve the plaintiff of its burden or vest the court with jurisdiction.” Equity Residential
Properties Management Corp. v. Nasolo, 364 Ill. App. 3d 26, 35 (2006).
¶ 14 We must therefore turn to the question of whether Stone Street waived any objection to
service through Johnson’s participation at the hearing. Johnson was a nonattorney who
worked as a caretaker for a gravely ill corporate officer. He filed a written appearance on
behalf of the corporation. We have little information about what else happened at the hearing
other than that it ended with the imposition of a fine against the corporation. This dearth of
information results from the City’s own destruction of most of the records from the hearing, a
destruction it undertook even though the fine had not been paid, and the City was pursuing
collection of it–albeit at a glacial pace. Appearance and active participation in a judicial
proceeding, of course, waives any objection regarding improper service. 735 ILCS
5/2-301(a) (West 2010); GMB Financial Group v. Marzano, 385 Ill. App. 3d 978, 996
(2008). The same principle applies regarding participation at administrative hearings. Greene
v. Board of Election Commissioners, 112 Ill. App. 3d 862 (1983).
¶ 15 Nonattorneys, including paralegals and claims negotiators, provide valuable professional
services to corporations in the same manner as licensed attorneys do. Under the general
principles of agency, a nonattorney can represent the corporation in negotiations with
customers, sign contracts for the corporation, and the like. However, the City’s
administrative hearings, like judicial proceedings, involve the admission of evidence and
examination and cross-examination of sworn witnesses–all of which clearly constitute the
practice of law. The City argues strongly that these hearings are so inconsequential that
corporations need not be represented by licensed attorneys, but to counter that point, we need
look no further than Express Valet, Inc. v. City of Chicago, 373 Ill. App. 3d 838 (2007),
where this court upheld the DOAH’s imposition of a fine of $135,825 for multiple violations
of a valet parking ordinance. The City also presents its administratively adjudicated traffic
citations as an example of cases so simple that anyone can successfully handle them, but
corporations do not drive motor vehicles. Administrative hearings, whether held by a
municipality or state agency, necessarily implicate the full range of the powers of sovereign
governments over individuals and other entities. Their decisions can implicate the ability to
practice a chosen profession or engage in a business, and can result in the imposition of
crushing financial sanctions. This is true regardless of whether the rules of the evidence are
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relaxed. Representation of a corporate defendant at these hearings requires expertise only a
lawyer is qualified to provide, such as drafting motions; interpreting laws and ordinances;
determining whether to call certain witnesses; how to examine the witnesses; how to properly
secure, object to, or admit evidence; and to analyze whether a settlement offer is favorable.
Additionally, there is little distinction between the range of remedies available in
administrative proceedings and those available in a court of law, with the exception of
imprisonment and equitable relief. In a court of law, corporations cannot represent
themselves through a nonattorney except in the simplest small claims cases. The similarity
between modern administrative proceedings and traditional judicial ones compels us to reject
the City’s contention that the proceedings are so manifestly different that corporations can
appear at them through non-lawyers.
¶ 16 There is no bright-line test to distinguish what is, or is not, the practice of law. “It is
immaterial whether the acts which constitute the practice of law are done in an office, before
a court, or before an administrative body. The character of the act done, and not the place
where it is committed, is the factor which is decisive of whether it constitutes the practice of
law.” People ex rel. Chicago Bar Ass’n v. Goodman, 366 Ill. 346, 357 (1937). A different
panel of this court struggled with the question in Sudzus v. Department of Employment
Security, 393 Ill. App. 3d 814, 823 (2009), finding, in a highly fact-based decision, that a lay
representative of a corporation attending an unemployment compensation hearing did not
engage in the unauthorized practice of law because “the character of the actions did not
require legal knowledge or skill; and he supplied simple, fact-based answers.” Similarly, in
Grafner v. Department of Employment Security, 393 Ill. App. 3d 791 (2009), a divided panel
of this court found that the relatively innocuous actions that had already been taken in a
particular hearing by a nonattorney representative of the employer did not rise to the level of
the practice of law so as to cause the hearing to be a nullity. One justice specially concurred,
noting “[t]his is the unauthorized practice of law.” Id. at 805 (O’Brien, P.J., specially
concurring). Even so, the Sudzus and Grafner analyses did not persuade the Board of
Governors of the Illinois State Bar Association (ISBA), which, in May 2010, reviewed the
newly adopted Illinois Rules of Professional Conduct of 2010 and reaffirmed its March 1994
advisory opinion holding that the pervasive practice of nonattorneys giving legal advice,
preparing evidence for presentation and examining witnesses and otherwise participating at
unemployment administrative hearings constituted the unauthorized practice of law. Ill. State
Bar Ass’n Op. No. 93-15 (Mar. 1994). We find neither Sudzus nor Grafner to be persuasive
on the larger issue presented here, but instead find the ISBA’s position to be well-taken, and
so hold that representation of corporations at administrative hearings–particularly those
which involve testimony from sworn witnesses, interpretation of laws and ordinances, and
can result in the imposition of punitive fines–must be made by a licensed attorney at law.
