                                                                             FOURTH DIVISION
                                                                             September 30, 2013




2013 IL App (1st) 120265

Nos. 1-12-0265 and 1-12-1556, Consolidated

CHRISTOPHER STASKO, STEVEN NAGLER,                           )       Appeal from the
BURTON CITRON, PETER LORENZ, CHARLES                         )       Circuit Court of
JENKINS, PAUL VANRID, AUTOMOTIVE                             )       Cook County.
PARTS SERVICE COMPANY, MICHAELINE                            )
PIEKARSKI, GREG DIPIERO, ARTHUR L. KELLY,                    )
                                                             )
               Plaintiffs-Appellants,                        )
                                                             )
       v.                                                    )       No. 09 CH 17167
                                                             )
THE CITY OF CHICAGO,                                         )       Honorable
                                                             )       Alexander P. White,
               Defendant-Appellee.                           )       Judge Presiding.

       PRESIDING JUSTICE HOWSE delivered the judgment of the court, with opinion.
       Justices McBride and Palmer concurred in the judgment and opinion.

                                            OPINION

¶1     Plaintiffs sought a declaration that the City of Chicago (the City) may not collect or assess

its amusement tax from or against permanent seat license (PSL) owners based on the sale or

transfer of a PSL; an order to the City to disgorge all amusement taxes it collected before

judgment in this case on the purchase, sale, or transfer of any PSL, with interest; and an

injunction against the City enjoining the imposition, assessment, levy, or collection of the

amusement tax on PSLs in the future. On the question of the City’s right to collect its

amusement tax on the sale of PSLs by either the originator of the PSL (the Chicago Park District)

or by an owner of a PSL, the trial court granted summary judgment in favor of defendant. For
1-12-0265)
1-12-1556)Cons.

the following reasons, we affirm the trial court’s judgment, and remand.

¶2                                       BACKGROUND

¶3     On June 1, 2009, plaintiffs filed their first amended class action complaint for declaratory

judgment and other relief (hereinafter complaint). The complaint sought a declaration that

defendant, the City may not collect, levy or charge an amusement tax based on the purchase or

sale of a PSL. The complaint named 10 plaintiffs and alleged that each purchased, and owns or

owned, a PSL. The putative class consisted of all present and former owners of PSL seat

licenses, including (1) all original PSL purchasers; (2) subsequent transferees; and (3) any other

person, entity or organization who has paid the amusement tax, or on whose behalf the tax was

paid, or to whom a demand for payment has been made.

¶4     The complaint alleged the Chicago Bears Football Club, Inc. (Bears), began selling PSLs

in 2002 as a means of financing renovations at Soldier Field. The Chicago Municipal Code

(Chicago Municipal Code § 4-156-020 (amended November 19, 2008)) imposes a 9 % tax on the

admission fees or other charges paid for the privilege to enter an amusement (amusement tax). In

May 2009, the City sent letters to approximately 1,700 PSL holders stating the amusement tax

applies to transfers of PSLs and that the PSL holders may have tax balances due. The complaint

alleges the Bears paid the amusement tax on the PSLs it sold, but the City is attempting to collect

the amusement tax on subsequent transfer sales of PSLs by original purchasers from the Bears,

specifically such sales occurring between 2004 and 2008, by making a demand for payment.

¶5     According to the complaint, a “PSL merely confers on the license holder the right to

acquire tickets rather than providing the license holder with any right to admittance or to gain

                                                 2
1-12-0265)
1-12-1556)Cons.

entry into an event.” The complaint alleged the City may not properly collect an amusement tax

from PSL holders for several reasons including, but not limited to, the following: (a) a PSL does

not confer any right to enter or to attend any event which constitutes an amusement under the

Chicago Municipal Code; (b) PSLs are not admission fees within the meaning of the amusement

tax; (c) a PSL is merely a right to purchase tickets and is not a right to gain entry or admittance to

any event which constitutes an amusement; (d) the City’s attempt to collect the tax is time barred

by section 13-205 of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/13-205 (West

2008)); (e) the amusement tax on PSLs is a tax on tangible personal property in violation of

section 8-11-6a of Illinois Municipal Code (65 ILCS 5/8-11-6a (West 2008)) and the City is not

authorized to tax the sale or purchase of tangible personal property. Plaintiffs allege the City was

never entitled to collect the amusement tax on the original sale or transfer of PSLs, thus, to the

extent the City collected the amusement tax from the Bears on original sales, the City wrongfully

collected those taxes.

¶6     On June 10, 2009, plaintiffs moved to certify the putative class of plaintiffs.

¶7     On June 18, 2009, defendant filed a motion to dismiss the complaint pursuant to section

2-619.1 of the Code (735 ILCS 5/2-619.1 (West 2008)). Defendant moved to dismiss pursuant to

section 2-615 of the Code (735 ILCS 5/2-615 (West 2008)) on the grounds the complaint fails to

state a claim for relief. Defendant moved to dismiss pursuant to section 2-619 of the Code (735

ILCS 5/2-619 (West 2008)) on the grounds plaintiffs failed to exhaust their administrative

remedies under the City’s Uniform Revenue Procedures Ordinance (URPO) (Chicago Municipal

Code § 3-4-010 et seq. (added November 14, 1991)); plaintiffs’ claims are invalid as a matter of

                                                  3
1-12-0265)
1-12-1556)Cons.

law because plaintiffs’ exclusive remedy is under URPO; even if URPO does not apply,

plaintiffs’ claims are barred by the statute of limitations and a lack of standing to seek refunds of

taxes paid; and, alternatively, plaintiffs’ claims are barred by the voluntary payment doctrine. On

August 6, 2009 defendant voluntarily withdrew its section 2-619 motion without prejudice and

the trial court scheduled briefing and argument on defendant’s section 2-615 motion to dismiss.

¶8     Plaintiffs filed a motion to strike defendant’s 2-615 motion to dismiss on August 27,

2009, contending that defendant’s motion was in effect an answer denying various allegations

and stating its reasons for taking contrary positions. On February 8, 2010, the trial court granted

plaintiffs’ motion to strike defendant’s section 2-615 motion to dismiss. On February 11, 2010,

defendant filed a second motion to dismiss pursuant to section 2-619 for failure to exhaust

administrative remedies. Defendant’s motion argued that to the extent plaintiffs challenge the

assessment of the amusement tax against future sales of PSLs or to the past assessment of the

amusement tax, URPO provides an exclusive administrative procedure and provides for appeal to

the circuit court under the Administrative Review Act (735 ILCS 5/3-101 et seq. (West 2012)).

On May 6, 2010, the trial court denied defendant’s motion to dismiss pursuant to section 2-619

for failure to exhaust administrative remedies for plaintiffs’ claims regarding taxes already paid

on the original PSL purchases and plaintiffs’ claims regarding future PSL sales.

¶9     On June 1, 2010, defendant filed its answer and counterclaim to plaintiffs’ complaint.

Defendant’s answer asserted affirmative defenses of (1) failure to exhaust administrative

remedies, (2) the statute of limitations as to plaintiffs’ claim for refunds, (3) the tax refund

claims were not filed by the party who paid the tax, (4) the voluntary payment doctrine, and (5)

                                                   4
1-12-0265)
1-12-1556)Cons.

lack of standing to seek refunds of taxes paid by the Bears. Defendant counterclaimed against

“all named plaintiffs and plaintiff class members who did not pay the City’s amusement tax ***

on the charges they paid to obtain PSLs after 2003.” Defendant prayed for a judgment declaring

the PSLs are subject to the amusement tax, and a monetary judgment against those who did not

pay the tax on the charges they paid to obtain PSLs after 2003. On August 18, 2010, plaintiffs

filed a motion to dismiss defendant’s counterclaim for failure to state a cause of action because

the matter is not appropriate for class certification under section 2-801, any counterclaim is

premature, and plaintiffs are not being sued individually. Plaintiffs also argued a lack of personal

jurisdiction over the counterdefendants.

