text:
    NATIONAL PRIDE OF CHICAGO, INC., Plaintiff-Appellant, v. THE CITY OF CHICAGO et al., Defendants-Appellees.
    First District (6th Division)
    No. 1—88—3133
    Opinion filed October 5, 1990.
    Rehearing denied November 19, 1990.

      Clausen, Miller, Gorman, Caffrey & Witous, P.C., of Chicago (James T. Ferrini, Richard C. Clark, Peter E. Kanaris, Kevin J. Young, and Edward M. Kay, of counsel), for appellant.
    Kelly R. Welsh, Corporation Counsel, of Chicago (Ruth M. Moscovitch and L. Anita Richardson, Assistant Corporation Counsel, of counsel), for appellees.
   PRESIDING JUSTICE LaPORTA

delivered the opinion of the court:

Plaintiff brought suit for declaratory relief and injunction against defendants, contending that the Chicago transaction tax should not apply to self-service car wash facilities such as those plaintiff operates. The suit sought a determination by statutory construction that department of revenue ruling 8 is an erroneous interpretation of the Chicago Transaction Tax Ordinance (Chicago Municipal Code, §200.1—2A5(b) (1984)) and that the imposition of the transaction tax on plaintiff’s self-service car wash facilities violated the uniform tax application requirement of the Illinois Constitution (Ill. Const. 1970, art. IX, §2), exceeded the city’s constitutional home rule authority because it is the levy of an occupation tax on one segment of the car wash industry (Ill. Const. 1970, art. VII, §6(c)), and violated the equal protection clause of the United States Constitution (U.S. Const., amend. XIV, §1) in treating plaintiff’s car wash business differently than competitor car wash facilities.

Cross-motions for summary judgment were filed. The trial court granted defendant’s motion, entering judgment for defendants and against plaintiff on all counts. The court denied plaintiff’s summary judgment motion. Thereafter, the trial court denied plaintiff’s subsequent motion to reconsider, ¡and plaintiff appealed.

Plaintiff raises the following issues on appeal: (1) whether plaintiff’s self-service car wash business constitutes a lease of personal property and as such is a transaction subject to taxation under the city ordinance; (2) whether department of revenue ruling No. 8, which imposes a transaction tax on self-service car wash facilities but exempts automatic or tunnel car washes from the tax, violates the uniformity clause of the Illinois Constitution; (3) whether the department of revenue in treating self-service car washes as businesses subject to the transaction tax while exempting automatic and tunnel car washes from the tax has imposed an unreasonable and arbitrary classification which violates the equal protection clause of the fourteenth amendment of the U.S. Constitution; and (4) whether the transaction tax as applied to plaintiff is an unconstitutional tax on an occupation or service in violation of article VII, section 6(e), of the Illinois Constitution.

In challenging the propriety of revenue ruling 8, plaintiff’s suit against the defendant alleges that the application of the transaction tax to self-service car wash facilities was not authorized by the ordinance. Plaintiff alleged in its complaint that the distinction drawn by the department of revenue (Department) between self-service car wash facilities and the tunnel and automatic car wash facilities unfairly and unlawfully discriminated against plaintiff’s type of facilities. Plaintiff sought a preliminary injunction against defendants to prevent the assessment and collection of the tax on its business earnings.

Defendant filed a general denial of plaintiff’s allegations and denied that plaintiff was entitled to the relief sought. Cross-motions for summary judgment were then filed.

Plaintiff argued, in addition to the allegations of the complaint, that the distinction made by the Department for purposes of taxing coin-operated self-service car washes while exempting automatic and tunnel car washes from the tax was arbitrary and inconsistent with prior ruling 7 of the department of revenue.

Plaintiff also claimed that the 6%-per-cycle increase could not be passed along to the consumer and would result in a 62% decrease in plaintiff’s revenues and that the disparate application of the transaction tax gave other car wash businesses an unwarranted and inappropriate commercial advantage over plaintiff.

Defendants argued in response that the nature of plaintiff’s operation constituted the lease or rental of personal property which is an activity specifically subject to the transaction tax and . that as such the tax does not violate constitutional prohibitions nor is it arbitrarily imposed.

In granting defendants’ motion for summary judgment, and denying plaintiff’s summary judgment motion, the court issued a memorandum decision of its ruling and enunciated certain express findings, specifically:

(1) There is a real and substantial difference between plaintiff’s operation, which provides customers with exclusive use of equipment for a fixed period of time and at a fixed price within the definition of renting, whereas plaintiff’s competitors provided a service. (2) There is no violation of the constitutional requirements of equal protection and uniformity of statutory application. (3) The city has the power to enact the transaction tax and it cannot be judicially stricken. Any change requires city council action. (4) The tax classification imposed by the department of revenue is premised upon a rational and reasonable basis for a proper legislative objective. (5) Plaintiff has not met its burden of proof in challenging the tax. (6) The transaction tax on lease transactions is not a tax on occupations. (7) The court rejected the plaintiff’s arguments in opposition to ruling 8 and found the defendants’ arguments in support of the tax to be persuasive.

Plaintiff moved for reconsideration of the order granting summary judgment in favor of the defendants. Defendants moved for sanctions and reasonable attorneys’ fees. The trial court denied both motions and plaintiff appealed.

The parties agree that in the Chicago metropolitan area there are three general types of commercial car wash facilities, i.e., the coin-operated self-service car wash, the automatic car wash and the tunnel car wash. Basic to a determination of the issues raised is a discussion of the similarities and differences in these three car wash systems.

The customer of the automatic car wash inserts money into a meter or pays an attendant to activate machinery. He then drives his car into a stall, where it remains stationary while car-washing machinery moves around the car. The customer, who has remained in the car, then drives the car out of the stall and dries his own car.

The tunnel car wash customer pays the cashier a fee and his car is connected to equipment that pulls it through a tunnel-shaped facility where it is washed by machines. Some tunnel facilities have attendants who dry the car at the end of the wash process while others have air-drying blowers as part of the wash cycle. The customer may, but need not, remain in the car during the wash process.

The self-service car wash customer drives his car into a bay, inserts coins into a meter which activates washing equipment for a predetermined period of time. The customer directs a high pressure water spray from a wand secured to a hose which is connected by piping running to a pump, electrical system, hot water supply, soap dispensers and other installations in an equipment room. The customer does not operate the equipment in the equipment room but merely handles the wand and directs the water spray which washes the car. Attendants or managers are on duty to instruct the customer in the use of the service.

Of the three, only the self-service customer provides hands-on control of the wand which directs the water to the vehicle, while the other methods of car wash systems function with automatic machines and do not require customer participation except to drive the car to a place in close proximity to the automatic machines. The cost of each is generally comparable to the others. The plaintiff owns and operates seven coin-operated self-service car wash facilities in the City of Chicago and the greater metropolitan area.

Initially we consider the origin and development of the challenged transaction tax ordinance and its application here.

The City of Chicago derives its power to tax from the home rule provisions of the Illinois Constitution (Ill. Const. 1970, art. VII, §§6(a), (e)), which also provides that these powers shall be liberally construed. The Chicago Transaction Tax Ordinance was enacted in 1975 and in the exercise of the city’s home rule power imposed a tax on the lease or rental of certain personal property. Personal property was originally defined in the ordinance by an extensive but not exclusive listing of items, including “leased time on equipment not otherwise itself rented.” Chicago Municipal Code §§200.1, 200.1—2A5(b) (1975).

The ordinance was subsequently amended and as amended on March 7,1984, provided in pertinent part that the tax be assessed on:

“A. Transactions consummated in the City of Chicago involving the lease or rental of any personal property, valued in money, whether received in money or otherwise by an individual person, domestic or foreign association, company, or corporation or certificates of interest in a business conducted by a trustee or trustees, made after the 1st day of January, 1974, whether made upon or shown by the books of the person, association, company, corporation, or trustee or by any paper or agreement or memorandum or other evidence of such lease or rental, when delivery or use also takes place in the City of Chicago.
1. The tax imposed by this Section 200.1 — 2A shall be six percent of such lease or rental price.” (Chicago Municipal Code §200.1-2A (1984).)

The ordinance further provides that the liability for payment of the tax is on the lessee while the duty to remit the tax to the city is on the lessor. The ordinance requires that the tax shall be paid by the purchase of tax stamps from the department of revenue, that the stamps be placed on the formal lease or rental document, or on a memorandum of such lease or rental document or where the transaction is shown only upon the books of the entity involved in the transaction then the stamps shall be affixed to the books. The ordinance requires that every formal lease or rental agreement or memorandum contain date, names of lessor and lessee, a description of the personal property to which it relates and shall bear an identification number on its face, to be entered and recorded in a book of account required to be kept by section 200.1 — 6 of chapter 200.1 of the Municipal Code. Chicago Municipal Code §200.1 — 2 (1984).

The amended ordinance then defines personal property as property falling within the eight general categories of (1) motor and other vehicles; (2) construction and demolition equipment; (3) road construction and maintenance equipment; (4) household and office equipment; (5) clothing; (6) office and computing equipment; (7) “such miscellaneous equipment as musical instruments”; and (8) leased time on equipment not otherwise itself rented. (Chicago Municipal Code §§200.1— 2A5(a), (b) (1984).) The ordinance describes specific examples of property included in each category but states that the ordinance is not limited to those items enumerated.

By amendment to the transaction tax ordinance adopted on March 7, 1984, the following language was added along with other changes not pertinent to this appeal:

“Nor shall this tax apply to any lease or rental upon which the imposition of the tax would violate the Constitution of the United States or the State of Illinois.” Chicago Municipal Code §200.1 — 2A.2 (1984).

The fourteenth amendment to the United States Constitution provides that no State shall deny equal protection of the law to any person within its jurisdiction (U.S. Const., amend. XIV, §1), while the Illinois Constitution provides that “[i]n any law classifying the subjects or objects of non-property taxes or fees, the classes shall be reasonable and the subjects and objects within each class shall be taxed uniformly” (Ill. Const. 1970, art. IX, §2). Section 6 of article VII of the Illinois Constitution prohibits the home rule unit from the imposition of a tax on services or occupations. Ill. Const. 1970, art. VII, §6.

