Appeal from the Circuit Court of Cook County. No. 08 COTD 2527 Honorable Edward P. O'Brien Judge Presiding.
The opinion of the court was delivered by: Presiding Justice Lavin
PRESIDING JUSTICE LAVIN delivered the judgment of the court, with opinion. Justices Pucinski and Salone concurred in the judgment and opinion.
¶ 1 In a scenario that has been replayed countless times in our troubled real estate economy, Graciela Garcia failed to pay a year's real estate taxes ($1383.50) on her mortgaged property, which opened an opportunity for an attempted tax deed purchase of her two-flat apartment building on Chicago's Southwest side. This appeal arises from the trial court's denial of a tax deed pursuant to the Property Tax Code (Code). 35 ILCS 200/1--1 et seq. (West 2008). The attempted purchaser of the property, tax deed petitioner Glohry, LLC, asserts the trial court erred by denying its application and petition for a tax deed. We affirm.
¶ 3 The essential facts in this appeal are generally undisputed. Graciela Garcia was the record owner of a two-flat building with a basement located at 2943 West 43rd Street in Chicago. To pay for the property in June of 2005, she obtained a mortgage from a mortgage broker, executed two promissory notes in favor of MILA, Inc. (MILA), and granted two mortgages to Mortgage Electronic Registration Systems, Inc. (MERS), which has at all times remained the mortgagee of record. The first mortgage document identified MILA as the lender and stated that MERS was acting "solely as nominee for Lender and Lender's successors and assigns." The second mortgage document contained nearly identical language. Both mortgage documents provided the address and phone number for MERS, as well as an 18-digit "MIN," an acronym for "mortgage identification number." On August 1, 2005, MILA assigned both promissory notes to IndyMac Bank, F.S.B. (Indy). Indy subsequently assigned the two notes to Deutsche Bank National Trust Company (Deutsche), the current noteholder, on October 21, 2005. Indy remained the servicer of the loans.
¶ 4 On June 21, 2006, Ridge TP, LLC (Ridge), purchased Garcia's property at a public auction due to unpaid 2004 taxes, and a certificate of purchase was issued to Ridge on August 15, 2006. The parties agree that the original statutory period in which the property could be redeemed by Garcia or other interested parties was two years and six months from the date of sale. See 35 ILCS 200/21--350(b) (West 2006). The parties also agree that two years and six months from the date of sale would be Sunday, December 21, 2008. We note that while petitioner contends this date constitutes the expiration of the original redemption date, respondents essentially contend that date could not fall on a Sunday and thus, would be Monday, December 22, 2008. See 5 ILCS 70/1.11 (West 2006) ("[t]he time within which any act provided by law is to be done shall be computed by excluding the first day and including the last, unless the last day is *** Sunday *** and then it shall also be excluded"). This trivial-sounding inconsistency proved to be central to the decision of the trial court.
¶ 5 On October 5, 2006, Ridge extended the redemption period to February 9, 2009. Five days later, Ridge submitted an official notice to be sent to Garcia at the subject property pursuant to section 22--5 of the Code. 35 ILCS 200/22--5 (West 2006). The form of the notice required that the redemption expiration date be included in three different places on the form. Notwithstanding the extension of the redemption period five days earlier, Ridge listed the redemption period's expiration date as December 21, 2008, in all three blanks. It is undisputed that Garcia never received the notice sent by the clerk's office.
¶ 6 Ridge assigned the certificate of purchase to petitioner on June 28, 2007. On July 11, 2008, Indy was placed in receivership by the Federal Deposit Insurance Corporation and became IndyMac Federal Bank, F.S.B. (Indy Federal). In September 2008, Richard Glickman, petitioner's attorney, and Ronald Ohr took certain measures to ascertain the persons and entities to which petitioner needed to send the notice set forth in section 22--10 of the Code and the addresses to which said notice would be sent. See 35 ILCS 200/22--10, 22--15, 22--20, 22--25 (West 2008). Their specific efforts in this arcane, but important legal arena will be punctiliously delineated below.
¶ 7 On September 24, 2008, petitioner extended the redemption period so that it would expire on March 23, 2009, and filed a petition for a tax deed. Petitioner subsequently made attempts to serve Garcia, MERS and MILA with the notice set forth in section 22--10. On March 20, 2009, OneWest Bank (OneWest) acquired Indy Federal and became the successor servicer to the two notes. Three days later, the redemption period expired without redemption occurring.