¶ 10   On July 16, 2010, the trial court entered an order certifying plaintiffs’ class pursuant to

sections 2-801 and 2-802 of the Code (735 ILCS 5/2-801, 2-802 (West 2010)). The court’s order

certifies two classes of plaintiffs: (1) the persons who seek refunds of taxes that the Bears paid to

the City in 2002, when PSLs were first issued, and (2) the persons who seek an injunction against

any effort by the City to collect taxes on charges paid on subsequent transfers of PSLs.

¶ 11   On July 20, 2010, defendant filed a motion for partial summary judgment on plaintiffs’

request for a declaratory judgment that it may not impose the amusement tax on the purchase or

sale of a PSL and on plaintiffs’ request for a refund of taxes paid on the original sale of PSLs.

Defendant attached an affidavit by Karen Murphy, senior director of finance and treasurer for the

Bears. Ms. Murphy averred that the Bears began selling PSLs in 2002 as an agent of the

Lakefront Improvement Fund. A person may purchase season tickets or individual tickets

without purchasing a PSL. A person may purchase individual tickets without purchasing season

                                                 5
1-12-0265)
1-12-1556)Cons.

tickets. If a person purchases a PSL, “the PSL gives that person the right to purchase a season

ticket for a specific seat location” for home games. PSL owners have the right to transfer a PSL

by, for example, “aftermarket” sale.

¶ 12   On July 26, 2010, plaintiffs filed a motion for summary judgment on the issue of liability

as to their complaint for a declaratory judgment that the City’s amusement tax is invalid,

unconstitutional, and/or inapplicable to the purchase or sale of a PSL at Soldier Field for Bears

football games.

¶ 13   On August 12, 2010, defendant filed a motion to certify a counter-defendant class

consisting of “all persons who seek an injunction against any effort by the City to collect taxes on

charges paid in connection with subsequent transfers of PSLs.” The motion stated that the relief

sought against the counter-defendant class, which is identical to the second plaintiffs’ class, is the

relief set forth in defendant’s counterclaim.

¶ 14   On August 26, 2010, the trial court entered an agreed order to clarify the class definition.

The court’s order provided the following class definition:

                       “All persons and entities who purchased and own or owned

               a Permanent Seat License (‘PSL’) at Soldier Field for Chicago

               Bears football games including: (1) all original PSL purchasers;

               (2) all subsequent transferees; and (3) any other person or entity

               who has paid the amusement tax, or on whose behalf the tax was

               paid, or to whom a demand for payment has been made.”



                                                  6
1-12-0265)
1-12-1556)Cons.

¶ 15   On October 26, 2010, after full briefing by the parties, the trial court took the motions for

summary judgment under advisement. On December 14, 2010, the court entered a memorandum

decision and judgment making the following orders:

                      “1. Plaintiffs’ motion for summary judgment, barring

              enforcement of the Ordinance on proceeds of sales of PSLs, as to

              sales of PSLs from the Bears to a patron, is DENIED.

                      2. Plaintiffs’ motion for summary judgment, barring

              enforcement of the Ordinance on proceeds of sales of PSLs, as to

              sales of PSLs from a patron to another buyer, is GRANTED.

                      3. The City’s motion for partial summary judgment,

              requesting enforcement of the Ordinance, as to sales of PSLs from

              the Bears to a patron, is GRANTED.

                      4. The City’s motion for partial summary judgment,

              requesting enforcement of the Ordinance, as to sales of PSLs from

              a patron to another buyer, is DENIED.

                      5. The City’s motion for partial summary [judgment]

              regarding whether the URPO acts to bar patrons who have sold

              their PSLs to a patron, or bought their PSLs from a patron, from

              seeking a refund of the Amusement Tax is GRANTED.”

¶ 16   On December 23, 2010, plaintiffs filed a motion for leave to file a second amended

complaint. The motion states “Plaintiffs seek to file a Second Amended Complaint *** to add a

                                                 7
1-12-0265)
1-12-1556)Cons.

cause of action based on 42 U.S.C. § 1983 predicated on a violation by Defendants of the

Takings Clause of the Fifth Amendment.” Plaintiffs attached a proposed second amended

complaint that contains a count for declaratory judgment (count I) and a count on behalf of the

class of subsequent transferees based on the takings clause (U.S. Const., amend. V) (count II).

On January 7, 2011, the trial court granted the motion and granted plaintiffs leave to file a second

amended complaint.

¶ 17   On January 12, 2011, plaintiffs filed a notice of motion for reconsideration. Plaintiffs

asserted that the trial court should reconsider its order sustaining the collection of defendant’s

amusement tax on the initial sale of PSLs.

¶ 18   On January 13, 2011, defendant filed a motion to reconsider the January 11, 2011 order

granting plaintiffs leave to file a second amended complaint and a separate motion to reconsider

portions of the trial court’s December 14, 2010, summary judgment order. Specifically,

defendant sought reconsideration of the portions of the order holding that the City may not

enforce its amusement tax with regard to sales of PSLs from a patron to another buyer and

holding that plaintiffs’ refund claims are not barred by the voluntary payment doctrine.

¶ 19   On February 23, 2011, plaintiffs filed a second amended complaint. On March 28, 2011,

plaintiffs filed a response to defendant’s motion to reconsider the trial court’s order granting

plaintiffs leave to file a second amended complaint. On April 8, 2011, defendant moved to

dismiss count II of plaintiffs’ second amended complaint and a separate reply in support of its

motion to reconsider the order granting leave to file the second amended complaint. Defendant’s

reply addressed plaintiffs’ argument that the issue of finality was moot because of the parties’

                                                  8
1-12-0265)
1-12-1556)Cons.

motions to reconsider, which plaintiffs raised in response to the City’s argument that the motion

to file a second amended complaint was erroneous because the trial court entered a final

judgment and the amended complaint adds a new cause of action under the takings clause. Also

on April 8, 2011, defendant filed a separate motion to strike counts III and IV of the second

amended complaint on the grounds plaintiffs’ motion for leave to file a second amended

complaint attached the pleading plaintiffs sought to file which, along with the motion, made clear

plaintiffs only sought leave to add a count II based on the takings clause. Therefore, plaintiffs

failed to obtain leave of court to file the additional counts.

¶ 20    On April 26, 2011, plaintiffs moved for a permanent injunction against the City,

enjoining it from “imposing, assessing, levying and/or collection an Amusement Tax on the sale

or transfer of PSLs where the sale takes place between a PSL owner (other than the Chicago Park

District and the Chicago Bears Football Club, Inc., as agent for the Chicago Park District) and

any subsequent purchaser or transferee.”

¶ 21    On December 22, 2011, the trial court entered a memorandum decision and judgment on

the parties’ cross-motions for reconsideration. The issues to be decided by the court in its

December 22, 2011, judgment included whether plaintiffs’ motion for leave to file a second

amended complaint should be granted, whether count II of plaintiffs’ second amended complaint

should be dismissed, and whether counts III and IV of plaintiffs’ second amended complaint

should be stricken. The court’s judgment made the following orders:

                        “1. The City’s motion to reconsider portions of the Court’s

                December 14, 2010 Decision is DENIED as to the Court’s

                                                   9
1-12-0265)
1-12-1556)Cons.

             Decision the City does not have the statutory authority to tax

             Resales of PSLs.

                    2. The City’s motion to reconsider portions of the Court’s

             December 14, 2010 Decision is DENIED as to the Court’s

             Decision, even if the City’s Uniform Revenue Procedures

             Ordinance did not apply, Plaintiffs’ refund claims would not be

             barred pursuant to the voluntary payment doctrine.

                    3. The City’s motion to reconsider portions of the Court’s

             December 14, 2010 Decision is GRANTED as to the Court’s

             Decision, the City’s home rule authority to tax Resales has been

             preempted by 65 ILCS 5/8-11-6a.

