Pernalski v. Illinois Racing Bd.
Annotate this Case
THIRD DIVISION
March 11, 1998
No. 1-96-3912
MICHAEL PERNALSKI, ) Appeal from the
) Circuit Court of
Plaintiff-Appellant, ) Cook County.
)
v. )
)
ILLINOIS RACING BOARD, GARY L. STARKMAN, )
RICHARD BALOG, RALPH M. GONZALEZ, WILLIAM )
E. JACKSON, JOSEPH F. KINDLON, GENE LAMB, )
LORNA E. PROPES, JOHN B. SIMON, THOMAS J. )
GARVEY, members of the Illinois Racing Board,)
BALMORAL PARK TROT, INC., an Illinois )
corporation; BALMORAL RACING CLUB, INC., an )
Illinois corporation, JOHN A. JOHNSTON, )
and DAN NEMETH, )
) The Honorable
Defendant-Appellees. ) Margaret McBride,
) Judge Presiding.
JUSTICE GORDON delivered the opinion of the court:
BACKGROUND
This is an appeal under the Administrative Review Law (735
ILCS 5/3-101 et seq. (West 1994)) from the affirmance by the
circuit court of the determination of the Illinois Racing Board
(IRB) affirming the action taken by defendant, Balmoral Park
Trot, Inc. (Balmoral), banning plaintiff, an owner and trainer of
harness horses, from racing on its track.
There is no dispute in the record that in January 1995
Balmoral excluded plaintiff from racing at Balmoral pursuant to
section 9(e) of the Illinois Horse Racing Act of 1975 (230 ILCS
5/9(e)(West 1994)) (the Act). Pursuant to Pernalski's request,
the IRB held a hearing as required by section 14a of the Act (230
ILCS 5/14a (West 1994)). The evidence adduced at the hearing
established that plaintiff drew two separate one-year suspensions
from the IRB, in 1990 and 1994 respectively. In 1990, plaintiff
was suspended for one year after a horse which he trained
(Edgewood Dandy) tested positive for thiobendazol, promazine
sulphoxide and etorphine, all of which were drugs whose use was
prohibited. In 1993, a horse trained by plaintiff (Mountain
Shannon) tested positive for caffeine resulting in plainitff's
second suspension by the IRB for a period of one year commencing
January 9, 1994. The evidence also established that in 1991,
following the first suspension in 1990, plaintiff was found to
have engaged in the prohibited practice known as "milkshaking"
which involves forced ingestion by a horse of high levels of
sodium bicarbonate potassium and/or lactic acid or related
substances within hours prior to a race.
On January 15, 1995, after plaintiff served his second
suspension terminating on January 8, 1995, the IRB approved
plaintiff's application for a new license. Plaintiff thereupon
met with the management of Balmoral to advise them of his intent
to resume racing there. About one week thereafter, Balmoral
advised plaintiff that it decided to exclude plaintiff from
racing on its track pursuant to section 9(e) of the Act. The
reasons attributed by Balmoral management for its exclusion were
plaintiff's past conduct, including his foregoing two
suspensions, and his milkshaking violation.
Plaintiff thereafter obtained a temporary restraining order
against enforcement of the Balmoral exclusion. Over plaintiff's
objection, the IRB heard testimony about misconduct by the
plaintiff which occurred within the duration of the temporary
restraining order after the Balmoral decision to exclude him from
its track. The nature of the misconduct involved plaintiff's
attempt to secretly stable two horses on Balmoral's track without
Balmoral's authorization.
After the hearing, the IRB issued its order upholding
Balmoral's exclusion of Pernalski from its race track. Pernalski
thereafter filed his complaint for administrative review. The
circuit court affirmed the IRB's decision; and Pernalski appeals.
On appeal, plaintiff claims that the exclusion by Balmoral
based upon events which preceded the IRB's 1994 suspension and
subsequent license renewal, disciplined the plaintiff twice for
the same misconduct in violation of our Supreme Court's decision
in Coleman v. Illinois Racing Board, 124 Ill. 2d 218, 529 N.E.2d 520 (1988). Plaintiff further claims that the IRB should not
have heard evidence concerning any misconduct of the plaintiff
with regard to his alleged illicit stabling since that act
occurred after Balmoral made its exclusion decision. Lastly,
plaintiff contends that, without the foregoing stabling evidence,
Balmoral's determination to exclude plaintiff lacks the support
of any competent evidence and is therefore contrary to the
manifest weight of the evidence.
THE JURISDICTION QUESTION
Before reaching the merits of plaintiff's appeal, we must
first consider the IRB's contention that we lack subject matter
jurisdiction to entertain this appeal. The IRB contends that
plaintiff filed his complaint for administrative review
prematurely before the IRB issued a written order of disposition.
There is no dispute that plaintiff filed his complaint for
administrative review on September 11, 1995, eight days before
the Board issued its written order dated September 19, 1995.
Accordingly, IRB contends that the trial court had no
jurisdiction to consider plaintiff's appeal pursuant to a
prematurely filed complaint.
Section 3-103 of the Administrative Review Law (735 ILCS
5/3-103 (West 1994)) provides that an action for administrative
review must commence "within 35 days from the date that a copy of
the decision sought to be reviewed was served upon the party
affected by the decision." A "copy of the decision" denotes a
writing. Moreover, the Board's internal regulations provide
that "[o]rders disposing of contested matters upon the merits
shall set forth the Board's findings of fact and conclusions of
law and shall be served by certified mail." 11 Ill. Adm. Code
204.140 (1996).
Collectively, these provisions have been construed to
require the filing of a written decision as a prerequisite for
the commencement of an action for administrative review. See
Batka v. Board of Trustees, 227 Ill. App. 3d 735, 592 N.E.2d 230
(1992). In Batka, the defendant was asked to determine the
amount and effective date of the benefits to which plaintiff was
entitled. Instead of issuing a written order, the agency simply
commenced to pay a certain amount as of a given date. The court
in Batka held that the plaintiff was entitled, via an action for
mandamus, to compel the defendant agency to issue a written
decision because without it the plainitff would be deprived of
his right to appeal the administrative order.
