Deerpath Consolidated Neighborhood Ass'n v. Lake County Board of Review

2021 IL App (2d) 190985, 219 N.E.3d 1108, 467 Ill. Dec. 709

• Court: Appellate Court of Illinois
• Decided: December 20, 2021
• Docket: 2-19-0985
• Status: Published

Opinion

2021 IL App (2d) 190985 No. 2-19-0985 Opinion filed December 20, 2021 ______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT ______________________________________________________________________________

DEERPATH CONSOLIDATED ) Appeal from the Circuit Court NEIGHBORHOOD ASSOCIATION, ) of Lake County. ) Plaintiff-Appellant, ) ) v. ) No. 17-CH-1420 ) THE LAKE COUNTY BOARD OF REVIEW ) and MARTIN P. PAULSON in His Official ) Capacity as Clerk of the Lake County Board ) of Review, ) Honorable ) Luis A. Berrones, Defendants-Appellees. ) Judge, Presiding. ______________________________________________________________________________

JUSTICE ZENOFF delivered the judgment of the court, with opinion. Justices Jorgensen and Brennan concurred in the judgment and opinion.

OPINION

¶1 Plaintiff—the Deerpath Consolidated Neighborhood Association (Association)—filed an

action against defendants—the Lake County Board of Review (Board of Review) and its clerk,

Martin P. Paulson—seeking to establish that the Association has standing to pursue a property tax

appeal on behalf of the individual homeowners. Both parties moved for summary judgment. The

trial court granted the Board of Review’s and Paulson’s motion and denied the Association’s

motion. The Association appeals. We reverse and remand for entry of summary judgment in the

Association’s favor on the issue of associational standing. We further direct the trial court to enter 2021 IL App (2d) 190985

a writ of mandamus commanding Paulson or his successor to vacate the dismissal of the tax appeal

and to docket that appeal.

¶2 I. BACKGROUND

¶3 The Association is a homeowners’ association governed by the Common Interest

Community Association Act (765 ILCS 160/1-1 to 1-90 (West 2018)). On or about July 6, 2017,

the Association filed an appeal with the Board of Review, challenging the property tax assessments

on individual properties owned by the Association’s members. In August 2017, the Board of

Review dismissed the appeal because the individual homeowners had not authorized the appeal.

In October 2017, the Association filed a four-count complaint in the circuit court of Lake County

against the Board of Review and Paulson, seeking (1) a declaratory judgment that, inter alia, the

Board of Review improperly dismissed the appeal, in violation of the Property Tax Code (35 ILCS

200/1-1 to 32-20 (West 2018)), based on an “unpublished rule” prohibiting tax appeals by

homeowners’ associations on behalf of their members (count I); (2) a declaratory judgment that

the “unpublished rule” deprived the Association of equal protection of the law, because

condominium associations were permitted to pursue property tax appeals on behalf of unit owners

(see 765 ILCS 605/10(c) (West 2018)) (count II); (3) a permanent injunction against enforcement

of the “unpublished rule” (count III); and (4) a writ of mandamus compelling the appeal to be

docketed (count IV).

¶4 The Board of Review and Paulson filed a motion to dismiss under section 2-619.1 of the

Code of Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2018)). They sought dismissal of

counts I, III, and IV pursuant to section 2-619(a)(9) (id. § 2-619(a)(9)) because the Association

lacked standing to appeal the assessments of properties owned by the individual homeowners. In

addition, the Board of Review and Paulson sought dismissal of count II under section 2-615 of the

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Code (id. § 2-615) for failure to state a cause of action. The trial court granted the motion, but we

reversed the dismissal. Deerpath Consolidated Neighborhood Ass’n v. Lake County Board of

Review, 2018 IL App (2d) 180244-U. For counts I, III, and IV, we reasoned that lack of standing

was an affirmative defense and the Board of Review and Paulson failed to meet their burden of

establishing that defense in their motion to dismiss. Id. ¶ 26. We concluded that the dispute over

standing hinged on application of the associational-standing doctrine (see generally Hunt v.

