Austin Gardens, LLC v. City of Chicago Department of Administrative Hearings , 2018 IL App (1st) 163120 ( 2018 )


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    Date: 2018.04.12
    Appellate Court                         10:42:33 -05'00'
    Austin Gardens, LLC v. City of Chicago Department of Administrative Hearings,
    
    2018 IL App (1st) 163120
    Appellate Court         AUSTIN GARDENS, LLC, Plaintiff-Appellant, v. THE CITY OF
    Caption                 CHICAGO DEPARTMENT OF ADMINISTRATIVE HEARINGS,
    Defendant-Appellee.
    District & No.          First District, Sixth Division
    Docket No. 1-16-3120
    Filed                   January 19, 2018
    Decision Under          Appeal from the Circuit Court of Cook County, No. 15-L-050060; the
    Review                  Hon. Joseph M. Sconza, Judge, presiding.
    Judgment                Orders vacated.
    Counsel on              Saul, Ewing, Arnstein & Lehr, LLP, of Chicago (Hal R. Morris, David
    Appeal                  C. Dunkin, and Michael J. Pollock, of counsel), for appellant.
    Edward N. Siskel, Corporation Counsel, of Chicago (Benna Ruth
    Solomon, Myriam Zreczny Kasper, and Suzanne M. Loose, Assistant
    Corporation Counsel, of counsel), for appellee.
    Panel                   JUSTICE CUNNINGHAM delivered the judgment of the court, with
    opinion.
    Justices Connors and Delort concurred in the judgment and opinion.
    OPINION
    ¶1       In this administrative review action, plaintiff-appellant Austin Gardens, LLC (Austin
    Gardens), appeals the decision of the City of Chicago Department of Administrative Hearings
    (DOAH) which denied Austin Gardens’ motion to vacate a 2013 default judgment. For the
    following reasons, we conclude that the DOAH lacked jurisdiction to consider the motion.
    ¶2                                          BACKGROUND
    ¶3        This appeal stems from two separate actions brought by the City of Chicago (City) alleging
    building code violations at real property owned by Austin Gardens. In April 2005, the City
    initiated an action in the municipal division of the circuit court of Cook County (the circuit
    court action) alleging certain building code violations at Austin Gardens’ property at 300 to
    308 North Central Avenue in Chicago. The circuit court action remained pending until 2014.
    ¶4        Meanwhile, in May 2013, the City initiated a separate action in the DOAH (the DOAH
    action) by filing an administrative complaint alleging that a March 2013 inspection revealed 13
    violations at two properties owned by Austin Gardens, including the same property that was
    the subject of the circuit court action. Certain of the building code ordinances that were cited in
    the administrative complaint were also the subject of alleged violations in the circuit court
    action. In addition to Austin Gardens, the administrative complaint named each of the
    company’s individual members as respondents in the DOAH action.
    ¶5        Austin Gardens did not appear at subsequent hearing dates in the DOAH action on June 25,
    2013, and August 27, 2013. As a result, on August 27, 2013, an administrative law judge (ALJ)
    entered a default order in favor of the City in the DOAH action (the default judgment) that
    specified $500 fines for each of 12 separate building violations, plus $40 in costs, for a total
    judgment of $6040. The default judgment, which was mailed to Austin Gardens on August 30,
    2013, specified that “You have 21 days from the above mailing date to file a motion to
    set-aside (void) this default order for good cause with the [DOAH].”
    ¶6        Separately, in April 2014, the City and Austin Gardens entered into an “Agreed Order of
    Injunction and Judgment” (Agreed Order) resolving the circuit court action. Under the Agreed
    Order, Austin Gardens agreed to pay $2000 in full settlement of the allegations in that action.
    The Agreed Order provided that the matter was “dismissed by agreement of the parties” and
    that it was a final order. The Agreed Order contains no explicit reference to the DOAH action
    or the default judgment.
    ¶7        Austin Gardens subsequently discovered the existence of the default judgment. On
    December 5, 2014, Austin Gardens filed a “motion to set-aside” the default judgment (motion
    to vacate). That motion asserted that Austin Gardens had not appeared in the DOAH action
    because it “thought this case had been taken care of” due to the circuit court action.
    ¶8        On December 19, 2014, an ALJ of the DOAH held a hearing on Austin Gardens’ motion to
    vacate. At the hearing, Austin Gardens argued that it was impermissible for the City to initiate
    the DOAH action in 2013, while the circuit court action was pending for building code
    violations at the same property. The ALJ rejected Austin Gardens’ argument and declined to
    disturb the default judgment, to the extent it was entered against Austin Gardens. However, the
    ALJ independently concluded that the individual members of the company should not be held
    personally liable for the fines assessed against Austin Gardens and thus decided to “dismiss”
    -2-
    the DOAH action with respect to those individuals. Accordingly, on December 19, 2014, the
    ALJ entered an order denying the motion to vacate that specified, “Default Judgment stands as
    to [Austin Gardens] LLC only. All other parties are dismissed.”
    ¶9         On January 23, 2015, Austin Gardens filed a complaint in the circuit court of Cook County,
    pursuant to the Administrative Review Law (735 ILCS 5/3-101 et seq. (West 2014)) for
    administrative review of the ALJ’s denial of the motion to vacate the 2013 default judgment.
    The complaint contended that the City’s “filing of an administrative action alleging code
    violations while a simultaneous action also alleging code violations was currently pending in
    the circuit court should be held to be void and without legal effect.”
    ¶ 10       On October 24, 2016, the circuit court conducted a hearing. Austin Gardens argued that
    res judicata barred the City from maintaining duplicative actions in the circuit court and the
    DOAH, and that the 2014 Agreed Order resolving the circuit court action “extinguished the
    jurisdiction of” the DOAH. The circuit court rejected Austin Gardens’ res judicata argument.
    However, the circuit court independently noted that, in reviewing the complaints from the two
    actions, it found “some duplication in that some of the exact same ordinances were cited in the
