Palumbo Brother, Inc. v. Wagner
Annotate this Case
SIXTH DIVISION
DECEMBER 12, 1997
No. 1-95-4090
)
PALUMBO BROS., INC., ) APPEAL FROM THE
an Illinois corporation, ) CIRCUIT COURT
Plaintiff-Appellant, ) OF COOK COUNTY.
)
v. )
)
RAYMOND T. WAGNER, JR., Director ) HONORABLE
of the ILLINOIS DEPARTMENT OF ) EARL ARKISS,
REVENUE, ) ALEXANDER P. WHITE,
Defendant-Appellee. ) JUDGES PRESIDING.
PRESIDING JUSTICE CAMPBELL delivered the opinion of the
court:
Plaintiff Palumbo Bros, Inc. (Palumbo) appeals orders of the
circuit court of Cook County dismissing a complaint Palumbo filed
against defendant Raymond T. Wagner, the Director of the Illinois
Department of Revenue (Director) to determine the enforceability
of a tax obligation against Palumbo and denying Palumbo's motion
to reconsider.
The record on appeal indicates the following facts. On
April 7, 1995, Palumbo filed a complaint for declaratory judgment
and other relief against the Director. Palumbo alleged that it
was a member of a joint venture with a separate, independent
Illinois corporation known as Benchmark Construction Company
(Benchmark). The Illinois Department of Revenue (Department)
assigned the joint venture an Illinois Business Tax (IBT) number
that was different from Palumbo's IBT number.
The complaint alleged that on December 12, 1991, the Depart-
ment issued a Notice of Tax Liability (1991 NTL) numbered "S F
199134385402012" to the joint venture under its own IBT number,
proposing to assess $31,849 in use taxes, $3,185 as a penalty and
$14,332 in interest, for a total of $49,366. The 1991 NTL, which
was attached as an exhibit to the complaint, is addressed to
Palumbo at 323 S Center Street in Hillside, Illinois. On
June 15, 1992, the Department issued a Notice of Tax Liability
(1992 NTL) numbered "S F 9213544903001" to the joint venture
proposing to assess motor vehicle use taxes, with a penalty and
interest totalling $262,158. The 1992 NTL, which was attached as
an exhibit to the complaint, is addressed to "Palumbo Bros.
Inc./Benchmark Const. Co." (Palumbo/Benchmark) at 323 S Center
Street in Hillside, Illinois.
The complaint alleged that the Department never notified or
instituted proceedings against Palumbo individually for these
proposed assessments. On November 3, 1993, the Director caused a
tax lien to be filed in favor of the Department upon all real and
personal property owned or acquired "by the above named tax-
payer." The Notices of Tax Lien, which are attached as exhibits
to the complaint: refer to both Palumbo and Palumbo/Benchmark;
state that they are based on the 1991 NTL and the 1992 NTL; and
carry the joint venture's IBT number.
Palumbo sought a declaration that it had no obligation to
the Department for the taxes, penalties and interest assessed
against the joint venture. Palumbo also sought a declaration
that the Department had no valid lien against Palumbo's individ-
ual assets, including, but not limited to a particular piece of
real property located in South Barrington, Illinois. Palumbo
also sought similar relief, including a declaration that the
Department had no legal basis to enforce a tax lien against
Palumbo by reason of a tax obligation of the joint venture.
On April 12, 1995, Palumbo filed an emergency motion for a
temporary restraining order, alleging that the Department was
attempting to serve a notice of levy on the Chicago Title Insur-
ance Company, which was holding $169,000 in escrow that repre-
sented the net profit on the sale of the property Palumbo named
in its complaint. The next day, the parties entered into an
agreed preliminary injunction restraining the Director or his
agents from levying on the property at issue until the order was
vacated or modified by the court or altered by agreement of the
parties.
The Director then filed a motion to dismiss Palumbo's
complaint pursuant to section 2-619 of the Code of Civil Proce-
dure (735 ILCS 5/2-619 (1996))(Code). The motion alleged that
the Department learned of the joint venture during an audit of
Palumbo performed at Palumbo's place of business, causing The
Department to assign the joint venture an IBT number. The motion
alleged that the 1991 NTL was issued as a result of the audit and
that the 1991 NTL and the 1992 NTL were sent to Palumbo's place
of business in accordance with statutory requirements.
The Director alleged that Palumbo failed to request a
hearing on either NTL issued under the joint venture's IBT number
and thus became final after 60 days. The Director asserted that
Palumbo was given notice that comported with due process. The
motion asked the court to dismiss the complaint for failure to
state a claim and to allow the Department to collect the taxes
administratively. The Director also attached his notarized sworn
statement that he had full knowledge of the facts set forth in
the motion and that the matters asserted therein were true.
Palumbo apparently filed a response to the motion to dis-
miss. However, the parties have failed to identify where this
response appears in the record on appeal.
On July 5, 1995, the Department, through an Assistant
Attorney General, filed a reply to "its motion to dismiss."
Attached to the reply are two exhibits that purport to be domes-
tic return receipts for certified mail. Exhibit A of the reply
includes a photocopy of a receipt addressed to Palumbo at the
Center Street address that purports to show delivery on Decem-
ber 20, 1991; the space designated as "Signature -- Agent" is
signed by a Jim Romano. Exhibit B of the reply includes a
photocopy of a receipt addressed to Palumbo/Benchmark at the
Center Street address that purports to show delivery on June 18,
1992; the space designated as "Signature -- Agent" is again
signed by a Jim Romano. The motion states that Jim Romano is
"presumably a Palumbo agent ***."
The record does not disclose the respective interests of
Palumbo and Benchmark in the joint venture. The record does not
disclose the identity of the joint venture's officers or direc-
tors. The record does not disclose the purpose of the joint
venture. The record does not disclose the business or project to
be carried on by the joint venture. The record does not disclose
when the joint venture commenced or whether it has ceased opera-
tion. The record does not disclose any information relevant to
Benchmark, aside from the allegation that it is an Illinois
corporation. The record does not disclose whether the joint
venture had any other address other than that of Palumbo's
principal place of business. The 1992 NTL refers to the purchase
or sale of a vehicle, aircraft, trailer or mobile home; other-
wise, the record does not disclose the transactions that formed
the grounds for the Department's assessment. The 1991 NTL states
that it is based on an audit for November 1988; otherwise, the
record does not disclose the time period for which the Department
assessed taxes. The record does not disclose whether the joint
venture ever registered or filed returns with the Department or
paid any taxes.
