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Monday, April 14, 2014

Procedural Errors Doom Administrative Adjudication Hearing

The Illinois Appellate Court recently invalidated a fine imposed by a City of Chicago administrative hearing officer regarding building code violations, because the process used by the City was, in the words of one judge, “a civil-procedure disaster.”  Stone Street Partners v. City of Chicago, 2014 IL App (1st) 123654 (March 31, 2014).  The opinion was authored by Justice Delort, a former municipal attorney, and is instructive for all attorneys involved in municipal administrative adjudication proceedings.

In 1999, a city inspector found several building code violations in plaintiff’s building. Plaintiff is a corporation. The city mailed a “notice of violation and summons” for an administrative hearing to the street address of the building.  The city code (and State law) requires that notice and summons be mailed to the registered agent of a corporation, but the city failed to do so.  The corporation had no knowledge of the code violations or the administrative hearing.  However, someone did receive the notice, because at the scheduled hearing a non-attorney friend of a managerial employee of the corporation (the employee was seriously ill), appeared and presented evidence to the hearing officer.  The hearing officer found the corporate owner liable for the code violations and fined it $1,050.  In 2004 the city “registered” the fine in court.  In 2009 the city filed a lien against the property for the amount of the fine and costs and in 2012 turned the original administrative fine into a “judgment” of the circuit court.  

In 2011, the corporation discovered the lien.  It attempted to get the original administrative fine vacated on the grounds that the city had failed to notify the registered agent of the corporation.  In the meantime, the city had destroyed most of the records of the original hearing, even though it was still attempting to collect the fine.  The hearing officer ruled that, for procedural reasons, the 1999 fine could not be vacated.  The corporation then filed suit in circuit court, raising several arguments.  The circuit court dismissed the complaint and the corporation appealed. 

The appellate court made a careful analysis of the sometimes obscure procedures involved in municipal administrative adjudication proceedings and ruled in favor of the corporation on two points which are key in all such proceedings.  First, the court held that because the city had failed to properly notify the owner of the building, service of process was invalid.  Service of process on a corporation must be made on the registered agent.  Second, the court held that a non-attorney may not represent a corporation in administrative adjudication proceedings.  Representation of a corporation in administrative proceedings constitutes the practice of law and must be made by a licensed attorney.  The appellate court allowed the corporation to nullify the original fine twelve years after it was imposed. 

While most administrative adjudications involve relatively small amounts of money, procedural rules must be followed in every case, or the process could be a waste of time. 

Post Authored by Paul Keller, Ancel Glink


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