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Supreme Court Date: 2018.09.10
10:27:51 -05'00'
Parmar v. Madigan, 2018 IL 122265
Caption in Supreme PAMINDER S. PARMAR, Appellee, v. LISA MADIGAN, Attorney
Court: General, et al., Appellants.
Docket No. 122265
Filed May 24, 2018
Decision Under Appeal from the Appellate Court for the Second District; heard in that
Review court on appeal from the Circuit Court of Du Page County, the Hon.
Bonnie M. Wheaton, Judge, presiding.
Judgment Appellate court judgment reversed.
Circuit court judgment affirmed.
Counsel on Lisa Madigan, Attorney General, of Springfield (David L. Franklin,
Appeal Solicitor General, and Carl J. Elitz, Assistant Attorney General, of
Chicago, of counsel), for appellants.
Eric H. Jostock and Nicholas P. Hoeft, both of Chicago, for appellee.
William D. Heinz, Richard P. Steinken, and Clifford W. Berlow, of
Jenner & Block LLP, of Chicago, for amicus curiae Board of Trustees
of the University of Illinois.
Justices 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 no tax was due. The
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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 enacted 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 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.”
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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¶ 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 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).
¶ 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
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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 enacted 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.
¶ 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)).
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¶ 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, ¶ 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 (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
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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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 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.
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.
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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 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.
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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¶ 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. 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 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
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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 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
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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.
¶ 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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Parmar v. Madigan
Combined Opinion