On July 26, 1995, the trial court issued a memorandum and
decision dismissing Palumbo's complaint. Palumbo filed a timely
motion to reconsider; the Department filed a response. Palumbo
filed a reply memorandum, in which Palumbo states that it first
learned of the NTLs at issue on February 10, 1994, during a
proceeding before the Department regarding unrelated matters.
The trial court denied the motion to reconsider on October 25,
1995. Palumbo now appeals.
I
Palumbo maintains that the trial court erred in granting the
Department's motion to dismiss, claiming that the Department
failed to present affirmative matter defeating Palumbo's claim.
The Director was granted involuntary dismissal under section
2-619 of the Code. In its reply to Palumbo's response, the
Department specifically relied on Section 2-619(a)(9), which
permits dismissal where "the claim asserted * * * is barred by
other affirmative matter avoiding the legal effect of or defeat-
ing the claim." 735 ILCS 5/2-619(a)(9) (1996). A section
2-619(a)(9) motion to dismiss admits the legal sufficiency of the
plaintiff's cause of action much in the same way that a section
2-615 motion to dismiss admits a complaint's well-pleaded facts.
Kedzie and 103rd Currency Exchange, Inc. v. Hodge, 156 Ill. 2d 112, 115, 619 N.E.2d 732, 735 (1993). Conclusions of law,
however, are not admitted. McKinnon v. City of Chicago, 243 Ill.
App. 3d 87, 91, 612 N.E.2d 67, 69 (1993). The phrase "affirma-
tive matter" encompasses any defense other than a negation of the
essential allegations of the plaintiff's cause of action. Hodge,
156 Ill. 2d at 115, 619 N.E.2d at 735. The granting of a section
2-619 motion to dismiss is subject to de novo review on appeal.
Hodge, 156 Ill. 2d at 116, 619 N.E.2d at 735.
II
In this case, Palumbo alleges that the Department violated
Palumbo's right to due process in the tax proceeding regarding
the joint venture of which Palumbo was a part. The guarantee of
due process of law extends to every governmental proceeding which
may interfere with personal or property rights, whether the
process be legislative, judicial, administrative, or executive.
People ex rel. Harris v. Parrish Oil Production, Inc., 249 Ill.
App. 3d 664, 667, 622 N.E.2d 810, 814 (1993). Due process of
law, at a minimum, prohibits the deprivation of property without
providing notice and an opportunity for a hearing appropriate to
the nature of the case. Harris, 249 Ill. App. 3d at 668, 622 N.E.2d at 814. The procedural safeguards mandated by due process
in a particular case vary, depending upon:
"first, the private interest that will be
affected by the official action; second, the
risk of an erroneous deprivation of such
interest through the procedures used, and the
probable value, if any, of additional or
substitute procedural safeguards; and final-
ly, the Governments' interest, including the
function involved and the fiscal and adminis-
trative burdens that the additional or sub-
stitute procedural requirement would entail."
Mathews v. Eldridge, 424 U.S. 319, 335, 96 S. Ct. 893, 903, 47 L. Ed. 2d 18, 33 (1976).
This case involves a tax proceeding. We note that the United
States Supreme Court has often held that a state may employ
various financial sanctions and summary remedies to encourage
timely payment of taxes prior to the resolution of any dispute
over their validity. E.g., McKeeson Corp. v. Division of Alco-
holic Beverages and Tobacco, Dept. of Business Regulation of
Florida, 496 U.S. 18, 37, 110 S. Ct. 2238, 2250-51, 110 L. Ed. 2d 17, 36 (1990). A tax proceeding generally has two phases:
assessment and collection. People ex rel. Scott v. Pintozzi, 50 Ill. 2d 115, 126-27, 277 N.E.2d 844, 850-51 (1971). Palumbo
claims that it was denied due process in both phases.
A
Regarding the assessments in this case, we note that Illi-
nois law has allowed for the imposition of personal tax liability
on corporate officers under certain circumstances. For example,
our supreme court has stated that:
"Due process does not require that the defen-
dants be given personal notice in the assess-
ment phase apart from the notice that was
given to their corporate entity before per-
sonal liability for the tax can be imposed
upon them in a separate proceeding." Pin-
tozzi, 50 Ill. 2d at 127, 277 N.E.2d at 851.
In Department of Revenue v. Semenek, 194 Ill. App.3d 616, 619,
551 N.E.2d 314, 315-16 (1990), this court held that NTLs ad-
dressed to a dissolved corporation under the corporate registra-
tion number were sufficient to give the operators of the business
notice of the assessment of liability. Indeed, in Semenek, this
court was concerned that the defendants' interpretation of
Illinois corporate law would enable taxpayers to undermine the
detailed registration requirement and enforcement scheme of the
Retailers' Occupation Tax Act by permitting taxpayers to shift
tax liability to nonexistent or insolvent corporations. Semenek,
194 Ill. App.3d at 619, 551 N.E.2d at 316.
This case does not involve the corporate form; it is undis-
puted here that Palumbo was a member of a joint venture, which is
treated as a partnership subject to the Uniform Partnership Act.
Japczyk v. Gust K. Newberg Construction Co., 224 Ill. App. 3d
325, 328-29, 586 N.E.2d 572, 574 (1991). Every partner is an
agent of the partnership for the purpose of its business. 805
ILCS 205/9 (West 1996). Generally, notice to any partner of any
partnership matter constitutes notice to all partners. 805 ILCS
205/12 (West 1996). Partners are also liable for the wrongful
acts and omissions, penalties, misapplication of funds and all
other debts and obligations of the partnership. See 805 ILCS
205/15 (West 1996).
In Cook v. Department of Revenue, 281 Ill. App. 3d 171, 177,
666 N.E.2d 893, 897 (1996), this court upheld a partner's due
process claim,[fn1] distinguishing Pintozzi on the ground that
the corporations involved were the alter egos of individual
defendants, who used the corporation to commit fraud. Palumbo's
complaint conceals more than it reveals about the nature of the
joint venture and its operation. Although there is no allegation
of fraud in this case, it is undisputed that the Department first
learned of the joint venture's existence during an audit of
Palumbo and assigned an IBT number to the joint venture. It
could be safely inferred from these undisputed facts that the
joint venture did not register or file returns with the Depart-
ment or pay taxes.