This transaction tax has been judicially tested and found to be constitutional and to be neither an impermissible tax on services nor a tax on occupations. Webster v. City of Chicago (1985), 132 Ill. App. 3d 666, 669, 478 N.E.2d 446 (transaction tax on rental cars and formal clothing); Meites v. City of Chicago (1989), 184 Ill. App. 3d 887, 892, 540 N.E.2d 973 (transaction tax on online database searches); Katz v. City of Chicago (1988), 177 Ill. App. 3d 305, 311, 532 N.E.2d 322 (transaction tax on coin-operated laundry facilities); Wellington v. City of Chicago (1986), 144 Ill. App. 3d 774, 779, 494 N.E.2d 603 (transaction tax on leased cabs); Williams v. City of Chicago (1977), 66 Ill. 2d 423, 432, 362 N.E.2d 1030 (transaction tax on leased cars and real estate transfers).

By the express terms of the transaction tax ordinance the city has the power to delegate administration of the ordinance to the department of revenue. (Chicago Municipal Code §200.1 — 3 (amend. 1981, amend, by deletion 1984).) By city ordinance adopted January 1, 1984, the city established an executive department of municipal government known as the department of revenue to administer and enforce every tax ordinance then current and subsequently to be enacted by the city. (Chicago Municipal Code §§10, 10 — 1 (1984).) The department of revenue was given the power “to make and enforce such reasonable rules and regulations as may be necessary to effectively administer” the city tax ordinances. Chicago Municipal Code, §§10, 10 — 4(a), (b) (1984).

On January 23, 1985, the city council amended the Chicago Municipal Code by adding the Uniform Revenue Procedures Ordinance (Chicago Municipal Code §10.1 (1985)), which provided in pertinent part at subsection 10.1 — 5.A, “As to any tax ordinance, the Director is empowered to adopt, promulgate and to enforce, rules and regulations relating to any matter or thing pertaining to the administration and enforcement of the provisions of such tax ordinance ***.” Thereafter, on February 3, 1987, the city council reenacted and ratified the Uniform Revenue Procedures Ordinance in its entirety. The department of revenue thus was empowered to promulgate rules and regulations pertaining to the administration of the transaction tax.

On April 7, 1985, the director of the department of revenue issued revenue ruling No. 7, which provided in pertinent part:

“Section 6. A transaction involving the transfer of the possession or use of personal property shall be taxable even though only a small portion of the transaction involves the transfer of the possession or use of such property. However, the amount subject to tax shall be determined as provided in this ruling. If the transfer of personal property is incidental to the service provided, in that the use of the personal property has little or no value without the accompanying service and the cost of the personal property is incidental to the price charged for the total transaction, then no lease or rental shall be deemed to have occurred and no portion of the price shall be taxable. Furthermore, if the lessor or his agent furnishes the services of operating the personal property for the lessee so that the lessor or his agent solely uses the property and remains in total possession and control of said property, then no lease or rental shall be deemed to have occurred and no portion of the price shall be taxable. (However, the person who operates a terminal to use a computer is considered the user of that computer, and such use is subject to this tax, even though the physical possession of the computer remains in the hands of the computer owner.) The location of the terminal used by the operator shall be deemed the location of the use of the computer by such operator for purposes of this tax.”

On February 1, 1987, the director of the department of revenue issued revenue ruling 8, which extended the activities which are subject to a transaction tax to:

“The use of a clothes washing or car washing machine, where the possession does not transfer but where a charge is made for the period of use of the machine by the user. This applies even for coin-operated machines. However, automatic car washing machines operated and controlled by the owner or manager of such machines, and where the customers only drive their automobiles into and out of such machines, are not subject to this tax. See Chicago Transaction Tax Ruling No. 7, Section 6.”

Following the issuance of ruling 8, the department of revenue imposed and attempted to collect the transaction tax from plaintiff based on its determination that, by the definitions of ruling 8, self-service car wash facilities are subject to the transaction tax. This litigation followed and is a challenge to the propriety of ruling 8.

First, we consider whether plaintiff’s self-service ear wash business constitutes a lease of personal property and as such is a transaction subject to the city ordinance. The transactions taxed under the Chicago Transaction Tax Ordinance are those “[transactions consummated in the City of Chicago involving the lease or rental of any personal property.” Chicago Municipal Code §200.1 — 2A (1984).

Plaintiff argues that the use of its car wash facility does not involve the leasing of personal property contemplated by the Chicago Transaction Tax Ordinance. Defendants, however, argue that use of the wand through which the water, soap, and other cleaning agents are pumped when customers deposit coins and with which they direct the water to wash their cars constitutes the leasing of personal property.

Plaintiff contends that in ruling No. 7, issued in 1985, the department of revenue clarified the definition of personal property which, when leased, is taxable to the customer. The ruling stated in part:

“If the transfer of personal property is incidental to the service provided, in that the use of the personal property has little or no value without the accompanying service and the cost of the personal property is incidental to the price charged for the total transaction, then no lease or rental shall be deemed to have occurred and no portion of the price shall be taxable.” Chicago Department of Revenue Ruling No. 7 (1985).

In applying the criteria of ruling 7 to the National Pride operation, plaintiff contends that the wand used by its customers to direct the water spray has little or no value without the accompanying water service supply, that its cost is incidental to the price charged for the total transaction and therefore by application of ruling 7 the use of its facilities must be found to be nontaxable as a lease transaction under the city ordinance.

All three car wash systems provide a bay, stall or tunnel, soap, cleaning agents, water, wax, pump, piping and electricity. Their operations differ only in the fact that the automatic washing machinery, with brushes and other equipment attached, is used in tunnel and automatic car washes while the hose, wand, and hand brushes are used by the customer in plaintiff’s facilities. Since the machinery in the competitor facilities is automatic, it is activated by an attendant who pushes a button or buttons and, except for some facilities which offer the additional service of vacuuming or cleaning the interior and/or hand drying the exterior, the extent of the service rendered by them involves pushing buttons to activate the system. Plaintiff's customer holds the wand, directs the water spray and, if needed, uses available brushes to scrub his vehicle by hand. The customer, rather than an attendant, pushes the button to activate the water supply. The wand and hose by themselves have no practical value to the customer without the underlying water supply and equipment, nor would they have a use to the customer if removed from the premises.

We next consider the application of the transaction tax to the business operations of specific taxpayers. Plaintiff contends that department of revenue ruling 8, which declares that self-service, coin-operated car-washing machines are subject to the tax while exempting from the tax automatic car-washing machines operated and controlled by the owner, violates the uniformity clause of the Illinois Constitution (Ill. Const. 1970, art. IX, §2), the equal protection clause of the U.S. Constitution (U.S. Const., art. XIV, §1), and that the department has created an arbitrary and unreasonable classification in assessing the tax against National Pride.

The defendant argues and the trial court found that the tax classification of revenue ruling 8 is premised upon clear differences between plaintiff’s operation and those of its competitors in that plaintiff is engaged in the lease or rental of equipment while its competitors provide a service and for that reason there exists a real and substantial difference between them which permits the assessment of the tax on plaintiff’s operation and the exemption from the tax for plaintiff’s competitors.

In explaining its rationale for finding no violation of equal protection and uniformity constitutional requirements here (Ill. Const. 1970, art. IX, §2), the trial court referred to the analysis of the Searle court (Searle Pharmaceuticals, Inc. v. Department of Revenue (1987), 117 Ill. 2d 454, 468, 512 N.E.2d 1240), which held that an appropriate test is that (1) the classification be based on a real and substantial difference between those taxed and those not taxed and (2) the classification must bear a reasonable relationship to the legislative objective or to public policy. The Searle court rejected the argument that the party challenging a tax classification had the burden of negating every conceivable basis which would support the classification. We note, however, that in reaching its final conclusion, the trial court here found that the plaintiff had not met its burden, i.e., “to negate every conceivable basis which might support” the classification. Thus, the trial court did not apply the Searle test to the challenged classification, but instead found that plaintiff had not met the standards of the rejected test.

Here the court found there was a marked distinction between the operations of the plaintiff and that of its commercial competition. The court concluded that plaintiff’s customers rented equipment, whereas plaintiff’s competition rendered a service to their customers.

The court cited the Arizona case of State Tax Commissioners v. Peck (1970), 106 Ariz. 394, 476 P.2d 849, solely for the definition of the term “renting” as applied to coin-operated washing machines and dryers and automatic car-washing equipment, all operated by customers. The Peck court held that, within the meaning of the Arizona statute, where the customer has exclusive use of the equipment on owner’s premises for a fixed period of time for a fixed amount of money, such exclusive use and control comes within the meaning of the term “renting” in the statute. However, the Arizona statute in question differs from the Chicago transaction tax. The Arizona statute provided that a tax of 2% be paid on gross proceeds of sales or gross income from the business of persons engaging in, among others, the “[sjales of tangible personal property to be leased or rented to a person engaged in the business of leasing or renting such tangible personal property for a consideration shall be deemed to be resale sales.” Ariz. Rev. Stat. Ann., §42—1314A2 (1980).

We find the Arizona case has no application here for the reasons that the Peck controversy concerned the imposition of a tax on the sale of equipment to one who is in the business of leasing such property for a consideration, and the tax is imposed on the operator of the business and not on the ultimate customer who uses the coin-operated equipment, as in our case.

In addition, the Arizona court does not differentiate or discuss the application or nonapplication of the challenged tax on the various kinds of car wash facilities as exist in the present case. The statutory language construed in Peck differs substantially from the language of the Chicago ordinance and ruling 8.

We agree with the trial court’s statement that the city had the power to enact the transaction tax ordinance and that the ordinance may not be judicially stricken but requires action by the city council to change its provisions. Our inquiry here focuses on the determinations made by the department of revenue in its administrative ruling 8 and the validity of the trial court’s conclusion that the tax classification defined in that ruling is premised on real and substantial differences in car wash operations which would justify disparate tax treatment among competitors.

The trial court relied on the holding in Katz v. City of Chicago (1988), 177 Ill. App. 3d 305, 311-12, 532 N.E.2d 322, in finding that ruling 8 was a proper exercise of the administrative authority given to the department of revenue. In Katz, the court considered the argument, that in addition to using the owner’s washing machine the customer also used plaintiff’s real property, furnishings, and auxiliary facilities such as plumbing, fixtures, electricity and areas for waiting and parking and therefore the use of the machine was incidental to the laundromat service. The Katz court noted that the original transaction tax ordinance enacted in 1974 provided that taxable personal property included washers and dryers, and that in 1981 the amendment to the ordinance deleted washers and dryers from the list of examples of personal property. In contrast we note that self-service car washes were never specifically listed among those examples of personal property transactions subject to the tax.

