Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

DAVIS v. U.S.

February 7, 1989

STEVEN
v.
DAVIS AND JUDITH A. DAVIS, PLAINTIFFS, V. UNITED STATES OF AMERICA INTERNAL REVENUE SERVICE, GILLIAN RONGEY, DEFENDANTS.



The opinion of the court was delivered by: Richard Mills, District Judge:

OPINION

Cross motions for summary judgment.

Both must be denied.

This cause must proceed to trial.

Facts

This case involves a mixture of the unique Illinois land holding device called a land trust,*fn1 the all-encompassing scope of the federal tax lien, and an unreported name change. Both the Plaintiffs and the Internal Revenue Service claim priority interests in real property once owned by Defendant Gillian Rongey. Between the Internal Revenue Service (hereinafter IRS) and the Davises, there can be no real winner. For now, though, we must postpone making the hard choice between these two relative innocents.

Gillian Rongey has not always been known by that name; until February of 1982, she was known as Gillian Renslow. In 1978, Gillian Renslow and her mother purchased property at 4 Chatsford Court, Bloomington, Illinois, as joint tenants. Thereafter the property was placed in an Illinois land trust, which named BancMidwest as trustee. Gillian Renslow lived there with her husband, John Renslow.

In July of 1981 the IRS made an assessment against John and Gillian Renslow for their 1978 income taxes. A notice of federal tax lien, filed in February 1982 with the Recorder of Deeds for McLean County, Illinois, included the assessment for the 1978 taxes. The notice of tax lien named "John & Gillian Renslow" as the taxpayers, and stated that their residence was "4 Chatsford Ct., Bloomington, IL 61701."

Gillian Renslow divorced John Renslow in April of 1981 and married Richard Rongey on February 19, 1982. On April 23, 1986, title to 4 Chatsford Court was transferred from the land trust to Gillian Rongey. Later that year, on November 18, Gillian and Richard Rongey entered into a contract for the sale of 4 Chatsford Court to Steven and Judith Davis, the Plaintiffs here. Pursuant to the contract for sale, the Rongeys submitted a commitment from a title insurance company that no outstanding encumbrances, including tax liens, existed against the property. The Davises and the Rongeys consummated the contract for sale, and the Davises have apparently been making payments upon the property since.

The IRS has sought to foreclose upon 4 Chatsford Court, pursuant to its Notice of Tax Lien filed in the names of John and Gillian Renslow. In response, the Davises filed the instant case — which is a suit to quiet title — naming the United States of America, Internal Revenue Service; in the alternative, the Davises seek recovery from Gillian Rongey for false and fraudulent misrepresentations in her sale of the property to Plaintiffs.

The perspective of the title examiner warrants further scrutiny.

Using the grantor-grantee index, the title examiner would discover that Gillian Rongey received title from the land trust. Searching the tax liens, the examiner would find none naming Gillian Rongey. Then, moving backward, the title examiner would see that the land trust received its title from the deed from Gillian Renslow and her mother back in 1978. The title examiner would discover no notice of tax lien naming the land trust or its trustee. The title examiner would perhaps discover a notice of tax lien naming Gillian Renslow, but that notice of tax lien was filed four years after Gillian Renslow had transferred the property into the land trust. Hence, the title examiner would find no outstanding tax liens naming any record titleholder of 4 Chatsford Court.

It is therefore clear that the IRS thought that its lien covered the subject real estate (withholding for the time being any discussion of whether the IRS had notice of Gillian Renslow's name change, and the effect such notice would have upon the IRS's notice of lien); further, the tax examiner — and hence the Davises — could find no outstanding encumbrances on the property from their record search. The only person who may have had knowledge of both the tax lien and the name change was Gillian Renslow-Rongey, but she denies knowing of the tax lien.

As noted at the outset, these cross motions for summary judgment are thus brought by two relatively innocent ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.