¶ 17 Our supreme court quite recently reaffirmed a rule dating back to “as early as Lord
Coke’s time”3 that a corporation must be represented by counsel in legal proceedings. See
Downtown Disposal Services, Inc. v. City of Chicago, 2012 IL 112040, ¶ 17 (citing Nixon,
Ellison & Co. v. Southwestern Insurance Co., 47 Ill. 444, 446 (1868)). The reason for this
requirement, the court stated, was that “[i]t is not every case where the views or interests of a
principal and the corporation mesh. By requiring an attorney to represent a corporation in
3
Referring to English jurist Lord Edward Coke (1552-1634).
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legal proceedings, this problem is mitigated. *** Courts in this country, including this court,
unanimously agree that a corporation must be represented by counsel in legal proceedings.”
(Emphases added.) Id. ¶¶ 17, 22. The Downtown Disposal court found that an administrative
review complaint filed by a nonattorney was not a complete nullity, but could be validated by
having a licensed attorney file an amended complaint, even after the normal administrative
review period had elapsed. The three dissenting justices noted that even creating that narrow
exception violated an “unbroken line of precedent dating back before the Civil War.” Id. ¶ 41
(Karmeier, J., dissenting, joined by Kilbride, C.J., and Thomas, J.). Despite the split on
whether the exception should be created to the nullity rule, all seven justices agreed that
nonattorneys cannot represent corporations in matters requiring the expertise of an attorney.
Id. ¶¶ 22, 41.
¶ 18 The City presents several reasons why nonattorneys should be allowed to represent
corporations at administrative hearings; none of them is meritorious. First, it cites a series of
statutes and administrative regulations providing that nonattorneys can represent corporations
at various types of administrative hearings. The City notes that it specifically allows
nonattorneys to represent corporations at its administrative hearings. See City of Chicago
Department of Administrative Hearings R. 5.1, available at https://www.cityofchicago.org/
city/en/depts/ah.html (last visited Mar. 6, 2014) (select “Rules and Ordinances”; then select
“Rules and Regulations”; then select “Chapter 5. Right to Representation”). This grant of
authority may be efficacious, but it clearly usurps the authority of our supreme court to
administer the practice of law. “The General Assembly has no authority to grant a layman the
right to practice law.” Goodman, 366 Ill. at 352 (citing In re Day, 181 Ill. 73, 84 (1899)).
This problem apparently arises frequently at Chicago administrative hearings. See Downtown
Disposal Services, Inc., 2012 IL 112040, ¶ 8 (quoting trial judge who found that legal
instructions given by Chicago administrative hearing officers to nonattorneys representing
corporate defendants that the nonattorney had the “right to appeal this” were “clearly
erroneous” (internal quotation marks omitted)). Since only the Illinois Supreme Court can
regulate the practice of law, the statutes and regulations on which the City relies are of highly
doubtful validity. See Goodman, 366 Ill. at 349; Downtown Disposal Services, Inc., 2012 IL
112040, ¶ 14.
¶ 19 In its petition for rehearing, the City, joined by the Attorney General as amicus curiae,
suggests that our holding regarding nonattorney representation of corporations at
administrative hearings and our questioning of administrative regulations purporting to allow
unlicensed persons to practice law would have deleterious consequences. We disagree. As we
have noted, except in a small claims case, no judge sitting in a circuit court would allow a
corporation to appear as a party through a nonattorney employee or officer. Judges routinely
provide admonitions in such situations and grant continuances to obtain counsel.
Administrative agencies vested with the power of government to punish, fine, and transfer
property should, and must, follow the same principal. If anything, our holding will protect the
rights of corporations which may lose valuable rights or property because they have lost
administrative hearings due to the presence of an unqualified representative working on their
behalf. All that being said, we note that this case hinges largely on the allegation of lack of
proper service. When a corporate administrative defendant has been properly served, and a
judgment has been entered against it, the judgment is properly cognizable as a standard
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default, regardless of whether the corporation did not appear at all or appeared through a
nonattorney.
¶ 20 Second, the City cites Illinois Supreme Court Rule 282(b) (Ill. S. Ct. R. 282(b) (eff.