The Katz court cited as authority for its ultimate conclusion of taxability the case of Springfield Hotel-Motel Association v. City of Springfield (1983), 119 Ill. App. 3d 753, 457 N.E.2d 1017. In Springfield, the court found a hotel tax to be valid and that it was not an invalid tax on services. The court reasoned that the maid services, television, telephone and other services were incidental to the rental of the hotel room. The Katz court concluded that a similar result was required as to the use of laundromat facilities. However, we agree with the distinction drawn by plaintiff between the washing machine used by the Katz customer and the wand used by the National Pride customer. The washing machine, if removed from the owner’s premises, still has a practical use, whereas plaintiff’s wand has no use to the customer if removed from the underlying equipment.

Legislative enactments are presumed to be constitutional. This rule applies equally to statutes adopted by the General Assembly and to ordinances adopted by the City of Chicago in the exercise of its home rule power. (O’Connor v. A & P Enterprises (1980), 81 Ill. 2d 260, 266, 408 N.E.2d 204.) The language of the act or ordinance should be liberally construed to achieve its legislative purpose with reasonable doubts resolved in favor of its validity, (O’Connor, 81 Ill. 2d at 266.) The agency charged with administration of the statute or ordinance has the authority to adopt rules interpreting the legislation for the guidance of those persons involved in the assessment procedure and to assure a uniform application of the statute or ordinance. O’Connor, 81 Ill. 2d at 266.

While administrative rules interpreting an act or ordinance are given substantial deference as an informed source of guidance as to legislative intent, they are not binding on the court in its determination of validity of the ruling except to the extent that they follow the statute. Katz, 177 Ill. App. 3d at 311; Canteen Corp. v. Department of Revenue (1988), 123 Ill. 2d 95, 104-05, 525 N.E.2d 73; Du-Mont Ventilating Co. v. Department of Revenue (1978), 73 Ill. 2d 243, 247, 383 N.E.2d 197; Farm Progress Show Concessions v. Department of Revenue (1980), 83 Ill. App. 3d 228, 233, 403 N.E.2d 1242.

Administrative rulings can neither limit, enlarge nor amend the scope of the statute beyond the clear import of the legislative language used (Canteen, 123 Ill. 2d at 104-05; Chicago Health Clubs, Inc. v. Picur (1988), 124 Ill. 2d 1, 11, 528 N.E.2d 978; Du-Mont, 73 Ill. 2d at 247-48) and courts are not bound by them except to the extent that they fall within the parameters of the statute or ordinance which the ruling purports to interpret.

In determining the scope of the ordinance, the court must determine legislative intent, beginning with the language of the ordinance itself (Canteen, 123 Ill. 2d at 104), and must then consider the purposes to be attained by the ordinance. Canteen, 123 Ill. 2d at 104.

It is clear that the purpose of the ordinance here is to impose a tax on transactions consummated in the City of Chicago involving (a) the lease or rental of personal property, and (b) transfers of title to or possession of real property. (Chicago Municipal Code §200.1—2 et seq. (1984).) The ordinance definition of personal property subject to the tax as used in section 200.1 — 2A includes, but is not limited to: (1) motor and other vehicles; (2) construction and demolition equipment; (3) road construction and maintenance equipment; (4) household and office equipment; (5) clothing; (6) office and computing equipment; (7) “such miscellaneous equipment as musical instruments” (Chicago Municipal Code §200.1 — 2A5(a) (1984)); and (8) to “leased time on equipment not otherwise itself rented, such as” a specified variety of office and computer equipment “whether [the] leased time is fully or partially utilized” (Chicago Municipal Code §200.1 — 2A5(b) (1984)).

In Williams (66 Ill. 2d 423), the supreme court examined the statutory language of the transaction tax ordinance to determine legislative intent and held:

“Viewed in its entirety the ordinance, in our judgment, does not express an intention to tax lease or rental transactions involving any and all personal property; instead, it has as its objective the taxation of transactions involving the lease or rental of those types of personal property defined in subsection 5. We find no inconsistency or ambiguity in these provisions and do not concur with the argument that the definition contained in subsection 5 is somehow contrary to the intent and object of the tax or that it reflects a mistaken or irrational omission which creates an unreasonable and arbitrary, classification of transactions subject to tax.” (Emphasis added.) 66 Ill. 2d 434-35.

In comparing plaintiff’s coin-operated self-service car wash operation to the subsection 5 criteria of the ordinance, we conclude that the customer’s use of the wand, hoses and hand brushes for a fixed price, at a fixed location and for a fixed amount of time does not constitute the lease or rental of (1) a motor or other vehicle, (2) construction or demolition equipment, (3) road construction and maintenance equipment, (4) household and office equipment, (5) clothing, (6) office and computing equipment, or (7) miscellaneous equipment such as musical instruments.

When testing the National Pride car-washing operation against the criterion “leased time on equipment not otherwise itself rented,” we find that all of the ordinance examples are office equipment, i.e., calculators, computers, data processing equipment, tabulating equipment, accounting equipment, copying machines, duplicating machines or addressing machines, and bear not even a remote resemblance to the wand, hose and brushes offered by plaintiff for its customers’ use, nor does plaintiff’s operation fit the category of “such miscellaneous equipment as musical instruments.” We find, therefore, that the plain language of the statute does not encompass a car-washing operation such as we have in this case.

We next consider the application of the transaction tax to the business operations of specific taxpayers. Plaintiff contends that ruling 8 issued by the department of revenue, which declares that plaintiff’s business operation is subject to the tax while exempting its competitors from the transaction tax, violates the uniformity clause of the Illinois Constitution as well as the equal protection clause of the Federal Constitution, and that the Department has created, an unreasonable and arbitrary classification in assessing the tax against National Pride. Article IX of the Illinois Constitution provides that “[i]n any law classifying the subjects or objects of nonproperty taxes or fees, the classes shall be reasonable and the subjects and objects within each class shall be taxed uniformly.” Ill. Const. 1970, art. IX, §2.

While legislative bodies have broad discretion to establish classifications which define objects of taxation, in order to withstand a constitutional challenge the classification must bear a clear relationship to the legislative intent, must be reasonable and must be based on real and substantial differences between those taxed and those not taxed, and shall not be arbitrary. Satellink of Chicago, Inc. v. City of Chicago (1988), 168 Ill. App. 3d 689, 523 N.E.2d 13; Federated Distributors, Inc. v. Johnson (1988), 125 Ill. 2d 1, 15, 530 N.E.2d 501; Searle Pharmaceuticals, Inc. v. Department of Revenue (1987), 117 Ill. 2d 454, 468, 512 N.E.2d 1240.

The Searle court described the equal protection clause of the Federal Constitution (U.S. Const, amend. XIV, §1) as a general limitation on the power of State legislative bodies to tax and noted that to a great extent the courts defer to legislative judgment in classifications relating to tax matters (Searle, 117 Ill. 2d at 466). The court adds, however, that by contrast the uniformity requirements of the Illinois Constitution impose a specific limitation on that governmental body in •the exercise of its taxing power (Searle, 117 Ill. 2d at 466-67), which requires that the more rigorous standard of reasonableness in classification be met. Searle, 117 Ill. 2d at 467.

The Searle court defined the appropriate test to be met in challenging a classification as requiring a showing that the classification was not based on a real and substantial difference between those taxed and those not taxed, and a showing that the classification does not bear a reasonable relationship to the object of the legislation or to public policy. (Searle, 117 Ill. 2d 468.) The court rejected as an inappropriate test the proposition that plaintiff was required to negate every conceivable basis which might support the classification. Searle, 117 Ill. 2d at 468.

The trial court here found that ruling 8 interpreted the language of the ordinance of the transaction tax to include the use of a car-washing machine in the category “where the possession of the machine does not transfer, but where a charge is made for the period of use of the machine by the user” even if coin-operated, while exempting “automatic car-washing machines operated and controlled by the owner or manager of such machines, and where the customers only drive their automobiles into and out of such machines” and found that this was a proper exercise of the department of revenue’s power to interpret the ordinance. The trial court upheld the city’s assessment of the tax against National Pride. We disagree.

The trial court based its conclusion that plaintiff’s operation differed from those of its competitors on the facts that the National Pride customer had exclusive use of the equipment for a fixed period of time and for a fixed amount of money, found that exclusive control and use is singular to plaintiff’s operation and that the distinction in ruling 8 was both rational and practical. We submit that in competitors’ automatic and tunnel car washes, where only one car can be washed in the stall or tunnel at a given time, each wash takes a prescribed period of time and payment is a fixed amount, such operation also meets the definition of exclusive use of the equipment for a fixed period of time for a fixed amount of money.

We find therefore that the disparate treatment between plaintiff’s operation and those of its competitors is not based on exclusive use of equipment for a fixed period of time and for a fixed amount of money but rather is based solely on the self-service aspect of plaintiff’s operation.

We find that ruling 8 is an expansion of the identified categories of personal property transactions intended to be taxed, which violates the restriction on the department of revenue to interpret but not to expand or amend the ordinance. We also find that ruling 8 makes an artificial distinction between plaintiff and its competitors based solely on the customer’s hands-on participation in plaintiff’s wash process. For purposes of the city ordinance for transaction taxes we hold that such distinction is arbitrary and is based on no real or substantial difference and that ruling 8 is an improper exercise of the authority of the department of revenue to interpret the ordinance.

We conclude that the department of revenue’s disparate tax treatment between plaintiff and its commercial competitors violates the legislative intent of the ordinance and the uniformity requirements of the Illinois Constitution and that the trial court finding that real and substantial differences exist between them is not supported in the record.

Having determined that the classification of ruling 8 as applied to plaintiff’s car wash operation was arbitrary and did not meet the reasonable and substantial differences test of Searle, we need not consider the question of whether the tax as applied to plaintiff was a tax improperly applied to an occupation or service.

For all of the foregoing reasons, the judgment of the trial court is reversed.

Reversed.

EGAN and RAKOWSKI, JJ., concur.


source: Caselaw Access Project

author: JUSTICE McNAMARA

license: Public Domain

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. EDGAR LOUIS ORTIZ et al., Defendants-Appellants.
    First District (6th Division)
    Nos. 1 — 87—3687,1—88—2517 cons.
    Opinion filed December 7, 1990.
    —Rehearing denied February 5, 1991.