¶ 8 On April 16, 2009, Glickman filed on petitioner's behalf an application for a tax deed, alleging in pertinent part, that on October 10, 2006, the notice required by section 22--5 of the Code had been delivered to the county clerk to mail to Garcia. The application also alleged that Garcia, MERS and MILA were owners, occupants and parties interested in the subject property. Regarding the section 22--10 notice, the application represented that the sheriff's return of service showed that the manner of service for Garcia was certified mail sent on October 28, 2008, the manner of service for MERS was "Corporate" on October 9, 2008, and the manner of service for MILA was certified mail sent October 1, 2008.
¶ 9 On May 4, 2009, OneWest's attorney, Jeffrey Blumenthal of Slutzky and Blumenthal, filed a response to petitioner's application which essentially denied that petitioner complied with section 22--5, admitted that Garcia and MERS were owners, occupants or parties interested in the party and further alleged that the petitioner's list of interested parties entitled to notice pursuant to section 22--10 was incomplete. OneWest denied that Garcia, MERS or MILA received notice. OneWest requested that the trial court deny the application and dismiss the petition for a tax deed with prejudice. On November 24, 2009, Blumenthal also filed a response on behalf of Garcia, which generally provided the same representations as OneWest's response.
¶ 10 On May 18, 2010, petitioner and respondents tendered their "Joint Trial Materials," which included their stipulations, certain exhibits and the majority of the aforementioned facts and documents. We recite only that testimony which is relevant to the issues raised on appeal. Ohr, a member of petitioner, testified that he inspected the subject property three times in September 2008 and brought his inspection report to Glickman. The report essentially pertained to any indicia, or lack thereof, of who occupied the subject property and described the property's condition.
¶ 11 Glickman, who had practiced in the tax deed area for almost 50 years, testified that Ohr's office had prepared the first notice extending the redemption period. Glickman testified that section 22--5 set forth notice to be submitted to the county clerk within 4 months and 15 days of the tax sale to be directed to the last tax assessee of record, in this case Garcia, and that the redemption date was required to be included in the notice. He acknowledged that when the section 22--5 notice was tendered to the county clerk on October 10, 2006, it listed the redemption date of December 21, 2008, even though the redemption expiration date had already been extended once to February 9, 2009.
¶ 12 Glickman testified that prior to the expiration of the extended period of redemption on March 23, 2009, there was an additional notice-serving period, during which a diligent inquiry and effort had to be made to serve all owners, occupants and interested parties. Petitioner retained Glickman for this purpose. Pursuant to his investigation, he had Ohr inspect the property and prepare a report and apparently at some point, located Garcia's warranty deed from a tract book search. Glickman also identified his search results from the Chicago Abstract, Inc., regarding the subject property on September 11, 2008. The results indicated that on June 28, 2005, the subject property was deeded to Garcia and she granted two mortgages on the property to MILA. The three documents were recorded on August 10, 2005. Glickman also testified that he always searched the Cook County recorder's records both before and after obtaining the Chicago Abstract document but could not specifically recall doing so in this case. Glickman apparently determined from the Chicago Abstract, Inc., results and the mortgage documents that Garcia, MILA and MERS had sufficient interests in the property to warrant directing notice toward them. On September 22, 2008, Glickman took certain additional steps, including performing an Accurint search, to attempt to identify occupants of the property and locate Garcia. His attempt to telephone Garcia was unsuccessful. Our record also indicates that in October 2008, petitioner unsuccessfully attempted to mail notice to Garcia but whether these particular attempts were sufficient is not at issue on appeal.