Defendant IRB also purports to derive support for its
jurisdiction argument from our decision in Lutheran General
Health Care System v. Department of Revenue, 231 Ill. App. 3d
652, 595 N.E.2d 1214 (1992). In that case, the Illinois
Department of Revenue omitted a page of its written decision from
the written order which it served upon the plaintiffs denying
them a charitable real estate tax exemption. The plaintiffs
failed to file their complaint for administrative review within
35 days of their receipt of the fragmented decision. Defendant,
in seeking dismissal of the appeal for lack of jurisdiction,
contended that "the portion of the decision mailed to plaintiff *
* * was sufficient to advise plaintiffs of Nafziger's [the
administrative law judge] findings of fact and conclusions of
law." Lutheran General, 231 Ill. App. 3d at 659, 595 N.E.2d at
1219. In holding that the 35 days did not commence to run from
receipt of the incomplete order, the court held that although the
portion sent included the determination to deny the exemption, it
did not fully inform the defendants of what claim should be
addressed in their complaint stating,
"The failure to include a full page of the 7 1/2-page
decision was not a minor omission. Until a complete
copy of the decision was received, plaintiffs had no
way of knowing that Nafziger failed to address the
school exemption issue; nor could they know the precise
grounds on which Nafziger relied in denying them tax-
exempt status. While plaintiffs could have filed a
complaint for administrative review without this
information, we believe it would be unfair to require
them to file a complaint where they can only guess at
the contents of the decision they are seeking to have
reviewed." 231 Ill. App. 3d at 660, 595 N.E.2d at
1219.
Plaintiff contends that neither Batka nor Lutheran General
should control in this case. He argues that, in this case, the
decision of the IRB was announced from the bench and fully
transcribed in the report of proceedings by the court reporter
and that a copy of that transcript was obtained by plaintiff's
counsel (apparently on his own initiative prior to filing the
complaint for administrative review). He also contends that he
submitted an affidavit of his counsel, which is not factually
challenged, that the IRB advised his counsel that its written
ruling may be delayed but that, if he proceeded to appeal before
its issuance, the Board would not object thereto. Plaintiff
therefore contends that the appeal was not premature in that the
rationale underlying the requirement of a written order is that
of providing adequate notice, which plaintiff urges to have been
satisfied by the transcript of the IRB's oral order.
In support of his position, plaintiff cites to the decision
in Johnson v. Machetti, 228 Ill. App. 3d 420, 592 N.E.2d 1149
(1992). In that case plaintiff, a police officer, applied to the
Peoria Police Board for disability pension benefits. At the
hearing on October 13, 1988, the Board awarded the plaintiff a
non-job-related disability of 50% of his annual salary. On
October 27, 1988, the Board notified plaintiff of its decision by
letter stating that the Board decided to grant him a pension in
the amount of $1549.10 per month. Plaintiff computed this amount
to be equal to 50% of his salary. Instead of appealing,
plaintiff submitted to the Board a doctor's report stating that
his disability was job related. One year later, in November,
1989, the Police Board sent plaintiff a letter indicating that
its October 13, 1988 decision was final. Plaintiff then filed
his complaint for administrative review. Defendant moved to
dismiss on the grounds that plaintiff's 35 days to appeal expired
after 35 days from plaintiff's receipt of the Police Board's
letter of October 27, 1988. That motion was sustained
notwithstanding plaintiff's contention that the letter was
insufficient because it did not specify that the award was for
50% of his salary instead of the 65% disability pension which he
sought. In holding that the letter comprised adequate notice the
court declared,
"The letter did inform plaintiff that he would receive
$1,549.10 per month, which was an amount equal to 50%
of his salary. Plaintiff, in his amended complaint,
admits that the 1988 letter put him on notice that he
had received a non-line-of-duty disability pension. On
appeal, plaintiff admits that when he received the
letter he made the calculation and discovered that he
had been awarded a pension at the rate of 50%. The
record reflects plaintiff was present at the October
13, 1988, Pension Board meeting where the matter of his
disability pension was discussed. Plaintiff presented
letters from doctors and other information to the
Pension Board. A motion was made, seconded and passed
that plaintiff be awarded a 50% non-job-related
disability pension based on an annual salary of
$37,178.36, resulting in a monthly disability benefit
of $1,549.10 per month. This is the same figure that
appeared in the October 27, 1988, letter. We find no
merit to plaintiff's contention that the letter failed
to inform him that he had not been awarded a line of
duty disability pension." Johnson, 228 Ill. App. 3d at
422-23, 592 N.E.2d at 1150-51.
Based upon Johnson, plaintiff in the instant case contends that
the transcript of the oral decision was sufficient notice and
analogous to the letter sent by the Police Board in Johnson. We
disagree.
There can be no dispute that under the Administrative Review
Law as well as under the internal rules and regulations of the
IRB, an adjudicative order of the IRB must be in writing and
served upon the affected party by certified mail. See 735 ILCS
5/3-103; 11 Ill. Adm. Code 204.140. The fact that a party may
obtain a copy of the transcript of the administrative agency
session that discusses and arrives at a determination of a
contested matter cannot substitute for the written order which
the agency must then serve upon the party whose rights have been
adjudicated. Otherwise, it can be argued that the 35-day period
must then commence from the date that an oral determination is
transcribed. Plaintiff may contend that the key factor would be
the date upon which the transcript containing the agency's orals
determination is obtained. However, this would make commencement
of the 35-day period dependent upon the unilateral action of the
prospective appellant to initiate obtaining a transcript, rather
than upon the agency. Moreover, what would the result be if,
instead of purchasing or otherwise acquiring a transcript, the
prospective appellant merely reads a transcript in someone else's
possession or is told by another of its contents? Even more
overridingly, what if that party is merely present at the hearing
when the agency arrives at its decision? Why should
transcription of the decision and its acquisition by a party
become an additional prerequisitite, when that transcription
involves what is, in reality, a private transaction between the
court reporter and the acquiring party? Surely, the event which
would trigger the 35-day period within which to commence
administrative review cannot be left to depend upon such
desultory factors, as when the appellant actually learned of the
decision or the contents of the transcript. To do so could
jeopardize rather than expand the appellant's right to appeal
should he choose to wait until he is served with an actual
written order before filing his complaint for administrative
review. The timeliness of that complaint would be subject to
challenge if in fact the appellant had earlier obtained or become
apprised of the transcript containing the oral determination of
the agency. Appellant cannot under the rules claim in both
directions, namely that he should be free to wait for actual
receipt of the written order, or, at his option, file his
complaint for review upon learning of the Board's oral decision
by unilaterally obtaining a transcript or otherwise. Nor have
the parties contended that, once having voted, the Board is
precluded from reconsidering its vote and changing its
determination before serving its written order upon the impacted
party. Thus, the finality of the order cannot be presumed until
it is actually served upon the party whose rights are
adjudicated.
