On June 10, 2016, the Illinois Third District Court of Appeals decided Willie Pearl Burrell Trust v. City of Kankakee, Case No. 2016 IL App (3d) 150655, finding that the City of Kankakee (the City) was justified when it required a business owner to pay off debts owed to the City before it would renew a property rental license.
The Court’s Decision
Willie Pearl Burrell Trust (the Plaintiff) owned several properties that it rented to tenants. When the Plaintiff submitted applications to renew its rental licenses, the City informed the Plaintiff that it would take no action on the applications until the Plaintiff paid off approximately $40,000 in fines owed to the City. Those fines accrued as a result of the Plaintiff’s numerous code violations. The City relied on a specific code provision requiring that, in order to obtain a City license, an applicant must have first paid off all debts owed to the City.
The Plaintiff sued, making three main arguments against the City:
The City had a duty to issue the rental licenses. Casting aside this argument, the court found that under the City code, the Plaintiff was ineligible to receive rental licenses until it paid its debts. Thus, the Plaintiff could not demonstrate that it had a right to the licenses, or that the City had a duty to issue them.
The City violated the Plaintiff’s constitutional due process rights by refusing to issue the licenses.Dismissing this argument, the court found that the Plaintiff had no protectable property interest in the renewal of its rental licenses and, thus, the City was not required to provide due process safeguards when it did not renew the Plaintiff’s licenses.
The City’s demand for repayment of prior debts was an unconstitutional taking of property. The unconstitutional takings doctrine prevents the government from requiring that someone give up a constitutional right in exchange for a benefit conferred by the government when the benefit has little or no relationship to the burden imposed on the party. The court found that the City had not violated the takings doctrine because it did not require the Plaintiff to relinquish any constitutional rights in order to obtain rental licenses. Rather, the City merely required the Plaintiff to pay outstanding debts.
Having dismissed all of the Plaintiff’s arguments, the court ruled in favor of the City and found that it had not violated the Plaintiff’s rights by refusing to renew the rental licenses so long as the Plaintiff had outstanding debts.
Your Municipal Code
Municipalities should consider whether they are using the best available practice after the court’s decision in Willie Pearl. Municipalities that already have language in their codes allowing for collection of outstanding debts before issuing licenses should review their code language in light of the court’s decision. Municipalities without this type of provision in their codes should consider whether they want to add it to their collection practices.
The following is sample code language to reference in order to ensure that your municipality is best protecting its fiscal interests:
|Prior to issuing any license, certificate and/or permit required pursuant to the laws and ordinances of this municipality, the municipal Clerk, or his/her duly designated agent, shall confirm that there are no unpaid charges for water service, other municipal services or any other municipal fees, fines, judgments, levies or debts then due and unpaid. No such license, certificate or permit shall be approved or issued until such time as the applicant presents to the appropriate department a certificate of the municipal Clerk, or his/her duly designated agent, indicating that all charges, fees, assessments, fines, judgments, levies or debts owed to the Village have been paid in full.|
If you have any questions about how this applies specifically to your municipality, please contact your attorney.