    administrative review [complaint] as w[ere] cited in the [circuit court] complaint.” The circuit
    court indicated that the City could not maintain separate cases “on the very same ordinance.”
    The circuit court concluded that the default judgment should be affirmed but reduced by $2000
    so as to remove fines for violations that were alleged in the circuit court action. The circuit
    court’s written order specified that the ALJ’s decision denying the motion to vacate was
    “Affirmed except for those violations which were duplicative of those contained” in the circuit
    court action, resulting in a $2000 reduction of the amount of the default judgment.
    ¶ 11       On November 22, 2016, Austin Gardens filed a timely notice of appeal. Accordingly, we
    have jurisdiction.
    ¶ 12                                             ANALYSIS
    ¶ 13       On appeal, Austin Gardens argues that the ALJ erred in denying its motion to vacate the
    default judgment in the DOAH action because, as a matter of res judicata, the circuit court
    action barred the DOAH action. Austin Gardens claims that the requirements for res judicata
    were met because there was a final judgment on the merits in the circuit court action, the same
    parties were involved in both actions, and both cases “arose from the same set of operative
    facts—the condition of the Property.” Austin Gardens contends that it is improper to allow the
    City to “litigate what is substantially the same claim in multiple forums, at the same time.”
    ¶ 14       In response, the City’s primary argument is that the DOAH lacked jurisdiction to vacate its
    2013 default judgment because Austin Gardens’ motion to vacate was untimely. The City
    relies upon section 2-14-108(a) of the Chicago Municipal Code (Code), which provides:
    “An administrative law officer may set aside any order entered by default and set a new
    hearing date, upon a petition filed within 21 days after the issuance of the order of
    default, if the administrative law officer determines that the petitioner’s failure to
    appear at the hearing was for good cause or, at any time, if the petitioner establishes
    that the petitioner was not provided with proper service of process. If the petition is
    granted, the administrative law officer shall proceed with a new hearing on the
    underlying matter as soon as practical.” (Emphasis added.) Chicago Municipal Code
    § 2-14-108(a) (added Apr. 29, 1998).
    -3-
    The City argues that, since the motion to vacate the 2013 DOAH default judgment was not
    filed within 21 days (and because there is no claim of improper service in the DOAH action),
    the DOAH lacked jurisdiction to decide the motion to vacate. Alternatively, the City argues
    that, on the merits, the doctrine of res judicata is inapplicable.1
    ¶ 15        We first note that, on administrative review, this court “reviews the administrative
    agency’s final decision, not the circuit court’s decision. [Citations.]” Sloper v. City of Chicago,
    Department of Administrative Hearings, 
    2014 IL App (1st) 140712
    , ¶ 15. That is, we review
    the DOAH’s decision on Austin Gardens’ motion to vacate rather than the circuit court’s
    decision upon administrative review.
    ¶ 16        Before we may reach the merits of the agency’s decision, we address the City’s threshold
    argument that the DOAH lacked jurisdiction to consider Austin Gardens’ motion to vacate.
    See Modrytzkji v. City of Chicago, 
    2015 IL App (1st) 141874
    , ¶ 9 (“As a challenge to
    jurisdiction is a threshold matter we must address it first, before we can reach the substance” of
    the appeal.). “Whether an administrative agency has jurisdiction is a question of law that is
    reviewed de novo.” 
    Id.
    ¶ 17        We briefly note Austin Gardens’ claim that the City waived this argument because “[t]he
    record is devoid of the City having challenged the timeliness of Austin Gardens’ Motion to
    Vacate in front of the DOAH.” We disagree. A challenge to an agency’s jurisdiction “can be
    raised at any time,” including on appeal. Id.; see also Robinson v. Human Rights Comm’n, 
    201 Ill. App. 3d 722
    , 726 (1990) (“A lack of jurisdiction may be raised at any time, either directly
    or collaterally.”). Thus, we consider whether the DOAH had jurisdiction to consider Austin
    Gardens’ motion to vacate.
    ¶ 18        “[A]n administrative agency has no inherent or common law power and may only act in
    accordance with the power conferred upon it by the legislature. *** Like a court of limited
    jurisdiction, an administrative agency can only act in conformity with the procedure set forth in
    the statute which empowers it. [Citation.]” Robinson, 201 Ill. App. 3d at 728. “Since an
    administrative agency *** is a creature of statute, its jurisdiction or authority must be found
    within the provisions of the statute by which it acts. [Citations.] Thus, parties seeking review of
    an agency decision must ‘strictly comply’ with the procedures set forth in the statute or
    ordinance. [Citation.]” Modrytzkji, 
    2015 IL App (1st) 141874
    , ¶ 10.
    ¶ 19        “The City [of Chicago] has the authority under its home rule powers to establish
    administrative agencies. Ill. Const. 1970, art. VII, § 6(a).” Id. ¶ 11. Pursuant to this power, the
    City created the DOAH “to conduct administrative adjudication proceedings for departments
    and agencies of the city.” Chicago Municipal Code § 2-14-010 (amended Feb. 15, 2012).
    Section 2-14-150 of the Code specifies that the DOAH “shall operate a system of
    administrative adjudication of violations of building code provisions” within a buildings
    hearings division. Chicago Municipal Code § 2-14-150 (amended July 29, 1998). The director
    of the DOAH is empowered to appoint administrative law officers to conduct hearings, make
    findings of fact and conclusions of law, and “impose penalties and fines *** consistent with
    applicable code provisions.” Chicago Municipal Code §§ 2-14-030 (amended Feb. 15, 2012),
    2-14-040 (amended Apr. 29, 1998).
    1
    The City’s brief explicitly declines to challenge the portion of the circuit court’s decision reducing
    the amount of the default judgment by $2000.
    -4-
    ¶ 20       If a party accused of building code violations fails to appear at a properly noticed DOAH
    hearing, “the administrative law officer may find the recipient [of a notice of violation] in