Plaintiff's reliance upon Johnson v. Machetti is ill
advised. In Johnson, there is no dispute that the letter of the
Police Board would satisfy the prerequisites of a written order
if it contained all the essential information required in an
order. None of the parties took issue, nor could they have, with
the fact that the order was embodied in the form of an official
letter of notification. In Johnson the pivotal question was
whether the order, albeit in letter form, contained sufficient
information to advise the plaintiff that his request for a 65%
pension was rejected in favor of a 50% pension. The court quite
correctly held that since the letter did convey the actual dollar
amount of the monthly pension awarded, there was no necessity to
also note that the dollar amount was 50% rather than 65% of
plaintiff's actual monthly salary since that amount was readily
computable. In fact, the plaintiff admitted that, on his own
initiative, he made the simple arithmetic calculation to
determine that the award was for 50% of his pension. Thus the
plaintiff here cannot rely upon Johnson to dispense with the
requirement of a written order altogether where the plaintiff
otherwise becomes cognizant of the agency's decision.
Plaintiff further argues, based upon the affidavit of his
counsel, that the Board agreed to refrain from objecting to the
jurisdiction of the circuit court should plaintiff decide to
appeal before receiving its written order. Consequently,
plaintiff contends that the IRB waived any jurisdictional
impedient arising from his otherwise premature appeal and is
otherwise estopped from raising any jurisdictional objection.
Again, we must disagree.
The premature filing of a complaint for administrative
review is insufficient to confer jurisdiction upon the court over
the subject matter of the appeal. See International Harvester v.
Industrial Comm'n, 71 Ill. 2d 180, 374 N.E.2d 182 (1978); Buroff
v. Board of Fire & Police Comm'rs, 248 Ill. App. 3d 626, 618 N.E.2d 930 (1993). Since the premature filing of a complaint for
review fails to confer subject matter jurisdiction upon the
courts, it is not subject to a claim of waiver or estoppel in
that the parties even by overt stipulation may not confer subject
matter jurisdiction upon the court where none otherwise exists.
See Currie v. Lao, 148 Ill. 2d 151, 592 N.E.2d 977 (1992) (issue
of subject matter jurisdictional cannot be waived); Smith v.
Jones, 113 Ill. 2d 126, 130, 497 N.E.2d 738, 739 (1986) ("it is
axiomatic that subject matter jurisdiction cannot be waived").
Thus, it is clear that the circuit court was without jurisdiction
to hear plaintiff's appeal.
Moreover, the fact that the Board did ultimately serve a
written order upon the plaintiff on September 19, 1995, eight
days after the plaintiff filed his complaint for administrative
review on September 11, 1995, did not serve to retroactively
confer jurisdiction on the circuit court. See Buroff, 248 Ill.
App. 3d at 630-31, 618 N.E.2d at 933 (if a complaint for
administrative review is filed prematurely, a new complaint must
be filed, i.e., a new action must be commenced when the action
taken by the agency becomes final and appealable). Consequently,
when the complaint is not refiled within 35 days after the agency
determination became final and appealable, which in this case
would have been 35 days from September 19, 1995 when the IRB's
written letter was served, the right to appeal was lost. See
Buroff, 248 Ill. App. 3d 626, 618 N.E.2d 930. See also Lockett
v. Chicago Police Board, 133 Ill. 2d 349, 549 N.E.2d 1266 (1990).
A BRIEF LOOK AT THE MERITS
We note that even if jurisdiction were properly conferred
upon the circuit court, the result would be no different in that
the determination of the IRB would have to be affirmed on its
merits. Briefly on the merits, plaintiff contends that neither
the IRB, acting on its own initiative, nor Balmoral, as an
organization licensee, had the right to sanction the plaintiff
more than once for the same violation. In support plaintiff
relies upon the decision in Coleman v. Illinois Racing Board, 124 Ill. 2d 218, 529 N.E.2d 520 (1988). There, the Illinois Supreme
Court held that where a groom was suspended by the IRB for two
years for using a goading device, the IRB could not thereafter,
once the two suspensions passed, refuse to reinstate the
groomer's license by reason of the offense for which he was given
the two-year suspension. The court held that once the IRB acted
upon a violation to grant a given sanction, it could not
thereafter enhance the severity of that sanction by transforming
the two-year suspension into a permanent one.
Plaintiff in the instant case urges this court to apply
Coleman even though Balmoral, rather than the IRB, excluded
plaintiff from its track. Plaintiff argues that that fact is of
no consequence since Balmoral's right is derivative of the IRB
and not original to it. We disagree.
We first note defendants' contention that plaintiff waived
this argument in failing to raise it before the Board. Plaintiff
in his brief does not respond to this contention, nor does the
record reflect that this contention was ever raised before the
Board. Accordingly, we must agree with the defendants that
arguments not raised before an administrative agency are waived
on administrative review. Edwards v. Illinois Racing Board,
187 Ill. App. 3d 287, 543 N.E.2d 172 (1989).
Moreover, even if not otherwise waived, plaintiff cannot
prevail in his contention. Contrary to plaintiff's contention
that Balmoral's power to exclude is derived from a delegation of
authority from the IRB, it is clear that the power of exclusion
of the racetrack management is original to it. This is made
clear under the express provisions of section 9(e) of the Horse
Racing Act (230 ILCS 5/9(e)(West 1994)) which provides as
follows:
"The Board, and any person or persons to whom it
delegates this power, may eject or exclude from any
race meeting or organization grounds or any part
thereof, any occupation licensee or any other
individual whose conduct or reputation is such that his
presence on organization grounds may, in the opinion of
the Board, call into question the honesty and integrity
of horse racing or interfere with the orderly conduct
of horse racing; provided however, that no person shall
be excluded or ejected from organization grounds solely
on the grounds of race, color, creed, national
origin, ancestry, or sex. The power to eject or
exclude occupation licensees may be exercised for just
cause by the organization licensee or the Board,
subject to subsequent hearing by the Board as to the
propriety of said exclusion." (Emphasis added.)