Moreover, regardless of Palumbo's intent in the matter,
given that the joint venture is akin to a partnership, there was
and is no corporate veil to pierce. Similar to Pintozzi, the
plaintiff here does not allege that the joint venture did not
receive adequate notice of the tax assessments at issue. Palumbo
has alleged no facts that would prevent the imputation of that
notice and knowledge of potential personal liability to Palumbo
under Illinois partnership law.
The Cook court also distinguished Semenek on the basis that
the individuals therein had assumed a personal obligation to
collect and remit taxes by continuing the business after the
dissolution of the corporation. See Cook, 281 Ill. App. 3d at
177, 666 N.E.2d at 897-98. However, as with the Cook opinion's
treatment of Pintozzi, the distinctions went to the issue of
whether liability could be imposed on the individual defendants,
not the issue of whether the individual defendants were entitled
to notice in an individual capacity. Furthermore, while the
skeletal record in this case is silent on the questions of
whether the joint venture still exists and, if so, whether it is
solvent, we note that Palumbo's argument could open the door to
the type of liability shifting described in Semenek. Thus, the
basic thrust of Semenek seems applicable in the partnership
context.
On the issue of notice, Cook relied upon People ex rel.
Harris v. Parrish Oil Production, Inc., 249 Ill. App. 3d 664, 622 N.E.2d 810 (1993), in which this court invalidated tax sales
resulting from a regulation that provided no notice to tenants in
common owning undivided, fractional portions of a working
interest in oil and gas leases. The Parrish Oil Production court
rejected the argument that notice to the operator of a well was
sufficient, because there was no proof that the operator was the
agent of the owners, particularly for the purpose of payment of
taxes. Parrish Oil Production, 249 Ill. App. 3d at 670, 622 N.E.2d at 816. These concerns are simply not present in the
context of the liability of a joint venturer, for the reasons
explained above.
In sum, given the nature of the partnership form and part-
nership liability, we conclude that Pintozzi and Semenek are
persuasive authority on the issue of notice of the tax assess-
ment.[fn2] Accordingly, regardless of whether the NTLs consti-
tute notice to Palumbo individually, Palumbo was not denied due
process in the assessment of the taxes in this case.
B
Nevertheless, Palumbo maintains that it was denied due
process of law when the Department recorded a lien against not
only property belonging to the joint venture, but also property
belonging to Palumbo in an individual capacity. Palumbo notes
that "the Pintozzis never claimed they were denied due process in
the collection proceeding." Yet Palumbo also claims that there
was no "collection proceeding" in this case, because the Depart-
ment simply recorded a lien against Palumbo's property.
Of course, if there has been no collection proceeding,
Palumbo cannot complain that it was denied due process in the
proceeding. However, we note that a lien affords a supplemental
and additional remedy for the collection of a debt. Gaskill v.
Robert E. Sanders Disposal Hauling, 249 Ill. App. 3d 673, 676,
619 N.E.2d 235, 238 (1993). Thus, the recording of the lien may
be characterized as a collection proceeding or as a part thereof.
The ultimate question in this case is whether the Department
denied Palumbo due process of law by recording a lien against
Palumbo's property "without bothering to provide Palumbo with the
opportunity to contest liability for the [j]oint [v]enture's
debt."
In this case, the trial court ruled that Palumbo was indi-
vidually notified at the assessment stage. The NTLs in this case
were attached to Palumbo's complaint and control over any con-
trary allegation by Palumbo. The 1991 NTL was addressed to
"Palumbo Bros., Inc." at Palumbo's address. The 1992 NTL was
addressed to the joint venture, which includes "Palumbo Bros.,
Inc." in its own name, at the same address. The NTLs used the
IBT number assigned to the joint venture. The Director's veri-
fied motion to dismiss establishes that the NTLs were sent in
accordance with the statutory requirements.
The argument that a NTL that names Palumbo alone and is sent
to Palumbo's principal place of business does not provide notice
to Palumbo strains credulity. The claim that Palumbo was not
notified by a NTL that names a joint venture which includes
Palumbo in its title and is sent to Palumbo's principal place of
business is only slightly more credible. Palumbo has made no
argument and has alleged no facts that would show it could escape
personal liability under partnership principles as a member of
the joint venture in a collection proceeding.
Palumbo relies primarily on three cases to support its
argument regarding the lien. First, Palumbo relies on Parrish
Oil Production. However, that case held that a Department
regulation was unconstitutional because it did not provide
adequate notice to the property owners who were not partners of
the assessment of certain taxes. In this case, notice to the
joint venture is sufficient to the partners that they may be held
personally liable for the tax debt in a collection proceeding.
Second, Palumbo cites Peterson v. Superior Bank FSB, 242
Ill. App. 3d 1090, 611 N.E.2d 1139 (1993), for the propositions
that: (1) a judgment obtained against a partnership cannot be
enforced against an individual partner that was not a party named
in the underlying proceedings; and (2) an individual partner
cannot be held vicariously liable for partnership debts. Peter-
son was not a tax case; rather, it was an attempt by a private
plaintiff to bind a joint venture or co-venturers that were not
parties to an arbitration proceeding to a judgment confirming an
award against two of the venturers. The Peterson court noted
that Illinois partnership law generally provides that a partner
cannot submit a partnership claim or liability to arbitration.
Peterson, 242 Ill. App. 3d at 1093, 611 N.E.2d at 1141; see 805
ILCS 205/9(3)(e) (West 1996). There is no such statutory bar
regarding tax protests.
Furthermore, Peterson involved the enforceability of a
judgment against two venturers as applied to a joint venture and
co-venturers who were not parties to the underlying arbitration
proceeding. In this case, the lien against Palumbo's property
was not reduced to judgment. We note that the Cook opinion
states that "a final assessment is a judgment or its procedural
and substantive equivalent." Cook, 281 Ill. App. 3d at 178, 666 N.E.2d at 898. However, Cook cites no authority for this propo-
sition. The Cook opinion cites section 3-101 of the Administra-
tive Review Law for the proposition that an administrative
decision is a judgment, but section 3-101 does not stand for this
broad proposition. See 735 ILCS 5/3-101 (West 1996).
The plain text of section 5 of the Retailers' Occupation Tax
Act states that the Department must submit a certified copy of a
final assessment, along with other documents, to a circuit court
to have judgment entered against a taxpayer. 35 ILCS 120/5 (West
1996). Moreover, an aggrieved person may seek a hearing on a
final assessment "at any time before such assessment is reduced
to judgment." 35 ILCS 120/5 (West 1996). Thus, it is clear that
the statute does not equate a final assessment with a judgment.