    default and proceed with the hearing and accept evidence relevant to the existence of a code
    violation and conclude with a finding, decision, and order.” Chicago Municipal Code
    § 2-14-078(a) (amended Apr. 29, 1998). “The recipient of a notice of violation or a notice of
    hearing who is found to be in default may petition the administrative law officer to set aside the
    order of default and set a new hearing date in accordance with Section 2-14-108.” Chicago
    Municipal Code § 2-14-078(b) (amended Apr. 29, 1998). In turn, section 2-14-108 provides:
    “An administrative law officer may set aside any order entered by default and set a new
    hearing date, upon a petition filed within 21 days after the issuance of the order of
    default, if the administrative law officer determines that the petitioner’s failure to
    appear at the hearing was for good cause or, at any time, if the petitioner establishes
    that the petitioner was not provided with proper service of process.” Chicago
    Municipal Code § 2-14-108(a) (added Apr. 29, 1998).
    ¶ 21       “Illinois has consistently held that time limitations upon bringing actions before
    administrative agencies are matters of jurisdiction which cannot be tolled.” (Internal quotation
    marks omitted.) Modrytzkji, 
    2015 IL App (1st) 141874
    , ¶ 13. Thus, in Modrytzkji, our court
    held that an analogous time limit in a Code provision was jurisdictional. In that case, the
    plaintiff requested a DOAH hearing to challenge determinations by the City’s Commission on
    Animal Care and Control (Commission) that two of his dogs were “dangerous animals” under
    the Code. Id. ¶ 5. The DOAH held a hearing and affirmed the Commission’s determinations.
    Id. ¶ 6. The circuit court then affirmed the DOAH decision. Id. ¶ 7.
    ¶ 22       On appeal to this court, the City argued that the DOAH lacked jurisdiction to conduct the
    hearing, as the plaintiff’s request for DOAH review of the Commission’s determinations was
    untimely. We agreed, relying on the Code provision that animal owners must be informed of
    the right to appeal Commission determinations “ ‘by filing a written request for a hearing
    within seven days of service of the notice.’ ” Id. ¶ 11 (quoting Chicago Municipal Code
    § 7-12-050(d) (added Oct. 2, 1995)). We reasoned:
    “[The ordinance] does not provide for written requests for hearings that are filed
    beyond seven days of the notice and there is nothing in the Chicago Municipal Code
    that authorizes the Department to conduct hearings when a request for a hearing is
    untimely. Because the Department only has limited statutory authority, its powers
    cannot be expanded beyond what is authorized by the Chicago Municipal Code.” Id.
    ¶ 12.
    We concluded that as “plaintiff’s request for a hearing was untimely, the [DOAH] did not have
    authority” to review the Commission’s determinations, and so the DOAH’s decision was void.
    Id. ¶ 14. In turn, “the circuit court did not have the authority to consider the merits of plaintiff’s
    appeal” but was “limited to reviewing the [DOAH]’s decision for whether the decision was
    void.” Id. ¶ 15. Accordingly, we vacated both the judgment of the circuit court and the order of
    the DOAH. Id.
    ¶ 23       Austin Gardens’ reply brief asserts that Modrytzkji is distinguishable from the instant case
    because “[t]he provision in Modrytzkji did not set a time for the DOAH to act as [section]
    2-14-108(a) does. Instead, it set a requirement for the party to act.” Austin Gardens is
    incorrect. The Code provisions at issue in Modrytzkji and in this case set limits on when parties
    must act in order to obtain review from the DOAH: the Code provision in Modrytzkji allowed
    -5-
    an animal owner seven days to seek review of the Commission’s dangerous animal
    determinations and, in this case, section 2-14-108(a) of the Code required Austin Gardens to
    seek review of the default judgment entered against it within 21 days. Thus, our reasoning in
    Modrytzkji applies here.
    ¶ 24       Our conclusion that the 21-day limit in section 2-14-108(a) of the Code constitutes a limit
    on the DOAH’s jurisdiction is also consistent with our discussion of that provision in Stone
    Street Partners, LLC v. City of Chicago Department of Administrative Hearings, 
    2014 IL App (1st) 123654
    , aff’d in part and rev’d in part on other grounds, 
    2017 IL 117720
    , which also
    concerned a property owner’s attempt to vacate a DOAH judgment. In that case, fines for
    building violations were assessed against the plaintiff, Stone Street, following a 1999 hearing
    at which a nonattorney purported to represent Stone Street. Id. ¶¶ 3-4. In 2011, Stone Street
    moved to vacate the 1999 DOAH order, but an ALJ determined that the DOAH lacked
    jurisdiction to do so because “[t]he governing ordinance [section 2-14-108(a)] only allowed it
    to consider vacating default judgments within 21 days of their entry.” Id. ¶ 5. Stone Street’s
    circuit court complaint seeking administrative review was dismissed, and Stone Street
    appealed to our court. Id. ¶ 6.
    ¶ 25       On appeal, Stone Street argued that the DOAH was authorized to consider its motion to
    vacate the 1999 order, pursuant to section 2-14-108(a) of the Code. Our court recognized that
    because “an administrative agency is a creature of statute, any power or authority claimed by it
    must find its source within the provisions of the statute by which it is created.” (Internal
    quotation marks omitted.) Id. ¶ 24. However, because the 1999 order at issue was not a
    “default” order, we held that section 2-14-108(a) did not apply and “the DOAH correctly
    determined it had no jurisdiction to consider Stone Street’s motion to vacate.” Id. ¶ 25.
    ¶ 26       Stone Street illustrates that the DOAH’s jurisdiction is defined by the Code and that section
    2-14-108(a) defines the DOAH’s authority to review default judgments. In this case, there is
    no question that Austin Gardens did not file its motion to vacate the August 2013 default
    judgment until December 2014, well beyond the 21-day time limit in section 2-14-108(a). As
    the motion to vacate was too late, the DOAH lacked authority to consider it.
    ¶ 27       Austin Gardens’ reply brief asserts that the 21-day time limit in section 2-14-108(a) did not
    affect the DOAH’s jurisdiction because that provision is merely “directory” rather than
    “mandatory.” Austin Gardens relies on Cooper v. Department of Children & Family Services,
    