The last sentence of this statute is explicit in treating
the organization licensee as an independent authority able to
sanction trainers and other personnel operating on its grounds.
In so doing, the organization licensee is not operating as an arm
of the IRB, but as a private business licensee subject only to
IRB review as to the propriety of the exclusion. See Phillips v.
Graham, 86 Ill. 2d 274, 427 N.E.2d 550 (1981) stating,
"There is no such delegation of a recognized
legislative power here. The right to exclude patrons
from a private enterprise, here a racetrack, has long
been recognized at common law. (See, e.g., Marrone v.
Washington Jockey Club (1913), 227 U.S. 633, 57 L. Ed. 679, 33 S. Ct. 401; Flores v. Los Angeles Turf Club,
Inc. (1961), 55 Cal. 2d 736, 361 P.2d 921, 13 Cal. Rptr. 201; Tamelleo v. New Hampshire Jockey Club, Inc.
(1960), 102 N.H. 547, 163 A.2d 10; Annot., 90 A.L.R.3d
1361 (1979).) Though it cannot be said that section
9(e), which goes further and permits the exclusion of
occupation licensees, is a precise codification of the
common law right, it is clear that the authority to
exclude here is not derived from some recognized
legislative power, unique to the legislature, that has
been delegated to organization licensees. It is
simply, as the State argues, a grant of authority by
the legislature. 86 Ill. 2d at 288-89, 427 N.E.2d at
556.
Here, unlike the facts in Coleman, we are not confronted by
an attempt of a single authority to sanction a party twice for
the same violation. Rather there are two separate sanctions by
two independent authorities. The IRB properly reinstated the
plaintiff's license after he completed his suspension. Only
Balmoral, acting by itself, considered the violations for which
he was previously suspended by the IRB, at least as a partial
predicate for its action to exclude the plaintiff. We note that
unlike the sanction of the IRB, which can have statewide
application, the power of the racetrack can only extend to its
own property.
Plaintiff next contends that Balmoral's sanction of
exclusion was unreasonable, arbitrary and overly harsh.
Plaintiff contends that, since 1990, he had committed only two
infractions. The first involved a high blood gas violation and
the second a caffeine violation. Plaintiff cites to the
testimony of Balmoral's general manager, Daniel Nemeth, who
stated that no one ever before received a lifetime suspension for
a single blood gas violation or, for that matter, for acts which
already resulted in a suspension by the IRB.
We first note that plaintiff conceded that he did not know
the length of his suspension. Moreover, the plaintiff testified
that he was advised by Nemeth that he could be reconsidered after
6 months to have his privileges restored. Moreover, here the
plaintiff was not purportedly excluded for violation of a single
blood gas test in 1993 or a single caffeine violation in 1994,
but for his entire record, which included both the 1993 and 1994
violations cumulatively, as well as a 1990 violation for which he
was also suspended by the IRA wherein his horse tested positive
for 3 drugs. In addition, the record reflects that plaintiff was
fined in 1975 for premature removal of a horse from the drug
list;[fn1] in 1978 for "negligence of a child"; and in 1989 for
failure to honor a declaration to race.
Under the provisions of section 9(e) of the Horse Racing
Act, the IRB is given the power to eject or exclude from any
racing meet or organization any occupation licensee,
"whose conduct or reputation is such that his presence
on organization grounds may, in the opinion of the
Board, call into question the honesty and integrity of
horse racing or interfere with the orderly conduct of
horse racing * * *."
The constitutionality of this power has been explicitly upheld by
our Supreme Court in Phillips v. Graham, 86 Ill. 2d 274, 427 N.E.2d 550 (1981).
The misconduct record of the plaintiff is therefore
sufficient to satisfy the statutory standard applicable to
Balmoral's decision to exclude plaintiff on an indefinite basis
subject to the possibility of ultimate reinstatement. That
decision cannot therefore be deemed to be arbitrary or
unreasonably harsh or contrary to the manifest weight of the
evidence.
Plaintiff next contends that to the extent that plaintiff's
exclusion is predicated upon a blood gas violation, that action
violated a blood gas agreement entered into between Balmoral and
the Illinois Harness Horseman's Association (IHHA). Under that
agreement if the blood of a horse tested is above a certain level
on three readings, the trainer should request that the horse be
scratched. Plaintiff contends that, under the foregoing
agreement, the exclusive remedy for high blood gas was that the
horse be scratched.
Plaintiff's contention must fail under the explicit
provision of that agreement which provides at paragraph 8
thereof,
"Notwithstanding any provision of the Main Agreement or
this Amendment, Licensee retains its right to exclude
occupation licensees as provided in the Illinois Horse
Racing Act of 1975 as amended."
Under this express provision the agreement does not purport
to preempt the remedies or sanctions available under the Horse
Racing statute. Thus, a trainer is not necessarily free to
"milkshake" a horse, as the blood gas violation is referred in
the racing vernacular, with impunity subject only to a
"scratching" penalty, if, based on his record, the trainer meets
the exclusion criteria of section 9(e) of the Horse Racing Act.
Lastly, plaintiff contends that he did not receive a fair
hearing in that Balmoral was permitted to introduce evidence of a
violation of track rules involving stabling of a horse which
occurred after Balmoral notified plaintiff of his exclusion from
its track premises. Plaintiff has not cited to any specific
authority to show that the Board was not free to consider post
hoc evidence showing subsequent violations. Thus, this argument
is technically waived. See, e.g., Bank of Illinois v. Thweatt,
258 Ill. App. 3d 349, 630 N.E.2d 121 (1994). However, even if we
were to agree that such evidence is irrelevant, it would
constitute harmless error in that, as previously discussed, there
was ample evidence of other violations by the plaintiff to
justify Balmoral's sanction to exclude him from racing on its
premises.
Accordingly, even if the circuit court had jurisdiction over
plaintiff's administrative appeal, its affirmance on the merits
was warranted. However, since we have found by our
jurisdictional analysis that plaintiff's complaint for
administrative review was prematurely filed, depriving the
circuit court of jurisdiction, we must as a consequence dismiss
this appeal for lack of subject matter jurisdiction under the
Administrative Review Law.
Appeal dismissed.
LEAVITT, P.J. and CAHILL, J., concur.
[fn1]Apparently, the transcript of the agency hearing
erroneously shows the fine as having occurred in 1995 rather than
1975.
