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In re Application of the County Tresurer

March 29, 2004

[5] IN RE APPLICATION OF THE COUNTY TREASURER, FOR JUDGMENT AND ORDER OF SALE AGAINST LANDS AND LOTS RETURNED DELINQUENT FOR NONPAYMENT OF GENERAL TAXES AND/OR SPECIAL ASSESSMENT FOR THE YEARS 1994 AND PRIOR YEARS
(MIDWEST REAL ESTATE INVESTMENT COMPANY, PETITIONER (HOMESIDE LENDING INC., RAMIRO HERNANDEZ AND JOSE ALVARADO, PETITIONERS-APPELLANTS,
v.
MIDWEST REAL ESTATE INVESTMENT COMPANY, RESPONDENT-APPELLEE)).



[6] Appeal from the Circuit Court of Cook County Honorable Alfred J. Paul, Judge Presiding.

[7] The opinion of the court was delivered by: Justice McNULTY

[8]  The trial court granted Midwest Real Estate Investment Company a tax deed to property Jose Alvarado's family occupied. Jose, who had received no notice of the tax deed proceedings, filed a petition for vacation of the tax deed under the standards stated in section 22-45 of the Property Tax Code (35 ILCS 200/25-45 (West 2000)). The trial court denied the petition, holding that Jose did not have an "other recorded interest" in the property within the meaning of the Property Tax Code.

[9]  We hold that any interest sufficient to require notice under sections 22-10 and 22-15 of the Property Tax Code (35 ILCS 200/22-10, 22-15 (West 2000)) can qualify as an "other recorded interest," if the tax purchaser can discover the interest by reasonable inference from properly recorded instruments reflected in the public record of the title. Because Midwest could have reasonably inferred Jose's interest from the properly recorded mortgage, Jose presented valid grounds for vacating the tax deed. We reverse the decision of the trial court and remand for further proceedings.

[10]   BACKGROUND

[11]   In August 1995 Herminia Alvarado, with the help of her cousin, Ramiro Hernandez, purchased a house in Chicago. She and Ramiro borrowed $124,693 for the purchase from CTX Mortgage Company. CTX sold the mortgage to BancBoston Mortgage Corporation. Herminia properly recorded title and BancBoston recorded its mortgage.

[12]   The mortgage on its face noted that Herminia had married Jose and Ramiro had married Severa Hernandez, but Jose and Severa did not share ownership of the property. To ensure enforceability of the mortgage against all interests in the property, both Jose and Severa signed the mortgage. Under Jose's signature the document stated: "Jose Alvarado signs as borrower for the sole purpose of waiving homestead rights." A similar legend explained Severa's signature.

[13]   BancBoston promised to apply all payments from the Alvarados first to the mortgage insurance premium and second to any taxes and other insurance before taking any part of the payment as interest or to retire the principal. Cook County received all taxes charged for 1995 and for all the years the Alvarados occupied the property, but taxes for 1994 went unpaid. In 1996 BancBoston changed its name to HomeSide Lending Inc.

[14]   Midwest purchased the property in 1996 at a tax sale for unpaid 1994 property taxes. Midwest paid $948.71 for the property. In 1998 Midwest filed a petition for a tax deed to the property. Midwest obtained summons addressed to BancBoston, Herminia, Ramiro, and two other named occupants of the property.

[15]   The sheriff certified service of the summonses, including one personally served on Ramiro at the property. Midwest addressed no summons to Jose or Severa. The sheriff served all the summonses between November 30, 1998, and December 2, 1998. On December 24, 1998, the clerk of court mailed summonses to each person Midwest named. Each summons included a notice advising that the county had sold the property for delinquent taxes and the redemption period would expire on March 11, 1999. No one redeemed the property in time.

[16]   In April 1999 Midwest moved for issuance of the tax deed. In the motion Midwest specified: "All notices required by law to be given have been given *** and [Midwest] has complied with all of the provisions of law entitling it to a Tax Deed."

[17]   At an ex parte hearing in June 1999 Midwest's attorney told the court that the two owners and two other persons already served occupied the property. He did not mention Jose. Although he informed the court about the mortgage, did not put a copy of the mortgage into evidence.

[18]   The court granted Midwest's motion for an order directing the county clerk to issue a tax deed. The court expressly found that "all persons and parties entitled thereto have been duly served with notice," and that Midwest "exercised due diligence in attempting to ascertain the identity and location of all parties entitled to notice."

[19]   In November 1999 Midwest moved for an order for possession of the property. Midwest alleged that it had "made a demand for possession on the parties in possession of the real estate who have *** refused to vacate."

[20]   Following an urgent phone call, HomeSide in November 1999 filed its petition to vacate the tax deed pursuant to section 2-1401 of the Code of Civil Procedure (735 ILCS 5/2-1401 (West 2000)). Jose and Ramiro joined HomeSide's petition in December 2000.

[21]   An officer of HomeSide admitted, in an affidavit, that HomeSide's legal department received notice of the tax deed petition, addressed to BancBoston, in December 1998. HomeSide's logs also indicated the tax petition had been forwarded to the tax department. The tax department, which had sole responsibility for investigating and handling claims involving delinquent taxes and tax deed sales, had no record of receiving the notice. The tax department first learned of the delinquency and sale in November 1999. HomeSide sought relief in count I of the petition.

[22]   Jose alleged in count II that he lived at the property with his family continuously from the purchase to the date of the petition, and he received no notice of the tax deed proceedings, including the sale. He sought relief as a person with a "recorded interest" in the property, within the meaning of section 22-45(4) of the Property Tax Code (35 ILCS 200/22-45(4) (West 2000)).

[23]   In count III Ramiro and Jose alleged that the Property Tax Code required mailing of notice before December 11, 1998, and the county clerk failed to mail notice until December 24, 1998. Jose also repeated his allegations that he received no notice although he lived at the property. Ramiro claimed that he, too, did not receive notice of the proceedings despite his ownership of the property. Ramiro and Jose sought relief due to fraudulent misrepresentations Midwest made to the court at the ex parte hearing in June 1999.

[24]   Ramiro separately alleged in count IV that he never received notice of the proceedings. He had never so much as set foot on the property, so the sheriff could not have served him with process there, as stated in the return of service.

[25]   At the hearing on the section 2-1401 petition, held in September 2001, Jose testified that he married Herminia 14 years before the hearing and they had three children, ranging in age from 2 years to 12 years. He lived in the house with his family ever since Herminia bought it in 1995. Ramiro never lived in the house.

[26]   Jose received no notice about taxes or the sale. He had little ability to understand English, and almost no ability to read English. Jose relied on Herminia to make all mortgage payments along with insurance and tax payments. Herminia first told him in late 2000 or early 2001 that there was a problem concerning taxes on the house, but she also told Jose that she made all the payments needed and the matter was resolved. At some ...


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