Furthermore, a prior version of the collection provisions of
the Retailers' Occupation Tax Act was declared unconstitutional
as a violation of the separation of powers precisely because it
attempted to confer the power to enter a judgment on the court
clerk at the behest of the Department. People ex rel. Issacs v.
Johnson, 26 Ill. 2d 268, 186 N.E.2d 346 (1963). If a final
assessment were the equivalent of a judgment, all of the Depart-
ment's final assessments would be unconstitutional; to so hold
would unconstitutionally impinge on the legislative function of
taxation. Indeed, this is another reason why an administrative
decision cannot generally be considered a judgment under section
3-101 of the Administrative Review Law, even though such a
decision may affect the legal rights and duties of the parties.
Nor can a tax lien be considered a judgment. The Retailers'
Occupation Tax Act allows aggrieved persons to seek a hearing
from the Department at any time before the assessment is reduced
to judgment, even though a tax lien may have attached. 35 ILCS
120/5, 5a (West 1996). The lien was not imposed by a court. As
Palumbo is not attacking the enforcement of a judgment, Peterson
is distinguishable from this case.
Finally, Palumbo cites the Cook opinion for the proposition
that it was entitled to separate notice because it is deemed a
separate "person" from the joint venture under the Retailers'
Occupation Tax Act and the Use Tax Act. See Cook, 281 Ill. App.
3d at 176, 666 N.E.2d at 896-97. The Cook court concluded that
"the partnership is an entity separate from the partners" because
the tax statutes defined a partnership as a "person"; we note
that the statutes similarly define a "joint adventure" as a
"person." See Cook, 281 Ill. App. 3d at 176, 666 N.E.2d at 896-
97; 35 ILCS 105/2, 120/1 (West 1996). The Cook court also based
its conclusion on the fact that a partnership can own property.
See Cook, 281 Ill. App. 3d at 176, 666 N.E.2d at 897.
The Cook opinion cites no authority for the proposition that
every "person" must be considered a separate entity for all
purposes. Although a partnership is treated as a separate entity
for the purpose of owning property, it is not a separate legal
entity. E.g., In re Marriage of Werries, 247 Ill. App. 3d 639,
645, 616 N.E.2d 1379, 1386 (1993). Palumbo has identified no
provision of the Retailers' Occupation Tax Act or the Use Tax Act
that expressly (or even impliedly) abrogates the personal liabil-
ity imposed on partners for partnership debt by Illinois partner-
ship law. Palumbo cites a number of provisions of the Illinois
Code of Civil Procedure addressing the treatment of partners and
partnerships in civil litigation. Aside from Cook, which likened
a final assessment to a judgment, Palumbo cites no case law
holding that the applicable tax statutes or due process require
that partners and partnerships be treated identically to their
treatment under the Illinois Code of Civil Procedure in the
context of recording a tax lien.
Palumbo states that the Department "jumped the gun" by
recording the lien. However, the record on appeal shows that the
Department did not act with all deliberate speed to collect the
assessments at issue. Moreover, prior to any attempt by the
Department to reduce the lien to judgment or levy upon Palumbo's
property, Palumbo filed its complaint for declaratory judgment,
claiming a lack of due process in the assessment of the taxes.
The general rule in Illinois is that questions regarding the
propriety or regularity of an assessment are generally required
to be raised before the Department and then, if necessary, before
the circuit court by way of administrative review. See, e.g.,
Department of Revenue v. Downstate Coal Co., 11 Ill. 2d 317, 321-
22, 143 N.E.2d 247, 250 (1957).[fn3] In tax cases, equity
generally will not assume jurisdiction to grant relief where an
adequate remedy at law exists. Schlenz v. Castle, 115 Ill. 2d 135, 141, 503 N.E.2d 241, 243 (1986). Furthermore, in all but
extraordinary cases, tax relief is not afforded by way of declar-
atory judgment in cases which would not have merited relief by
way of injunction. Schlenz, 115 Ill. 2d at 141, 503 N.E.2d at
242-43; Goodyear Tire & Rubber Co. v. Tierney, 411 Ill. 421, 430,
104 N.E.2d 222, 226 (1952).
In sum, given the facts and circumstances of this case, the
trial court did not err in concluding that Palumbo was not denied
due process of law in this matter.
For all of the aforementioned reasons, the judgment of the
circuit court of Cook County is affirmed.
Affirmed.
BUCKLEY, J., and GALLAGHER, J., concur.
[fn1] Accordingly, the Department was permanently enjoined
from collecting or attempting to collect taxes from a general
partner based on the liability of the limited partnership. See
Cook, 281 Ill. App. 3d at 174, 666 N.E.2d at 895. The Department
is an arm of the State. E.g., Moline Tool Co. v. Dept. of
Revenue, 410 Ill. 35, 39, 101 N.E.2d 71, 73 (1951). Thus, the
Department is typically immune from suit, except as provided for
by statutes such as the Administrative Review Law. E.g., 735
ILCS 5/3-101 et seq. (West 1996). However, the Department
apparently did not raise the issue of sovereign immunity in Cook.
Although the complaint in this case refers to actions of the
Department, we note that Palumbo's complaint names Director
Wagner, rather than the Department, and alleges that Wagner has
acted illegally.
[fn2] We note that Pintozzi, Semenek and Cook were primari-
ly concerned with the Retailers' Occupation Tax Act, whereas this
case also involves the Use Tax Act. However, these statutes are
complementary in purpose and function; the Use Tax Act prevents
avoidance of the Retailers' Occupation Tax Act. Chicago Tribune
Co. v. Johnson, 106 Ill. 2d 63, 67-68, 477 N.E.2d 482, 483-84
(1985). Indeed, the collection mechanisms of the Retailers'
Occupation Tax Act are applicable in the context of the Use Tax
Act. 35 ILCS 105/12 (West 1996).
[fn3] We note that in the Cook opinion, the court suggested
that the partnership was the only "person aggrieved" that could
seek a hearing or rehearing before the Department. See Cook, 281
Ill. App. 3d at 176-77, 666 N.E.2d at 897. In this case, howev-
er, the Department took the position that Palumbo was individual-
ly notified of the potential liability assessed against it. The
trial court held that Palumbo was properly notified. The Depart-
ment has recorded liens against property held by Palumbo individ-
ually, based on the assessments at issue. Given these facts, it
seems quite improbable that the Department would conclude that
Palumbo lacked standing to seek a hearing regarding its liabili-
ty.