March 11, 1998
No. 1-96-3912
MICHAEL PERNALSKI, ) Appeal from the
) Circuit Court of
Plaintiff-Appellant, ) Cook County.
)
v. )
)
ILLINOIS RACING BOARD, GARY L. STARKMAN, )
RICHARD BALOG, RALPH M. GONZALEZ, WILLIAM )
E. JACKSON, JOSEPH F. KINDLON, GENE LAMB, )
LORNA E. PROPES, JOHN B. SIMON, THOMAS J. )
GARVEY, members of the Illinois Racing Board,)
BALMORAL PARK TROT, INC., an Illinois )
corporation; BALMORAL RACING CLUB, INC., an )
Illinois corporation, JOHN A. JOHNSTON, )
and DAN NEMETH, )
) The Honorable
Defendant-Appellees. ) Margaret McBride,
) Judge Presiding.
JUSTICE GORDON delivered the opinion of the court:
BACKGROUND
This is an appeal under the Administrative Review Law (735
ILCS 5/3-101 et seq. (West 1994)) from the affirmance by the
circuit court of the determination of the Illinois Racing Board
(IRB) affirming the action taken by defendant, Balmoral Park
Trot, Inc. (Balmoral), banning plaintiff, an owner and trainer of
harness horses, from racing on its track.
There is no dispute in the record that in January 1995
Balmoral excluded plaintiff from racing at Balmoral pursuant to
section 9(e) of the Illinois Horse Racing Act of 1975 (230 ILCS
5/9(e)(West 1994)) (the Act). Pursuant to Pernalski's request,
the IRB held a hearing as required by section 14a of the Act (230
ILCS 5/14a (West 1994)). The evidence adduced at the hearing
established that plaintiff drew two separate one-year suspensions
from the IRB, in 1990 and 1994 respectively. In 1990, plaintiff
was suspended for one year after a horse which he trained
(Edgewood Dandy) tested positive for thiobendazol, promazine
sulphoxide and etorphine, all of which were drugs whose use was
prohibited. In 1993, a horse trained by plaintiff (Mountain
Shannon) tested positive for caffeine resulting in plainitff's
second suspension by the IRB for a period of one year commencing
January 9, 1994. The evidence also established that in 1991,
following the first suspension in 1990, plaintiff was found to
have engaged in the prohibited practice known as "milkshaking"
which involves forced ingestion by a horse of high levels of
sodium bicarbonate potassium and/or lactic acid or related
substances within hours prior to a race.
On January 15, 1995, after plaintiff served his second
suspension terminating on January 8, 1995, the IRB approved
plaintiff's application for a new license. Plaintiff thereupon
met with the management of Balmoral to advise them of his intent
to resume racing there. About one week thereafter, Balmoral
advised plaintiff that it decided to exclude plaintiff from
racing on its track pursuant to section 9(e) of the Act. The
reasons attributed by Balmoral management for its exclusion were
plaintiff's past conduct, including his foregoing two
suspensions, and his milkshaking violation.
Plaintiff thereafter obtained a temporary restraining order
against enforcement of the Balmoral exclusion. Over plaintiff's
objection, the IRB heard testimony about misconduct by the
plaintiff which occurred within the duration of the temporary
restraining order after the Balmoral decision to exclude him from
its track. The nature of the misconduct involved plaintiff's
attempt to secretly stable two horses on Balmoral's track without
Balmoral's authorization.
After the hearing, the IRB issued its order upholding
Balmoral's exclusion of Pernalski from its race track. Pernalski
thereafter filed his complaint for administrative review. The
circuit court affirmed the IRB's decision; and Pernalski appeals.
On appeal, plaintiff claims that the exclusion by Balmoral
based upon events which preceded the IRB's 1994 suspension and
subsequent license renewal, disciplined the plaintiff twice for
the same misconduct in violation of our Supreme Court's decision
in Coleman v. Illinois Racing Board, 124 Ill. 2d 218, 529 N.E.2d 520 (1988). Plaintiff further claims that the IRB should not
have heard evidence concerning any misconduct of the plaintiff
with regard to his alleged illicit stabling since that act
occurred after Balmoral made its exclusion decision. Lastly,
plaintiff contends that, without the foregoing stabling evidence,
Balmoral's determination to exclude plaintiff lacks the support
of any competent evidence and is therefore contrary to the
manifest weight of the evidence.
THE JURISDICTION QUESTION
Before reaching the merits of plaintiff's appeal, we must
first consider the IRB's contention that we lack subject matter
jurisdiction to entertain this appeal. The IRB contends that
plaintiff filed his complaint for administrative review
prematurely before the IRB issued a written order of disposition.
There is no dispute that plaintiff filed his complaint for
administrative review on September 11, 1995, eight days before
the Board issued its written order dated September 19, 1995.
Accordingly, IRB contends that the trial court had no
jurisdiction to consider plaintiff's appeal pursuant to a
prematurely filed complaint.
Section 3-103 of the Administrative Review Law (735 ILCS
5/3-103 (West 1994)) provides that an action for administrative
review must commence "within 35 days from the date that a copy of
the decision sought to be reviewed was served upon the party
affected by the decision." A "copy of the decision" denotes a
writing. Moreover, the Board's internal regulations provide
that "[o]rders disposing of contested matters upon the merits
shall set forth the Board's findings of fact and conclusions of
law and shall be served by certified mail." 11 Ill. Adm. Code
204.140 (1996).
Collectively, these provisions have been construed to
require the filing of a written decision as a prerequisite for
the commencement of an action for administrative review. See
Batka v. Board of Trustees, 227 Ill. App. 3d 735, 592 N.E.2d 230
(1992). In Batka, the defendant was asked to determine the
amount and effective date of the benefits to which plaintiff was
entitled. Instead of issuing a written order, the agency simply
commenced to pay a certain amount as of a given date. The court
in Batka held that the plaintiff was entitled, via an action for
mandamus, to compel the defendant agency to issue a written
decision because without it the plainitff would be deprived of
his right to appeal the administrative order.