    234 Ill. App. 3d 474
     (1992). In that case, the Department of Children and Family Services
    (DCFS) failed to hold a hearing within 30 days, as required by the Child Care Act of 1969 (Ill.
    Rev. Stat. 1989, ch. 23, ¶ 2219(a)), after the agency notified the owners of a daycare center that
    DCFS sought to revoke their license to operate. Cooper, 234 Ill. App. 3d at 481. The circuit
    court concluded that the failure to hold a timely hearing caused DCFS to lose jurisdiction. Id.
    On appeal, our court discussed whether the statutory 30-day time frame was “mandatory, thus
    leaving DCFS without jurisdiction” or “merely directory.” Id. We concluded that the provision
    was only directory:
    “Here, by allowing a mandatory interpretation of this provision ***, the persons whom
    the statute was intended to protect, children, will be adversely affected. *** Moreover,
    there is no negative language in the statute denying performance by DCFS for failure to
    comply with the statute. It appears that this provision is one that merely directs a
    manner of conduct for the guidance of the officials and specifies the time for
    -6-
    performance of an official duty. Thus, *** we hold this provision is directory.” Id. at
    483.
    In turn, we held that DCFS did not lose jurisdiction by failing to hold the license revocation
    hearing within 30 days. Id.
    ¶ 28        Austin Gardens relies on Cooper to argue that section 2-14-108 of the Code is directory
    and does not impact DOAH’s jurisdiction. This argument is without merit, as the distinction
    between “directory” and “mandatory” concerns provisions directing government officials, not
    limits upon parties. As explained by our supreme court:
    “the law presumes that statutory language issuing a procedural command to a
    government official is directory rather than mandatory, meaning that the failure to
    comply with a particular procedural step will not have the effect of invalidating the
    governmental action to which the procedural requirement relates. That presumption
    can be overcome under either of two conditions: (1) when there is negative language
    prohibiting further action in the case of noncompliance or (2) when the right the
    provision is designed to protect would generally be injured under a directory reading.”
    (Emphasis added.) In re James W., 
    2014 IL 114483
    , ¶ 35.
    ¶ 29        This inquiry also applies to Code provisions governing acts by DOAH officials. Sloper,
    
