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In Re Application of Rosewell





Appeal from the Circuit Court of Cook County; the Hon. Francis Barth, Judge, presiding.


This is an appeal by petitioner-appellant Phoenix Bond & Indemnity Company (Phoenix) from a trial court order in a cause involving an admitted error in the redemption date in a real estate tax foreclosure proceeding. The parties and their interests are as follows.

The applicant-appellee is Edward J. Rosewell, treasurer and ex officio collector of Cook County. A deputy clerk of the Cook County clerk's office entered an erroneous redemption date in the judgment record purporting to extend the redemption date from November 14, 1983, to February 15, 1984, for a parcel of real estate described by permanent index number 03-29-336-008. The property had been forfeited to the State of Illinois and subsequently was sold to Phoenix for delinquent 1979 real estate taxes.

The respondent-appellee is the Federal Deposit Insurance Company (FDIC), which is the assignee in liquidation of the legal owner of the land trust holding the involved property. FDIC is the attempted redeemer of the property.

The order appealed from (1) granted Rosewell's motion to dismiss Phoenix's petition for a tax deed; (2) granted FDIC's motion for summary judgment; and (3) denied Phoenix's cross-motion for summary judgment. The practical effect of the order is to permit FDIC to redeem the property on the basis of the erroneous extension date. Although Rosewell's motion was filed under section 2-615 of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2-615), the trial court treated it as the "functional equivalent" of a section 2-619 summary judgment motion. (Ill. Rev. Stat. 1983, ch. 110, par. 2-619(9).) The court held that Rosewell had standing and granted his motion to dismiss. The court granted FDIC's summary judgment motion on the grounds that there were no fact issues and on the basis of FDIC's reliance on a public record.

This cause arose out of the following undisputed facts.

On November 31, 1981, Phoenix purchased a parcel of real estate that had been forfeited to the State of Illinois at a 1979 annual tax sale. Phoenix's purchase was made pursuant to section 272 of the Illinois Revenue Act of 1939 (Ill. Rev. Stat. 1981, ch. 120, par. 753). Section 272 authorizes a party to purchase property forfeited for delinquent real estate taxes and special assessment, and also permits the redemption within specified time limits of property so purchased. Ill. Rev. Stat. 1981, ch. 120, par. 753(2).

Phoenix complied with procedures established by the Revenue Act. It sent notice of the sale date and of the expiration date of the extended period of redemption (November 14, 1983) to the owner of record, Ford City Bank and Trust Company, and other interested parties as required by the Revenue Act. (Ill. Rev. Stat. 1981, ch. 120, par. 719 et seq.) FDIC was not served with notice since it was neither an owner of record nor even known to Phoenix as having an interest in the property. However, the trustee of the land trust did forward a timely copy of the notice, with an expiration date of November 14, 1983, to FDIC.

On approximately October 6, 1983, a deputy county clerk, purportedly obeying a circuit court order in another but related proceeding, entered an extension in the judgment record from November 14, 1983, to February 15, 1984. The undisputed erroneous entry occurred concurrently with the extension of the redemption date for six other tax forfeiture purchases by Phoenix which had been indexed in the same sequence of numbers as the property involved in this appeal. The redemption date for those other six parcels was extended to February 15, 1984. The court order did not extend the redemption date for the property at issue.

Phoenix was without notice of the improper extension until November 15, 1983, the day after the expiration of the correct extension date, when Phoenix examined the judgment record for a possible redemption. At that same time, Phoenix learned that several estimates of redemption bearing the February 15 date had been sent by the county clerk's office to an unknown party. In fact, four estimates of redemption had been sent to FDIC. The first estimate, dated October 5, 1983, was prepared before the erroneous entry was made and listed the proper expiration date. Three subsequent estimates bearing the improper expiration date of February 15, 1984, were sent to FDIC on October 11, October 18, and November 10, respectively.

On November 15, the deputy clerk, at the request of and in the presence of counsel for Phoenix, "whited out" the incorrect date. On November 18, a deputy clerk, after an initial refusal, accepted FDIC's tendered redemption deposit and reinscribed the erroneous date of February 15, in the judgment record. Thereafter, Phoenix initiated proceedings to expunge FDIC's redemption and sought permission to file an application for a tax deed.

On appeal, Phoenix raises three issues. It argues that (1) an issue of fact exists as to whether FDIC relied on the erroneous expiration date since FDIC attached no counteraffidavits to its motion for summary judgment; (2) FDIC, as a matter of law, knowingly made its deposit for redemption after the expiration of the actual, legal redemption period; and (3) Rosewell has no standing to oppose its motion to expunge the redemption. FDIC counters with the argument that summary judgment was properly entered in its favor since there was no fact issue, and that FDIC was entitled to rely on the erroneous entry in a public record. FDIC claims that it did so rely in good faith, and further, that there is no harm to Phoenix since it will recover the amount paid plus interest if FDIC redeems the property. In other words, both parties will be made whole.

As to the first issue, Phoenix asserts that since FDIC received one estimate of redemption bearing the correct expiration date from the county clerk, the ambiguity created by three subsequent estimates with a different and later expiration date placed an affirmative duty on FDIC to examine the tax-deed file. Furthermore, Phoenix points out that the copy of the original notice and an FDIC internal memo indicated that the period of redemption expired on November 14, 1983. Phoenix contends that these circumstances raise an issue of fact as to FDIC's reliance. Furthermore, Phoenix argues that entry of summary judgment was improper because FDIC did not submit counteraffidavits disputing Phoenix's affidavit and supporting documents. Phoenix's attached papers included excerpts from the deposition of an FDIC employee and an FDIC internal memo, both of which indicated a November 14 expiration date, the statutory notices served, and copies of the estimates of redemption ordered by FDIC.

Secondly, Phoenix contends that the redemption was not exercised in conformity with the statute and approval of the FDIC redemption would create a right where none existed. In other words, court approval would give the county clerk the ...

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