                    4. Plaintiffs’ motion for summary judgment, barring

             enforcement of the Ordinance on proceeds of Resales of PSLs is

             DENIED.

                    5. Plaintiffs’ motion to reconsider whether the Court’s

             Decision the language of the Ordinance is applicable to the Refund

             Class, original purchases of PSLs is DENIED.

                    6. Plaintiffs’ motion to reconsider whether the City does

             not possess the statutory authority to tax original purchases of

             PSLs is GRANTED.

                    7. Plaintiffs’ motion to reconsider whether the City’s

                                              10
1-12-0265)
1-12-1556)Cons.

               Uniform Revenue Procedure Ordinance does not bar Plaintiffs’

               refunds is GRANTED.

                      8. The City possesses the statutory authority to tax the

               Refund Class, original purchases of PSLs.

                      9. Plaintiffs’ argument that the City’s Uniform Revenue

               Procedure Ordinance does not bar Plaintiffs’ refunds is moot.

                      10. The City’s motion to reconsider the Court’s January

               11, 2011 Decision granting Plaintiffs’ motion for leave to file a

               second amended complaint is GRANTED.

                      11. Plaintiffs’ motion for leave to file a Second Amended

               Complaint is DENIED.

                      12. The City’s motion to dismiss Count II of Plaintiffs’

               Second Amended Complaint is GRANTED.

                      13. The City’s motion to strike Counts III and IV of

               Plaintiffs’ Second Amended Complaint pursuant to 735 ILCS 5/2-

               615 is DENIED.

¶ 22   On January 23, 2012, plaintiffs filed a notice of appeal from (a) the December 14, 2010

judgment with respect to the cross-motions for summary judgment, (b) the December 22, 2011

judgment with respect to the cross-motions to reconsider the summary judgment order, (c) the

December 22, 2011 order granting defendant’s motion to reconsider the order granting plaintiffs

leave to file a second amended complaint and denying plaintiffs’ motion for leave to file a second

                                                11
1-12-0265)
1-12-1556)Cons.

amended complaint. This court docketed the appeal under case number 12-0265.

¶ 23   On March 12, 2012, defendant filed a motion for an order pursuant to Illinois Supreme

Court Rule 304 (Ill. S. Ct. R. 304 (eff. Feb. 26, 2010)) making an express finding that there is no

just reason for delaying enforcement or appeal of the trial court’s December 22, 2011 judgment.

Defendant’s motion states that although the court’s judgment disposed of the key issues in the

case, defendant’s counterclaim for tax, interest and penalties on the resale of PSLs remained

pending. On April 24, 2012, the court entered an order finding no just reason to delay

enforcement or appeal of the December 22, 2011 judgment.

¶ 24   On May 24, 2012 plaintiffs filed a second notice of appeal based on the trial court’s April

24, 2012 order. This court docketed the May 24, 2012 notice of appeal in case number 12-1556.

The notice of appeal in case number 12-1556 specifies the following orders: (1) the December

14, 2010 judgment on the parties’ cross-motions for summary judgment; (2) the December 22,

2011 judgment on the parties’ cross-motions to reconsider portions of the December 14, 2010

judgment on the cross-motions for summary judgment; (3) the December 22, 2011 judgment

granting defendant’s motion to reconsider the January 11, 2011 judgment granting plaintiffs

leave to file a second amended complaint.

¶ 25   Defendant has not filed a notice of cross-appeal of any issues or judgments. On July 24,

2012, we allowed defendant’s motion to consolidate the appeal in case number 12-0265 with the

appeal in case number 12-1556.

¶ 26                                        ANALYSIS

¶ 27   Before reaching the merits of the parties’ arguments on appeal, a question as to this

                                                12
1-12-0265)
1-12-1556)Cons.

court’s jurisdiction must be resolved. “Whether the appellate court has jurisdiction to consider

an appeal presents a question of law which we review de novo.” EMC Mortgage Corp. v. Kemp,

2012 IL 113419, ¶ 39 (2012). Defendant argues this court lacks jurisdiction over the appeal

docketed in case number 12-0265 because when plaintiffs filed their notice of appeal, the City’s

counterclaim was still pending and the trial court had made no findings pursuant to Illinois

Supreme Court Rule 304 (Ill. S. Ct. R. 304 (eff. Feb. 26, 2010)). Plaintiffs did not reply to

defendant’s jurisdictional argument. Defendant admits this court has jurisdiction of the appeal

docketed as case number 12-1556 pursuant to Rule 304(a).

¶ 28   We agree with defendant that this court has no jurisdiction over the appeal docketed in

this court as case number 12-0265. “If multiple claims are involved in an action, an appeal may

be taken from a final judgment as to one or more but fewer than all of the claims only if the trial

court makes an express written finding of no just reason to delay either enforcement, appeal, or

both. [Citation.] Without a Rule 304(a) finding, a final order disposing of fewer than all the

claims is not an appealable order and does not become appealable until all of the claims are

resolved.” In re Marriage of Gaudio, 368 Ill. App. 3d 153, 156 (2006). There is no dispute that

the City’s counterclaim for a money judgment for taxes on subsequent transfers of PSLs was and

is pending before the trial court, or that the court did not make any findings pursuant to Rule 304

before plaintiffs filed the notice of appeal in appellate case number 12-0265. Therefore, the

January 23, 2012 notice of appeal is insufficient to confer jurisdiction on this court. In re

Marriage of Gaudio, 368 Ill. App. 3d at 158 (“A premature notice of appeal does not confer

jurisdiction on the appellate court.”).

                                                 13
1-12-0265)
1-12-1556)Cons.

¶ 29   We did, however, grant defendant’s motion to consolidate the two appeals. Compare In

re Marriage of Gaudio, 368 Ill. App. 3d at 158. The May 24, 2012 notice of appeal is sufficient

to invoke this court’s jurisdiction. Waugh v. Morgan Stanley and Co., Inc., 2012 IL App (1st)

102653, ¶ 51 (“When a trial court makes a finding pursuant to Rule 304(a) that there is no just

reason for delaying enforcement or appeal of a final judgment, any notice of appeal from that

final judgment must be filed within 30 days.”). Accordingly, the appeal docketed as case number

12-0265 is dismissed and we will proceed to resolve the issues under case number 12-1556. See

Ameren Illinois Co. v. Illinois Commerce Comm’n, 2012 IL App (4th) 100962, ¶ 172 (dismissing

one of three consolidated appeals and resolving the remaining two appeals on the merits).

¶ 30                                  1. Standard of Review

¶ 31   “We must remain mindful *** that this matter was decided in the context of motions for

summary judgment, and the purpose of summary judgment is not to try questions of fact but

simply to determine if triable questions of fact exist. Summary judgment should not be granted

unless the moving party’s right to judgment is clear and free from doubt. If the undisputed

material facts could lead reasonable observers to divergent inferences, or where there is a dispute

as to a material fact, summary judgment should be denied and the issue decided by the trier of

fact.” Pielet v. Pielet, 2012 IL 112064, ¶ 53 (2012). “When parties file cross-motions for

summary judgment, they agree that only a question of law is involved and invite the court to

decide the issues based on the record. [Citation.] However, the mere filing of cross-motions for

summary judgment does not establish that there is no issue of material fact, nor does it obligate a

court to render summary judgment.” Id. at ¶ 28. “Where a case is decided through summary

                                                14
1-12-0265)
1-12-1556)Cons.

judgment, our review is de novo.” Id. at ¶ 30. “[T]he principal issues we are asked to resolve

involve matters of statutory construction. We review issues of statutory construction de novo.”

NDC LLC v. Topinka, 374 Ill. App. 3d 341, 358 (2007).