July 1, 1997)), which allows corporations to defend against small claims cases through a
nonattorney officer or manager. However, it neglects to cite Rule 281, which defines “small
claim[s]” only as including “civil action[s] based on either tort or contract for money not in
excess of $10,000, exclusive of interest and costs, or for the collection of taxes not in excess
of that amount.” Ill. S. Ct. R. 281 (eff. Jan. 1, 2006). Ordinance enforcement and the
imposition of fines are not based in “tort or contract” and so clearly fall outside this
definition. Rule 282(b) does not legitimize Johnson’s representation of Stone Street at the
1999 hearing.
¶ 21 Johnson’s appearance at the hearing does not change the result. A defendant does not
waive objection to jurisdiction if it participated through someone who was unauthorized to
do so–even if the representative is a licensed attorney at law. When an attorney appears of
record for a party, there is a rebuttable presumption that the party authorized the attorney to
do so. Gray v. First National Bank of Chicago, 388 Ill. 124, 129 (1944). However, “when the
facts show a lack of authorization, express or implied, and there is no proof of ratification,
the acts of counsel are a nullity.” Id. Where affidavits establish that an attorney was not
acting as the party’s attorney, no general appearance is made. People v. Mickow, 58 Ill. App.
3d 780, 783 (1978).
¶ 22 That brings us to the question of the appropriate remedy and the various counts which
Stone Street presented in its complaint. In count I, Stone Street sought administrative review
of the DOAH’s 2011 order. Neither a court nor a governmental body gains jurisdiction over a
nonserved defendant merely by the passage of a long period of time. A judgment entered
without jurisdiction–that is, because of lack of service–is void and can be vacated at any
time, either directly or collaterally. Sarkissian v. Chicago Board of Education, 201 Ill. 2d 95,
103 (2002). In January 2012, Stone Street sought relief by filing a motion before the DOAH
which, while not titled as such, was essentially a motion to quash service and void the 1999
order. However, the DOAH determined that it had no jurisdiction to consider such a motion
because the City ordinances provided no mechanism for un-served defendants to vacate void
orders. Stone Street disagrees, relying on a City ordinance which states in part:
“Petition to set aside default order.
(a) An administrative law officer may set aside any order entered by default and
set a new hearing date, upon a petition filed within 21 days after the issuance of the
order of default, if the administrative law officer determines that the petitioner’s
failure to appear at the hearing was for good cause or, at any time, if the petitioner
establishes that the petitioner was not provided with proper service of process. If the
petition is granted, the administrative law officer shall proceed with a new hearing on
the underlying matter as soon as practical.” Chicago Municipal Code § 2-14-108(a)
(added Apr. 29, 1998).
¶ 23 A related code section provides that a “default” as entered only “[i]f at the time set for a
hearing the recipient of a notice of violation or a notice of hearing, or his or her attorney of
record, fails to appear.” Chicago Municipal Code § 2-14-078 (amended Apr. 29, 1998).
¶ 24 The City argues that section 2-14-108(a) only applies to default orders. We give
substantial weight to the agency’s opinion about an ambiguous statute or regulation, and we
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also give deference when the agency’s interpretation relates to its own jurisdiction. See
Aurora Manor, Inc. v. Department of Public Health, 2012 IL App (1st) 112775, ¶ 9. Our
supreme court has long held that because “an administrative agency is a creature of statute,
any power or authority claimed by it must find its source within the provisions of the statute
by which it is created.” (Internal quotation marks omitted.) County of Knox ex rel. Masterson
v. Highlands, L.L.C., 188 Ill. 2d 546, 554 (1999).
¶ 25 We agree with the City’s interpretation of section 2-14-108(a), noting that the title of the
section refers only to default orders, and further finding that the term “default” in the first
clause modifies both the clause regarding good cause and the clause following the “or”
dealing with service of process. Stone Street was not held in default at the 1999
hearing–perhaps it should have been, on the basis that Johnson’s appearance was a nullity.
Nonetheless, the 1999 order mentions nothing about default, and it was clearly entered after
some sort of adjudication on the merits. Accordingly, the DOAH correctly determined it had
no jurisdiction to consider Stone Street’s motion to vacate, and the circuit court correctly
confirmed that administrative decision on review. We therefore affirm the dismissal of
count I of the complaint.
¶ 26 Count II of the complaint is labeled both as a claim to quiet title and for a declaratory
judgment. Specifically, the forms of relief it requests are: (1) a declaration that the City’s lien
on Stone Street’s property is void; (2) a declaration that the 1999 administrative judgment is
null and void; and (3) a judgment against the City for slander of title and attorney fees. The
City’s failure to provide defendants with a procedure to quash service of process and vacate
void orders leaves Stone Street without an in-house remedy. As we explained above, the
complaint and affidavits set forth sufficient facts to support a valid claim based on voidness
of the 1999 order. The City contends here that Stone Street is left without a remedy because
it failed to seek administrative review of the 1999 order. Indeed, it is well settled that
“[w]here the statute creating or conferring power on an administrative agency expressly
adopts the Administrative Review Law, a circuit court has no authority to entertain an
independent action.” Metzger v. DaRosa, 209 Ill. 2d 30, 42 (2004). However, a defendant
cannot be expected to timely seek review of an order of which it was not properly notified.