Washington State Apple Advertising Comm’n, 432 U.S. 333 (1977); International Union of

Operating Engineers, Local 148, AFL-CIO v. Illinois Department of Employment Security, 215

Ill. 2d 37 (2005)) and that the record did not contain sufficient information to apply that doctrine.

Deerpath, 2018 IL App (2d) 180244-U, ¶ 21. As we noted, the record at that time did not contain

any documents relating to the Association’s July 2017 appeal to the Board of Review or any

documents setting forth the Association’s purposes and powers. Id. ¶¶ 21-22. We also rejected the

Board of Review’s and Paulson’s argument that the dismissal of count II was proper because there

was “a rational basis for treating homeowner’s associations differently from condominium

associations for purposes of standing.” Id. ¶ 27. We noted that this argument begged the question

of whether the Association lacked standing. Id.

¶5 On remand, the parties filed cross-motions for summary judgment. Documents submitted

in support of the motions included a “2017 Residential Appeal Form” with an attached 6-page list

of 280 separate properties, the 2017 assessments for those properties, and the requested reductions.

The 2017 Residential Appeal Form contains checkboxes for the various grounds for the appeal.

The Association checked the box indicating that the assessment was greater than one-third of each

property’s fair cash value. Also submitted with the motions were the “Amended and Restated

Declaration of Easements, Restrictions and Covenants, for the Deerpath Master Association, Now

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Known as Deerpath Consolidated Homeowner’s Association” (Declaration) and the Association’s

Bylaws (Bylaws). We will discuss the relevant portions of the Declaration and Bylaws below.

¶6 The trial court granted summary judgment for the Board of Review and Paulson. This

appeal followed.

¶7 II. ANALYSIS

¶8 Summary judgment is proper when “the pleadings, depositions, and admissions on file,

together with the affidavits, if any, show that there is no genuine issue as to any material fact and

that the moving party is entitled to a judgment as a matter of law.” 735 ILCS 5/2-1005(c) (West

2018). “When *** parties file cross-motions for summary judgment, they mutually agree that there

are no genuine issues of material fact and that the case may be resolved as a matter of law.” Iwan

Ries & Co. v. City of Chicago, 2019 IL 124469, ¶ 18. Our review of a trial court’s ruling on a

summary judgment motion is de novo. First Midwest Bank v. Cobo, 2018 IL 123038, ¶ 16.

¶9 The sole issue raised on appeal is whether the Board of Review and Paulson met their

burden of establishing that the Association lacked standing to bring its July 2017 property tax

appeal on behalf of the individual property owners. “The function of the doctrine of standing is to

insure that issues are raised only by those parties with a real interest in the outcome of the

controversy.” Wexler v. Wirtz Corp., 211 Ill. 2d 18, 23 (2004). Lack of standing is an affirmative

defense. Id. at 22.

¶ 10 In Hunt, the Supreme Court of the United States considered whether the plaintiff, a

Washington state agency, had standing to bring an action on behalf of apple growers to challenge

a North Carolina regulation prohibiting growers from labeling closed containers of apples with

grades given as a result of the Washington Department of Agriculture’s inspection process. North

Carolina officials maintained that the plaintiff could not bring suit based upon injuries sustained

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by the growers. The Court disagreed. The Court explained that the following three-part test

determines associational standing: 1

“[A]n association has standing to bring suit on behalf of its members when: (a) its members

would otherwise have standing to sue in their own right; (b) the interests it seeks to protect

are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief

requested requires the participation of individual members in the lawsuit.” Hunt, 432 U.S.

at 343.

¶ 11 The Hunt Court observed that associational standing depends to a significant extent on the

type of relief sought. “ ‘If in a proper case the association seeks a declaration, injunction, or some

other form of prospective relief, it can reasonably be supposed that the remedy, if granted, will

inure to the benefit of those members of the association actually injured.’ ” Id. at 343 (quoting

Warth v. Seldin, 422 U.S. 490, 515 (1975 )); see also 33 Charles Alan Wright & Arthur R. Miller,

Federal Practice and Procedure § 8345 (2d ed. 1987) (“Generally speaking, the third [prong] is

satisfied where an association seeks just injunctive or declaratory relief because these do not

usually depend on the individualized circumstances of members.”).