¶ 32                                   2. Taxation Principles

¶ 33   The Illinois Constitution of 1970 delineates the powers of home rule units of government,

including the City, and gives such units the authority to “exercise any power and perform any

function pertaining to its government and affairs including, but not limited to, the power *** to

tax.” Ill. Const. art. VII, § 6(a). Section 6(g) of article VII provides that “[t]he General

Assembly *** may deny or limit the power to tax.” Ill. Const. art. VII, § 6(g). Article VII,

section 6(e), of the Illinois Constitution requires authorization by the General Assembly before a

home rule unit can impose a tax upon occupations. Commercial National Bank of Chicago v.

City of Chicago, 89 Ill. 2d 45, 51-52 (1982). The power of home rule units to tax is also limited,

pursuant to section 6(g) of article VII, by section 8-11-6(a) of the Illinois Municipal Code

(Municipal Code) (65 ILCS 5/8-11-6(a) (West 2008)). Section 8-11-6(a) prohibits a home rule

municipality from imposing a tax on the use, sale or purchase of tangible personal property based

on the gross receipts from such sales or the selling or purchase price of said tangible personal

property. 65 ILCS 5/8-11-6(a) (West 2008). The City may impose a tax that is beyond its home

rule taxing authority if the tax is specifically authorized by the General Assembly. Commercial

National Bank of Chicago, 89 Ill. 2d at 50-51 (“The power to raise revenue in the enumerated

methods stems not from home rule powers but from legislative grant of authority.”); City of

Chicago, Ill. v. StubHub, Inc., 622 F. Supp. 2d 699, 704 (N.D. Ill. 2009) (“even if home rule

                                                  15
1-12-0265)
1-12-1556)Cons.

authority is preempted, a home rule municipality can still impose whatever taxes the General

Assembly has granted all municipalities the power to impose.”).

¶ 34   The City has exercised is authority to tax with, among others, a tax on amusements in

Chicago Municipal Code title 4, division VI, chapter 4-156. Section 4-156-010 of the Chicago

Municipal Code defines an amusement as “any exhibition, performance, presentation or show for

entertainment purposes *** including *** any *** athletic contest *** such as *** football.”

Chicago Municipal Code § 4-156-010 (amended November 19, 2008). Section 4-156-020

imposes “an amusement tax *** upon the patrons of every amusement within the city.” Chicago

Municipal Code § 4-156-020(A) (amended November 19, 2008). The rate of the tax is a

percentage1 “of the admission fees or other charges paid for the privilege to enter, to witness, to

view or to participate in such amusement.” Id.

¶ 35                                  3. Authority to Tax PSLs

¶ 36   Before we may determine if the amusement tax is applicable to either the original sale or

subsequent transfer of a PSL, we must first determine whether the tax is preempted. Section 8-

11-6a of the Municipal Code states that, with certain exceptions, “no home rule municipality has

the authority to impose, pursuant to its home rule authority, a *** tax on the use, sale or purchase

of tangible personal property based on the gross receipts from such sales or the selling or



       1
        The percentage tax rate changed between the original sale of PSLs by the Bears in 2002 and
2003 and any subsequent transfers beginning in 2004. In this appeal, the percentage tax rate is not
germane. Defendant’s counterclaim for payment of taxes on subsequent transfers of PSLs remains
pending and is not a subject of this appeal. In light of our disposition, the appropriate tax rate must
be determined on remand.

                                                  16
1-12-0265)
1-12-1556)Cons.

purchase price of said tangible personal property.” 65 ILCS 5/8-11-6a (West 2008). Plaintiffs

argue that section 8-11-6a preempts the City’s home rule authority to tax PSLs because a PSL is

tangible personal property under our decision in Mr. B’s, Inc. v. City of Chicago, 302 Ill. App. 3d

930 (1998). Plaintiffs also argue that the tax on PSLs in analogous to the attempt to tax

membership fees that was rejected in Chicago Health Clubs, Inc. v. Picuar, 124 Ill. 2d 1 (1988).

Plaintiffs argue that applying the tax to the sale of a PSL “is not on the activity of attending a

football game, but on the activity of selling certain rights or amenities which are incidental to

attendance.” Plaintiffs characterize the sale of PSLs as a service performed by the Bears to raise

funds for the renovation of Soldier Field and argue that the application of the amusement tax is a

tax on that service; thus Chicago Health Clubs, Inc. is applicable. Plaintiffs assert the Bears did

not sell the PSLs for entertainment, but to finance renovations, and the Bears were subject to the

same responsibilities for the collection and remittance of the tax as were the plaintiffs in Chicago

Health Clubs, Inc.

¶ 37   First, we reject any implicit argument that the fact revenue from PSL sales was used to

finance lakefront improvements or renovations to Soldier Field has any bearing on the validity of

the City’s amusement tax. The purpose of the underlying taxable transaction has no bearing on

the validity of the tax on that transaction. “For this tax, levied by the city of Chicago, to be valid

it must *** be for a corporate purpose-that is, in aid of a public object which is within the

purposes for which such government is established.” People v. City of Chicago, 413 Ill. 83,

87-88 (1952). Plaintiffs have made no argument the City does not use its tax revenue from the

amusement tax for a corporate purpose.

                                                  17
1-12-0265)
1-12-1556)Cons.

¶ 38   Second, we find that Mr. B’s, Inc. is not controlling on this issue and in fact conflicts with

our supreme court’s decisions as to what constitutes tangible personal property for taxation

purposes. The sole basis of plaintiffs’ argument that PSLs are tangible personal property is that

the transaction to purchase a PSL is allegedly similar to the transaction to purchase a ticket from

a ticket broker in Mr. B’s Inc. Plaintiffs argue that the prices charged for PSLs are over and

above the amount paid for the season tickets, therefore, the original purchase of a PSL should be

treated the same as the tickets sold by ticket brokers over and above the face value of the tickets.

Plaintiffs argue that, like the transaction between ticket brokers and their patrons, the purchase of

a PSL from the Bears is incidental to the purchase of season tickets. Plaintiffs argue that the

subsequent transfer of a PSL by an original purchaser is even more similar to the transaction at

issue in Mr. B’s, Inc. because “[n]ot only is the charge independent from that of the tickets, but

the price of the PSL is determined solely by market forces.”

¶ 39   We do not find Mr. B’s Inc. compelling authority in favor of finding that a PSL is

tangible personal property. The Mr. B’s, Inc. court found that the tickets in that case were

tangible personal property in response to the plaintiffs’ argument that tickets are not tangible

personal property under this court’s decision in Soderholm v. Chicago National League Ball

Club, Inc., 225 Ill. App. 3d 119 (1992). Mr. B’s, Inc., 302 Ill. App. 3d at 937. The Mr. B’s Inc.

court found that the plaintiffs’ reliance on Soderholm was misplaced because “[t]his court in

Soderholm did not conclude that tickets are not tangible personal property; rather, this court

addressed the issue of whether a season ticket is a license that permits the holder to enter a ball

park subject to its terms and conditions. Thus, Soderholm does not stand for the proposition that

                                                 18
1-12-0265)
1-12-1556)Cons.

all tickets are licenses.” Mr. B’s, Inc., 302 Ill. App. 3d at 937. While Soderholm may not stand

for the very broad and general proposition that all tickets are licenses, we find that Soderholm

does support finding that a PSL is not tangible personal property.

¶ 40   The Soderholm court expressly held that “a season ticket is a revocable license.”

Soderholm, 225 Ill. App. 3d at 124. The court reasoned as follows:

                       “A license grants the licensee a right to enter upon the

               licensor’s land and use it for a specific purpose, without giving up

               the licensor’s legal possession and control over the property ***.

               [Citation.] A license is revocable at any time at the will of the

               licensor [citation], and mere permission to use land does not ripen

               into a prescriptive right regardless of the length of time that such

               enjoyment is permitted. [Citation.]