Defendant IRB also purports to derive support for its
jurisdiction argument from our decision in Lutheran General
Health Care System v. Department of Revenue, 231 Ill. App. 3d
652, 595 N.E.2d 1214 (1992). In that case, the Illinois
Department of Revenue omitted a page of its written decision from
the written order which it served upon the plaintiffs denying
them a charitable real estate tax exemption. The plaintiffs
failed to file their complaint for administrative review within
35 days of their receipt of the fragmented decision. Defendant,
in seeking dismissal of the appeal for lack of jurisdiction,
contended that "the portion of the decision mailed to plaintiff *
* * was sufficient to advise plaintiffs of Nafziger's [the
administrative law judge] findings of fact and conclusions of
law." Lutheran General, 231 Ill. App. 3d at 659, 595 N.E.2d at
1219. In holding that the 35 days did not commence to run from
receipt of the incomplete order, the court held that although the
portion sent included the determination to deny the exemption, it
did not fully inform the defendants of what claim should be
addressed in their complaint stating,
"The failure to include a full page of the 7 1/2-page
decision was not a minor omission. Until a complete
copy of the decision was received, plaintiffs had no
way of knowing that Nafziger failed to address the
school exemption issue; nor could they know the precise
grounds on which Nafziger relied in denying them tax-
exempt status. While plaintiffs could have filed a
complaint for administrative review without this
information, we believe it would be unfair to require
them to file a complaint where they can only guess at
the contents of the decision they are seeking to have
reviewed." 231 Ill. App. 3d at 660, 595 N.E.2d at
1219.
Plaintiff contends that neither Batka nor Lutheran General
should control in this case. He argues that, in this case, the
decision of the IRB was announced from the bench and fully
transcribed in the report of proceedings by the court reporter
and that a copy of that transcript was obtained by plaintiff's
counsel (apparently on his own initiative prior to filing the
complaint for administrative review). He also contends that he
submitted an affidavit of his counsel, which is not factually
challenged, that the IRB advised his counsel that its written
ruling may be delayed but that, if he proceeded to appeal before
its issuance, the Board would not object thereto. Plaintiff
therefore contends that the appeal was not premature in that the
rationale underlying the requirement of a written order is that
of providing adequate notice, which plaintiff urges to have been
satisfied by the transcript of the IRB's oral order.
In support of his position, plaintiff cites to the decision
in Johnson v. Machetti, 228 Ill. App. 3d 420, 592 N.E.2d 1149
(1992). In that case plaintiff, a police officer, applied to the
Peoria Police Board for disability pension benefits. At the
hearing on October 13, 1988, the Board awarded the plaintiff a
non-job-related disability of 50% of his annual salary. On
October 27, 1988, the Board notified plaintiff of its decision by
letter stating that the Board decided to grant him a pension in
the amount of $1549.10 per month. Plaintiff computed this amount
to be equal to 50% of his salary. Instead of appealing,
plaintiff submitted to the Board a doctor's report stating that
his disability was job related. One year later, in November,
1989, the Police Board sent plaintiff a letter indicating that
its October 13, 1988 decision was final. Plaintiff then filed
his complaint for administrative review. Defendant moved to
dismiss on the grounds that plaintiff's 35 days to appeal expired
after 35 days from plaintiff's receipt of the Police Board's
letter of October 27, 1988. That motion was sustained
notwithstanding plaintiff's contention that the letter was
insufficient because it did not specify that the award was for
50% of his salary instead of the 65% disability pension which he
sought. In holding that the letter comprised adequate notice the
court declared,
"The letter did inform plaintiff that he would receive
$1,549.10 per month, which was an amount equal to 50%
of his salary. Plaintiff, in his amended complaint,
admits that the 1988 letter put him on notice that he
had received a non-line-of-duty disability pension. On
appeal, plaintiff admits that when he received the
letter he made the calculation and discovered that he
had been awarded a pension at the rate of 50%. The
record reflects plaintiff was present at the October
13, 1988, Pension Board meeting where the matter of his
disability pension was discussed. Plaintiff presented
letters from doctors and other information to the
Pension Board. A motion was made, seconded and passed
that plaintiff be awarded a 50% non-job-related
disability pension based on an annual salary of
$37,178.36, resulting in a monthly disability benefit
of $1,549.10 per month. This is the same figure that
appeared in the October 27, 1988, letter. We find no
merit to plaintiff's contention that the letter failed
to inform him that he had not been awarded a line of
duty disability pension." Johnson, 228 Ill. App. 3d at
422-23, 592 N.E.2d at 1150-51.
Based upon Johnson, plaintiff in the instant case contends that
the transcript of the oral decision was sufficient notice and
analogous to the letter sent by the Police Board in Johnson. We
disagree.
There can be no dispute that under the Administrative Review
Law as well as under the internal rules and regulations of the
IRB, an adjudicative order of the IRB must be in writing and
served upon the affected party by certified mail. See 735 ILCS
5/3-103; 11 Ill. Adm. Code 204.140. The fact that a party may
obtain a copy of the transcript of the administrative agency
session that discusses and arrives at a determination of a
contested matter cannot substitute for the written order which
the agency must then serve upon the party whose rights have been
adjudicated. Otherwise, it can be argued that the 35-day period
must then commence from the date that an oral determination is
transcribed. Plaintiff may contend that the key factor would be
the date upon which the transcript containing the agency's orals
determination is obtained. However, this would make commencement
of the 35-day period dependent upon the unilateral action of the
prospective appellant to initiate obtaining a transcript, rather
than upon the agency. Moreover, what would the result be if,
instead of purchasing or otherwise acquiring a transcript, the
prospective appellant merely reads a transcript in someone else's
possession or is told by another of its contents? Even more
overridingly, what if that party is merely present at the hearing
when the agency arrives at its decision? Why should
transcription of the decision and its acquisition by a party
become an additional prerequisitite, when that transcription
involves what is, in reality, a private transaction between the
court reporter and the acquiring party? Surely, the event which
would trigger the 35-day period within which to commence
administrative review cannot be left to depend upon such
desultory factors, as when the appellant actually learned of the
decision or the contents of the transcript. To do so could
jeopardize rather than expand the appellant's right to appeal
should he choose to wait until he is served with an actual
written order before filing his complaint for administrative
review. The timeliness of that complaint would be subject to
challenge if in fact the appellant had earlier obtained or become
apprised of the transcript containing the oral determination of
the agency. Appellant cannot under the rules claim in both
directions, namely that he should be free to wait for actual
receipt of the written order, or, at his option, file his
complaint for review upon learning of the Board's oral decision
by unilaterally obtaining a transcript or otherwise. Nor have
the parties contended that, once having voted, the Board is
precluded from reconsidering its vote and changing its
determination before serving its written order upon the impacted
party. Thus, the finality of the order cannot be presumed until
it is actually served upon the party whose rights are
adjudicated.
