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In re Application of the County Treasurer

June 5, 2007


Appeal from the Circuit Court of Carroll County. Nos. 01-TX-9, 01-TX-10, 01-TX 13, 02-TX-26, 02-TX-29, 03-TX-10, 03-TX-11, 03-TX-12, 03-TX-13, 03-TX-14.Honorable Val Gunnarsson, Judge, Presiding.

The opinion of the court was delivered by: Justice KAPALA*fn1

Petitioner, AAM/US Bank LLC , appeals from a November 8, 2005, order of the circuit court of Carroll County denying its motion for summary judgment and granting that of respondent, the Lake Carroll Association. For the reasons that follow, we affirm in part, reverse in part, and remand.


On August 5, 2002, petitioner filed a petition for tax deed for 16 parcels of real estate in Carroll County. On February 11, 2003, the trial court granted the petition and issued petitioner an "Order for Issuance of Tax Deed" (Tax Deed Order) for 15 of the 16 properties.*fn2 Each order required "that the Carroll County Clerk do forthwith make, execute, and deliver to said Petitioner upon surrender to said County Clerk of the Certificate of Purchase delivered to the original purchaser, a good and sufficient deed conveying to said Petitioner" the real estate described in the order.

Following the trial court's February 11, 2003, orders, petitioner was issued tax deeds for the properties on various dates, beginning on July 3, 2003. Petitioner obtained other deeds on July 25, 2003, October 1, 2003, October 14, 2003, and November 4, 2003. On the same dates these deeds were issued, they were recorded.

On September 10, 2003, petitioner filed a motion for declaratory judgment concerning respondent's claims for homeowners' assessment fees on the 15 properties. In its motion, petitioner requested a declaration that it would not be responsible for the homeowners' assessment fees until it submitted each order to the county clerk, who would then issue a deed and record the deed with the county recorder. In response, respondent argued that petitioner was obligated to pay assessment fees on the properties as of February 11, 2003, when the Tax Deed Orders were entered.

On October 29, 2003, the trial court denied petitioner's motion for declaratory judgment and found that the properties were subject to homeowners' assessment fees that accrued since February 11, 2003, the date of the Tax Deed Orders. However, on May 14, 2004, the trial court granted petitioner's motion to reconsider and vacated its October 29, 2003, order. The trial court also granted petitioner's motion for leave to file an amended motion for declaratory judgment as a writ of assistance. In addition, the trial court granted petitioner's motion to consolidate the pending case regarding the 15 properties discussed above (No. 02--TX--29) with petitioner's other pending tax cases involving properties subject to respondent's assessment fees (No. 01--TX--9, No. 01--TX--10, No. 01--TX--13, No. 02--TX--26, No. 03--TX--10, No. 03--TX--11, No. 03--TX--12, No. 03--TX--13, No. 03--TX--14).*fn3

On June 15, 2004, petitioner filed its amended motion, entitled "Amended Application in Writ of Assistance for Declaratory and Other Relief; and Claim for Unjust Enrichment." In its amended application, petitioner sought a declaration that it was not liable for any of respondent's assessment fees, past, present, or future, because the assessment obligations were not covenants running with the land and the covenant of assessments contained in the "Declaration of Restrictive Covenants, Lake Carroll" (Declaration) violated the rule against perpetuities. Petitioner also alleged that even if respondent could properly charge assessment fees upon the properties at issue, petitioner was not liable for the assessment fees that accrued between the date of the Tax Deed Orders and the dates the deeds were recorded. Petitioner also requested that any and all assessments it paid to respondent for the properties at issue be returned with prejudgment and postjudgment interest.

Petitioner attached the Declaration to its amended application. The Declaration contains the covenants and restrictions that pertain to the land within the Lake Carroll Development. The Declaration expressly authorizes respondent to "levy annual assessments against all Lots in the Development." The Declaration states that any unpaid assessments may become a lien on the property. The Declaration also provides that its terms are intended "to operate as covenants running with the land for the benefit of each and all other such Lots and Parcels in the Development and their respective owners, present and future." The Declaration is dated May 15, 1972, and states that it shall exist "until January 1, 1995, after which the same shall be [automatically] extended for successive periods of ten (10) years each."

On July 11, 2005, respondent moved for summary judgment, arguing that there was no genuine issue of material fact and that petitioner's amended application for declaratory judgment and claim of unjust enrichment should be denied as a matter of law. On August 29, 2005, petitioner also filed a motion for summary judgment. On November 8, 2005, the trial court granted respondent's motion for summary judgment and denied petitioner's motion for summary judgment. The trial court held that the homeowners' assessments were covenants running with the land and did not run afoul of the rule against perpetuities. The trial court further held that once a person obtains an order for the issuance of a tax deed, he has the right to obtain a tax deed and record it that day, and his liability for the assessments relates back to the date of the order for the issuance of the tax deed. Petitioner now appeals the order of the trial court. The trial court has stayed its judgment pending the mandate of this court.