                       It is clear that a Cubs season ticket consists of a series of

               revocable licenses ***. *** Each individual ticket permits the

               holder to enter the ball park on the date and at the time stated on

               the ticket for the specific purpose of attending the identified game

               and sitting in the specified seat, subject to all terms, conditions and

               policies established by the Chicago Cubs.” Soderholm, 225 Ill.

               App. 3d at 124-25.

¶ 41   We note here that for reasons set out fully below, the price paid for a PSL constitutes part

of the charge paid to view an amusement. Thus, just as in Soderholm, the price paid for a PSL is

                                                 19
1-12-0265)
1-12-1556)Cons.

part of the total charges which permit the holder to enter the stadium for the specific purpose of

attending a Bears game and of siting in the specified seat. The fact that an additional step is

required to obtain that privilege--the purchase of the season tickets associated with the PSL seat--

does not change the nature of the rights obtained by the purchase of a PSL, which is a personal

privilege which carries with it no vested property right. See Weinstein v. Daley, 85 Ill. App. 2d

470, 481 (1967) (involving revocation of a retail liquor license and holding that “[a] license is

purely a personal privilege to do what would otherwise be unlawful and hence carries with it no

vested property right.”).

¶ 42      The decisions of our supreme court provide additional authority in support of finding that

a PSL is not tangible personal property. In Colorcraft Corp., Inc. v. Illinois Department of

Revenue, 112 Ill. 2d 473 (1986), the issue was whether the plaintiff’s business, which developed

film for retail dealers, was a service occupation or whether it was engaged in manufacturing. Id.

at 476.

                 “[A] standard has been developed to determine whether a business

                 is a service or a retail occupation. The test *** provides:

                 If the article sold has no value to the purchaser except as a result of

                 services rendered by the vendor and the transfer of the article to the

                 purchaser is an actual and necessary part of the service rendered,

                 then the vendor is engaged in the business of rendering service and

                 not in the business of selling at retail. If the article sold is the

                 substance of the transaction and the service rendered is merely

                                                    20
1-12-0265)
1-12-1556)Cons.

               incidental to and an inseparable part of the transfer to the purchaser

               of the article sold, then the vendor is engaged in the business of

               selling at retail. [Citations.]” (Internal quotation marks omitted.)

               Id. at 481-82.

¶ 43   Our supreme court held that the plaintiff-taxpayer was not in the business of selling

tangible personal property. Colorcraft Corp., Inc., 112 Ill. 2d at 483. The court reasoned that

“the article sold in the instant case, the finished prints, have no value to the customer except as a

result of the services rendered by Colorcraft. *** [A]lthough the transfer of the prints *** is an

actual and necessary part of the service rendered, it is the service of creating the prints which is

the essence of the transaction.” Id. The court found that “[t]he customer is really paying for the

skill, labor, and use of the machinery and equipment of the photofinisher.” Id. at 484.

“Therefore, Colorcraft is not in the business of selling tangible personal property.” Id.

¶ 44   Similarly, here, the purchaser of a PSL is really paying for the privilege of viewing an

amusement. The Colorcraft Corp., Inc. court noted that “[i]t is unlikely that the average person

would be even remotely interested in purchasing prints developed for another.” Colorcraft

Corp., Inc., 112 Ill. 2d at 484. It is similarly unlikely that the average person would be even

remotely interested in purchasing a PSL, then never viewing a Bears game. Although, for some,

the purchase of the PSL is an actual and necessary part of obtaining the privilege of viewing a

Bears game, it is the privilege to view the game which is the essence of the transaction, not the

transfer of the PSL. See Colorcraft Corp., Inc., 112 Ill. 2d at 483 (citing First National Bank of

Springfield v. Department of Revenue, 85 Ill. 2d 84, 91 (1981) (“the sale of computer software

                                                  21
1-12-0265)
1-12-1556)Cons.

*** is, in substance, the transfer of intangible personal property”)). In First National Bank of

Springfield, the court looked to the “essence of the transaction” to determine whether the transfer

involved tangible personal property. First National Bank of Springfield, 85 Ill. 2d at 90. The

privilege of viewing a Bears game is the substance of a transaction involving a PSL.

¶ 45   The true benefit of the sale or purchase of a PSL is to view a Bears game from a

particular seat. This is evident from the fact that the PSL becomes void if the season ticket for its

seat is not purchased. Therefore, the true substance of the transaction is the privilege of viewing

a Bears game. See generally Communications & Cable of Chicago, Inc. v. Department of

Revenue of the City of Chicago, 275 Ill. App. 3d 680, 685 (1995) (“the transfer of tangible

property will not result in sales tax liability where such transfer is merely incidental to the

rendering of a service, which is the true substance of the transaction”).

¶ 46   We find that under our supreme court’s reasoning in First National Bank and Colorcraft

Corp., Inc., as well as Soderholm, a PSL is not tangible personal property. Neither City of

Chicago v. StubHub, Inc., 622 F. Supp. 2d 699, 703-07 (N.D. Ill. 2009), nor City of Chicago v.

eBay, Inc., No. 08 C 3281 (N.D. Ill. 2009), is binding on this court. Moreover, each case relied

solely on Mr. B’s, Inc. for their conclusion that the sale of amusement tickets at prices above face

value constitutes tangible personal property. See StubHub, Inc., 622 F. Supp. 2d at 703-04. For

the reasons stated above, we find that Mr. B’s, Inc. is unpersuasive in light of conflicting

supreme court authority on this topic.

¶ 47   Finally, the amusement tax on PSL sales is not an occupation tax. Kerasotes Rialto

Theater Corp. v. City of Peoria, 77 Ill. 2d 491, 500 (1979) (holding that a tax upon the privilege

                                                  22
1-12-0265)
1-12-1556)Cons.

of participating in or witnessing an amusement was not a tax on an occupation) (citing Town of

Cicero v. Fox Valley Trotting Club, Inc., 65 Ill. 2d 10 (1976)). In Fox Valley Trotting Club, Inc.,

65 Ill. 2d at 22, our supreme court found that a tax “upon all amusements within the town of

Cicero at the rate of 10 cents per person witnessing, participating or entering the grounds or

enclosure of a place of amusement or entertainment” was not a tax upon given occupations. Id.

The court recognized that “some of those who are taxed by the Ordinance may be said to be

engaged in the occupation of presenting or conducting amusements.” Id. at 23. The court held

that “[i]t is not sufficient *** that the burden of the tax fall upon those engaged in occupations

***. Rather, the ordinance must be designed to impose, and in fact impose, a tax upon given

occupations.” Id.

¶ 48   “[A]n occupation tax has one of two missions: either to regulate and control a given

business or occupation, or to impose a tax for the privilege of exercising, undertaking or

operating a given occupation, trade or profession.” (Internal quotation marks omitted.) Fox

Valley Trotting Club, Inc., 65 Ill. 2d at 23. The court held that the ordinance at issue was not so

designed because the tax did not have a regulatory purpose and was not otherwise designed to tax

those engaged in a given occupation, trade, or profession. Id. Similarly, in this case, we find that

the City’s amusement tax has no regulatory purpose. Nor is the tax designed to tax those

engaged in a given occupation, trade, or profession. The tax is not designed to tax the occupation

of presenting professional football games. The tax is on the privilege to view or to participate in

a professional football game, which is indisputably an amusement within the meaning of the

ordinance. The duty to pay the tax is not predicated upon the generation of revenue, therefore the

                                                 23
1-12-0265)
1-12-1556)Cons.

tax is not confined to those who are “engaged in businesses for profit.” Fox Valley Trotting

Club, Inc., 65 Ill. 2d at 22. Rather, the tax is on the charges paid for the privilege of viewing an

amusement. Moreover, the incidence of the tax is on the consumer, although responsibility for

collecting and remitting the tax may fall to the wholesaler and retailer. Our supreme court has

found that similar taxes are not an occupation tax. Kerasotes Rialto Theater Corp., 77 Ill. 2d at

500.