Plaintiff's reliance upon Johnson v. Machetti is ill
advised. In Johnson, there is no dispute that the letter of the
Police Board would satisfy the prerequisites of a written order
if it contained all the essential information required in an
order. None of the parties took issue, nor could they have, with
the fact that the order was embodied in the form of an official
letter of notification. In Johnson the pivotal question was
whether the order, albeit in letter form, contained sufficient
information to advise the plaintiff that his request for a 65%
pension was rejected in favor of a 50% pension. The court quite
correctly held that since the letter did convey the actual dollar
amount of the monthly pension awarded, there was no necessity to
also note that the dollar amount was 50% rather than 65% of
plaintiff's actual monthly salary since that amount was readily
computable. In fact, the plaintiff admitted that, on his own
initiative, he made the simple arithmetic calculation to
determine that the award was for 50% of his pension. Thus the
plaintiff here cannot rely upon Johnson to dispense with the
requirement of a written order altogether where the plaintiff
otherwise becomes cognizant of the agency's decision.
Plaintiff further argues, based upon the affidavit of his
counsel, that the Board agreed to refrain from objecting to the
jurisdiction of the circuit court should plaintiff decide to
appeal before receiving its written order. Consequently,
plaintiff contends that the IRB waived any jurisdictional
impedient arising from his otherwise premature appeal and is
otherwise estopped from raising any jurisdictional objection.
Again, we must disagree.
The premature filing of a complaint for administrative
review is insufficient to confer jurisdiction upon the court over
the subject matter of the appeal. See International Harvester v.
Industrial Comm'n, 71 Ill. 2d 180, 374 N.E.2d 182 (1978); Buroff
v. Board of Fire & Police Comm'rs, 248 Ill. App. 3d 626, 618 N.E.2d 930 (1993). Since the premature filing of a complaint for
review fails to confer subject matter jurisdiction upon the
courts, it is not subject to a claim of waiver or estoppel in
that the parties even by overt stipulation may not confer subject
matter jurisdiction upon the court where none otherwise exists.
See Currie v. Lao, 148 Ill. 2d 151, 592 N.E.2d 977 (1992) (issue
of subject matter jurisdictional cannot be waived); Smith v.
Jones, 113 Ill. 2d 126, 130, 497 N.E.2d 738, 739 (1986) ("it is
axiomatic that subject matter jurisdiction cannot be waived").
Thus, it is clear that the circuit court was without jurisdiction
to hear plaintiff's appeal.
Moreover, the fact that the Board did ultimately serve a
written order upon the plaintiff on September 19, 1995, eight
days after the plaintiff filed his complaint for administrative
review on September 11, 1995, did not serve to retroactively
confer jurisdiction on the circuit court. See Buroff, 248 Ill.
App. 3d at 630-31, 618 N.E.2d at 933 (if a complaint for
administrative review is filed prematurely, a new complaint must
be filed, i.e., a new action must be commenced when the action
taken by the agency becomes final and appealable). Consequently,
when the complaint is not refiled within 35 days after the agency
determination became final and appealable, which in this case
would have been 35 days from September 19, 1995 when the IRB's
written letter was served, the right to appeal was lost. See
Buroff, 248 Ill. App. 3d 626, 618 N.E.2d 930. See also Lockett
v. Chicago Police Board, 133 Ill. 2d 349, 549 N.E.2d 1266 (1990).
A BRIEF LOOK AT THE MERITS
We note that even if jurisdiction were properly conferred
upon the circuit court, the result would be no different in that
the determination of the IRB would have to be affirmed on its
merits. Briefly on the merits, plaintiff contends that neither
the IRB, acting on its own initiative, nor Balmoral, as an
organization licensee, had the right to sanction the plaintiff
more than once for the same violation. In support plaintiff
relies upon the decision in Coleman v. Illinois Racing Board, 124 Ill. 2d 218, 529 N.E.2d 520 (1988). There, the Illinois Supreme
Court held that where a groom was suspended by the IRB for two
years for using a goading device, the IRB could not thereafter,
once the two suspensions passed, refuse to reinstate the
groomer's license by reason of the offense for which he was given
the two-year suspension. The court held that once the IRB acted
upon a violation to grant a given sanction, it could not
thereafter enhance the severity of that sanction by transforming
the two-year suspension into a permanent one.
Plaintiff in the instant case urges this court to apply
Coleman even though Balmoral, rather than the IRB, excluded
plaintiff from its track. Plaintiff argues that that fact is of
no consequence since Balmoral's right is derivative of the IRB
and not original to it. We disagree.
We first note defendants' contention that plaintiff waived
this argument in failing to raise it before the Board. Plaintiff
in his brief does not respond to this contention, nor does the
record reflect that this contention was ever raised before the
Board. Accordingly, we must agree with the defendants that
arguments not raised before an administrative agency are waived
on administrative review. Edwards v. Illinois Racing Board,
187 Ill. App. 3d 287, 543 N.E.2d 172 (1989).
Moreover, even if not otherwise waived, plaintiff cannot
prevail in his contention. Contrary to plaintiff's contention
that Balmoral's power to exclude is derived from a delegation of
authority from the IRB, it is clear that the power of exclusion
of the racetrack management is original to it. This is made
clear under the express provisions of section 9(e) of the Horse
Racing Act (230 ILCS 5/9(e)(West 1994)) which provides as
follows:
"The Board, and any person or persons to whom it
delegates this power, may eject or exclude from any
race meeting or organization grounds or any part
thereof, any occupation licensee or any other
individual whose conduct or reputation is such that his
presence on organization grounds may, in the opinion of
the Board, call into question the honesty and integrity
of horse racing or interfere with the orderly conduct
of horse racing; provided however, that no person shall
be excluded or ejected from organization grounds solely
on the grounds of race, color, creed, national
origin, ancestry, or sex. The power to eject or
exclude occupation licensees may be exercised for just
cause by the organization licensee or the Board,
subject to subsequent hearing by the Board as to the
propriety of said exclusion." (Emphasis added.)