¶ 27 In Sarkissian, 201 Ill. 2d at 104-05, our supreme court noted that the Code of Civil
Procedure makes no “provision for the filing of a motion to challenge a judgment on
voidness grounds” and that section 2-1401(f) (735 ILCS 5/2-1401(f) (West 2000)) “expressly
abolishes all other common law means of attacking void judgments.” The court noted that a
void order may be attacked at any time. Sarkissian, 201 Ill. 2d at 103. It further held that the
general requirements for a valid section 2-1401 petition cannot, and do not, apply to petitions
to invalidate service of process. Id. at 105. In particular, the supreme court held that a petition
challenging a void judgment in the nature of a motion to quash: (1) need not allege either a
meritorious defense or due diligence; and (2) may be brought at any time, not merely within
two years of the final order. Id. at 104. To resolve the legislature’s failure to provide a
specific mechanism to vacate void orders more than two years after their entry, the
Sarkissian court created one. It held that while a pleading to challenge a void judgment based
on invalid service must be brought under section 2-1401, it could be brought more than two
years after the judgment was entered, despite the time limitation established by the
legislature. Id.; see also Protein Partners, LLP v. Lincoln Provision, Inc., 407 Ill. App. 3d
709, 715 (2010) (noting that “[o]ur courts have repeatedly held that an untimely
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postjudgment motion must be viewed as a section 2-1401 motion by the appellate court
because it is the only vehicle that a party may use once the 30 days have expired”).
¶ 28 Using Sarkissian as our guide, we hold that cases such as Metzger do not bar us from
providing a remedy. Because some sort of equitable relief must be available to remedy the
alleged wrong suffered by Stone Street, the circuit court erred in dismissing count II.
However, the relief available in count II on remand, should Stone Street prove the underlying
facts, may not include damages for slander of title, as that claim is barred for the reasons set
forth below. Additionally, we note that this remedy is only potentially available to Stone
Street because of the unusual convergence of both of two qualifying factors: (1) the City’s
failure to properly serve defendant in the first instance, a situation normally addressed in
courts by a motion to quash; and (2) the fact that Stone Street did not waive jurisdiction
merely because a nonauthorized representative of it appeared at the hearing. Administrative
judgments against corporations that were properly served must still be reviewed under the
standards established in the governing ordinance with respect to motions to vacate default
judgments. While we reverse the dismissal of the main portion of count II, we affirm the
dismissal of the third portion of the prayer for relief of count II.
¶ 29 Our dissenting colleague suggests that the 1999 judgment was somehow subject to
administrative review not merely for the usual 35 days, but for years and years until, at some
point, Stone Street found out about it. Section 3-103 of the Administrative Review Law
provides that a losing party may file for administrative review “within 35 days from the date
that a copy of the decision sought to be reviewed was served upon the party affected by the
decision.” 735 ILCS 5/3-103 (West 2010). The “served upon” language seems to recognize
there may be a delay between the conclusion of the hearing and the issuance of the decision.
Even so, one can interpret the 35-day “was served” period as running from the date of
mailing or from the date of receipt. If the period ran from the date of receipt, the dissent
would have a valid point. However, in a case the City cites in its own brief, our supreme
court has resolved the statutory ambiguity, holding that decisions served by mail must be
appealed 35 days after the date the decision is placed in the mail. 735 ILCS 5/3-103 (West
2010); Nudell v. Forest Preserve District, 207 Ill. 2d 409, 424 (2003). Therefore, Stone
Street could not have appealed the 1999 decision in 2009 when it claims to have first found
about it. As interpreted by the Nudell court, the Administrative Review Law cannot toll the
35-day deadline when losing parties are unaware of the pending administrative hearing in the
first instance, allowing them to file for review 5 or 10 years after the fact. Had Stone Street
filed for administrative review of the 1999 judgment in 2009 or 2011, the City would have
undoubtedly claimed it was untimely, and it would have been correct.
¶ 30 Further, the dissent suggests that a different remedy was created to assist a similarly
situated administrative defendant by In re Abandonment of Wells Located in Illinois, 343 Ill.