¶ 12 Subsequently, in International Union, United Automobile, Aerospace, & Agricultural

Implement Workers of America v. Brock, 477 U.S. 274, 289-90 (1986), the Court observed that:

“[A]n association suing to vindicate the interests of its members can draw upon a pre-

existing reservoir of expertise and capital. ‘Besides financial resources, organizations often

have specialized expertise and research resources relating to the subject matter of the

1 Although the plaintiff was a state agency rather than an association, the Court concluded

that, for purposes of standing, the same considerations applied. Hunt, 432 U.S. at 344.

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lawsuit that individual plaintiffs lack.’ [Citation.] These resources can assist both courts

and plaintiffs. As one court observed of an association’s role in pending litigation: ‘[T]he

interest and expertise of this plaintiff, when exerted on behalf of its directly affected

members, assure “that concrete adverseness which sharpens the presentation of issues upon

which the court so largely depends for illumination of difficult … questions.” ’ [Citation.]

In addition, the doctrine of associational standing recognizes that the primary

reason people join an organization is often to create an effective vehicle for vindicating

interests that they share with others. ‘The only practical judicial policy when people pool

their capital, their interests, or their activities under a name and form that will identify

collective interests, often is to permit the association or corporation in a single case to

vindicate the interests of all.’ [Citations.] The very forces that cause individuals to band

together in an association will thus provide some guarantee that the association will work

to promote their interests.”

¶ 13 The General Assembly codified the Hunt test in section 103.10(b) of the General Not For

Profit Corporation Act of 1986 (805 ILCS 105/103.10(b) (West 2018)), and our supreme court

adopted the test in Operating Engineers, 215 Ill. 2d 37. In Operating Engineers, a labor union

brought an action for administrative review of the Department of Employment Security director’s

decision denying benefits to union members who refused to cross another union’s picket line. The

director’s ruling disqualified members from receiving unemployment benefits because they had a

direct interest in the second union’s labor dispute. Our supreme court concluded that the union had

standing to represent its members under the Hunt test. Thus, the first prong was satisfied: union

members had standing to seek administrative review of the denial of unemployment benefits.

Operating Engineers, 215 Ill. 2d at 51.

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¶ 14 Discussing the second prong, the court observed that the union “acted as the sole bargaining

agent for its members with the purpose of furthering their work-related interests, particularly in

income and benefits.” Id. The court added: “In seeking review of the Director’s decision, [the

union] sought to protect the interests of its members to income and benefits. Such a goal could not

be more germane to the purpose of the union.” Id. at 51-52.

¶ 15 Applying the third prong of the test, the Operating Engineers court observed:

“[T]he resources of the judiciary are scarce and should be preserved where compatible with

the effective administration of justice. *** [T]he eligibility of the members of [the union]

to unemployment compensation benefits turns on common questions of law. Such

questions are appropriately resolved in a lawsuit where [the union] represents the vast

majority of the *** union members rather than in a multiplicity of lawsuits filed in different

counties of this state.” Id. at 51.

¶ 16 Arguing that the union in Operating Engineers lacked associational standing, the Illinois

Department of Employment Security contended that participation of the individual union members

was necessary because each employee’s entitlement to benefits was a fact-specific inquiry

depending on information outside the union’s knowledge. The court rejected the argument,

reasoning: “The judicial proceedings raise pure questions of law. Awards of benefits are not at

issue and would be determined by the administrative agency if the judicial review process results

in a determination that the union members are eligible for benefits.” Id. at 54.

¶ 17 Associational standing is not necessarily limited to cases involving pure questions of law.

Winnebago County Citizens for Controlled Growth v. County of Winnebago, 383 Ill. App. 3d 735,

744 (2008). Some member participation (such as providing evidence) is compatible with

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associational standing. Retired Chicago Police Ass’n v. City of Chicago, 7 F.3d 584, 603 (7th Cir.