DECEMBER 12, 1997
No. 1-95-4090
)
PALUMBO BROS., INC., ) APPEAL FROM THE
an Illinois corporation, ) CIRCUIT COURT
Plaintiff-Appellant, ) OF COOK COUNTY.
)
v. )
)
RAYMOND T. WAGNER, JR., Director ) HONORABLE
of the ILLINOIS DEPARTMENT OF ) EARL ARKISS,
REVENUE, ) ALEXANDER P. WHITE,
Defendant-Appellee. ) JUDGES PRESIDING.
PRESIDING JUSTICE CAMPBELL delivered the opinion of the
court:
Plaintiff Palumbo Bros, Inc. (Palumbo) appeals orders of the
circuit court of Cook County dismissing a complaint Palumbo filed
against defendant Raymond T. Wagner, the Director of the Illinois
Department of Revenue (Director) to determine the enforceability
of a tax obligation against Palumbo and denying Palumbo's motion
to reconsider.
The record on appeal indicates the following facts. On
April 7, 1995, Palumbo filed a complaint for declaratory judgment
and other relief against the Director. Palumbo alleged that it
was a member of a joint venture with a separate, independent
Illinois corporation known as Benchmark Construction Company
(Benchmark). The Illinois Department of Revenue (Department)
assigned the joint venture an Illinois Business Tax (IBT) number
that was different from Palumbo's IBT number.
The complaint alleged that on December 12, 1991, the Depart-
ment issued a Notice of Tax Liability (1991 NTL) numbered "S F
199134385402012" to the joint venture under its own IBT number,
proposing to assess $31,849 in use taxes, $3,185 as a penalty and
$14,332 in interest, for a total of $49,366. The 1991 NTL, which
was attached as an exhibit to the complaint, is addressed to
Palumbo at 323 S Center Street in Hillside, Illinois. On
June 15, 1992, the Department issued a Notice of Tax Liability
(1992 NTL) numbered "S F 9213544903001" to the joint venture
proposing to assess motor vehicle use taxes, with a penalty and
interest totalling $262,158. The 1992 NTL, which was attached as
an exhibit to the complaint, is addressed to "Palumbo Bros.
Inc./Benchmark Const. Co." (Palumbo/Benchmark) at 323 S Center
Street in Hillside, Illinois.
The complaint alleged that the Department never notified or
instituted proceedings against Palumbo individually for these
proposed assessments. On November 3, 1993, the Director caused a
tax lien to be filed in favor of the Department upon all real and
personal property owned or acquired "by the above named tax-
payer." The Notices of Tax Lien, which are attached as exhibits
to the complaint: refer to both Palumbo and Palumbo/Benchmark;
state that they are based on the 1991 NTL and the 1992 NTL; and
carry the joint venture's IBT number.
Palumbo sought a declaration that it had no obligation to
the Department for the taxes, penalties and interest assessed
against the joint venture. Palumbo also sought a declaration
that the Department had no valid lien against Palumbo's individ-
ual assets, including, but not limited to a particular piece of
real property located in South Barrington, Illinois. Palumbo
also sought similar relief, including a declaration that the
Department had no legal basis to enforce a tax lien against
Palumbo by reason of a tax obligation of the joint venture.
On April 12, 1995, Palumbo filed an emergency motion for a
temporary restraining order, alleging that the Department was
attempting to serve a notice of levy on the Chicago Title Insur-
ance Company, which was holding $169,000 in escrow that repre-
sented the net profit on the sale of the property Palumbo named
in its complaint. The next day, the parties entered into an
agreed preliminary injunction restraining the Director or his
agents from levying on the property at issue until the order was
vacated or modified by the court or altered by agreement of the
parties.
The Director then filed a motion to dismiss Palumbo's
complaint pursuant to section 2-619 of the Code of Civil Proce-
dure (735 ILCS 5/2-619 (1996))(Code). The motion alleged that
the Department learned of the joint venture during an audit of
Palumbo performed at Palumbo's place of business, causing The
Department to assign the joint venture an IBT number. The motion
alleged that the 1991 NTL was issued as a result of the audit and
that the 1991 NTL and the 1992 NTL were sent to Palumbo's place
of business in accordance with statutory requirements.
The Director alleged that Palumbo failed to request a
hearing on either NTL issued under the joint venture's IBT number
and thus became final after 60 days. The Director asserted that
Palumbo was given notice that comported with due process. The
motion asked the court to dismiss the complaint for failure to
state a claim and to allow the Department to collect the taxes
administratively. The Director also attached his notarized sworn
statement that he had full knowledge of the facts set forth in
the motion and that the matters asserted therein were true.
Palumbo apparently filed a response to the motion to dis-
miss. However, the parties have failed to identify where this
response appears in the record on appeal.
On July 5, 1995, the Department, through an Assistant
Attorney General, filed a reply to "its motion to dismiss."
Attached to the reply are two exhibits that purport to be domes-
tic return receipts for certified mail. Exhibit A of the reply
includes a photocopy of a receipt addressed to Palumbo at the
Center Street address that purports to show delivery on Decem-
ber 20, 1991; the space designated as "Signature -- Agent" is
signed by a Jim Romano. Exhibit B of the reply includes a
photocopy of a receipt addressed to Palumbo/Benchmark at the
Center Street address that purports to show delivery on June 18,
1992; the space designated as "Signature -- Agent" is again
signed by a Jim Romano. The motion states that Jim Romano is
"presumably a Palumbo agent ***."
The record does not disclose the respective interests of
Palumbo and Benchmark in the joint venture. The record does not
disclose the identity of the joint venture's officers or direc-
tors. The record does not disclose the purpose of the joint
venture. The record does not disclose the business or project to
be carried on by the joint venture. The record does not disclose
when the joint venture commenced or whether it has ceased opera-
tion. The record does not disclose any information relevant to
Benchmark, aside from the allegation that it is an Illinois
corporation. The record does not disclose whether the joint
venture had any other address other than that of Palumbo's
principal place of business. The 1992 NTL refers to the purchase
or sale of a vehicle, aircraft, trailer or mobile home; other-
wise, the record does not disclose the transactions that formed
the grounds for the Department's assessment. The 1991 NTL states
that it is based on an audit for November 1988; otherwise, the
record does not disclose the time period for which the Department
assessed taxes. The record does not disclose whether the joint
venture ever registered or filed returns with the Department or
paid any taxes.