App. 3d 303 (2003). In that case, however, the court remanded the case back to the circuit
court “to resolve the factual dispute and to determine whether the Department complied with
the notice requirements and satisfied due process requirements.” Id. at 308. In so doing, the
Abandonment of Wells court recognized that expired time limitations caused the
administrative agency to lose jurisdiction, but placed the matter in the hands of the circuit
court, which had plenary equitable jurisdiction to resolve the dispute. In short, that is
precisely the remedy we provide here, albeit under the framework of declaratory relief.
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¶ 31 Count III is a claim for slander of title based on the City’s recording of the judgment lien
against Stone Street’s property. In that count, Stone Street claims that the City knew that the
1999 order was void at the time that the City recorded the order in 2009 and knowing it was
void. The City moved to dismiss both because it was time-barred and because section 2-107
of the Local Governmental and Governmental Employees Tort Immunity Act immunizes it
from liability for libel and slander. See 745 ILCS 10/2-107 (West 2010). Stone Street glosses
over the tort immunity defense in its briefs before this court, preferring instead to focus only
on whether the claim pled the elements of a slander-of-title claim and the merits of a
statute-of-limitations argument raised by the City. See 745 ILCS 10/8-101(a) (West 2010)
(one-year statute of limitations applies for tort claims against government entities). We need
not reach the limitations issue because the immunity provided by section 2-107 is absolute
and there are no exceptions. Plaintiff has not argued otherwise (see Ill. S. Ct. R. 341(h)(7)
(eff. Feb. 6, 2013) (claims not raised are forfeited)), and we may affirm on any ground
appearing in the record (see Camper v. Burnside Construction Co., 2013 IL App (1st)
121589, ¶ 29). The circuit court correctly dismissed this count.
¶ 32 On rehearing, the City has asked us to grant a certificate of importance under Illinois
Supreme Court Rule 316 (eff. Dec. 6, 2006) to facilitate its appeal of this decision to the
Illinois Supreme Court. This court has consistently determined that it will use this power
sparingly and defer to the Illinois Supreme Court’s determination of which cases it deems
worthy of review. People v. Cherry Valley Public Library District, 356 Ill. App. 3d 893, 900
(2005). We decline to do so here.
¶ 33 To summarize; as to count I, we affirm the circuit court’s affirmance of the DOAH’s
administrative ruling; we reverse the circuit court’s dismissal of count II, less the prayer for
monetary damages, and remand it for further proceedings consistent with this order; and we
affirm the circuit court’s dismissal of count III.
¶ 34 Affirmed in part and reversed in part; cause remanded for further proceedings.
¶ 35 JUSTICE CONNORS, concurring in part and dissenting in part.
¶ 36 Fundamentally, this case is about the procedural methods that are available, and those
that are not, to litigants who claim that an administrative judgment is void. We all agree that
the procedures surrounding the DOAH hearing in 1999 were, if plaintiff’s allegations are
true, woefully inadequate. What the majority and I disagree about is how that proceeding and
the resulting administrative judgment can be reviewed by the courts. I agree with my
colleagues that plaintiff’s quiet-title and slander-of-title claims cannot stand and that
DOAH’s 2011 administrative decision should be confirmed, so I concur in the court’s
judgment and opinion on those points. But I must respectfully dissent from the majority’s
conclusion that the declaratory judgment claim should proceed.
¶ 37 The majority holds that an allegedly void administrative judgment may be challenged at
any time via a declaratory judgment action. In my opinion, however, our constitution,
statutes, and precedent preclude such a claim. This case is, to be blunt, a civil procedure
disaster. But while the majority opinion amply documents the City’s procedural failures,
plaintiff is not blameless. In my opinion, regardless of the merits of plaintiff’s arguments
about the validity of the 1999 order, plaintiff made several procedural decisions that preclude
the courts from granting any relief in this case.
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¶ 38 At the heart of this case is the inescapable fact that the 1999 order is a final
administrative judgment. While the circuit court has general subject matter jurisdiction over
nearly every kind of claim, the Illinois Constitution of 1970 permits the courts to review
administrative orders only as provided by statute. See Ill. Const. 1970, art. VI, § 9. As the
supreme court has explained, “[b]ecause review of a final administrative decision may be
obtained only as provided by statute, a court exercises ‘special statutory jurisdiction’ when it
reviews an administrative decision. Special statutory jurisdiction is limited to the language of
the statute conferring it and the court has no powers from any other source. A party seeking
to invoke a court’s special statutory jurisdiction must strictly comply with the procedures
prescribed by the statute.” (Emphasis added.) Ultsch v. Illinois Municipal Retirement Fund,