¶ 13 Glickman reviewed the mortgage documents to determine where to serve the remaining entities and observed that the documents referred to both MERS, the mortgagee as nominee for the lender, and MILA, the lender. As to MERS, the parties stipulated that during the statutory notice-serving period, MERS was served with notice, which it forwarded to Indy Federal. Regarding MILA, Glickman checked the Illinois Secretary of State's website to identify MILA's registered agent in Illinois but saw that MILA, a Washington corporation, had withdrawn its foreign registration in 2007. Glickman found that as a result, MILA was a nonentity in Illinois. He believed that MILA had a recorded interest in the property as the lender but that it was his duty to make a diligent inquiry and effort to find MILA only if it "had a nexus in Illinois." He also believed there was no requirement to serve an out-of-state corporation that has withdrawn from Illinois, regardless of whether it had a recorded interest, and that it was MILA's duty as an interested party to keep a registered agent in Illinois. In addition, Glickman believed that "service on MERS, as their registered agent, would have been service on MILA even though they've withdrawn if they were the lender, or any successor lender that they might have had that they didn't report an interest to." Nonetheless, he searched for MILA's president to determine where to send notice. We note that our record includes the letter, apparently containing the section 22--10 notice, sent by certified mail to MILA on October 1, 2008, care of Mark Hikel, MILA's president, at the same address listed for Hikel in the Illinois Secretary of State website's search results. That address was 6021 244th Street Southwest in Mountlake Terrace, Washington, 98043. We also note that the envelope was marked "return to sender" on October 4, 2008, with a forwarding address for MILA at 601 Union Street, Suite 4400 in Seattle, Washington, 98101-1367. In addition, the return receipt was file stamped by the clerk's office on October 22, 2008. Glickman testified that he did not check the court file between September 23, 2008, and December 23, 2008, to determine what happened to the certified mail sent to MILA. Glickman also testified that he did not examine the Washington Secretary of State's website regarding MILA because his attempt to serve MILA was gratuitous. Published notice directed toward Garcia, MERS and MILA was provided from November 19, 2008, to November 21, 2008.
¶ 14 Glickman further testified that he was familiar with MERS mortgages, although there were different types. He had also occasionally examined chapters 10 and 11 of a publication by the Illinois Institute for Continuing Legal Education (IICLE) titled "Real Estate Taxation," which was authored by Douglas Karlen and Rodney Slutzky but essentially disagreed with its representation that MERS should be contacted to obtain the name of the current noteholder and that both the current noteholder and MERS should be served with notice. He believed there was no reason to call MERS in this instance because it was served with notice and was the only entity, as mortgagee, nominee and trustee for the lender, which was entitled to notice. When he read a provision of the IICLE indicating that MERS was akin to a land trust, Glickman testified that a beneficiary of a land trust is served with notice when the beneficiary is disclosed of record. In addition, he testified that due to noteholders not receiving notice regarding unrecorded documents in the 1990s and early 2000s, MERS's purpose was to permit the free assignment of mortgage notes without having to record assignments and to act as a clearing house. He further testified that MERS was formed to "cover the gap" and accept service. He did not previously know that "MIN" stood for "mortgage identification number" or that a MIN number appeared on the top of a MERS mortgage.
¶ 15 Rodney Slutzky testified, in pertinent part, that in November 2009, Blumenthal asked him to conduct a search for MILA. After spending but three or four minutes conducting an Internet search with the Google search engine, he learned that MILA had filed for bankruptcy and that the website for the bankruptcy trustee's law firm revealed five addresses, one of which we observe was similar to the forwarding address added to the certified letter sent to MILA but marked "return to sender." The address was 4400 Two Union Square, 601 Union Street, Seattle, Washington, 98101-2352. Slutzky also visited the Washington Secretary of State's website, which listed MN Service Corporation as MILA's agent and the same address as the forwarding address added to the certified letter sent to MILA. The website also showed that Geoffrey Groshong, MILA's bankruptcy trustee, was also MILA's president and listed the same address for Groshong as the aforementioned address on his law firm's website. Exhibits corroborating the steps taken in Slutzky's Internet search were admitted into evidence.
¶ 16 Charles Boyle, the assistant vice president of the default risk management litigation department of OneWest, testified that he was previously employed with OneWest's predecessors, Indy and Indy Federal. OneWest currently serviced the loans in question on behalf of Deutsche and its responsibilities included maintaining a valid interest in the mortgages and the subject property, and ensuring that taxes were paid. Boyle testified that pursuant to the pooling and servicing agreement between Indy and Deutsche, Indy had authority to act regarding the loan without first consulting with the lender. Boyle also testified that a limited power of attorney executed by Deutsche in favor of OneWest similarly gave OneWest the power to act as if it were the lender and take all actions regarding the loan without first conferring with Deutsche. In addition, he testified that a corporate resolution between MERS and OneWest, dated March 19, 2009, permitted employees and officers of OneWest to sign documents on behalf of MERS without conferring first with MERS and that Indy and Indy Federal had previously had the same authority. Boyle further testified that MERS permitted lenders and servicers to register a mortgage and easily assign interests between different servicing entities. He testified that loans were commonly transferred and MERS generally would forward notice of a tax sale to the servicer. When counsel informed Boyle that MERS forwarded the section 22--10 notice it received to Indy Federal, Boyle testified he did not know why his company did not pay the taxes. Following Boyle's testimony, the court entered a continuance and ordered the parties to submit briefs.