The last sentence of this statute is explicit in treating
the organization licensee as an independent authority able to
sanction trainers and other personnel operating on its grounds.
In so doing, the organization licensee is not operating as an arm
of the IRB, but as a private business licensee subject only to
IRB review as to the propriety of the exclusion. See Phillips v.
Graham, 86 Ill. 2d 274, 427 N.E.2d 550 (1981) stating,
"There is no such delegation of a recognized
legislative power here. The right to exclude patrons
from a private enterprise, here a racetrack, has long
been recognized at common law. (See, e.g., Marrone v.
Washington Jockey Club (1913), 227 U.S. 633, 57 L. Ed. 679, 33 S. Ct. 401; Flores v. Los Angeles Turf Club,
Inc. (1961), 55 Cal. 2d 736, 361 P.2d 921, 13 Cal. Rptr. 201; Tamelleo v. New Hampshire Jockey Club, Inc.
(1960), 102 N.H. 547, 163 A.2d 10; Annot., 90 A.L.R.3d
1361 (1979).) Though it cannot be said that section
9(e), which goes further and permits the exclusion of
occupation licensees, is a precise codification of the
common law right, it is clear that the authority to
exclude here is not derived from some recognized
legislative power, unique to the legislature, that has
been delegated to organization licensees. It is
simply, as the State argues, a grant of authority by
the legislature. 86 Ill. 2d at 288-89, 427 N.E.2d at
556.
Here, unlike the facts in Coleman, we are not confronted by
an attempt of a single authority to sanction a party twice for
the same violation. Rather there are two separate sanctions by
two independent authorities. The IRB properly reinstated the
plaintiff's license after he completed his suspension. Only
Balmoral, acting by itself, considered the violations for which
he was previously suspended by the IRB, at least as a partial
predicate for its action to exclude the plaintiff. We note that
unlike the sanction of the IRB, which can have statewide
application, the power of the racetrack can only extend to its
own property.
Plaintiff next contends that Balmoral's sanction of
exclusion was unreasonable, arbitrary and overly harsh.
Plaintiff contends that, since 1990, he had committed only two
infractions. The first involved a high blood gas violation and
the second a caffeine violation. Plaintiff cites to the
testimony of Balmoral's general manager, Daniel Nemeth, who
stated that no one ever before received a lifetime suspension for
a single blood gas violation or, for that matter, for acts which
already resulted in a suspension by the IRB.
We first note that plaintiff conceded that he did not know
the length of his suspension. Moreover, the plaintiff testified
that he was advised by Nemeth that he could be reconsidered after
6 months to have his privileges restored. Moreover, here the
plaintiff was not purportedly excluded for violation of a single
blood gas test in 1993 or a single caffeine violation in 1994,
but for his entire record, which included both the 1993 and 1994
violations cumulatively, as well as a 1990 violation for which he
was also suspended by the IRA wherein his horse tested positive
for 3 drugs. In addition, the record reflects that plaintiff was
fined in 1975 for premature removal of a horse from the drug
list;[fn1] in 1978 for "negligence of a child"; and in 1989 for
failure to honor a declaration to race.
Under the provisions of section 9(e) of the Horse Racing
Act, the IRB is given the power to eject or exclude from any
racing meet or organization any occupation licensee,
"whose conduct or reputation is such that his presence
on organization grounds may, in the opinion of the
Board, call into question the honesty and integrity of
horse racing or interfere with the orderly conduct of
horse racing * * *."
The constitutionality of this power has been explicitly upheld by
our Supreme Court in Phillips v. Graham, 86 Ill. 2d 274, 427 N.E.2d 550 (1981).
The misconduct record of the plaintiff is therefore
sufficient to satisfy the statutory standard applicable to
Balmoral's decision to exclude plaintiff on an indefinite basis
subject to the possibility of ultimate reinstatement. That
decision cannot therefore be deemed to be arbitrary or
unreasonably harsh or contrary to the manifest weight of the
evidence.
Plaintiff next contends that to the extent that plaintiff's
exclusion is predicated upon a blood gas violation, that action
violated a blood gas agreement entered into between Balmoral and
the Illinois Harness Horseman's Association (IHHA). Under that
agreement if the blood of a horse tested is above a certain level
on three readings, the trainer should request that the horse be
scratched. Plaintiff contends that, under the foregoing
agreement, the exclusive remedy for high blood gas was that the
horse be scratched.
Plaintiff's contention must fail under the explicit
provision of that agreement which provides at paragraph 8
thereof,
"Notwithstanding any provision of the Main Agreement or
this Amendment, Licensee retains its right to exclude
occupation licensees as provided in the Illinois Horse
Racing Act of 1975 as amended."
Under this express provision the agreement does not purport
to preempt the remedies or sanctions available under the Horse
Racing statute. Thus, a trainer is not necessarily free to
"milkshake" a horse, as the blood gas violation is referred in
the racing vernacular, with impunity subject only to a
"scratching" penalty, if, based on his record, the trainer meets
the exclusion criteria of section 9(e) of the Horse Racing Act.
Lastly, plaintiff contends that he did not receive a fair
hearing in that Balmoral was permitted to introduce evidence of a
violation of track rules involving stabling of a horse which
occurred after Balmoral notified plaintiff of his exclusion from
its track premises. Plaintiff has not cited to any specific
authority to show that the Board was not free to consider post
hoc evidence showing subsequent violations. Thus, this argument
is technically waived. See, e.g., Bank of Illinois v. Thweatt,
258 Ill. App. 3d 349, 630 N.E.2d 121 (1994). However, even if we
were to agree that such evidence is irrelevant, it would
constitute harmless error in that, as previously discussed, there
was ample evidence of other violations by the plaintiff to
justify Balmoral's sanction to exclude him from racing on its
premises.
Accordingly, even if the circuit court had jurisdiction over
plaintiff's administrative appeal, its affirmance on the merits
was warranted. However, since we have found by our
jurisdictional analysis that plaintiff's complaint for
administrative review was prematurely filed, depriving the
circuit court of jurisdiction, we must as a consequence dismiss
this appeal for lack of subject matter jurisdiction under the
Administrative Review Law.
Appeal dismissed.
LEAVITT, P.J. and CAHILL, J., concur.
[fn1]Apparently, the transcript of the agency hearing
erroneously shows the fine as having occurred in 1995 rather than
1975.
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