      Jeffrey Urdangen and Andrea M. Lubelfeld, both of Chicago, for appellants.
    Cecil A. Partee, State’s Attorney, of Chicago (Renee Goldfarb, James E. Fitzgerald, and Janet C. Mahoney, Assistant State’s Attorneys, of counsel), for the People.
   JUSTICE McNAMARA

delivered the opinion of the court:

Following separate bench trials, defendants, Angel Torres and Edgar Luis Ortiz, each were found guilty of murder, aggravated kidnapping, and armed robbery. They each were sentenced to concurrent prison terms of 70 years, 30 years, and 15 years, respectively.

In their consolidated appeal, defendants contend that they were not proved guilty of murder beyond a reasonable doubt. Ortiz also contends that he was deprived of effective assistance of counsel; that alibi witnesses were improperly impeached; and that the State improperly introduced evidence of other crimes in connection with the Ortiz arrest.

The pertinent facts are as follows. Iris Rosario, age 23, testified that on October 7, 1986, at approximately 11 p.m., she was with her sister Raquel, age 12, Gustavo Trevino, and defendants. They were watching television and getting high at Torres’ house. Iris stated that Ortiz was extremely upset about the killing of his brother, Gilberto, who had been shot to death that evening. Iris was Trevino’s girlfriend.

Iris testified further that around 11:30 p.m., defendants and Trevino left for about an hour and returned with three guns: an Uzi submachine gun, a .38 caliber gun, and a .25 caliber gun, and began cleaning bullets with grain alcohol. According to Iris, defendants said they were going to hunt for Disciple gang members because they had killed Gilberto. Iris also testified that Torres was a chief in the War Lords and that Ortiz and Trevino were members of that gang. Iris stated that defendants and Trevino invited her and Raquel to cruise around with them because the police would not stop or search them if the girls were in the car.

Iris and Raquel rode in the front seat of the car driven by Torres, with Ortiz and Trevino in the back seat, to the Disciples’ neighborhood. They cruised around for at least an hour, until they saw a man dressed in beige pants, a black jacket and a black and white Playboy hat. The man was later identified as the victim, William Agron. Torres pulled the car over and asked Agron if he had some joints. Agron replied that he did and told them to wait while he went inside the house.

Iris testified further that when Agron emerged from the house, Torres got out of the car carrying his .25 caliber gun, opened the back door, and forced Agron into the back seat of the car. Torres then drove back to their neighborhood, during which time Ortiz and Trevino searched Agron’s pockets and took some joints and his wallet. Ortiz and Trevino then searched Agron’s body for tattoos that would indicate he was a member of the Disciples, but found none. Iris learned that the man’s name was William and that he was from Puerto Rico.

Iris testified that defendants decided to kill Agron. After returning' to the neighborhood, Torres drove to the alley. At that point, defendants took Agron from the back seat and into the alley.

Trevino drove Iris and Raquel back to the girls’ house, approximately two or three houses from the alley. Iris stated that Trevino and Raquel remained in front of the house, while she walked back towards the alley where defendants and Agron were standing. She saw defendants shoot at Agron; Agron tried to run away from them and towards her. Defendants continued shooting and chased Agron, who eventually collapsed between a light pole and a garbage can in the alley. Defendants then returned to their car and drove away. Later that day, Torres threatened to kill anybody who spoke to the police about the killing of Agron. (Trevino was also charged in connection with this murder; however, his case was severed and he is not involved in this appeal.) Raquel also testified for the State and corroborated the testimony of Iris.

Officer Tolemo testified that on October 8, 1986, at approximately 4:30 a.m., he responded to a call that there were “shots fired” at 1913 West Potomac in Chicago. Tolemo and his partner drove to the alley behind that location, where they discovered the body of a man near a light pole and next to a garbage can, in beige pants and a black jacket, with a black and white Playboy hat near his head. The parties stipulated that Dr. Nancy Jones, the medical examiner, concluded that Agron died as a result of multiple gunshot wounds. Two of the bullets recovered from his body were fired from a .25 caliber gun, while the other two bullets were fired from either a .357 or a .38 caliber gun.

Flavio Ortiz, who had known defendants since grammar school, also testified for the State. (Flavio did not admit any knowledge to the police about Agron’s death until he and his wife were arrested for possession of a controlled substance, around October 24, 1986.) On October 8, 1986, Flavio went to Ortiz’ apartment to give him a haircut. Ortiz stated that on the previous evening, in retaliation for his brother’s death, he drove to an area frequented by the Disciples with Torres, Trevino, Raquel and Iris. Flavio testified that Ortiz told him that after they found a man in that neighborhood, they forced him into the car, drove to an alley, and that he and Torres both shot him. Flavio testified further that later in the day he was with Torres, who told him that he would kill anyone, including the 12-year-old girl, if they told the police about Agron’s murder.

Iris Rosario testified that during October 1986, she was using $400 to $500 worth of cocaine per day. She had been using cocaine on the evening of Agron’s death. Iris testified that she used cocaine over the past four years. Similarly, there is evidence in the record that Raquel also had a history of drug use.

On October 24, 1986, Iris was taken into police custody for questioning about the murder. When she was first questioned, she admitted her involvement as well as that of Torres in the murder; however, her fear of Ortiz prevented her from disclosing his identity. Iris testified that later that day, Officer Paulnitsky threatened that he would take her children away if she did not reveal the identity of the second man involved in the murder. At that point, Iris told them of Ortiz’ involvement. After five days in police custody, Iris also told police that her boyfriend, Trevino, and Raquel were also present on the night of the murder.

On February 2, 1987, Iris gave a statement to Investigator Schwartz, in which she denied that defendants murdered Agron; instead, she stated that she had lied before the grand jury because she was afraid that Paulnitsky would take her children away from her. On July 21, 1987, after testifying at a pretrial hearing on July 10, Iris again denied that defendants had killed Agron or intimidated her and stated that she had identified the defendants only because the police had threatened to take her children. At trial, however, Iris testified that her denial of defendants’ involvement in the murder on July 21 was the result of threats Torres had made to her while she was walking to her mother’s house.

On February 12, 1987, Schwartz also took a statement from Raquel concerning her version of the events on the evening of the murder. In that statement, Raquel did not mention the car ride with defendants, Trevino and Iris. Instead, Raquel stated that she was at home on the evening of the murder with Trevino and the defendants, who did not leave until 3:30 a.m. Raquel also told Schwartz that neither defendant carried any weapons that evening and that she had learned about Agron’s murder through rumor. Raquel testified further that she did not tell Schwartz the truth because she did not know for whom he was working and that she was afraid that Torres would hurt her or a member of her family.

Iris and Raquel had been relocated for their protection by the State three months prior to trial. Although both girls denied ever returning to their neighborhood during that period, the defense introduced witnesses who stated that they had seen them at their mother’s house during that time.

Dr. Henry Lahmeyer, a physician and psychiatrist at the University of Illinois, testified for the defense as an expert witness in the field of drug abuse. Dr. Lahmeyer testified that a cocaine addict’s ability to tell the truth is reduced and that cocaine usage can produce mental confusion as well as memory distortion. After reviewing police reports and taped interviews of Iris Rosario, Dr. Lahmeyer opined that she was addicted to cocaine.

Several alibi witnesses testified on behalf of defendants. Jane Ortiz, the woman with whom Torres was living, testified that on October 7 Torres went out for a few beers with friends, but returned home around midnight and did not leave the house again that evening. Several members of Ortiz’ family, including his mother, sister, brother, and cousin, testified that on the evening of October. 7, he was with them at his mother’s apartment mourning the death of Gilberto.

In their appeal, defendants initially contend that they were not proved guilty of murder beyond a reasonable doubt. Specifically, defendants contend that because Iris and Raquel Rosario were drug addicts and accomplices to the murder, their testimony provided an insufficient basis for conviction.

While uncorroborated testimony of an accomplice can be a sufficient ground upon which the trier of fact may base a conviction, it is testimony that must be cautiously scrutinized on appeal. (People v. Baynes (1981), 88 Ill. 2d 225, 430 N.E.2d 1070; People v. Pittman (1973), 55 Ill. 2d 39, 302 N.E.2d 7.) Moreover, where a witness has hopes of reward from the prosecution, that testimony should not be accepted unless it carries with it an absolute conviction of its truth. People v. Gnat (1988), 166 Ill. App. 3d 107, 519 N.E.2d 497.

The trial court considered defense counsel’s arguments that Iris and Raquel were accomplices and that their testimony should be given little or no weight. Nevertheless, the court found their testimony credible as to the details of the homicide. It is well settled that in a bench trial it is the function of the trial court to determine the credibility of the witnesses and the weight to be accorded their testimony, to resolve inconsistencies and conflicts therein, and to render its decision accordingly. (People v. Shore (1984), 129 Ill. App. 3d 443, 472 N.E.2d 512, citing People v. Berland (1978), 74 Ill. 2d 286, 385 N.E.2d 649.) A reviewing court will not substitute its judgment for that of the trial court on these matters, nor will we reverse a conviction unless the evidence is so unreasonable, improbable, or unsatisfactory as to leave a reasonable doubt of defendant’s guilt. People v. Kline (1982), 92 Ill. 2d 490, 442 N.E.2d 154.

The State asserts that Iris and Raquel were not accomplices, but even assuming that they were accomplices, we find sufficient evidence to support the trial court’s judgment. Iris’ description of the events surrounding Agron’s murder is corroborated by the physical evidence, particularly the number and caliber of guns used by defendants, the location of the victim’s body between the light pole and the garbage can, as well as her testimony concerning the victim’s name and description of his clothing. The testimony of Flavio Ortiz and Raquel also supports Iris’ description of the circumstances surrounding Agron’s murder.

Torres also contends that the trial court’s reliance on the testimony of Iris and Raquel was misplaced because they were using drugs on a regular basis at the time of the murder. Torres points to the inconsistencies between the initial statements Iris and Raquel made to Investigator Schwartz and their trial testimony as evidence of their inability to be truthful and that drug addiction negatively affects an individual’s ability to perceive and recall events.

This court has consistently held that while a narcotics addict’s testimony is suspect, it does not have to be disbelieved, especially when it is corroborated by other witnesses. (People v. Smith (1968), 41 Ill. 2d 158, 242 N.E.2d 198.) Although there is a need for close scrutiny of such testimony (People v. Galloway (1974), 59 Ill. 2d 158, 319 N.E.2d 498), it may be sufficient to sustain the conviction if it is credible under the surrounding circumstances. (People v. Norman (1963), 28 Ill. 2d 77, 190 N.E.2d 819; People v. Taylor (1977), 53 Ill. App. 3d 241, 368 N.E.2d 699.) In this case, the record reveals that the court was cognizant of the witnesses’ drug history and assessed the credibility of the witnesses with proper scrutiny. We find that both defendants were proved guilty of murder beyond a reasonable doubt.