1993).

¶ 18 “[S]o long as the nature of the claim and of the relief sought does not make the individual

participation of each injured party indispensable to proper resolution of the cause, the association

may be an appropriate representative of its members, entitled to invoke the court’s jurisdiction.”

(Emphasis added.) Warth, 422 U.S. at 511. However, the third prong is not satisfied in “ ‘situations

in which it is necessary to establish “individualized proof,” [citation] for litigants not before the

court in order to support the cause of action.’ ” Citizens for Controlled Growth, 383 Ill. App. 3d at

743 (quoting Retired Chicago Police Ass’n, 7 F.3d at 601-02).

¶ 19 We recently considered the doctrine of associational standing in connection with property

tax challenges in Sunnyside Elgin Apartments, LLC v. Miller, 2021 IL App (2d) 200614. There,

the plaintiffs were condominium associations, townhome associations, and homeowner

associations that brought suit on behalf of individual homeowners challenging property taxes

based on excess accumulations by a particular taxing jurisdiction. At issue was whether a specific

plaintiff, Brookside Condominium Association, had standing to raise an excess-accumulation

challenge on behalf of its member unit owners. We held that Brookside had statutory standing. We

further determined, however, that Brookside also had associational standing. The first prong of the

Hunt test was satisfied because the individual homeowners had standing to sue. Id. ¶ 31. Citing

the statute authorizing condominium associations to lodge tax objections (see 765 ILCS 605/10

(West 2018)), the Sunnyside court held that “tax objections are germane to a condominium

association’s purpose, provided that the association is duly authorized to act on behalf of its

members.” Id. ¶ 32. Finally, the Sunnyside court concluded that the third prong of the Hunt test

was satisfied. The court observed that “[a]ll the evidence needed to establish a right to the refund

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[of the alleged excess accumulation]—the levies, taxes assessed, and amount paid per

condominium unit—is a matter of public record and easily proven with official documents.” Id.

¶ 33.

¶ 20 With these principles in mind, we consider whether the Association satisfied the Hunt test

here. There is no dispute that the members of the Association have standing to appeal their property

tax assessments, so we turn our attention to the second prong: whether the property tax appeals are

germane to the purpose of the Association. To resolve that issue, we examine the contents of the

Declaration and the Bylaws. The Declaration recites that the Association “is the successor owner

of and solely responsible for the storm water detention and recreational areas set out in Exhibit A

(the ‘Property’).” Exhibit A lists three parcels, consisting of several lots and outlots. Under the

heading “General Purposes,” the Declaration provides that the Association “is the owner of the

Property located in Lake County, Illinois, and desires to establish a single association thereon for

the proper operation and management of the Property.” The Declaration further provides that the

Association is “responsible for maintenance and operation of the Stormwater Detention Facilities

and Improvements and in general and to maintain and promote the desired character of the

Property.” The Association’s powers and duties under the Declaration include “[o]wn[ing],

maintain[ing] and otherwise manag[ing] the Common Areas, if any, and all facilities,

improvements and landscaping thereon.” The Association’s Bylaws state:

“The purposes of this Association are to act on behalf of its members collectively, as their

governing body for civil functions and other purposes, with respect to the preservation,

care, maintenance, replacement, improvement, enhancement, operation, and

administration of both real and personal property and for the promotion of the health, safety

and welfare of the Members of the Association, all on a not-for-profit basis.”

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Although there is no mention of taxation among the matters for which the Association may act on

its members’ behalf, the broad statement of the Bylaws, in our view, encompasses matters related

to property taxes. Property tax appeals are within the ambit of “civil functions” concerning

property “administration.” Property taxes are also germane to the general welfare of the members

of the Association. We note that the germaneness test has been described as “ ‘undemanding.’ ”

Id. ¶ 32 (quoting Humane Society of the United States v. Hodel, 840 F.2d 45, 58 (D.C. Cir. 1988)).