    2014 IL App (1st) 140712
    , ¶ 19 (“An ordinance including language that dictates a procedural
    command to a governmental official is presumed directory rather than mandatory, which
    means the failure to comply *** does not invalidate the governmental action to which the
    procedural requirement relates.”). Thus, the DOAH’s failure to act within a time period set
    forth by the Code will not cause the agency to lose jurisdiction if the Code provision is merely
    directory. See id. ¶ 20 (DOAH’s failure to conduct vehicle impoundment hearing within 30
    days of party’s request, as required by section 2-14-132(2) of the Code, did not deprive DOAH
    of jurisdiction, as the ordinance was “directory rather than mandatory”).
    ¶ 30        Although “[a]n ordinance *** that dictates a procedural command to a government official
    is presumed directory rather than mandatory” (id. ¶ 19), that principle is not relevant to the
    analysis in this case. The 21-day time limitation in section 2-14-108(a) is not a procedural
    directive to government officials, but it specifies when a party must act to obtain review of a
    default judgment. Thus, we reject Austin Gardens’ argument that the provision is merely
    directory. Rather, consistent with the precedent discussed, it limits the DOAH’s authority to
    act.
    ¶ 31        Because Austin Gardens did not move to vacate the default judgment within the 21-day
    limit set by the Code, the DOAH lacked jurisdiction to consider that motion, and its December
    19, 2014, order is void. Modrytzkji, 
    2015 IL App (1st) 141874
    , ¶ 14. In turn, the circuit court
    should not have reached the merits of Austin Gardens’ complaint for administrative review,
    but “was limited to reviewing the [DOAH’s] decision for whether the decision was void.” 
    Id.
    ¶ 15 (citing Kyles v. Maryville Academy, 
    359 Ill. App. 3d 423
    , 432 (2005)).2 Accordingly, the
    order of the DOAH denying the motion to vacate, as well as the judgment of the circuit court
    affirming that decision, must be vacated.
    2
    We note that the voidness of the DOAH’s decision on the motion to vacate does not deprive our
    court of jurisdiction although “we are limited on review to considering whether the [DOAH] had
    authority to act.” Modrytzkji, 
    2015 IL App (1st) 141874
    , ¶ 16.
    -7-
    ¶ 32      For the foregoing reasons, the October 24, 2016, judgment of the circuit court of Cook
    County, as well as the December 19, 2014, order of the DOAH, are vacated.
    ¶ 33      Orders vacated.
    -8-
    

Document Info

Docket Number: 1-16-3120

Citation Numbers: 2018 IL App (1st) 163120

Filed Date: 4/30/2018

Precedential Status: Precedential

Modified Date: 4/30/2018