¶ 49   We are not persuaded by plaintiffs’ reliance on Chicago Health Clubs, Inc. In Chicago

Health Clubs, Inc., our supreme court found that the tax at issue imposed an occupation tax

(Chicago Health Clubs, Inc., 124 Ill. 2d at 11) and was not a tax on an amusement and, therefore,

was not authorized by section 11-42-5 of the Municipal Code (Chicago Health Clubs, Inc., 124

Ill. 2d at 13-14). Chicago Health Clubs, Inc. is distinguishable. First, our supreme court found

that “although the tax may ostensibly fall on individuals receiving the clubs’ services, the tax

truly is an ‘occupation’ tax within the meaning of section 6(e) [of article VII].” Chicago Health

Clubs, Inc., 124 Ill. 2d at 10. The court reached that conclusion considering that the clubs are

responsible for collecting and remitting the tax, responsible for paying the tax regardless of

whether their patrons refuse to do so, and are subject to penalties for delays in submitting tax

payments. Id. The court concluded that “it is clear that a tax on membership fees on health and

racquetball club memberships is a tax on those occupations.” Id. at 12.

¶ 50   Next, our supreme court turned to the meaning of “amusement” for purposes of section

11-42-5 of the Illinois Municipal Code (Ill. Rev. Stat. 1985, ch. 24, ¶11-42-5) to determine if the

statute authorized the tax on health clubs as “amusements” or “places of amusement.” Chicago

                                                 24
1-12-0265)
1-12-1556)Cons.

Health Clubs, Inc., 124 Ill. 2d at 12. In that case, the court found that the membership fees that

were subject to the tax “covered a wide variety of both amusement and nonamusement

activities.” Id. The nonamusement services provided by the clubs included “nutritional

instructions, weight loss counseling, diet counseling, cardiovascular examinations and

counseling, and instruction in weightlifting and other physical fitness activities.” Id. at 13-14.

The court held that “in view of the wide variety of nonamusement activities carried on at these

clubs, we simply cannot conclude that a tax on their membership fees is a tax on either

‘amusements’ or ‘places of amusement.’ ” Id. at 14. The ordinance could not be saved by

attempting to insulate from taxation either service activities or items purchased at the health

clubs. Id. at 14-15. “The plain language of the amended ordinance *** does not distinguish

between service and nonservice components of the entities remitting the tax, and there is nothing

in the amended ordinance to support defendant's ‘theory’ that the tax applies to anything less than

the gross receipts of health and racquetball clubs.” Id. at 15.

¶ 51   In this case, the incidence of the tax is not just ostensibly on the patron of an amusement.

The practical operation and effect of the tax is in fact on patrons of amusements who are

responsible for the tax even if the tax collector--which includes the operators of amusements and

the resellers of tickets--fails to collect the tax. Chicago Municipal Code § 4-156-030(C)

(amended November 19, 2008). The placement of responsibility on the operator of an

amusement, the place where an amusement is being held, or on resellers, to collect and remit the

tax does not make the tax a de facto occupation tax. Kerasotes Rialto Theater Corp., 77 Ill. 2d at

500 (“In that case it was held that the incidence of the tax was on the consumer, although the tax

                                                 25
1-12-0265)
1-12-1556)Cons.

ordinance placed responsibility for collecting and remitting the tax on the wholesaler and retailer.

The tax in that case was held not to be an occupation tax.”) (citing S. Bloom, Inc. v. Korshal, 52

Ill. 2d 56 (1972)). Nor is the tax unique to a particular commercial enterprise, such as Chicago

Bears’ football. Compare Chicago Health Clubs, Inc., 124 Ill. 2d at 11-12 (“by defining

‘amusement’ to include ‘racquetball or health clubs,’ and by further establishing a tax on those

clubs’ membership fees, the city has gone far beyond merely taxing particular activities

[citation], and has imposed a tax unique to those types of commercial enterprises.”).

¶ 52   Also instructive is Justice Ryan’s special concurrence in Chicago Health Clubs, Inc.

Justice Ryan concurred in the judgment that the tax at issue constitutes an occupation tax which

had not been authorized by the General Assembly, but found that “the opinion is not clear in its

analysis for determining whether a tax is an occupation tax within the meaning of article VII,

section 6(e).” Chicago Health Clubs, Inc., 124 Ill. 2d at 16 (Ryan, J., specially concurring). In

Chicago Health Clubs, Inc., Justice Ryan found determinative the fact that “a tax on membership

fees or dues of health and racquetball clubs is not such a tax as the delegates to the constitutional

convention intended home rule units to levy.” Id. at 18. “These clubs perform services, and the

tax is measured not by participation in or admissions to individual events, but on membership

dues collected by the clubs. It is in the nature of a service tax and, as such, is similar to those

taxes held invalid in Commercial National Bank v. City of Chicago.” Id. In this case, the tax is

measured by the charges paid for admission to events, not any services performed by the Bears or

by the Chicago Park District.

¶ 53   Additionally, we find that the ordinance does not create an occupation tax because it does

                                                  26
1-12-0265)
1-12-1556)Cons.

not impose a tax on the service of raising renovation funds, the privilege of presenting Bears’

football, or for engaging in professional football as a profession. Illinois Gasoline Dealers Ass’n

v. City of Chicago, 119 Ill. 2d 391, 399 (1988) (“To determine if a tax constitutes an occupation

tax, it must be judged by the standard of whether it regulates and controls a given occupation, or

imposes a tax for the privilege of engaging in a given occupation, trade or profession [citation],

or finally, whether it imposes a tax on the privilege of engaging in the business of selling

services.”). The charge for a PSL is a charge for the privilege to view an amusement and the

City’s tax on those charges is not preempted.

¶ 54   For the foregoing reasons, we conclude that PSLs are an intangible right to purchase a

ticket to enter the stadium to view or attend an amusement and, therefore, section 8-11-6a does

not preempt the tax as a tax on tangible personal property. Nor is the tax on PSLs a tax on

occupations. We find that the City’s amusement tax, as applied to PSLs, is not preempted by any

provision in Article VII of the Illinois Constitution. Accordingly, we find that the City is

authorized to tax PSLs. See Commercial National Bank, 89 Ill. 2d at 50 (“any limitation on the

power of a home rule unit to tax must be found within section 6 of article VII of the

Constitution”). Based on our finding, we have no need to reach the question of whether the

City’s tax is specifically authorized by section 11-42-5 of the Municipal Code.

¶ 55                               4. Applicability of Ordinance

¶ 56   Having determined that the amusement tax is not preempted, we must now determine

whether the tax is applicable to PSLs under the language of the ordinance. The amusement tax

defines football as an amusement. Chicago Municipal Code § 4-156-010 (amended November

                                                 27
1-12-0265)
1-12-1556)Cons.

19, 2008). The ordinance imposes the tax on “the admission fees or other charges paid for the

privilege to enter, to witness, to view or to participate in such amusement.” Chicago Municipal

Code § 4-156-020(A) (amended November 19, 2008). The question in this case is not whether

the activity involved is an amusement, but whether the price paid for a PSL is a charge to enter,

to witness, to view or to participate in such amusement.

¶ 57    Plaintiffs argue that it is not, because the PSL does not give its purchaser the right to

enter, witness, view or participate in the game. Plaintiffs argue that a PSL grants the holder the

right to purchase season tickets annually for a particular seat, and to transfer that right, but,

unlike the season tickets themselves, a PSL does not grant its holder the right to enter, view,

witness or participate in the event. The “bundle of rights” rights conferred by a PSL are distinct

from the rights conferred by a ticket. Plaintiffs interpret the amusement tax to apply only to the

charge for actual entry to an amusement and under the ordinance, the right of entry is defined as a

“ticket.” Further, plaintiffs argue the original sales of PSLs are not within the scope of the

amusement tax because the Chicago Park District did not sell PSLs for an amusement, but to

finance lakefront improvements. Plaintiffs argue that the purpose for the charge is relevant

because the plain language of the ordinance limits its reach to charges for admission to

amusements.

