Friday, May 2nd, 2014

Strict Procedural Compliance in Administrative Adjudication/Code Hearing Proceedings

The First District Appellate Court rendered a decision in Stone Street Partners, LLC v. The City of Chicago Department of Administrative Hearings that invalidated the City of Chicago’s administrative adjudication judgment against a corporation for some noteworthy reasons.  The case stemmed from a 1999 violation of the City of Chicago property maintenance code.  The property in question was owned by a corporation, and the City served the corporation at the subject property, not at its primary business address or with its registered agent.  Furthermore, a non-attorney corporate officer initially appeared on behalf of the corporation and argued, unsuccessfully, against the alleged violation.  Over the next 14 years, the City continued efforts through Circuit Court to revive the judgment and collect the outstanding debt.

In 2011, the corporation moved to vacate the 1999 judgment under the auspice that it never knew the judgment existed.  The administrative law judge denied the motion, and the Circuit Court judge confirmed.

The Appellate Court reversed the lower court, stating two fundamental reasons. First, notice to the corporation was invalid because the City’s code required service on the corporation’s registered agent or at its place of business, and the City failed to follow its own protocol for service. Therefore, service was defective. Second, the administrative body allowed a non-attorney to appear before it, represent the corporation, and such actions constitute the unlawful practice of law which cannot constitute an appearance by the corporation.

There are a couple of important takeaways from this case.  Initially, and as David W. McArdle previously cautioned in the case of Farrar v. City of Rolling Meadows, a local government must follow its own rules for code hearing or administrative adjudication. Recent case law is trending to strict interpretation of even seemingly minor procedural requirements.  Notice and hearing requirements should be reviewed in both the state statute enabling the administrative adjudication/code hearing as well as the local government code, to ensure that there are no deviations in the process being used.

Also, do not allow a business entity to be represented by a non-attorney in any phase of the adjudication process. If a non-attorney appears on behalf of a business entity, respectfully identify the non-attorney to the judge as a non-attorney, and either ask for a default against the entity, or assess a no-show fee and give them a new date, with a mailed copy of the order to the registered agent (or as the City of Chicago’s code provided, to the primary corporate address).


William C. Westfall

Author: William C. Westfall