¶ 17 At a hearing on June 10, 2010, the trial court denied the application and petition for a tax deed following the parties' arguments. Regarding the notice required by section 22--10, the court found, in pertinent part, that service of notice to MILA, which had assigned its interest in the note, was a moot point. The court also found that petitioner made a diligent inquiry to serve Garcia with notice. As to MERS, the court found it was properly served with notice through its Illinois agent. The court found that as to any unrecorded interests, including an unrecorded assignment, the best way to receive notice is to record one's interest. As a result, the court found there was no obligation for a petitioner to search for potential assignees who had not recorded their interest and that petitioner had made a diligent inquiry and effort to serve the section 22--10 notice.
¶ 18 The trial court found, however, that petitioner failed to satisfy section 22--5 of the Code because the date included in the notice was incorrect. Specifically, the court found that substantial compliance, rather than strict compliance, was required and that either the original or extended redemption date would have sufficed but that neither of those days would have been December 21, 2008, because it was a Sunday. The court found that prejudice regarding an error in the content of the notice was to be presumed, even though Garcia never received notice.
¶ 19 II. SECTION 22--5 NOTICE
¶ 20 Petitioner first asserts that the section 22--5 notice in this case was sufficient. Petitioner contends it is unclear what standard of compliance applies to section 22--5, but urges us to find that substantial compliance is sufficient. In contrast, respondents contend that strict compliance is required. This issue of first impression presents a question of statutory construction, which we review de novo. In re Application of the County Collector, 356 Ill. App. 3d 668, 670 (2005).
¶ 21 Our primary objective in interpreting a statute is to determine and give effect to the legislature's intent. Barragan v. Casco Design Corp., 216 Ill. 2d 435, 441 (2005). All other rules of statutory construction are subordinate to this rule. Barragan, 216 Ill. 2d at 441. The most reliable indicator of the legislature's intent is the statute's language, which must be given its plain and ordinary meaning. Solon v. Midwest Medical Records Ass'n, 236 Ill. 2d 433, 440 (2010). In determining the statute's plain meaning, we consider the statute in its entirety, the subject being addressed and the apparent purpose of the legislature in enacting the statute. Solon, 236 Ill. 2d at 440. If possible, a statute should be construed so that no language is rendered meaningless or superfluous. In re Application of the County Collector, 356 Ill. App. 3d at 670. In addition, the statutory construction principle that the expression of one thing in a statute excludes any other thing may be used to ascertain the legislature's intent where it is unclear. Bridgestone/Firestone, Inc. v. Aldridge, 179 Ill. 2d 141, 153 (1997). This maxim is applied only where it appears to reflect, and not defeat, the legislature's intent. Bridgestone/Firestone, Inc., 179 Ill. 2d at 153-54; see also People v. Roberts, 214 Ill. 2d 106, 117 (2005) (the maxim expressio unius est exclusio alterius is subordinate to the primary principle that the legislature's intent controls the construction of a statute).
¶ 22 Where a statute's language is clear and unambiguous, the court must apply it as written without resorting to extrinsic aids of statutory interpretation. Solon, 236 Ill. 2d at 440. Nonetheless, if a statute could be understood by reasonably well-informed persons in multiple ways, the statute will be considered ambiguous. MD Electrical Contractors, Inc. v. Abrams, 228 Ill. 2d 281, 288 (2008). Where a statute's meaning is ambiguous, courts may look beyond the statutory language and consider the law's purpose, the evil that it was intended to remedy and the statute's legislative history. Cinkus v. Village of Stickney Municipal Officers Electoral Board, 228 Ill. 2d 200, 217 (2008). Furthermore, we may consider ...