Although petitioner separates its argument on appeal into five different issues, we believe these issues condense into two basic contentions. First, petitioner contends that it is not liable for any past, present, or future assessments on the properties, even following the recording of its tax deeds, because (1) the tax deeds were purchased free and clear of any restrictions and assessments, and any assessment fees sought by respondent were eliminated upon issuance of the tax deeds; (2) respondent has waived or is estopped from collecting assessments, due to its failure to pursue its right to those assessments at the tax deed proceedings; and (3) the covenant of assessments in the Declaration is void under the rule against perpetuities. Second, petitioner contends that even if it is liable for assessment fees, the trial court incorrectly chose the date of the Tax Deed Orders, rather than the dates of recording of the tax deeds, as the date the assessments began to accrue. Based on these two contentions, petitioner also contends that respondent owes petitioner prejudgment and postjudgment interest and was unjustly enriched by petitioner's payment of the assessments. We will address the second issue first, as it will help to illustrate when title to the properties vested in petitioner. The nature and extent of the titles are relevant to the relative merits of the first issue.

"Summary judgment is proper if, when viewed in the light most favorable to the nonmoving party, the pleadings, affidavits, depositions, and admissions on file demonstrate that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Allegis Realty Investors v. Novak, 223 Ill. 2d 318, 330 (2006). When parties file cross-motions for summary judgment, they agree that no material issue of fact exists and only a question of law is involved. Board of Education v. Cunningham, 346 Ill. App. 3d 1027, 1030 (2004). In such a case, we review de novo the trial court's decision. Cunningham, 346 Ill. App. 3d at 1030.

As a preliminary matter, we must address respondent's motion to strike the "Nature of the Case" section of petitioner's brief. Respondent argues that this section of petitioner's brief is not a simple introductory paragraph but rather is composed of self-serving, conclusory, and argumentative statements. Petitioner responds that respondent's motion to strike should be denied because it was not filed separately pursuant to Supreme Court Rule 361 (210 Ill. 2d R. 361), and that, despite being 41/2 pages long, the "Nature of the Case" section was not too long compared with the length of its brief.

Supreme Court Rule 341(h)(2) states that an appellant's brief should contain:

"(2) An introductory paragraph stating (i) the nature of the action and of the judgment appealed from and whether the judgment is based upon the verdict of a jury, and (ii) whether any question is raised on the pleadings and, if so, the nature of the question.


'This action was brought to recover damages occasioned by the alleged negligence of the respondent in driving his automobile. The jury rendered a verdict for the plaintiff upon which the court entered the judgment from which this appeal is taken. No questions are raised on the pleadings.' " 210 Ill. 2d R. 341(h)(2).

We agree with respondent that petitioner's 41/2 -page "Nature of the Case" section far exceeds the concept of an introductory paragraph and violates the direction of Rule 341(h)(2). However, " '[t]he striking of an appellate brief, in whole or in part, is a harsh sanction and is appropriate only when the alleged violations of procedural rules interfere with or preclude review.' " In re Detention of Powell, 217 Ill. 2d 123, 132 (2005), quoting Moomaw v. Mentor H/S, Inc., 313 Ill. App. 3d 1031, 1035 (2000). Although excessive, petitioner's "Nature of the Case" section does not interfere with our review, and therefore, we decline to strike this portion of the brief. Consequently, we need not consider petitioner's argument that respondent cannot raise a motion to strike in its appellee brief.

A. Commencement of Obligation to Pay Assessments

Petitioner contends that the trial court erred in holding that the time frame for accrual of assessments relates back to the date on which the trial court entered the Tax Deed Orders. Petitioner contends that the assessments charged by respondent accrue beginning "no earlier than the date of filing the tax deed." Respondent asserts that petitioner's obligation to pay the assessments arose February 11, 2003, when the trial court issued the Tax Deed Orders.

Initially, we note that both parties unnecessarily focus much of their arguments on whether the recording of the deeds marks the beginning of the accrual of the assessments. Each tax deed in the record was recorded on the same date the clerk issued the deed. Consequently, because each deed was issued and recorded on the same day, any argument distinguishing the date of issuance from the date of recording is unavailing.*fn4 Rather, the pivotal issue is whether respondent can collect assessments accruing from the date of the Tax Deed Orders rather than the dates that the deeds were issued and recorded. Because we conclude that respondent cannot collect assessments prior to the dates of issuance of the tax deeds, we need not address the effect of the recording dates.

"[T]he obligation to pay assessments is a covenant that runs with the land and is binding only on title holders." Newport Condominium Ass'n v. Talman Home Federal Savings & Loan Ass'n of Chicago, 188 Ill. App. 3d 1054, 1059 (1988); Illinois Ry. Museum, Inc. v. Siegel, 132 Ill. App. 2d 77, 82 (1971); see 35 ILCS 200/22-65 (West 2002). Thus, in order to determine when the assessments began to accrue, we must first determine when petitioner gained title to the properties.