Ortiz contends that certain trial errors deprived him of a fair trial. He initially maintains that he was denied his sixth amendment right to effective assistance of counsel. Ortiz points out that his defense counsel utilized prior inconsistent statements made by Iris and Raquel for impeachment, but he failed to direct the trial court to consider the prior inconsistent statements as substantive evidence.

We find the contention to be without merit. In order to prevail under a claim of ineffective assistance of counsel, a defendant must prove two elements: (1) that his attorney failed to perform as a reasonably competent attorney, and (2) there exists a reasonable probability that, but for counsel’s unprofessional errors, the outcome of the trial would have been different. Strickland v. Washington (1984), 466 U.S. 668, 694, 80 L. Ed. 2d 674, 698,104 S. Ct. 2052, 2068.

In this case, Ortiz admits that defense counsel properly impeached Iris and Raquel with their inconsistent statements given to Investigator Schwartz prior to trial. We do not find that defense counsel’s failure to specifically notify the judge that these statements could be used as substantive evidence would have produced a different result at trial, as required by the second element of the Strickland standard.

Next, Ortiz contends that he was denied a fair trial by the impeachment of the alibi witnesses concerning their failure to notify the police of Ortiz’ innocence. Ortiz also claims that the trial court’s restriction on the rehabilitation of Torres’ alibi witness on redirect examination was improper.

Although the alibi witnesses learned of defendants’ arrest at different times, ranging from a few days to several months later, they did not contact the authorities. Under cross-examination, all of the alibi witnesses were questioned regarding their failure to come forward and notify the police of the defendants’ innocence. On redirect examination of Jane Ortiz, an alibi witness for Torres, the trial court sustained the State’s objection to defense counsel’s attempt to have her explain her failure to come forward with the alibi prior to trial.

This court has consistently held that the scope and extent of cross-examination rest primarily within the discretion of the trial court, and only when clearly abused, resulting in manifest prejudice to the complaining party, will a reviewing court interfere with the trial court’s ruling. (People v. Outlaw (1979), 75 Ill. App. 3d 626, 645, 394 N.E.2d 541, 555, citing People v. Ganci (1978), 57 Ill. App. 3d 234, 240, 372 N.E.2d 1077.) Moreover, it is proper to allow the State to cross-examine a witness about the circumstances of an alibi to determine whether the alibi was recently fabricated and whether the witness previously told the same story. (People v. Green (1990), 204 Ill. App. 3d 461, 465.) We recognize the difficulties involved for a witness to contact the authorities about an accused’s innocence. Nevertheless, we believe that particularly here, where the alibi witnesses were members of Ortiz’ family, it was proper to cross-examine them about their failure to inform the authorities of Ortiz’ alibi.

Ortiz also maintains that the trial court erred in not permitting defense counsel on redirect examination to ask Jane Ortiz, an alibi witness for Torres, to explain her failure to notify the authorities of Torres’ alibi. We believe Ortiz was not prejudiced by the restrictions placed on a Torres witness. We agree, however, that on redirect examination defense counsel should have been permitted to rehabilitate the previous testimony of the alibi witness. Nevertheless, in this bench trial, the error was harmless.

Ortiz finally contends that the admission of evidence concerning his arrest denied him due process. He argues that the evidence had no probative value other than to show his predisposition to violence.

Officer Diego Flores testified that when he and his partner knocked on Ortiz’ apartment door to arrest him, Ortiz opened the door with a gun in his hand. When Flores ordered Ortiz to drop the gun, he obeyed and stated, “I thought you guys were the D’s.” (Disciples.)

An accused is entitled to have his guilt or innocence determined solely with reference to the crime with which he is charged. (People v. Connors (1980), 82 Ill. App. 3d 312, 402 N.E.2d 773.) Evidence of other crimes is admissible only if it is relevant to establish any fact material to the prosecution such as knowledge, intent, motive, design or identification. People v. Stewart (1984), 105 Ill. 2d 22, 473 N.E.2d 840.

In this case, the trial court properly permitted introduction of narrative evidence of the arrest, not to establish Ortiz’ propensity to commit crime, but as relevant circumstantial evidence pertaining to Ortiz’ implication in Agron’s murder. Ortiz threatened the police with a gun in the mistaken belief they were Disciples. Ortiz killed Agron because he thought that Agron was a Disciple, and he believed the Disciples had killed his brother. Because the evidence concerning his arrest connected him to the murder, it was properly admitted.

For the foregoing reasons, the judgments of the circuit court of Cook County are affirmed.

Judgments affirmed.

EGAN and RAKOWSKI, JJ., concur.


author: JUSTICE EGAN

text:
    RONALD S. SAMUELS, d/b/a Washington, Kennon, Hunter and Samuels, Plaintiff-Appellee, v. CHICAGO HOUSING AUTHORITY, Defendant-Appellant (Washington, Kennon, Hunter and Samuels et al., Counterdefendants).
    First District (6th Division)
    No. 1 — 90—1607
    Opinion filed December 7, 1990.

      Schiff, Hardin & Waite, of Chicago (Mark C. Friedlander, Barry S. Alberts, Jay Williams, and Helen T. Wilson, of counsel), for appellant.
    Ronald S. Samuels, of Chicago, appellee pro se.

   JUSTICE EGAN

delivered the opinion of court:

On November 22, 1988, the plaintiff, Ronald S. Samuels (Samuels), filed a four-count complaint against the defendant, the Chicago Housing Authority (CHA), seeking to recover unpaid legal fees amounting to $252,866.99; thereafter, the plaintiff filed, then voluntarily dismissed, then refiled a fifth count seeking punitive damages of $2 million from the CHA for alleged willful, malicious, and outrageous conduct involving a scheme to obtain legal services from the plaintiff’s firm without paying for such services. The CHA denied that it breached its contract with Samuels’ firm, Washington, Kennon, Hunter & Samuels (the firm), and set forth as an affirmative defense that it was entitled to set off $850,000 against any recovery by the plaintiff due to the firm’s legal malpractice in handling an unrelated lawsuit against the CHA. The alleged acts of malpractice were charged to Kennon, a member of the firm. On October 19, 1989, the trial judge struck the CHA’s affirmative defenses but granted the CHA leave to file a counterclaim for a setoff based on the alleged malpractice.

On November 21, 1989, the plaintiff filed a motion for partial summary judgment of $252,886.99 on two counts of his complaint: breach of contract and an account stated. The plaintiff based his motion on the CHA’s asserted admissions that the contract was made, that services were performed by the firm, that invoices were sent to the CHA, and that defense counsel admitted to the court that the invoices were approved for payment. On January 10, 1990, new counsel appeared for the CHA. They subsequently filed an appearance on January 24, 1990. At the hearing on the motion for summary judgment on January 10, the plaintiff stated, in part, as follows:

“We are just asking Your Honor[,] since we have a question of perhaps involuntary bankruptcy based upon the failure to pay these outstanding obligations and the fact that they are admitted!] to grant the motion for summary judgment].
* * *
We suggest to this Court that as we had suggested in Count V of the complaint, that it is the purpose of the CHA, it is the pattern and practice of the CHA not to pay their bills and to extend small vendors into a situation such as the plaintiff is in wherein he will be placed in involuntary bankruptcy because of failure of the CHA to pay monies that they have deposited into the * * * Bank saying that if they lose the case, then they will pay.” (Emphasis added.)

At the same hearing, the trial judge addressed the CHA’s request for an extension of time to file responses to outstanding motions and stated:

“I don’t blame Mr. Samuels here, you know. It has just been one constant battle to get the CHA to participate in this litigation to the full extent. ***
If you people [Schiff, Hardin & Waite, the CHA's new attorneys] are going to have the same problem with [the CHA as that had by Neal Gerber and Eisenberg, the CHA’s old firm], get out of this case fast. It is their [the CHA’s] fault really. They have been tinkling around with this man all this time. He is entitled to this money or he isn’t. He is entitled to have this decided.”

The judge granted the plaintiff’s motion for summary judgment and simultaneously granted the CHA until February 9 to file a motion to reconsider the order. In responding to the extension of time granted to the CHA, Samuels stated, “What the impact of this will be is to place the plaintiff in involuntary bankruptcy through no fault of the plaintiff(Emphasis added.)

On February 9, 1990, the CHA did file a motion to reconsider the partial summary judgment, as well as a motion for leave to file a counterclaim instanter, almost four months after the judge had already granted leave to file a counterclaim. The CHA’s proposed counterclaim sounded in malpractice, breach of contract, fraud, and racketeering (alleging violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c) (1988) (RICO)) against the firm. Compensatory damages were claimed under the malpractice count to be $837,000; under the fraud count the CHA sought $837,000 in compensatory damages and $1 million in punitive damages; under the RICO count the CHA sought treble damages totalling $2,511,000 plus attorney fees. On March 12, 1990, the trial judge held a hearing on the motion to reconsider. At the hearing, the CHA’s counsel made clear that it was not disputing its obligation to pay $173,174.49 of Samuels’ claimed fees; however, the CHA maintained that enforcement of a judgment for that amount should be stayed until its counterclaim was resolved. Samuels contended that he had supplied the CHA with proof of insurance coverage and that the CHA knew he had $25 million in malpractice coverage. The CHA disputed these representations.

The judge granted the CHA leave to file its counterclaim instanter and stated as follows:

“I am going to vacate the prior order of summary judgment for [$252,886.99]. I am going to enter today a final order for partial summary judgment on behalf of the Plaintiffs [sic] in the amount of [$173,174.49], I am going to stay the execution and enforcement of that order for thirty days.
In the meantime, after thirty days you can grab the money if you can and you can buy a building with it. The man said that he would be bankrupt if he didn’t get some money out of this thing; that is what he said, not that he was bankrupt but he has all of these people that are after him. So the [$173,174.49] that is owed. Let’s get that thing out of this case. Let’s get it paid. We will litigate the question of the difference between that and the [$252,886.99] and all of the other stuff later on.
In the meantime, after thirty days you get ahold of Pearl [Insurance Company] and you find out whether there was coverage, because if there is $25 million coverage, I want that money paid fast.” (Emphasis added.)

