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A.P. Properties Inc. v. Goshinsky

July 01, 1999

A.P. PROPERTIES, INC., APPELLANT,
v.
ROBERT H. GOSHINSKY ET AL., APPELLEES.



The opinion of the court was delivered by: Justice Rathje

16-May 1999.

This appeal arises from two actions consolidated in the circuit court of Lake County. In the first action, A.P. Properties, Inc. (A.P.), filed a petition for a tax deed, and respondent, Illinois Real Estate Opportunity Fund I, L.L.C. (Fund), sought to have the petition dismissed pursuant to section 2-619(a)(9) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(9) (West 1996)). In the second action, A.P. filed a chancery complaint against defendants Robert Goshinsky, Leeanna Goshinsky, Corey Goldstein, and the Fund (collectively defendants). Defendants sought to dismiss that action as well. See 735 ILCS 5/2-615 (West 1996). After consolidating the actions, the trial court granted both motions to dismiss. The appellate court affirmed the dismissals. 298 Ill. App. 3d 475. Thereafter, we granted A.P.'s petition for leave to appeal. See 177 Ill. 2d R. 315.

The issues presented are (1) whether the purchaser of a tax sale certificate is a creditor of the property owner and therefore may seek relief under the Uniform Fraudulent Transfer Act (Act) (740 ILCS 160/1 et seq. (West 1996)); and (2) whether a party redeeming delinquent taxes after a petition for tax deed has been filed must file a redemption under protest form.

BACKGROUND

In December 1993, A.P. purchased the delinquent taxes on property that Leeanna *fn1 owned. On June 7, 1996, Leeanna transferred her interest in the property to Robert, who became the sole owner. On July 26, 1996, A.P. filed a petition for tax deed. A.P. set the redemption period to expire on November 29, 1996. On November 19, 1996, for $5,000, Robert sold the property to the Fund. One day later, the Fund redeemed the taxes.

Thereafter, the Fund sought to dismiss A.P.'s petition for a tax deed. A.P. responded that, because the Fund had not filed a written redemption under protest, it was prohibited from challenging A.P.'s petition for a tax deed. Additionally, A.P. filed a chancery complaint alleging that the transfer of the property from Leeanna to Robert and from Robert to the Fund violated the Act. Defendants moved to dismiss this complaint, alleging that A.P. lacked standing under the Act. The trial court granted both motions to dismiss. The appellate court affirmed the trial court's judgment.

FRAUDULENT TRANSFER CLAIM

A.P. first argues that it is entitled to seek relief under the Act. The trial court dismissed A.P.'s claim pursuant to section 2-615. When we review the granting of such a motion, we accept all well-pleaded facts as true, and we should affirm the trial court's judgment if our de novo review reveals that the allegations, when viewed in the light most favorable to the plaintiff, are insufficient to state a cause of action upon which relief may be granted. Brogan v. Mitchell International, Inc., 181 Ill. 2d 178, 183 (1998).

A.P. asserts that its cause of action is based on section 5(a) of the Act. This section provides, in relevant part:

"A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:

"(1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or"

"(2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:"

***

"(B) intended to incur, or beleived or reasonably should have believed that he would incur, debts beyond his ability to pay as they became due." ...


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