February 6, 2014

Trucker’s Failure To Raise Commerce Clause Defense Dooms Tax Appeal

Witte Brothers is an intersate trucking company. After an audit, under protest, Witte paid Illinois for “pass-through” miles [distance driven in Illinois without picking up or delivering goods].

Witte sued Illinois for reimbursement of the taxes. The trial court ruled that the Illinois Income Tax Act did not allow the State to tax truckers pass-through miles. So Illinois appealed.

Among other things, Witte argued in the appellate court that taxing pass-through miles violated the Commerce Clause of the U.S. Constitution. But Witte did not raise this argument in the trial court, nor allege it as a separate count in its complaint. So the First District Illinois Appellate Court refused to consider the argument.

No need to worry if you’re concerned the State got beat out of tax revenue. The appellate court reversed, and ruled that pass-through miles are taxable. [“pass-through miles establish a physical and economic presence in Illinois which must be taxed …”]

This is the sort of ruling that annoys illinoisappellatelawyerblog.com. The appellate court would review the Commerce Clause argument de novo [no deference to the trial court]. If what the trial court says is inconsequential anyway, then the appellate court should not be allowed to avoid the issue because it was not raised in the trial court. So now we have precedent that blesses a tax that may violate the United States Constitution.

Read the whole case, Witte Brothers Exchange v. Department of Revenue, 2013 IL App (1st) 120850.

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October 31, 2010

Notice Of Appeal Saves Doctor From Forfeiting Reversal Argument

A baby sustained serious injuries at birth. His parents sued the doctor who performed the delivery for medical malpractice. The parents got a favorable trial verdict, so the doctor appealed.

In the appellate court, the doctor claimed he should have been awarded a directed verdict by the trial court “because there was a total failure of proof on the element of proximate causation.” But the doctor’s brief asked for a new trial, but did not ask the appellate court to reverse based on insufficient evidence.

The Second District Illinois Appellate Court ruled that the doctor forfeited “in [his] brief” the argument that the judgment should be reversed for lack of evidence. The court then reviewed the doctor’s notice of appeal, which did ask to “vacate or reverse the judgment, to enter judgment notwithstanding the verdict in their [parent’s] favor … and to grant any other relief warranted by the applicable law and record on appeal.”

The appellate court acknowledged that notices of appeal should be construed liberally, and decided to consider the doctor’s “alternative argument that they [doctor] are entitled to a directed verdict or a judgment n.o.v. [notwithstanding the verdict].”

The lesson is: Make sure your notice of appeal asks for a broad range of relief. There should be no harm done if you later decide to forego some aspect of the relief requested in the notice. But if it arguably is not there, you might unwittingly be forfeiting it.

Get the whole opinion, Northern Trust v. Burandt and Armbrust, No. 2-08-0193 (7/27/10), by clicking here.

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January 3, 2009

Estate Can’t Avoid Judgment Notwithstanding The Verdict By Changing Theory Of Liability On Appeal

Gul Nageen Ahmed, at age 7, was riding her bicycle near a retention pond. She lost control of the bike, slid down an embankment into the pond, and drowned.

Wasim Ahmed, as administrator of Gul’s estate, sued the homeowner association that owned the retention pond and the association’s property manager. A jury gave the estate a $100,000 judgment.

The estate’s theory at trial was that other debris in the pond caused Gul to get entangled with her bicycle, entrapping her in the water. The jury was given a special interrogatory, to which the estate did not object, asking, "Did the rusted bicycle proximately cause Gul Ahmed's death?" The jury answered, “No.” The homeowner association then asked, and the trial judge agreed, to vacate the judgment as being irreconcilable with the jury’s answer to the question.

The estate appealed. In the appellate court, the estate argued that the jury’s verdict could have been based on a theory other than the bicycle having been the cause of Gul’s death. The First District Illinois Appellate Court rejected the estate’s argument, and ruled that the estate could not change its theory of liability for the first time in the appellate court.

Based on the evidence presented, the only bicycle that plaintiff could be referring to was the rusted bicycle in the pond where they found Gul, which was the same bicycle that was pulled out of the water by police. It is well settled that the theory under which a case is tried in the trial court cannot be changed on review … To allow a party to change his or her trial theory on review would weaken the adversarial process and the system of appellate jurisdiction, and could also prejudice the opposing party, who did not have an opportunity to respond to that theory in the trial court … Accordingly, plaintiff's new hypotheses are inconsistent with the evidence of proximate cause and his theory at trial.

Get the whole case, Ahmed v Pickwick Place Owners’ Association, No. 1-07-2047 (9/30/08), by clicking here.

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