The written order of March 12, 1990, does not address the subject of proof of insurance coverage.

On April 11, 1990, the CHA filed a motion for modification of the March 12 judgment order under section 2 — 1203 of the Code of Civil Procedure (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 1203) seeking to stay enforcement of the judgment until final resolution of the CHA’s counterclaim. The CHA asserted that Samuels failed to demonstrate that he possessed any insurance coverage applicable to the CHA’s counterclaim and instructed his insurance carrier not to produce documents to the CHA. At a hearing on this motion on May 9, 1990, Samuels denied that lack of proof of insurance was an appropriate matter on which to bring a section 2 — 1203 motion, but nevertheless presented the court with a lawyers’ professional liability policy naming Samuels, Kennon, and the firm as insureds; the judge found that the policy evidenced $1 million of coverage for each claim and in the aggregate for the period of August 15,1984, to August 15,1985. The judge ruled:

“What’s before me today is shall I permit *** the original Plaintiffs to go ahead and try and collect that money. With a judgment entered *** against the Defendant on behalf of Plaintiffs, these Plaintiffs are entitled to their money.
The only argument *** is ‘Well, gee, Judge, if you let them collect this money they’ll go ahead and they will spend it. They’ll blow it. God knows what they will do with it, and we won’t be able to collect on the other side.’
If this was an initial suit filed by the CHA against Larry Kennon and Ron Samuels and they wanted me to tie up property of these people, they’d come in here for writ of attachment. You won’t get to first base with a writ of attachment in this.
There’s no showing here that either of these gentlemen are going to flee the jurisdiction. There’s no showing here that either of these gentlemen are going to be totally impecunious when the time comes to pay this judgment if it has to be paid.
And there’s no showing that this coverage does not exist, and I see no reason to stay the enforcement of this judgment. This money is due to these people, and they’re entitled to it. Whatever may be recovered later on is a chance you take when you get into litigation.” (Emphasis added.)

On May 17, 1990, the CHA filed an emergency motion for reconsideration of the ruling on the section 2 — 1203 motion and for an order compelling disclosure of insurance coverage. This motion included as an exhibit the proof of insurance presented to the trial judge by Samuels at the earlier hearing. The CHA argued that these materials did not provide proof of insurance but were “merely certificates evidencing possible insurance coverage for dates between 8/15/83 to 8/15/84, 8/15/84 to 8/15/85, and 8/15/85 to 8/15/86.” (Emphasis in original.)

At the hearing on this motion on May 31, 1990, the CHA argued that “[i]t would make no legal or logical sense” for the court to deny a stay of enforcement after the court had ordered Samuels to produce proof of insurance and he failed to do so. The judge noted that “I was only trying to help you people out to get the documents which I thought were readily available.” The judge also noted that there was no proof that Samuels was financially unstable, stating “for all I know Mr. Samuels may take his money and wisely invest it in the stock market and be a wealthy man. *** Admittedly, he has debts, but if he pays off his debtors he’ll have less debts and he’ll have more assets.” The judge and parties later stated:

“THE COURT: *** This Court has determined the Chicago Housing Authority owes this man this money. What he is going to do with it, that’s his problem. That may ultimately be your problem, but you owe him this money and this money ought to be paid.
If he pays his creditors and avoids bankruptcy he is just as well off as he is right now. If I don’t order you to pay him it may throw him into bankruptcy and he will throw in your claim and discharge that and you will be gone.
All motions are denied. This judgment is absolutely, totally final. There will be no further motions for reconsideration.
You may proceed, Mr. Samuels, to enforce your judgment. If you have to steal the building of the CHA to do so, go do it whatever way you have to do it.
MR. SAMUELS: Thank you, your Honor.
THE COURT: He is owed the money, Jay, pay the money.
Mr. [Jay] WILLIAMS [attorney for the CHA]: Respectfully-
THE COURT: Pay the money and God help you.”

The CHA has appealed both the order of May 9, 1990, denying its section 2 — 1203 motion for a stay of the enforcement of the order of March 12, 1990, granting partial summary judgment and the order of May 31, 1990, denying its motion for reconsideration of the May 9 order.

Supreme Court Rule 192 states:

“When the entry of a summary judgment will not dispose of all the issues in the case, the court may, as the justice of the case shall require, either (1) allow the motion and postpone the entry of judgment thereon; (2) allow the motion and enter judgment thereon; or (3) allow the motion, enter, judgment thereon, and stay the enforcement pending the determination of the remaining issues in the case. If a party resisting the entry of a summary judgment relies upon an affirmative demand against the moving party for an amount less than the latter’s demand, judgment for the difference may be entered and enforced.” (Emphasis added.) (107 Ill. 2d R. 192.)

The Historical and Practice Notes of the rule state:

“Under the present rule, if the party moving for summary judgment is entitled to such a judgment, the court must grant the motion but is accorded a broad discretion, to be exercised as the justice of the case requires, to stay the entry of judgment or to stay the enforcement of any judgment actually entered until all the remaining issues in the case are determined. These provisions are designed to permit the court to prevent possible unfair advantage which, under some circumstances a party entitled to summary judgment might have if he were able to secure and enforce a judgment in his favor while other issues in the same case were being decided.” (Emphasis added.) Ill. Ann. Stat., ch. 110A, par. 192, Historical and Practice Notes, at 223 (Smith-Hurd 1985).

The parties have cited, and our research has discovered, no Illinois case directly discussing Rule 192 in the present context. In the principal Illinois case cited by the CHA, Suriano v. EMI Services Corp. (1989), 181 Ill. App. 3d 789, 537 N.E.2d 836, the trial court granted summary judgment on a counterclaim. The plaintiff appealed the summary judgment while his own underlying case proceeded. The appellate court affirmed the summary judgment but sua sponte instructed the trial court to stay enforcement of the summary judgment until final judgment was entered in the underlying case. The applicability of Supreme Court Rule 192 was never discussed. The CHA has cited many cases from other jurisdictions, none of which, with one exception, we deem factually apposite. (See generally Proceeding for Summary Judgment as Affected by Presentation of Counterclaim, 8 A.L.R.Sd 1361 (1966 & Supp. 1989).) That excepted case, which was also cited by the plaintiff and which we will discuss further, supports the plaintiff’s position. Sunbeam Corp. v. Morris Distributing Co. (1976), 55 A.D.2d 722, 389 N.Y.S.2d 173.

A plain reading of Rule 192 and the Historical and Practice Notes reveals, and the CHA agrees, that the decision on whether to grant enforcement of summary judgment in the face of a counterclaim is a matter firmly within the trial judge’s discretion and that a trial judge’s discretionary power to stay the enforcement of a summary judgment involves an inquiry into the justice of the case. It is clear from the comments of the trial judge in this case that he considered the positions of the parties and the relative fairness of staying or enforcing the judgment. As one example, the judge stated, “If [Samuels] pays his creditors and avoids bankruptcy, he is just as well off as he is right now. If I don’t order you [the CHA] to pay him it may throw him into bankruptcy and he will throw in your claim and discharge that and you will be gone.” The judge weighed the positions of the parties and concluded that fairness required that the judgment be enforced.

The CHA contends that the judge abused his discretion and hinges its position on two assertions of alleged facts: (1) the plaintiff failed to establish adequate insurance coverage of the damages sought under the counterclaim; and (2) the plaintiff allegedly admitted that he was bankrupt or was about to become bankrupt.

We agree that the plaintiff failed to establish insurance coverage of the damages sought under the counterclaim. The judge ordered the plaintiff to provide insurance policies for the period from 1984 through 1988. The plaintiff provided some evidence of insurance coverage only through 1986. Contrary to the plaintiff’s argument in the trial court, the counterclaim is based on alleged acts of malpractice which occurred in 1987. (When the plaintiff made that argument in the trial court, the CHA made no response.) Consequently, we repeat, the plaintiff did not establish insurance coverage for the period in question. But that is not the end of the matter. The judge’s remarks when he ordered the plaintiff to provide copies of the insurance policy do not indicate that he was of the opinion that the plaintiff had to establish insurance coverage for the entire claim before he would deny the stay of enforcement. Nor do we interpret his final remarks to be a change of position. He said that when he ordered the plaintiff to produce proof of insurance, he “was only trying to help [the CHA] out to get the documents which [the judge] thought were readily available.” He pointedly added that there was no proof that the plaintiff was financially unstable.

Implicit in the CHA’s argument is the contention that absence of malpractice insurance in an amount necessary to satisfy the maximum judgment sought under the counterclaim (in this case over $2,500,000) entitles the CHA to a stay as a matter of law. We do not accept the validity of that contention. Moreover, we note that in its memorandum in the trial court, the CHA admitted that it was probable that any insurance the plaintiff might have would not in any event provide coverage for the punitive damages alleged under the fraud count and treble damages under the RICO count. Thus, under the CHA’s own argument, a general malpractice policy held by most attorneys for common law malpractice, in any amount, would not be sufficient. Before leaving this point, another observation is appropriate. We note that at the CHA’s hearing on the motion to reconsider, the plaintiff said that the CHA’s counterclaim had “not survived the motion to dismiss” and that the parties were “on the amended counterclaim.” In its brief in this court, the CHA has attached a second amended counterclaim filed September 10, 1990, five months after the notice of appeal was filed. That second amended counterclaim is in two counts, legal malpractice and breach of contract. We infer from the record that the trial judge determined that the fraud and RICO counts were meritless. We think the merits of a counterclaim are a factor a trial judge may consider in the exercise of his discretion when deciding whether to stay enforcement of summary judgment.

With respect to the second part of the defendant’s argument, that is, that the plaintiff was bankrupt or about to become bankrupt, we judge that the evidence is insufficient to support that claim, as the judge found. The alleged repeated admissions of bankruptcy, which we have set forth above, constituted mere argument by the plaintiff that, unless the judgment was paid, the firm might be forced into involuntary bankruptcy; moreover, the plaintiff alleged in count Y of his complaint that the CHA had a pattern and practice of withholding payment and forcing small vendors into involuntary bankruptcy. As the trial judge noted, the CHA offered no proof that the plaintiff was financially unstable to justify a stay on the enforcement of the judgment.