226 Ill. 2d 169, 178 (2007).
¶ 39 As an administrative judgment, review of the 1999 order can only be had pursuant to the
Administrative Review Law, and it is undisputed that plaintiff failed to petition for review
within 35 days after service of the judgment as required by the law. See 735 ILCS 5/3-103
(West 2010). Yet this was not plaintiff’s fatal mistake. As the majority points out, a party can
hardly be expected to seek timely review of an administrative judgment when it does not
know the judgment exists. See supra ¶ 26. The fatal mistake was that plaintiff never sought
administrative review of the judgment even after plaintiff learned of it. To be fair, had
plaintiff done so it is very likely that the City would have moved to dismiss the petition as
untimely. Yet we have previously rejected such a motion where the party seeking
administrative review did not receive notice of the judgment, which is what plaintiff alleges
happened here. In the case of In re Abandonment of Wells Located in Illinois, 343 Ill. App.
3d 303 (2003), the plaintiff petitioned for administrative review after the 35-day deadline but
argued that it had not received notice of the judgment. We reversed the circuit court’s order
dismissing the petition on timeliness grounds and remanded for an evidentiary hearing,
holding that if the administrative agency had in fact failed to properly serve notice of the
judgment on the plaintiff, then that alone would be grounds for vacating the administrative
judgment. See id. at 306-09.
¶ 40 Based on Abandonment of Wells, it is debatable whether a motion to dismiss on
timeliness grounds would have succeeded, since that would depend on whether the City
could prove that DOAH had properly served plaintiff with notice of the 1999 order. See 735
ILCS 5/3-103 (West 2010) (requiring that, in the absence of contrary provisions in an
enabling statute, an administrative decision must be served either by personal delivery or by
mail to “the party affected by the decision at his or her last known residence or place of
business”). But we will never know whether the City could have done so because plaintiff
never bothered to seek administrative review of the order when it learned of the order’s
existence. Instead, plaintiff filed a futile motion to vacate the 1999 order with DOAH and
then, when that failed, attempted to bootstrap review of the 1999 order into a misguided
petition for administrative review of the new 2011 order. I agree with my colleagues that new
petition was properly dismissed, given the clear limitations the Chicago Municipal Code
places on DOAH’s authority to vacate orders.
¶ 41 Plaintiff also attempted several collateral attacks on the 1999 order via claims for quiet
title, slander of title, and a declaratory judgment. In addition to the problems with the
quiet-title and slander-of-title claims that the majority has already mentioned, the
fundamental problem with these collateral attacks is that they are not viable methods of
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seeking review of an administrative judgment. We considered this issue in detail in Stykel v.
City of Freeport, 318 Ill. App. 3d 839 (2001), and we determined that the express terms of
the Administrative Review Law preclude all common-law and equitable collateral challenges
to an administrative decision. See id. at 845-47. Although the majority believes that there
must be some equitable method of reviewing the 1999 order (see supra ¶ 28), Stykel rejected
that very notion and held that declaratory judgments are not an available option for obtaining
review of an administrative judgment. See Stykel, 318 Ill App. 3d at 847; see also id. at 845
(“[W]here the Review Law embraces administrative agencies subject to its terms, it becomes
the sole means of securing judicial review of decisions of administrative agencies and
eliminates the heretofore conflicting and inadequate common-law and statutory remedies.”);
735 ILCS 5/3-102 (West 2010) (stating that in all administrative review cases, “any other
statutory, equitable or common law mode of review of decisions of administrative agencies
heretofore available shall not hereafter be employed” (emphasis added)). In fact, not even
section 2-1401 petitions (735 ILCS 5/2-1401 (West 2010)), which are the traditional method
of challenging a void or voidable judgment, are an available option in this context. See Krain
v. Department of Professional Regulation, 295 Ill. App. 3d 577, 580-81 (1998); Rodriguez v.
Du Page County Sheriff’s Merit Comm’n, 328 Ill. App. 3d 899, 905 (2002).
¶ 42 This rule is known as the doctrine of exhaustion of administrative remedies, under which
“a party may not seek judicial relief from an administrative action unless the party has
exhausted all available administrative remedies.” Arvia v. Madigan, 209 Ill. 2d 520, 531
(2004). The supreme court explained the purpose and scope of the rule in Arvia:
“Importantly, the exhaustion doctrine extends to administrative review in the
circuit court. [Citation.] That is, where the Administrative Review Law is applicable
and the circuit court may grant the relief a party seeks within the context of reviewing
the agency’s decision, a circuit court has no authority to entertain independent causes
of action regarding the agency’s actions. [Citations.] Any other conclusion would
enable a party to litigate separately every alleged error committed by an agency in the
course of the administrative proceedings.” (Internal quotation marks omitted.) Id. at
532.