On July 26, 1995, the trial court issued a memorandum and
decision dismissing Palumbo's complaint. Palumbo filed a timely
motion to reconsider; the Department filed a response. Palumbo
filed a reply memorandum, in which Palumbo states that it first
learned of the NTLs at issue on February 10, 1994, during a
proceeding before the Department regarding unrelated matters.
The trial court denied the motion to reconsider on October 25,
1995. Palumbo now appeals.
I
Palumbo maintains that the trial court erred in granting the
Department's motion to dismiss, claiming that the Department
failed to present affirmative matter defeating Palumbo's claim.
The Director was granted involuntary dismissal under section
2-619 of the Code. In its reply to Palumbo's response, the
Department specifically relied on Section 2-619(a)(9), which
permits dismissal where "the claim asserted * * * is barred by
other affirmative matter avoiding the legal effect of or defeat-
ing the claim." 735 ILCS 5/2-619(a)(9) (1996). A section
2-619(a)(9) motion to dismiss admits the legal sufficiency of the
plaintiff's cause of action much in the same way that a section
2-615 motion to dismiss admits a complaint's well-pleaded facts.
Kedzie and 103rd Currency Exchange, Inc. v. Hodge, 156 Ill. 2d 112, 115, 619 N.E.2d 732, 735 (1993). Conclusions of law,
however, are not admitted. McKinnon v. City of Chicago, 243 Ill.
App. 3d 87, 91, 612 N.E.2d 67, 69 (1993). The phrase "affirma-
tive matter" encompasses any defense other than a negation of the
essential allegations of the plaintiff's cause of action. Hodge,
156 Ill. 2d at 115, 619 N.E.2d at 735. The granting of a section
2-619 motion to dismiss is subject to de novo review on appeal.
Hodge, 156 Ill. 2d at 116, 619 N.E.2d at 735.
II
In this case, Palumbo alleges that the Department violated
Palumbo's right to due process in the tax proceeding regarding
the joint venture of which Palumbo was a part. The guarantee of
due process of law extends to every governmental proceeding which
may interfere with personal or property rights, whether the
process be legislative, judicial, administrative, or executive.
People ex rel. Harris v. Parrish Oil Production, Inc., 249 Ill.
App. 3d 664, 667, 622 N.E.2d 810, 814 (1993). Due process of
law, at a minimum, prohibits the deprivation of property without
providing notice and an opportunity for a hearing appropriate to
the nature of the case. Harris, 249 Ill. App. 3d at 668, 622 N.E.2d at 814. The procedural safeguards mandated by due process
in a particular case vary, depending upon:
"first, the private interest that will be
affected by the official action; second, the
risk of an erroneous deprivation of such
interest through the procedures used, and the
probable value, if any, of additional or
substitute procedural safeguards; and final-
ly, the Governments' interest, including the
function involved and the fiscal and adminis-
trative burdens that the additional or sub-
stitute procedural requirement would entail."
Mathews v. Eldridge, 424 U.S. 319, 335, 96 S. Ct. 893, 903, 47 L. Ed. 2d 18, 33 (1976).
This case involves a tax proceeding. We note that the United
States Supreme Court has often held that a state may employ
various financial sanctions and summary remedies to encourage
timely payment of taxes prior to the resolution of any dispute
over their validity. E.g., McKeeson Corp. v. Division of Alco-
holic Beverages and Tobacco, Dept. of Business Regulation of
Florida, 496 U.S. 18, 37, 110 S. Ct. 2238, 2250-51, 110 L. Ed. 2d 17, 36 (1990). A tax proceeding generally has two phases:
assessment and collection. People ex rel. Scott v. Pintozzi, 50 Ill. 2d 115, 126-27, 277 N.E.2d 844, 850-51 (1971). Palumbo
claims that it was denied due process in both phases.
A
Regarding the assessments in this case, we note that Illi-
nois law has allowed for the imposition of personal tax liability
on corporate officers under certain circumstances. For example,
our supreme court has stated that:
"Due process does not require that the defen-
dants be given personal notice in the assess-
ment phase apart from the notice that was
given to their corporate entity before per-
sonal liability for the tax can be imposed
upon them in a separate proceeding." Pin-
tozzi, 50 Ill. 2d at 127, 277 N.E.2d at 851.
In Department of Revenue v. Semenek, 194 Ill. App.3d 616, 619,
551 N.E.2d 314, 315-16 (1990), this court held that NTLs ad-
dressed to a dissolved corporation under the corporate registra-
tion number were sufficient to give the operators of the business
notice of the assessment of liability. Indeed, in Semenek, this
court was concerned that the defendants' interpretation of
Illinois corporate law would enable taxpayers to undermine the
detailed registration requirement and enforcement scheme of the
Retailers' Occupation Tax Act by permitting taxpayers to shift
tax liability to nonexistent or insolvent corporations. Semenek,
194 Ill. App.3d at 619, 551 N.E.2d at 316.
This case does not involve the corporate form; it is undis-
puted here that Palumbo was a member of a joint venture, which is
treated as a partnership subject to the Uniform Partnership Act.
Japczyk v. Gust K. Newberg Construction Co., 224 Ill. App. 3d
325, 328-29, 586 N.E.2d 572, 574 (1991). Every partner is an
agent of the partnership for the purpose of its business. 805
ILCS 205/9 (West 1996). Generally, notice to any partner of any
partnership matter constitutes notice to all partners. 805 ILCS
205/12 (West 1996). Partners are also liable for the wrongful
acts and omissions, penalties, misapplication of funds and all
other debts and obligations of the partnership. See 805 ILCS
205/15 (West 1996).
In Cook v. Department of Revenue, 281 Ill. App. 3d 171, 177,
666 N.E.2d 893, 897 (1996), this court upheld a partner's due
process claim,[fn1] distinguishing Pintozzi on the ground that
the corporations involved were the alter egos of individual
defendants, who used the corporation to commit fraud. Palumbo's
complaint conceals more than it reveals about the nature of the
joint venture and its operation. Although there is no allegation
of fraud in this case, it is undisputed that the Department first
learned of the joint venture's existence during an audit of
Palumbo and assigned an IBT number to the joint venture. It
could be safely inferred from these undisputed facts that the
joint venture did not register or file returns with the Depart-
ment or pay taxes.