In Sunbeam Corp. v. Morris Distributing Co. (1976), 55 A.D.2d 722, 389 N.Y.S.2d 173, the defendant-wholesaler admitted its failure to pay the plaintiff-manufacturer for certain goods, and the court awarded the plaintiff summary judgment for $458,351.91. The defendant, however, argued on appeal that its counterclaim against the plaintiff alleging breach of distributorship agreements and seeking an amount in excess of the judgment granted required a stay of the entry and enforcement of the judgment. The appellate division held that

“while [these counterclaims] are not totally unrelated to plaintiffs’ actions for goods sold and delivered, they are plainly distinct and separate therefrom and involve alleged damages of completely different characters and arising out of different occurrences [citations]. Moreover, there is no indication that plaintiffs are financially unstable so as to warrant any stay of the judgment.” (Emphasis added.) (55 A.D.2d at 723, 389 N.Y.S.2d at 174-75.)

We judge that the facts of Sunbeam are applicable here and its holding appropriate. See also Arimizu v. Financial Security Insurance Co. (Haw. App. 1984), 679 P.2d 627, 634 (The appellate court affirmed the trial judge’s exercise of discretion in granting the plaintiff’s motion for summary judgment despite the existence of a counterclaim alleging a setoff, noting that, among other factors, the trial judge considered that “there was nothing in the record to indicate that [the plaintiff] would be judgment proof if and when [the defendant] obtained a judgment on its counterclaim”).

In sum, the CHA, as the movant, had the burden of establishing its right to a stay. The trial judge concluded that it had not maintained that burden. The record does not justify the substituting of our judgment for that of the trial judge.

For these reasons, the judgment of the circuit court is affirmed.

Judgment affirmed.

LaPORTA, P.J., and RAKOWSKI, J., concur.


author: JUSTICE CAMPBELL

text:
    STEVEN R. DOBROFSKY, Plaintiff, v. RICHARD J. PRENDERGAST, LTD., Defendant-Appellee (Louis Wolf et al., Defendants-Appellants; William J. Harte, Ltd., Defendant).
    First District (1st Division)
    No. 1 — 88—2624
    Opinion filed December 10, 1990.

      Richard L. Hoffman, of Chicago, for appellants.
    Richard J. Prendergast, Ltd., of Chicago (Richard J. Prendergast, James Prendergast, and Joseph E. Tighe, of counsel), for appellee.
   JUSTICE CAMPBELL

delivered the opinion of the court:

In this interpleader action, defendants-appellants Louis Wolf, Joseph Berke and Benitta Berke appeal from the circuit court of Cook County’s grant of summary judgment in favor of defendant-appellee Richard Prendergast, Ltd., regarding the payment of attorney fees for services rendered to defendants-appellants and denying defendant-appellant Joseph Berke’s petition for change of venue. Defendants-appellants argue that the trial court erred in denying the petition for change of venue and in granting summary judgment regarding the contested fees. For the following reasons, we affirm.

The facts giving rise to this appeal are as follows. Defendant-appellee Prendergast is a law firm which had served as counsel for defendants-appellants in at least two matters in the circuit court of Cook County. In the first matter, defendants-appellants retained the services of defendant-appellee Prendergast and defendant William J. Harte, Ltd. In the second matter, which concerned a professional malpractice claim arising from the prosecution of the first matter, defendants-appellants entered into a contingent fee agreement with Prendergast. This second matter was settled for $800,000 and later dismissed with prejudice in the circuit court.

Later, defendants-appellants refused to go forward with the terms of the settlement. The defendant in the second matter filed a motion to enforce the settlement. A hearing on the motion was held on April 28, 1988. The hearing was attended by defendants-appellants Joseph and Benitta Berke, plaintiff Steven Dobrofsky (who had filed an appearance for defendants-appellants after the settlement), and representatives from Prendergast, Harte, and the firm representing defendant in the second matter. At this time, those present reached an agreement which permitted the exchange of releases, negotiation of the settlement check and the disposition of the settlement funds. However, this agreement provided that the sum of $140,180 be held in escrow by plaintiff Dobrofsky. These funds represented attorney fees payable to Prendergast and Harte. Prendergast and defendants-appellants later made competing claims on these escrowed funds.

Plaintiff Steven Dobrofsky filed a complaint pursuant to the inter-pleader statute (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 409) to settle these competing claims. Prendergast and Harte then filed their answer, counterclaim and third-party complaint. Plaintiff later successfully petitioned the court for a change of venue, and the case was reassigned to Judge O’Brien. On June 2, 1988, in the absence of Judge O’Brien, Judge Shields entered an order which stated that the third-party complaint would be treated as a counterclaim and cross-claim. On June 24, 1988, in the absence of Judge O’Brien, Judge Green ordered plaintiff to deposit the escrowed funds with the clerk of the circuit court of Cook County.

Thereafter, on July 15, 1988, in the absence of Judge O’Brien, Judge Gillis set cross-motions for summary judgment and Prendergast’s motion to direct payment of the funds for a hearing on July 21, 1988. At this hearing, defendant-appellant Joseph Berke presented a petition for change of venue pursuant to section 2 — 1001(a)(2) of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 1001(a)(2)), alleging fear of prejudice on the part of the judge. The court denied the petition, held that the interpleader action had been properly brought, awarded costs to plaintiff and allowed plaintiff to file a petition for attorney fees. Prendergast later obtained an amendment to the court’s order in response to the clerk’s request that the order specify the exact amount to be paid. After defendants-appellants’ motion to reconsider was denied, they filed their notice of appeal.

The first issue on appeal is whether the trial court erred in denying defendant-appellant Joseph Berke’s petition for a change of venue. Defendants-appellants argue that it was error to deny a petition which was timely filed and complied with the statutory requirements. Defendant-appellee contends that defendant-appellant did not comply with the statutory requirement that reasonable notice of the petition be given to the adverse party.

Section 2 — 1001 of the. Illinois Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, pars. 2 — 1001(a)(2), (c), (e)) provides that a change of venue may be granted:

“Where any party or his or her attorney fears that he or she will not receive a fair trial in the court in which the action is pending, because *** the judge is prejudiced against him or her ***. In any such situation the venue shall not be changed except upon application, as provided herein ***. * * *
(c) Every application for a change of venue by a party or his or her attorney shall be by petition *** and *** shall not be granted unless it is presented before trial or hearing begins and before the judge to whom it is presented has ruled on any substantial issue in the case ***. * * *
(e) The application may be made to the court in which the case is pending, reasonable notice thereof having been given to the adverse party or his or her attorney.”

The provisions of section 2 — 1001 are to be liberally construed in favor of granting a change of venue, especially in cases where judicial prejudice is alleged. (Weisberg v. Pickens (1989), 193 Ill. App. 3d 558, 549 N.E.2d 849; Oberman v. Byrne (1982), 104 Ill. App. 3d 1046, 433 N.E.2d 1024.) A litigant generally has absolute right to change venue where the motion alleges judicial prejudice and conforms to the statutory requirements. Stoller v. Paul Revere Life Insurance Co. (1987), 163 Ill. App. 3d 438, 517 N.E.2d 5; Intini v. Schwartz (1979), 78 Ill. App. 3d 575, 397 N.E.2d 84.

One such statutory requirement is that reasonable notice of the motion be given to the adverse party. A trial court may, in its discretion, deny a motion for change of venue if this requirement has not been met in a given case. (Weisberg, 193 Ill. App. 3d at 561, 549 N.E.2d at 860.) Absent an abuse of that discretion, this court will not disturb the trial court’s ruling on the reasonableness of the notice. Intini, 78 Ill. App. 3d 575, 397 N.E.2d 84.

In the present case, the record does not contain a report of proceedings from the hearing on the motion. Consequently, this court has no basis for holding that the trial court abused its discretion in denying the motion. Robinson v. Robinson (1986), 140 Ill. App. 3d 610, 488 N.E.2d 1349.

Moreover, in Weisberg v. Pickens (1989), 193 Ill. App. 3d 558, 549 N.E.2d 859, this court discussed prior cases regarding the reasonableness of notice. For example, Buckingham Corp. v. Modern Liquors, Inc. (1973), 16 Ill. App. 3d 534, 306 N.E.2d 655, affirmed a finding of unreasonableness where the notice of motion and petition for change of venue was not presented to the adverse party until the day before trial. We also noted that in Hutson v. Wood (1914), 263 Ill. 376, 105 N.E. 343, our supreme court reached a similar result where notice was not given until the day before the hearing on the motion to the trial court.

This case falls within the scope of these precedents. There is no record of any attempt to notify defendant-appellee of the petition prior to the hearing itself. Accordingly, defendants-appellants have failed to demonstrate that the trial court erred in denying the petition for change of venue.

Defendants-appellants next argue that the trial court committed reversible error by simultaneously ruling both on whether the action was proper and on the right to possess the funds. They contend that the trial court must first hold a hearing to determine whether plaintiff’s interpleader action was properly brought. This hearing would be required before ordering plaintiff to deposit the contested funds with the clerk and holding a hearing on the ultimate disposition of the funds.

Defendants-appellants cite City National Bank & Trust Co. v. Dunham (1940), 306 Ill. App. 354, 28 N.E.2d 812, in which this court stated:

“We think that a mistake was made in the trial of this case by not following [supreme court] procedure by having a preliminary hearing to determine whether or not the bill of inter-pleader was properly filed and, if so, have the money deposited with the court so that it would be free to handle it and decree it and dispose of it while it was in its physical possession.” Dunham, 306 Ill. App. at 362, 28 N.E.2d at 815.

A close examination makes it clear that this court was primarily concerned with the fact that the funds were never deposited with the court. The majority stated:

“[W]e do not see how the court could consider this bill as a bill of interpleader. The money involved is still in the hands of the plaintiff, and no payment of the money has been made to the clerk of the court.” (Dunham, 306 Ill. App. at 362, 28 N.E.2d at 815.)

The dissent argued:

“Here the procedure was irregular in that no interlocutory decree was entered. *** The fact that the fund was not deposited is immaterial as no question is raised by anyone as to the availability of such fund when the rightful owner thereof is determined.” Dunham, 306 Ill. App. at 364, 28 N.E.2d at 816 (Burke, J., dissenting).

In short, in Dunham, the failure to hold two hearings was reversible error because the court did not have control over the funds and therefore might have been unable to award them to the proper party.

By contrast, in the present case, the funds at issue were deposited with the clerk of the circuit court of Cook County pursuant to Judge Green’s June 24, 1988, order. Therefore, the fact that the court ruled on both the propriety of the interpleader action and the issue of the possession of funds on July 21, 1988, was a mere informality, not an abuse of discretion.