¶ 43 There are some exceptions to this doctrine, but they are extremely limited in number and
are strictly construed. See Castaneda v. Illinois Human Rights Comm’n, 132 Ill. 2d 304, 309
(1989); see also Stykel, 318 Ill. App. 3d at 848-50 (finding that a civil rights claim against an
administrative agency is not preempted by the Administrative Review Law). Yet even if an
exception might apply in this case, plaintiff has not raised one nor even acknowledged that
the doctrine exists, so the issue is forfeit. See Ill. S. Ct. R. 341(h)(7) (eff. Feb. 6, 2013)
(points not argued are forfeit); Vine Street Clinic v. HealthLink, Inc., 222 Ill. 2d 276, 300-01
(2006) (issues not raised in the circuit court are forfeit on appeal).
¶ 44 In my opinion, the law is clear that plaintiff cannot attempt an end run around the
Administrative Review Law by seeking relief from the 1999 order in the form of a
declaratory judgment, much less a claim for quiet title or slander of title. Plaintiff’s only
option was a petition for administrative review of the 1999 order, and plaintiff has not done
that. Not even plaintiff’s petition for administrative review of the 2011 order can save the
issue, given that plaintiff sought only review of DOAH’s 2011 order denying the motion to
vacate.
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¶ 45 I agree with my colleagues that the City’s actions in this case are troubling and that its
system of adjudicating ordinance violations deserves to be reviewed. But this is not the case
to do so. Plaintiff’s procedural decisions have fatally compromised our ability to review the
merits of its claims, and allowing plaintiff to mount a backdoor challenge to the 1999 order
in the guise of a declaratory judgment is contrary to our precedent and the express terms of
the Administrative Review Law. I would hold that plaintiff’s only option for challenging the
1999 order as void was to file a petition for administrative review of that order. Even given
the timeliness problem in this case, review would still have been possible if the City was
unable to prove that it had properly served plaintiff with notice of the administrative
judgment. But because plaintiff could have but did not seek review of the 1999 order as
required by the Administrative Review Law, the courts have no power to review the merits of
plaintiff’s claims under any other mechanism.
¶ 46 Aside from my disagreement with the majority on the viability of the
declaratory-judgment count, I also cannot join with the majority on three other points. The
first point is the majority’s holding that “representation of corporations at administrative
hearings *** must be made by a licensed attorney at law.” Supra ¶ 16. The City, joined by
the Illinois Attorney General as amicus curiae, argued in its petition for rehearing in this case
that this extremely broad holding is inconsistent with our precedent and will have a
significant impact on all administrative hearings conducted throughout Illinois.
¶ 47 The majority does not say so explicitly, but it has in effect invalidated not only DOAH
Rule 5.1 but also every other administrative rule that allows for nonattorneys to appear on
behalf of corporations at an administrative hearing. There are several problems with the
majority’s approach to this issue, in my view. The first, and perhaps the most important, is
that this issue was not presented on appeal and in any event is not essential to the ultimate
holding in the case. Plaintiff’s argument on appeal was not that Keith Johnson’s appearance
at the 1999 hearing rendered the proceedings invalid because he was not an attorney but,
rather, that the proceedings were invalid because Johnson was not authorized to represent
plaintiff at all. In the affidavit of Brian Farley, which plaintiff filed as part of its motion to
vacate the default before DOAH, Farley attests that Johnson “was not an employee of
[plaintiff] and was not authorized to represent [plaintiff] in this matter.” While plaintiff
initially also contended in the circuit court that the proceedings were invalid because Johnson
was not an attorney, plaintiff failed to argue that issue on appeal. The facial validity of
DOAH’s practice of allowing nonattorney representation at its hearings was therefore neither
properly briefed nor argued in this court.
¶ 48 The question of whether Johnson’s status as a nonattorney invalidates the proceedings is
thus a moot point, given not only that plaintiff abandoned that issue on appeal but that we can
resolve the issue of whether the proceedings were invalid without examining the
unauthorized practice of law issue. If the fact that Johnson was not authorized to represent
plaintiff in any capacity renders the proceedings invalid, then it is irrelevant whether his
status as a nonattorney would do so as well. We have no authority to issue advisory opinions,
which are opinions that “resolve[ ] a question of law which is not presented by the facts of
the case.” People ex rel. Partee v. Murphy, 133 Ill. 2d 402, 408 (1990); see also Duncan
Publishing Co. v. City of Chicago, 304 Ill. App. 3d 778, 783 (1999) (“Illinois courts are
foreclosed from issuing advisory opinions and cannot indulge in rendering opinions simply
for the sake of creating precedents to govern future cases.”). The supreme court has not only
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cautioned us repeatedly about issuing advisory opinions on issues not essential to the case but
more importantly has warned us against invalidating statutes when it is not necessary to do
so. See In re E.H., 224 Ill. 2d 172, 178-81 (2006). The admonition applies equally well to
invalidating administrative rules, which “have the force and effect of law and, like statutes,
are presumed valid.” People v. Selby, 298 Ill. App. 3d 605, 611 (1998). Yet not only has the
majority chosen to invalidate DOAH’s rules allowing for nonattorney representation when it
was not necessary to do so in order to resolve this case, it has couched its holding in language
that appears to invalidate all other similar rules used by other administrative agencies. I
cannot join in such a broad and unnecessary holding, and I express no view on the merits of
the issue because I do not believe it should be reached in this case.