¶ 58    According to plaintiffs, it is the price of the ticket, and only the price of the ticket, which

constitutes the “admission fees or other charges paid for the privilege to enter, to witness, to view

or to participate in [the] amusement.” This argument is irreconcilable with the plain language of

the ordinance. Plaintiffs’ interpretation of the ordinance would render the language “other

                                                  28
1-12-0265)
1-12-1556)Cons.

charges” completely superfluous to “admission fees.” Plaintiffs argue that both “admission fees”

and “other charges” modify “paid for the privilege to enter, to witness, to view or to participate in

such amusement,” and as such the price paid for the PSL cannot be considered. Plaintiffs’

argument, then, is that the ordinance is superfluous in its use of “admission fees” and “other

charges” but, somehow, in this context superfluidity is acceptable. We disagree because

construing the ordinance in this way would clearly be inappropriate. Daniels v. Corrigan, 382

Ill. App. 3d 66, 72 (2008) (“Courts apply the principles of statutory construction to ordinances.”);

Catom Trucking, Inc. v. City of Chicago, 2011 IL App (1st) 101146, ¶ 15 (“We must construe the

statute so that each word, clause, or sentence is given reasonable meaning and not deemed

superfluous or void.”).

¶ 59   We find that the price of a PSL represents a charge for the privilege of viewing the

amusement. The record contains the PSL terms and conditions. The terms and conditions are

“deemed a part of the Permanent Seat License Agreement” and are “binding upon [the] Licensee

and Licensor and their respective assigns.” The terms provide that each PSL relates to a specific

seat designated in the PSL agreement and state that in consideration of the purchase of a PSL, the

licensee under the PSL “shall have the right to purchase from the Team a Season Ticket, and the

Team agrees to offer for sale to Licensee a Season Ticket for the seat to which a PSL applies.

Licensee shall have no right to enter the Stadium or to attend the Team’s games without purchase

of a ticket for such game.” The terms regarding “Use of Seats and Stadium” provide that:

                       “Licensee will have the privilege to enter the Stadium for

               Team home games and use the seats to which Licensee’s PSL

                                                 29
1-12-0265)
1-12-1556)Cons.

               relates only upon presentation of a ticket for admission to a Team

               home game. Licensee’s PSL does not confer upon Licensee any

               privilege to enter the Stadium or attend a Team home game.”

¶ 60   The terms and conditions permit the licensee to transfer a PSL and requires there to be

only one licensee for a given seat at any given time. The terms contain the following disclaimer:

“The rights licensed under this Agreement are revocable rights of personal privilege and do not

confer upon Licensee any interest in real property or any leasehold interest in the seat to which

the PSL applies or the Stadium.” The termination clause of the PSL terms and conditions refer to

“Licensee’s right to purchase a Season Ticket for each seat to which a PSL applies.” A PSL

terminates upon the failure to purchase a season ticket for each PSL for any football season. The

terms also contain the following provision regarding taxes:

                       “At the option of the Team, any sales, use, service

               amusement or other tax or governmental charge imposed on the

               PSLs or the sale thereof or of Season Tickets to Licensee may be

               added to the prices(s) charged to Licensee and shall then be the

               responsibility of and paid by Licensee.”

¶ 61   Defendant argued, and, based on the forgoing, we agree, that the charge a PSL ticket

holder pays for the privilege of viewing a Bears game includes the charge for the PSL because

owning the PSL for their seat is a prerequisite to purchasing a ticket for their seat. A PSL

pertains to a seat in the stadium for which only the PSL holder may purchase a ticket. Therefore,

the “admission fees” and “other charges” a fan sitting in a seat subject to a PSL paid to view a

                                                30
1-12-0265)
1-12-1556)Cons.

Bears game includes both the season ticket and the fee for the PSL on his or her seat because that

fan would not be able to view the game unless he or she both held the PSL for the seat and

purchased season tickets for the seat2. This conclusion is supported by the language of the PSL

agreement. Under the PSL terms and conditions, a PSL is a nullity without a ticket. The

following “Representations of Licensee” contained in the terms and conditions is also relevant:

                        “(a) Licensee has read and understands the terms of this

                Agreement;

                                                  ***

                        (d) Licensee is acquiring the PSL solely for the right to

                purchase season tickets to the Team home games at the stadium”

¶ 62    The only function of a PSL, by its own terms, is to confer the privilege of viewing a Bears

game by being able to buy season tickets. A PSL is not the only means of obtaining that

privilege, but obtaining the privilege of entering the stadium is the only intrinsic reason for

purchasing a PSL. Plaintiffs’ argument that ownership of a PSL is not a prerequisite to entering

the stadium is unavailing. Purchasing the PSL is a prerequisite to viewing the game from a seat

covered by a PSL. Plaintiffs stated that a PSL has value because it requires the Bears to sell its

holder season tickets and gives the holder the ability to transfer that right. Whatever extrinsic

value that right has, our focus is on the purpose of the charge for the PSL itself. Intrinsically, the


        2
         Unless, of course, the PSL holder who purchased season tickets gifted tickets to a particular
game to a third party. The tax would still apply, because the tax is on the charges paid for the
privilege to enter, not, as plaintiffs argued, on the charges paid for actual entry. For that reason, the
tax applies even if the season ticket holder does not attend the game.

                                                   31
1-12-0265)
1-12-1556)Cons.

only purpose and function of purchasing a PSL is to purchase the right to view an amusement.

On its face, a PSL cannot be separated from the privilege of viewing a Bears game, because the

PSL terminates automatically and without notice if a ticket is not purchased.

¶ 63   We hold that the amusement tax applies to the price paid for a PSL, either by an original

purchaser or by a subsequent transferee, because that price is a charge paid for the privilege of

viewing an amusement. In light of this holding, we have no need to address the parties’

arguments concerning whether plaintiffs’ claim for refunds of the taxes paid on the original PSL

purchases is time barred. The City properly collected and the Bears voluntarily paid the tax on

the original PSL sales.

¶ 64   Plaintiffs’ first amended complaint alleged that the City’s attempt to collect the tax--

presumably against subsequent PSL transfers--is time barred by section 13-205 of the Code (735

ILCS 5/13-205 (West 2008)). We have held that the City’s amusement tax applies to resales of

PSLs. The City seeks monetary judgment against those who did not pay the tax on the charges

they paid to obtain PSLs after 2003. That claim remains pending in the trial court, and the trial

court’s judgment before this court did not make an express determination as to whether the City

is barred from collecting those taxes. Whether the statute of limitations applies3, and whether


       3
          See La Pine Scientific Co. v. Lenckos, 95 Ill. App. 3d 955, 958 (1981) (“Statutes of
limitation affect the remedy by limiting the period within which legal action may be brought or
remedies may be enforced; they bar the right to sue for recovery but do not extinguish the debt which
remains as before. [Citation.] *** [T]he assessments in question remain as debts owing to the State
but are not enforceable by means of a lawsuit brought by the State.”). But see Champaign County
Forest Preserve Dist. v. King, 291 Ill. App. 3d 197, 200 (1997) (“As a general rule, the statute of
limitations will not apply to bar a claim by a governmental entity acting in a public capacity.
However, where the entity is acting in a private capacity, its claim may be subject to a limitations

                                                 32
1-12-0265)
1-12-1556)Cons.

any particular counterdefendant can plead and prove a statute-of-limitations defense, is a fact-

specific determination that will depend on the particular facts and circumstances of the individual

counterdefendant’s purchase or sale of a PSL. See Rajcan v. Donald Garvey and Assoc., Ltd.,

347 Ill. App. 3d 403, 410 (2004) (“the statute of limitations is an affirmative defense to a

proceeding and applies only when raised by a party; the party asserting it has the burden to show

it applies”). Those questions have not been addressed in this appeal, and must be resolved in the

trial court in further proceedings on defendant’s counterclaim.