The third and final issue on appeal is whether summary judgment was properly granted. On this issue, this court’s function is to decide whether the trial court properly determined that there were no issues of material fact and that judgment for the moving party was correct as a matter of law. E.g., Futurevision, Inc. v. Dahl (1985), 139 Ill. App. 3d 61, 487 N.E.2d 127.

Prendergast argues that he was entitled to the escrowed funds under the terms of a settlement agreement among the parties evidenced by a transcript dated April 28, 1988. The transcript contains discussion to the effect that Prendergast would be entitled to the funds after plaintiff met with the attorney for defendant in the second matter to ascertain that, as of the date that Prendergast became involved in the settlement negotiations, there had not been a settlement offer in excess of $100,000. Defendants-appellants, however, argue that a material issue of fact is created by plaintiff’s answer and affidavit in opposition to summary judgment, in which plaintiff states that the transcript is incomplete because more than one party was speaking at once and because the funds were not to be paid until there was full disclosure by Prendergast.

To defeat a motion for summary judgment, an opposing affidavit must recite facts which support the elements of its claim; mere conclusions or statements on information and belief are insufficient. (E.g., Brewer v. Daubert Chemical Co. (1979), 72 Ill. App. 3d 718, 391 N.E.2d 110.) Here, neither plaintiff nor defendants-appellants have indicated in what respect the transcript is incomplete. It thus follows that neither party has demonstrated that the trial court erred in granting the motion.

For the aforementioned reasons, the judgment of the trial court is affirmed and remanded for further proceedings consistent with this opinion.

Judgment affirmed and remanded.

O’CONNOR and MANNING, JJ., concur.

      Defendant William Harte, Ltd., is not a party to this appeal.


author: PRESIDING JUSTICE BUCKLEY

text:
    ALAN MOMNEY, d/b/a/ Asher Auto Sales, Plaintiff-Appellee, v. JIM EDGAR, Secretary of State, Defendant-Appellant.
    First District (1st Division)
    No. 1 — 89—0875
    Opinion filed December 10, 1990.

      Neil F. Hartigan, Attorney General, of Springfield (Robert J. Ruiz, Solicitor General, and William D. Frazier, Assistant Attorney General, of Chicago, of counsel), for appellant.
    Anthony Sammarco, of Forest Park, for appellee.
   PRESIDING JUSTICE BUCKLEY

delivered the opinion of the court:

The Secretary of State (the Secretary) brings this appeal on the circuit court’s decision reversing the Secretary’s order which revoked the 1988 used vehicle dealer license of Alan J. Momney, doing business as Asher Auto Sales (plaintiff). The circuit court affirmed the Secretary’s finding that plaintiff violated section 5 — 501(a) of the Illinois Vehicle Code (the Code) (Ill. Rev. Stat. 1987, ch. 951/2, par. 5 — 501(a)) by failing to maintain records at his place of business, but vacated the revocation sanction and imposed a six-month license suspension. No cross-appeal having been filed by plaintiff, the only issues before this court on the Secretary’s appeal are whether the circuit court erred in vacating the administrative sanction and whether the circuit court had authority to reduce the administrative sanction.

Since 1974, plaintiff has operated the Asher automobile dealership at 2855 North Cicero in Chicago, Illinois. He was issued a 1988 Illinois “Dealer Certificate of Authority DL977” in 1988, authorizing him to deal in used vehicles. On July 30, 1988, the Secretary revoked plaintiff’s license, finding that, on January 26, 1988, plaintiff failed to maintain an established place of business, failed to maintain required records of the acquisition and disposition of vehicles, and failed to produce evidence of his right to possess 23 vehicles on the premises in violation of sections 5 — 102(d) and 5 — 401.2 of the Code (HI. Rev. Stat. 1987, ch. 95i/2, pars. 5 — 102(d), 5-401.2(a)(A)(4), (a)(A)(7), (a)(A)(8), (d)).

Prior to January 26, 1988, the Secretary’s Sergeant Serafini visited plaintiff’s place of business and examined plaintiff’s police book — a ledger recording the acquisition and disposition of vehicles. He directed plaintiff to update the book’s entries for disposition of automobiles. Plaintiff also was questioned, on approximately six occasions prior to January 26, 1988, regarding suspicions that he was giving favors to certain of the Secretary’s investigators. On January 26, 1988, Serafini and another sergeant again questioned. plaintiff regarding these suspicions and Serafini inspected plaintiff’s police book. Following the interview and inspection, Ross Finnelly, an investigator for the Secretary, conducted a “routine” dealer inspection.

From plaintiff’s police book, Finnelly noted 30 vehicles which were listed as having been purchased and indicated no disposition. The 30 vehicles were not present on the lot. Plaintiff informed Finnelly that the vehicles had been sold and that the entries were not completed due to his sister’s absence from work. Finnelly also discovered 33 vehicles on the lot for which plaintiff produced only 10 certificates of title. Plaintiff explained to Finnelly that some of the titles were at his mother’s home and that others were at Insurers and Lenders Auto Auction, where they were being held until checks cleared on purchased vehicles. The investigators declined plaintiff’s requests that they verify these facts.

At the administrative hearing, plaintiff explained that he did not keep his records at his place of business overnight because of frequent burglaries at his business. Before this incident, no complaint had been lodged against plaintiff in the 14 years he had operated Asher Auto Sales.

The Secretary first contends that the circuit court erred in vacating its order revoking plaintiff’s license. Under section 5 — 501 of the Code, the license of a used vehicle dealer “may be denied, revoked or suspended” if the Secretary finds that the dealer has failed “to file or produce for [the Secretary] any application, report, document or other pertinent books, records, documents, letters, contracts, required to be filed or produced under [the] Code.” (Ill. Rev. Stat. 1987, ch. 951/2, par. 5 — 501(a)(6).) A reviewing court has authority to review a sanction imposed under this section pursuant to its authority to review questions of law presented by the record as provided in section 3 — 110 of the Administrative Review Law. (Ill. Rev. Stat. 1987, ch. 110, par. 3 — 110; Walter Spector Co. v. Illinois Liquor Control Comm’n (1985), 133 Ill. App. 3d 95, 478 N.E.2d 635.) This authority, however, is limited to determining whether the agency acted unreasonably or arbitrarily or chose a sanction which is unrelated to the purpose of the statute. Ballin Drugs, Inc. v. Department of Registration & Education (1988), 166 Ill. App. 3d 520, 519 N.E.2d 1151.

In reaching its ruling, the circuit court noted that the “technical violation” related to “nothing more than sloppy bookkeeping” and that plaintiff’s conduct did not adversely affect the public. The court also stated that no person could reasonably conclude that the record-keeping deficiencies were a “cover” for a stolen car operation, where 20 of the 30 vehicles listed on the “Notice of Hearing” were more than seven years old and only four were less than five years old. Plaintiff also points out on appeal that no consumers were defrauded and no evidence exists that plaintiff engaged in an illicit auto sales scheme.

The purpose of section 5 — 501 is to protect the consumer, as well as to prevent crime. (Lindsey v. Edgar (1984), 129 Ill. App. 3d 718, 473 N.E.2d 92.) This section’s record-keeping requirements for automobile dealers protect consumers, not only from acts of fraud upon the public, but also from the perils of the inability to ascertain the prior ownership history of a purchased vehicle as a result of improper documentation of transactions by careless dealers. We do not agree, therefore, with the circuit court’s characterization of the violation here as a “technical violation.” Nonetheless, under the circumstances present here, we cannot conclude that the court erred in finding the revocation sanction to be unrelated to the purposes of the Code.

In allowing the Secretary to choose between the sanction of revocation and suspension, the legislature recognized that sanctions less severe than the ultimate revocation sanction would further the purposes of the Code in certain instances. The record here discloses no indication of an illicit auto sales scheme. Plaintiff’s offered explanations for his failure to have the certificates of title and books at his place of business, albeit not excusing his failures, were potential mitigating circumstances which the State investigators made no efforts to verify. The record further indicates that plaintiff operated his auto sales business for 14 years before this incident without having been charged with any activity sanctionable under the Code. We agree that, under these circumstances, the sanction of revocation is not related to the purposes of the statute.

The Secretary next contends that the circuit court lacked authority to impose its own sanction on plaintiff’s violation. It is established that the scope of a circuit court’s statutorily granted authority to review an administrative decision is limited to those powers expressly delegated by the legislature. (Admek v. Civil Service Comm’n (1958), 17 Ill. App. 2d 11, 149 N.E.2d 466.) The Administrative Review Law grants the circuit court the power to “affirm or reverse the decision in whole or in part” and, in the event of an agency hearing, to state the questions requiring further hearing or proceedings on remand (Ill. Rev. Stat. 1987, ch. 110, pars. 3 — lll(aX5), (a)(6)), but is silent as to the court’s power to modify a penalty imposed by the agency. A long line of authorities, however, have held that the determination of the appropriate sanction is one to be made by the agency, not the courts. (See, e.g., Citrano v. Department of Registration & Education (1980), 90 Ill. App. 3d 937, 414 N.E.2d 74; Epstein v. Civil Service Comm’n (1977), 47 Ill. App. 3d 81, 361 N.E.2d 782.) Despite acknowledgement of these authorities, plaintiff asserts that the circuit court had authority to reduce the sanction here.

The cases cited by the circuit court in its memorandum opinion as supporting the judicial reduction of administrative sanctions, in fact, bolster the Secretary’s position. None of the courts in these cases reduced a sanction imposed by an administrative agency. (See Fox v. Civil Service Comm’n (1978), 66 Ill. App. 3d 381, 383 N.E.2d 1201; Kirsch v. Rochford (1977), 55 Ill. App. 3d 1042, 371 N.E.2d 899; Parkhill v. Civil Service Comm’n (1978), 58 Ill. App. 3d 291, 374 N.E.2d 254; Kreiser v. Police Board (1976), 40 Ill. App. 3d 436, 352 N.E.2d 389; Caliendo v. Goodrich (1975), 34 Ill. App. 3d 1072, 340 N.E.2d 560.) Contrarily, in Fox (66 Ill. App. 3d 381, 383 N.E.2d 1201), the court, upon reversing the administrative sanction imposed in the case before it, stated that the suitable alternative punishment to be imposed was beyond its province.

Accordingly, the six-month suspension order imposed by the circuit court is vacated, and the case is remanded to the administrative agency for further proceedings consistent with this opinion.

Affirmed in part; reversed in part, and remanded.

O’CONNOR and MANNING, JJ., concur.