“An association’s litigation interests must be truly unrelated to its organizational objectives before

a court will declare that those interests are not germane.” American Insurance Ass’n v. Selby, 624

F. Supp. 267, 271 (D.D.C. 1985). Therefore, we conclude that property tax appeals are germane

to the Association’s purposes.

¶ 21 A 1996 federal case held that “an association fails to meet the second prong where there is

a serious conflict of interest between the organization and its members.” Retired Chicago Police

Ass’n v. City of Chicago, 76 F.3d 856, 863 (7th Cir. 1996). The Board of Review and Paulson

contend that the individual homeowners have inherent conflicts of interest because “it may be in

the best interest of individual homeowner’s [sic] to ‘point the finger’ at other properties within the

[Association], noting, for example, Property A deserves to have higher taxes than Property B

because it is a more expensive house or lot.” This argument is meritless. The owner of Property A

does not benefit if taxes are increased on Property B. Likewise, the owner of Property A suffers

no harm if the taxes on Property B decrease.

¶ 22 We turn to the third prong of the Hunt test. The relief requested in the property tax appeal

would not require the participation of the Association’s individual members. The Association can

base the appeal on publicly available comparable sales data, thus limiting the need for individual

homeowner involvement. Participation of individual homeowners is not indispensable. As noted,

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associations can often draw upon “a pre-existing reservoir of expertise and capital” when pursuing

litigation on behalf of their members. Brock, 477 U.S. at 289. Thus, a multi-parcel appeal by the

Association will likely be more efficient and economical than a multitude of separate appeals

brought by individual property owners. Therefore, recognizing that the Association has standing

to bring tax appeals will promote the interests of judicial economy.

¶ 23 Finally, we note that section 1-30(j) of the Common Interest Community Association Act

(765 ILCS 160/1-30(j) (West 2018)) provides that the board of a homeowners’ association “shall

have standing and capacity to act in a representative capacity in relation to matters involving the

common areas or more than one unit, on behalf of the members or unit owners as their interests

may appear.” (Emphasis added.) The Illinois Property Tax Appeals Board has held that a

homeowners’ association may pursue a property tax appeal involving more than one unit. See

Stonecreek Townhome Ass’n, Ill. Prop. Tax Appeal Bd. Op. No. 16-36976.001-R-1,

http://www.ptab.illinois.gov/web/Decisions/2016/2016-36976.pdf (last visited Dec. 3, 2020)

[https://perma.cc/37PX-NKJK].

¶ 24 Thus, we conclude that the Association had standing to file the July 2017 tax appeal on

behalf of the individual property owners. Therefore, the trial court erred in entering summary

judgment for the Board of Review and Paulson and denying the Association’s motion for summary

judgment on the issue of associational standing. Accordingly, on remand, the court is directed to

(1) enter summary judgment in the Association’s favor on the issue of associational standing and

(2) enter a writ of mandamus commanding Paulson or his successor to vacate the dismissal of the

tax appeal and to docket that appeal. This writ of mandamus in the Association’s favor, which the

Association requested in count IV of its complaint, moots the issues that the Association raised in

counts I through III of the complaint.

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¶ 25 III. CONCLUSION

¶ 26 For the foregoing reasons, we reverse the judgment of the circuit court of Lake County and

remand the cause for (1) entry of summary judgment in favor of the Association on the issue of

associational standing and (2) entry of a writ of mandamus commanding Paulson or his successor

to vacate the dismissal of the tax appeal and to docket that appeal.

¶ 27 Reversed and remanded with directions.

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No. 2-19-0985

Decision Under Review: Appeal from the Circuit Court of Lake County, No. 17-CH-1420; the Hon. Luis A. Berrones, Judge, presiding

Attorneys Hal R. Morris, David C. Dunkin, Elizabeth A. Thompson, and for Erik J. VanderWeyden, of Saul Ewing Arnstein & Lehr LLP, of Appellant: Chicago, for appellant.

Attorneys Michael G. Nerheim, State’s Attorney, of Waukegan (Gunnar for Gunnarsson and Jamie L. Helton, Assistant State’s Attorneys, of Appellee: counsel), for appellees.

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