Moreover, regardless of Palumbo's intent in the matter,
given that the joint venture is akin to a partnership, there was
and is no corporate veil to pierce. Similar to Pintozzi, the
plaintiff here does not allege that the joint venture did not
receive adequate notice of the tax assessments at issue. Palumbo
has alleged no facts that would prevent the imputation of that
notice and knowledge of potential personal liability to Palumbo
under Illinois partnership law.
The Cook court also distinguished Semenek on the basis that
the individuals therein had assumed a personal obligation to
collect and remit taxes by continuing the business after the
dissolution of the corporation. See Cook, 281 Ill. App. 3d at
177, 666 N.E.2d at 897-98. However, as with the Cook opinion's
treatment of Pintozzi, the distinctions went to the issue of
whether liability could be imposed on the individual defendants,
not the issue of whether the individual defendants were entitled
to notice in an individual capacity. Furthermore, while the
skeletal record in this case is silent on the questions of
whether the joint venture still exists and, if so, whether it is
solvent, we note that Palumbo's argument could open the door to
the type of liability shifting described in Semenek. Thus, the
basic thrust of Semenek seems applicable in the partnership
context.
On the issue of notice, Cook relied upon People ex rel.
Harris v. Parrish Oil Production, Inc., 249 Ill. App. 3d 664, 622 N.E.2d 810 (1993), in which this court invalidated tax sales
resulting from a regulation that provided no notice to tenants in
common owning undivided, fractional portions of a working
interest in oil and gas leases. The Parrish Oil Production court
rejected the argument that notice to the operator of a well was
sufficient, because there was no proof that the operator was the
agent of the owners, particularly for the purpose of payment of
taxes. Parrish Oil Production, 249 Ill. App. 3d at 670, 622 N.E.2d at 816. These concerns are simply not present in the
context of the liability of a joint venturer, for the reasons
explained above.
In sum, given the nature of the partnership form and part-
nership liability, we conclude that Pintozzi and Semenek are
persuasive authority on the issue of notice of the tax assess-
ment.[fn2] Accordingly, regardless of whether the NTLs consti-
tute notice to Palumbo individually, Palumbo was not denied due
process in the assessment of the taxes in this case.
B
Nevertheless, Palumbo maintains that it was denied due
process of law when the Department recorded a lien against not
only property belonging to the joint venture, but also property
belonging to Palumbo in an individual capacity. Palumbo notes
that "the Pintozzis never claimed they were denied due process in
the collection proceeding." Yet Palumbo also claims that there
was no "collection proceeding" in this case, because the Depart-
ment simply recorded a lien against Palumbo's property.
Of course, if there has been no collection proceeding,
Palumbo cannot complain that it was denied due process in the
proceeding. However, we note that a lien affords a supplemental
and additional remedy for the collection of a debt. Gaskill v.
Robert E. Sanders Disposal Hauling, 249 Ill. App. 3d 673, 676,
619 N.E.2d 235, 238 (1993). Thus, the recording of the lien may
be characterized as a collection proceeding or as a part thereof.
The ultimate question in this case is whether the Department
denied Palumbo due process of law by recording a lien against
Palumbo's property "without bothering to provide Palumbo with the
opportunity to contest liability for the [j]oint [v]enture's
debt."
In this case, the trial court ruled that Palumbo was indi-
vidually notified at the assessment stage. The NTLs in this case
were attached to Palumbo's complaint and control over any con-
trary allegation by Palumbo. The 1991 NTL was addressed to
"Palumbo Bros., Inc." at Palumbo's address. The 1992 NTL was
addressed to the joint venture, which includes "Palumbo Bros.,
Inc." in its own name, at the same address. The NTLs used the
IBT number assigned to the joint venture. The Director's veri-
fied motion to dismiss establishes that the NTLs were sent in
accordance with the statutory requirements.
The argument that a NTL that names Palumbo alone and is sent
to Palumbo's principal place of business does not provide notice
to Palumbo strains credulity. The claim that Palumbo was not
notified by a NTL that names a joint venture which includes
Palumbo in its title and is sent to Palumbo's principal place of
business is only slightly more credible. Palumbo has made no
argument and has alleged no facts that would show it could escape
personal liability under partnership principles as a member of
the joint venture in a collection proceeding.
Palumbo relies primarily on three cases to support its
argument regarding the lien. First, Palumbo relies on Parrish
Oil Production. However, that case held that a Department
regulation was unconstitutional because it did not provide
adequate notice to the property owners who were not partners of
the assessment of certain taxes. In this case, notice to the
joint venture is sufficient to the partners that they may be held
personally liable for the tax debt in a collection proceeding.
Second, Palumbo cites Peterson v. Superior Bank FSB, 242
Ill. App. 3d 1090, 611 N.E.2d 1139 (1993), for the propositions
that: (1) a judgment obtained against a partnership cannot be
enforced against an individual partner that was not a party named
in the underlying proceedings; and (2) an individual partner
cannot be held vicariously liable for partnership debts. Peter-
son was not a tax case; rather, it was an attempt by a private
plaintiff to bind a joint venture or co-venturers that were not
parties to an arbitration proceeding to a judgment confirming an
award against two of the venturers. The Peterson court noted
that Illinois partnership law generally provides that a partner
cannot submit a partnership claim or liability to arbitration.
Peterson, 242 Ill. App. 3d at 1093, 611 N.E.2d at 1141; see 805
ILCS 205/9(3)(e) (West 1996). There is no such statutory bar
regarding tax protests.
Furthermore, Peterson involved the enforceability of a
judgment against two venturers as applied to a joint venture and
co-venturers who were not parties to the underlying arbitration
proceeding. In this case, the lien against Palumbo's property
was not reduced to judgment. We note that the Cook opinion
states that "a final assessment is a judgment or its procedural
and substantive equivalent." Cook, 281 Ill. App. 3d at 178, 666 N.E.2d at 898. However, Cook cites no authority for this propo-
sition. The Cook opinion cites section 3-101 of the Administra-
tive Review Law for the proposition that an administrative
decision is a judgment, but section 3-101 does not stand for this
broad proposition. See 735 ILCS 5/3-101 (West 1996).
The plain text of section 5 of the Retailers' Occupation Tax
Act states that the Department must submit a certified copy of a
final assessment, along with other documents, to a circuit court
to have judgment entered against a taxpayer. 35 ILCS 120/5 (West
1996). Moreover, an aggrieved person may seek a hearing on a
final assessment "at any time before such assessment is reduced
to judgment." 35 ILCS 120/5 (West 1996). Thus, it is clear that
the statute does not equate a final assessment with a judgment.