¶ 49 My second point of disagreement is the method that the majority uses to reach its
conclusion that corporations cannot be represented in administrative proceedings by
nonattorneys. The majority has chosen to reject our holdings in Sudzus and Grafner, which
upheld administrative rules that allowed nonattorneys to appear on behalf of parties at
administrative hearings. See supra ¶ 16. I do not express any opinion on whether Sudzus and
Grafner were rightly or wrongly decided or even apply to this case, given that I do not think
the issue should even be reached. But having reached the issue, the majority chooses to reject
this court’s own precedent in favor of an advisory opinion by the ISBA. While there is ample
precedent for giving weight to the opinions of an administrative agency on legal questions
that fall within its purview (see, e.g., Provena Convenant Medical Center v. Department of
Revenue, 236 Ill. 2d 368, 387 n.9 (2010)), I am aware of no case that affords similar
deference to the advisory opinions of a nongovernmental body such as the ISBA. Indeed, the
ISBA, while venerable, is merely a voluntary professional association that has no authority
over the regulation of the practice of law in this state. I fail to see how an unreviewable
advisory opinion of such a body can have any persuasive effect when this court has issued
not one but two opinions on the same subject.
¶ 50 I also disagree with the majority’s reliance on Downtown Disposal, which the majority
contends stands for the proposition that a nonattorney cannot represent a corporation in legal
proceedings. See supra ¶ 17. Downtown Disposal does not, however, speak to the issue of
nonattorney representation in administrative proceedings, but instead dealt with that issue in
the context of judicial proceedings. In Downtown Disposal, the supreme court determined
that the act of filing a complaint for administrative review in the circuit court constituted the
unauthorized practice of law. See Downtown Disposal Services, 2012 IL 112040, ¶¶ 12-20.
The supreme court did not consider whether a similar action by a nonattorney in
administrative proceedings constituted the unauthorized practice of law, and so the case is
inapposite here. Even so, the supreme court also noted that the effect of the unauthorized
practice of law depends on the facts of each case, holding that there is no per se nullity rule.
See id. ¶ 31. Yet the majority does not take this fact-specific approach here, instead
considering the broad legal question of whether nonattorneys in general should ever be
allowed to represent corporations in administrative hearings. In my view, even if it were
necessary to reach the issue of the effect of nonattorney representation, Downtown Disposal
Services requires that our analysis be limited to the specific facts of the case itself. Cf.
id. ¶¶ 32-35 (examining the circumstances of the case and finding that the nonattorney
representation did not render the complaint a nullity).
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¶ 51 My final point of disagreement is about further review of this case. Along with its
petition for rehearing, the City asked us to issue a certificate of importance to the supreme
court under Illinois Supreme Court Rule 316 (Ill. S. Ct. R. 316 (eff. Dec. 6, 2006)). I must
respectfully dissent from the decision to deny the City’s motion. While “the appellate court’s
power to certify a case to the supreme court should be used very sparingly” (John Crane, Inc.
v. Admiral Insurance Co., 2013 IL App (1st) 093240-B, ¶ 73), I believe that this case is one
of those rare occasions that merit issuance of a certificate. There are no specific criteria for
when a certificate should be issued, but this case warrants the supreme court’s attention for
two reasons. First, the majority holding invalidates not only DOAH’s own rule allowing for
nonattorney representation during administrative hearings but also implicitly invalidates
similar rules used by administrative bodies throughout the state. Indeed, the implications of
the majority holding are serious enough that the Attorney General took the highly unusual
step of filing a brief as amicus curiae in support of the City’s petition for rehearing. Second,
the majority opinion affects the definition of the practice of law in this state, which we all
agree is a subject that only the supreme court has authority over. Taken together, I believe
these two points are important enough to warrant designating this case for the supreme
court’s immediate attention by issuing a certificate of importance. While the supreme court
may choose to hear the case anyway through an ordinary petition for leave to appeal,
certification will allow the court to resolve this important issue in the speediest possible
manner. I would therefore grant the City’s request and issue the certificate.
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