¶ 65                         5. Plaintiffs’ Second Amended Complaint

¶ 66   We now turn to the question of whether the trial court properly denied plaintiffs’ motion

for leave to file a second amended complaint. “The decision whether to allow or deny an

amendment is a matter within the circuit court’s discretion, and we will reverse only if the circuit

court abused its discretion.” Illinois State Bar Ass’n Mutual Insurance Co. v. Cavenagh, 2012 IL

App (1st) 111810, ¶ 23. Initially, plaintiffs argued that the trial court had authority to allow their

second amended complaint because the court’s order on the parties’ cross-motions for summary

judgment was not a final judgment, and the amendment satisfied the factors applicable to the

determination of whether amendment after summary judgment should be allowed pursuant to

section 2-1005(g) of the Code (735 ILCS 5/2-1005(g) (West 2010)). Those factors were

identified in Loyola Academy v. S & S Roof Maintenance, Inc., 146 Ill. 2d 263, 272 (1992).

Section 2-1005(g) of the Code of Civil Procedure states that “[b]efore or after the entry of a



defense.”).

                                                  33
1-12-0265)
1-12-1556)Cons.

summary judgment, the court shall permit pleadings to be amended upon just and reasonable

terms.” 735 ILCS 5/2-1005(g) (West 2012). In Loyola Academy, our supreme court held that:

               “to determine whether the trial court has abused its discretion, we

               must look at four factors *** adopted by this court. These factors

               are: (1) whether the proposed amendment would cure the defective

               pleading; (2) whether other parties would sustain prejudice or

               surprise by virtue of the proposed amendment; (3) whether the

               proposed amendment is timely; and (4) whether previous

               opportunities to amend the pleading could be identified.” Loyola

               Academy, 146 Ill. 2d at 273.

¶ 67   Plaintiffs argued the order on the motions for summary judgment was not a final order

because defendant’s counterclaim and plaintiffs’ claim for injunctive relief as to the taxation of

subsequent transfers of PSLs remained pending. As to the Loyola Academy factors, plaintiffs

argued their amendments correct certain defects in the pleading, including clarification of the

relationship between the Bears and the Chicago Park District, the fact that PSLs were sold

independently of season tickets, facts which purportedly obviated the applicability of the URPO

and buttressed the court’s decision regarding the inapplicability of the voluntary payment

doctrine, and the circumstances underlying the alleged lack of notice to original PSL purchasers

of the tax. Plaintiffs also argued defendant could not claim prejudice or surprise from the

amendment, the amendment was timely, and the only prior amendment was for the purpose of

adding additional plaintiffs. Plaintiffs assert the trial court was mistaken in its belief it acted

                                                  34
1-12-0265)
1-12-1556)Cons.

beyond its authority when it initially granted leave to amend, therefore its order upon

reconsideration denying plaintiffs’ motion for leave to file a second amended complaint should

be reversed.

¶ 68    Defendant concedes its counterclaim remains pending in the trial court. Defendant

focuses on the added counts III and IV and argues plaintiffs never obtained leave to file a second

amended complaint alleging either a due process or an equal protection violation. In reply,

plaintiffs argue defendant waived its argument regarding plaintiffs’ due process and equal

protection claims by failing to file a cross-appeal of the trial court’s denial of defendant’s motion

to strike those counts. Plaintiffs do not refute they failed to obtain leave to file counts III and IV,

but argue that the failure to obtain leave to add claims is not a jurisdictional defect and, if the trial

court believes a pleading is defective, the proper course is to allow the pleading to be filed and

then hear argument as to its efficacy, which is what the trial court did in this case when it denied

defendant’s motion to strike.

¶ 69    Plaintiffs’ second amended complaint contained a count for declaratory judgment (count

I); a count based on the takings clause (count II); a count alleging defendant deprived PSL

purchasers of due process (count III); and a count on behalf of original purchasers of PSLs

alleging that as a result of the court’s summary judgment order, the City has taxed some PSL

purchasers (original purchasers) and not others (subsequent transferees) in violation of the

original purchasers’ right to equal protection (count IV). If a proposed amendment will not cure

a defect in the pleading, the other factors used to determine whether the trial court abused its

discretion in denying leave to amend are superfluous. Watkins v. Office of the State Appellate

                                                   35
1-12-0265)
1-12-1556)Cons.

Defender, 2012 IL App (1st) 111756, ¶ 34.

¶ 70   In light of our disposition, we find that no amendments to count I of plaintiffs’ complaint

will cure a defect in the pleadings. For the reasons set forth herein, defendant’s amusement tax is

specifically authorized by the General Assembly, and, based on the purpose of purchasing a PSL

as embodied in its terms, and the nature of the rights conferred, the amusement tax applies to any

sales of PSLs by any party. Any argument concerning whether plaintiffs’ claims for a refund are

barred by the voluntary payment doctrine, any statute of limitations, whether the discovery rule

or equitable tolling applies to plaintiffs’ claim for a refund, or whether the City’s URPO bars

plaintiffs’ refunds, is moot. Plaintiffs are not entitled to a refund because the City properly

collected the tax.

¶ 71   Thus, there is no set of facts that would entitle plaintiffs to the declaratory and injunctive

relief they seek. Accordingly, any amendment to the complaint as to count I would be futile, and

the trial court did not abuse its discretion in denying plaintiffs leave to amend that count. See

Watkins, 2012 IL App (1st) 111756, ¶ 35.

¶ 72   As to count II, the trial court did not abuse its discretion because plaintiffs cannot state a

claim under the Takings Clause. Empress Casino Joliet Corp. v. Giannoulias, 231 Ill. 2d 62, 81

(2008) (“It is well settled that the takings clauses of the federal and state constitutions apply only

to the state’s exercise of eminent domain and not to the state’s power of taxation.”). A PSL is

not real property and confers no rights in real property. Therefore, a takings analysis is not

applicable. Id. at 83.

¶ 73   Finally, as to counts III and IV of the second amended complaint, the court has held that

                                                  36
1-12-0265)
1-12-1556)Cons.

“[a]mendments that are filed without leave of court ‘are said to be a nullity which should be

stricken.’ [Citation.]” Kurczaba v. Pollock, 318 Ill. App. 3d 686, 703 (2000). The failure to

obtain leave to amend a complaint is not a jurisdictional defect to the extent a party may waive

its right to object to the defect. Ragan v. Columbia Mutual Insurance Co., 183 Ill. 2d 342, 355

(1998). See also Savage v. Mui Pho, 312 Ill. App. 3d 553, 557 (2000) (“the requirement of

obtaining leave of court may be waived by the parties”). Here, defendant did not waive its right

to object to plaintiffs’ failure to obtain leave to file counts III and IV of their second amended

complaint. Defendant promptly moved to dismiss those counts on that basis. There is no

genuine dispute that plaintiffs did not obtain leave to file counts III and IV of the second

amended complaint. Those counts are a nullity.

¶ 74   The trial court’s judgment denying plaintiffs leave to file the second amended complaint

was not an abuse of discretion.

¶ 75                                      CONCLUSION

¶ 76   Case number 12-0265 is dismissed. We find that the City’s amusement tax is not

preempted and, therefore, is a proper exercise of its home rule authority. We express no opinion

on the City’s counterclaim for a money judgment because that claim remains pending in the trial

court. General Motors Corp. v. Pappas, 242 Ill. 2d 163, 176 (2011) (“A notice of appeal confers

jurisdiction on a court of review to consider only the judgments or parts of judgments specified

in the notice of appeal.”). The trial court’s judgment is affirmed and the cause remanded for

further proceedings.

¶ 77   Affirmed and remanded.

                                                 37