Furthermore, a prior version of the collection provisions of
the Retailers' Occupation Tax Act was declared unconstitutional
as a violation of the separation of powers precisely because it
attempted to confer the power to enter a judgment on the court
clerk at the behest of the Department. People ex rel. Issacs v.
Johnson, 26 Ill. 2d 268, 186 N.E.2d 346 (1963). If a final
assessment were the equivalent of a judgment, all of the Depart-
ment's final assessments would be unconstitutional; to so hold
would unconstitutionally impinge on the legislative function of
taxation. Indeed, this is another reason why an administrative
decision cannot generally be considered a judgment under section
3-101 of the Administrative Review Law, even though such a
decision may affect the legal rights and duties of the parties.
Nor can a tax lien be considered a judgment. The Retailers'
Occupation Tax Act allows aggrieved persons to seek a hearing
from the Department at any time before the assessment is reduced
to judgment, even though a tax lien may have attached. 35 ILCS
120/5, 5a (West 1996). The lien was not imposed by a court. As
Palumbo is not attacking the enforcement of a judgment, Peterson
is distinguishable from this case.
Finally, Palumbo cites the Cook opinion for the proposition
that it was entitled to separate notice because it is deemed a
separate "person" from the joint venture under the Retailers'
Occupation Tax Act and the Use Tax Act. See Cook, 281 Ill. App.
3d at 176, 666 N.E.2d at 896-97. The Cook court concluded that
"the partnership is an entity separate from the partners" because
the tax statutes defined a partnership as a "person"; we note
that the statutes similarly define a "joint adventure" as a
"person." See Cook, 281 Ill. App. 3d at 176, 666 N.E.2d at 896-
97; 35 ILCS 105/2, 120/1 (West 1996). The Cook court also based
its conclusion on the fact that a partnership can own property.
See Cook, 281 Ill. App. 3d at 176, 666 N.E.2d at 897.
The Cook opinion cites no authority for the proposition that
every "person" must be considered a separate entity for all
purposes. Although a partnership is treated as a separate entity
for the purpose of owning property, it is not a separate legal
entity. E.g., In re Marriage of Werries, 247 Ill. App. 3d 639,
645, 616 N.E.2d 1379, 1386 (1993). Palumbo has identified no
provision of the Retailers' Occupation Tax Act or the Use Tax Act
that expressly (or even impliedly) abrogates the personal liabil-
ity imposed on partners for partnership debt by Illinois partner-
ship law. Palumbo cites a number of provisions of the Illinois
Code of Civil Procedure addressing the treatment of partners and
partnerships in civil litigation. Aside from Cook, which likened
a final assessment to a judgment, Palumbo cites no case law
holding that the applicable tax statutes or due process require
that partners and partnerships be treated identically to their
treatment under the Illinois Code of Civil Procedure in the
context of recording a tax lien.
Palumbo states that the Department "jumped the gun" by
recording the lien. However, the record on appeal shows that the
Department did not act with all deliberate speed to collect the
assessments at issue. Moreover, prior to any attempt by the
Department to reduce the lien to judgment or levy upon Palumbo's
property, Palumbo filed its complaint for declaratory judgment,
claiming a lack of due process in the assessment of the taxes.
The general rule in Illinois is that questions regarding the
propriety or regularity of an assessment are generally required
to be raised before the Department and then, if necessary, before
the circuit court by way of administrative review. See, e.g.,
Department of Revenue v. Downstate Coal Co., 11 Ill. 2d 317, 321-
22, 143 N.E.2d 247, 250 (1957).[fn3] In tax cases, equity
generally will not assume jurisdiction to grant relief where an
adequate remedy at law exists. Schlenz v. Castle, 115 Ill. 2d 135, 141, 503 N.E.2d 241, 243 (1986). Furthermore, in all but
extraordinary cases, tax relief is not afforded by way of declar-
atory judgment in cases which would not have merited relief by
way of injunction. Schlenz, 115 Ill. 2d at 141, 503 N.E.2d at
242-43; Goodyear Tire & Rubber Co. v. Tierney, 411 Ill. 421, 430,
104 N.E.2d 222, 226 (1952).
In sum, given the facts and circumstances of this case, the
trial court did not err in concluding that Palumbo was not denied
due process of law in this matter.
For all of the aforementioned reasons, the judgment of the
circuit court of Cook County is affirmed.
Affirmed.
BUCKLEY, J., and GALLAGHER, J., concur.
[fn1] Accordingly, the Department was permanently enjoined
from collecting or attempting to collect taxes from a general
partner based on the liability of the limited partnership. See
Cook, 281 Ill. App. 3d at 174, 666 N.E.2d at 895. The Department
is an arm of the State. E.g., Moline Tool Co. v. Dept. of
Revenue, 410 Ill. 35, 39, 101 N.E.2d 71, 73 (1951). Thus, the
Department is typically immune from suit, except as provided for
by statutes such as the Administrative Review Law. E.g., 735
ILCS 5/3-101 et seq. (West 1996). However, the Department
apparently did not raise the issue of sovereign immunity in Cook.
Although the complaint in this case refers to actions of the
Department, we note that Palumbo's complaint names Director
Wagner, rather than the Department, and alleges that Wagner has
acted illegally.
[fn2] We note that Pintozzi, Semenek and Cook were primari-
ly concerned with the Retailers' Occupation Tax Act, whereas this
case also involves the Use Tax Act. However, these statutes are
complementary in purpose and function; the Use Tax Act prevents
avoidance of the Retailers' Occupation Tax Act. Chicago Tribune
Co. v. Johnson, 106 Ill. 2d 63, 67-68, 477 N.E.2d 482, 483-84
(1985). Indeed, the collection mechanisms of the Retailers'
Occupation Tax Act are applicable in the context of the Use Tax
Act. 35 ILCS 105/12 (West 1996).
[fn3] We note that in the Cook opinion, the court suggested
that the partnership was the only "person aggrieved" that could
seek a hearing or rehearing before the Department. See Cook, 281
Ill. App. 3d at 176-77, 666 N.E.2d at 897. In this case, howev-
er, the Department took the position that Palumbo was individual-
ly notified of the potential liability assessed against it. The
trial court held that Palumbo was properly notified. The Depart-
ment has recorded liens against property held by Palumbo individ-
ually, based on the assessments at issue. Given these facts, it
seems quite improbable that the Department would conclude that
Palumbo lacked standing to seek a hearing regarding its liabili-
ty.
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