Carle Foundation v. Cunningham Township Sheds New Light on Appellate Jurisdiction Under Rule 304(a)

By Richard Harris
Law Clerk to Hon. Susan F. Hutchinson, Illinois Appellate Court, Second District

The Illinois Supreme Court recently shed new light on appellate jurisdiction under Rule 304(a). The rule provides that, where “multiple claims” for relief are involved in a single action, an appeal may be taken from a final judgment as to a single “claim” upon the trial court’s written finding that there is no just reason for delaying an appeal. The court has previously explained that Rule 304(a) applies only to judgments that dispose of “separate, unrelated claims,” and that orders disposing only of “separate issues relating to the same claim” are not immediately appealable under the rule. (Emphasis in original.) In re Marriage of Leopando, 96 Ill. 2d 114, 119 (1983).

In Carle Foundation v. Cunningham Township, 2017 IL 120427, the trial court issued a Rule 304(a) finding after granting the plaintiff’s request for a declaratory judgment as to which section of the Property Tax Code governed certain claims in the plaintiff’s complaint. The Supreme Court held, however, that a declaration as to what law governs a complaint “resolves nothing other than the standard by which the underlying claim will be adjudicated.” Carle Foundation, 2017 IL 120427, ¶ 18. Thus, the trial court had merely resolved an “issue” that was ancillary to the plaintiff’s underlying “claims,” and its Rule 304(a) finding was improper. Id. 

The parties in Carle disputed whether a charitable-use tax exemption applied to four parcels of land that were used in connection with the operation of a hospital for the tax years 2004 through 2011. The plaintiff argued that the parcels qualified for an exemption that had recently been created for hospitals under section 15-86 of the Property Tax Code. See 35 ILCS 200 15-86 (eff. June 14, 2012). The defendants maintained that section 15-86 did not apply retroactively, and that the case was controlled by the older charitable purposes exemption, under section 15-65 of the Property Tax Code. See 35 ILCS 200 15/65 (eff. Jan 1, 1994).

The plaintiff’s fourth amended complaint included 35 counts. Count II sought a declaration that section 15-86 was applicable to the parcels for the tax years in question. The remaining counts sought declarations that an exemption the plaintiff had received prior to 2004 was never lawfully terminated, and that the parcels actually qualified for an exemption under section 15-65. Additionally, the plaintiff alleged the breach of a 2002 settlement agreement that it had entered with various local taxing authorities.

Shortly after filing its fourth amended complaint, the plaintiff filed a motion for summary judgment on count II and requested a Rule 304(a) finding. In granting the plaintiff’s motion, the trial court acknowledged that its ruling would not resolve the merits of all of the plaintiff’s claims. The court nonetheless granted a Rule 304(a) finding, reasoning that the applicable substantive law needed to be ascertained as a threshold matter before the case could proceed.

The appellate court concluded that it had appellate jurisdiction under Rule 304(a), but it reversed the trial court’s ruling after concluding that section 15-86 was unconstitutional. The Supreme Court then vacated the appellate court’s decision on the basis of its holding that the trial court’s Rule 304(a) finding was improper, and that the appellate court therefore lacked jurisdiction to review the order granting the plaintiff’s motion for summary judgment.

The Supreme Court emphasized, “ ‘it is difficult to conceive of a situation in which the issues are more interrelated’ than the pleading of a claim and the determination of what law governs that claim.” Carle Foundation, 2017 IL 120427, ¶ 23 (quoting Leopando, 96 Ill. 2d at 119). Hence, by requesting a declaratory judgment that section 15-86 was applicable to the parcels for the tax years in question, the plaintiff sought to dispose only of an “issue” that was related to the plaintiff’s “exemption claims.” Carle Foundation, 2017 IL 120427, ¶ 23.

The Supreme Court went on to note that the plaintiff’s request for declaratory judgment was improper in the first instance. The court explained that a declaratory judgment action must relate to an “actual controversy,” which refers to a “concrete dispute admitting of an immediate and definitive determination of the parties’ rights, the resolution of which will aid in the termination of the controversy or some part thereof.” Carle Foundation, 2017 IL 120427, ¶ 28. (quoting Underground Contractors Association, Ill. 2d 371, 375 (1977)). However, count II of the plaintiff’s fourth amended complaint was brought only to facilitate interlocutory appellate review of the trial court’s determination; it was not properly aimed at securing a declaration of unresolved rights as to an open legal controversy. Carle Foundation, 2017 IL 120427, ¶ 31.

Finally, the Supreme Court declined the parties’ shared request to address the merits of the case under the court’s supervisory authority. First, the court noted that it was not inclined to accommodate “piecemeal litigation.” Second, the court noted the issue surrounding the constitutionality of section 15-86, which had been the focus of the appellate court’s decision. However, the court’s long-standing rule is that cases should be decided on non-constitutional grounds whenever possible. Because plaintiff’s fourth amended complaint included claims that had nothing to do with the constitutionality of section 15-86, the court concluded that a ruling on the merits would be “decidedly premature.” Id. ¶ 34.

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