Two sections of the Property Tax Code (Code) (35 ILCS 200/1 et seq. (West 2002)) are particularly helpful to this determination. Section 22--40 states that once the redemption period expires, the property has not been redeemed, and the petitioner has complied with all the provisions of law entitling him or her to a deed, "the court shall so find and shall enter an order directing the county clerk on the production of the certificate of purchase and a certified copy of the order, to issue to the purchaser or his or her assignee a tax deed." 35 ILCS 200/22--40 (West 2002). Section 22--65 provides that "[a] tax deed executed by the county clerk under the official seal of the county shall be recorded in the same manner as other conveyances of property, and vests in the grantee, his or her heirs and assigns, the title of the property therein described without further acknowledgment or evidence of the conveyance." 35 ILCS 200/22--65 (West 2002).

" 'In interpreting a statute, a court's primary goal is to ascertain the intent of the legislature.' [Citations.] 'The best evidence of legislative intent is the language used in the statute itself, which must be given its plain and ordinary meaning.' [Citation.] If the legislative intent can be discerned from the statutory language, this [approach] must prevail, and no resort to other tools of statutory construction is necessary." Mattis v. State Universities Retirement System, 212 Ill. 2d 58, 76 (2004); People v. Burke, 362 Ill. App. 3d 99, 105 (2005). Where the language of the statute is clear, we may not read into it exceptions that the legislature did not express and we will give it effect as written. Elementary School District 159 v. Schiller, 221 Ill. 2d 130, 144 (2006).

Section 22--40 specifically provides that the court's order allows the clerk to issue a tax deed if, following the issuance of the court's order, the party presents the county clerk with the certificate of purchase and a certified copy of the order. 35 ILCS 200/22--40 (West 2002). This language suggests that the order itself does not amount to the issuance of the deed, but that steps must be taken before the deed is issued. Moreover, section 22--40 also states that it is the county clerk that issues the tax deed. 35 ILCS 200/22--40 (West 2002). Thus, while section 22--40 authorizes the court to enter an order for issuance of a tax deed, it plainly states it is the county clerk that issues the tax deed. See 35 ILCS 200/22--40 (West 2002). Moreover, section 22--65 specifically prescribes that a tax deed executed by the clerk "vests in the grantee, his or her heirs and assigns, the title of the property." 35 ILCS 200/22--65 (West 2002). Accordingly, the plain language of the above statutes provides that title is acquired at the time the county clerk issues the tax deed, and not at the time the order for issuance of the tax deed is entered.

The effect of the above statutes is also consistent with our supreme court's holding in Atkins v. Hinman, 7 Ill. 437 (1845). In Atkins, the defendant challenged the title that the plaintiff received at a sheriff's sale for taxes. Atkins, 7 Ill. at 437. Our supreme court held that three criteria must be met to prove the validity of a title purchased at a tax sale: (1) a valid judgment against the land, (2) a valid precept authorizing the sheriff to make the sale, and (3) proper conveyance of the land from the sheriff. Atkins, 7 Ill. at 448. Thus, our supreme court recognized that a conveyance is an essential part of vesting title, even when a court has authorized the sale. See Atkins, 7 Ill. at 448. More recently, in Illinois Ry. Museum, Inc., 132 Ill. App. 2d at 82, the appellate court also noted that "[a] certificate of sale does not pass title to the purchaser until the passing of the redemption period and the issuance of a tax deed." (Emphasis added.)

Therefore, in this case, petitioner obtained title to the properties on the days the tax deeds were issued by the clerk, not the days the court entered the Tax Deed Orders. Accordingly, because assessment fees can be collected only from titleholders, petitioner cannot be liable for fees accruing on its properties before the dates the deeds were issued by the clerk.

Furthermore, although the trial court pointed out that a tax deed purchaser may obtain a tax deed on the day the order for issuance of the tax deed is entered, we do not believe that the mere ability to acquire the tax deed endows the tax deed purchaser with the obligations and liabilities of a titleholder. In this regard, this case is similar to one faced by the First District, in Newport, 188 Ill. App. 3d at 1054. In Newport, the defendant successfully bid for a certificate of purchase of a foreclosed property. Newport, 188 Ill. App. 3d at 1056. The period of redemption expired six months thereafter. Newport, 188 Ill. App. 3d at 1056. However, the defendant did not exchange his certificate of purchase for the sheriff's deed until almost two years after the redemption period had ended. Newport, 188 Ill. App. 3d at 1056. Two months after the defendant received the deed to the property, the condominium association filed a complaint against the defendant to foreclose on a lien for the condominium assessments that had accrued on the property in the two years following the expiration of the period of redemption. Newport, 188 Ill. App. 3d at 1056. The trial court entered an order in favor of the condominium association, holding that the defendant had constructive title of the property from the time the redemption period expired. Newport, 188 Ill. App. 3d at 1057.

The appellate court reversed, holding that both the expiration of the redemption period and the conveyance of the deed are necessary to pass title. Newport, 188 Ill. App. 3d at 1059. The appellate court noted that the defendant had no legal obligation to exchange the certificate of purchase for the tax deed. The court also held that the certificate of purchase did not convey title and was merely evidence of the right to obtain title once the redemption period had expired. Newport, 188 Ill. App. 3d at 1059. Thus, the court concluded that the defendant was ...

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