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In re Application of County Treasurer

Court of Appeals of Illinois, Third District

October 16, 2013

In re APPLICATION OF THE COUNTY TREASURER AND ex officio COUNTY COLLECTOR OF WILL COUNTY, ILLINOIS, for Judgment and order of Sale Against Lands and Lots Returned Delinquent for Nonpayment of General Taxes for the Year 2007
v.
Nomanbhoy Family Limited Partners, Respondent-Appellant Lincoln Title Company, Petitioner-Appellee,

Rehearing denied December 6, 2013

Held [*]

In an action arising from a dispute over the issuance of a tax deed to respondent, the trial court properly denied respondent’s motion to dismiss the petition filed under section 2-1401 of the Code of Civil Procedure seeking to declare the tax deed void, since the petitioner was a title insurance company that had issued a policy when the property was sold, the title company’s obligation to provide clear title to the purchaser gave it standing to collaterally attack the tax deed, and the grant of the petition was affirmed, especially in view of the fact that respondent fraudulently procured the tax deed by failing to comply with the notice requirements under the statute; however, the cause was remanded to allow the trial court to order the title insurance company to reimburse respondent pursuant to section 22-80(b) of the Property Tax Code with a 90-day reimbursement date for the money respondent advanced to obtain the tax deed.

Appeal from the Circuit Court of Will County, No. 10-TX-324; the Hon. Barbara N. Petrungaro, Judge, presiding.

Jeffrey S. Blumenthal (argued) and Rodney C. Slutzky, both of Slutzky & Blumenthal, of Chicago, for appellant.

Mindy S. Salyer, Amanda L. Moressi (argued), and Brittney B. Rykovich, all of Salyer Law Offices, LLC, of Chicago, for appellee.

Justices McDade and O’Brien concurred in the judgment and opinion

OPINION

CARTER, JUSTICE

¶1 After respondent, Nomanbhoy Family Limited Partners (Nomanbhoy), obtained a tax deed to certain residential real property (the subject property) in Will County, Illinois, petitioner, Lincoln Title Company (Lincoln Title) filed a petition under section 2-1401 of the Code of Civil Procedure (735 ILCS 5/2-1401 (West 2010)) to declare the tax deed void and to vacate the order that directed the issuance of the tax deed. Nomanbhoy filed a motion to dismiss (735 ILCS 5/2-619 (West 2010)), alleging that Lincoln Title lacked standing to file a section 2-1401 petition to collaterally attack the tax deed. After a hearing, the trial court denied the motion to dismiss, took the case under advisement, and subsequently issued a ruling granting Lincoln Title's section 2-1401 petition. Nomanbhoy filed a motion to reconsider, which the trial court denied. A few weeks later, Nomanbhoy filed an emergency motion to vacate the previous order that granted the section 2-1401 petition, alleging that the trial court had failed to consider Nomanbhoy's right to reimbursement and that no reimbursement had been made as required by statute. The trial court denied that motion, as well. Nomanbhoy appeals, challenging the trial court's rulings: (1) denying Nomanbhoy's motion to dismiss; (2) granting Lincoln Title's section 2-1401 petition (and denying Nomanbhoy's motion to reconsider); and (3) denying Nomanbhoy's emergency motion to vacate the prior order. For the reasons that follow, we affirm the trial court's orders denying the motion to dismiss and granting the section 2-1401 petition, we reverse in part the trial court's order denying the emergency motion, and we remand this case with directions for further proceedings.

¶2 FACTS

¶3 On November 6, 2008, Nomanbhoy purchased the subject property at the annual tax sale for the delinquent 2007 general real estate taxes and was later issued a certificate of purchase. The subject property was improved with a single-family home and was owned at the time by Salta Group, Inc. (Salta), which, coincidentally, had previously acquired the property through the tax-sale process. Under section 22-5 of the Property Tax Code (35 ILCS 200/22-5 (West 2010)), to be entitled to a tax deed later in the process, Nomanbhoy was required to deliver a take notice to the county clerk (clerk) within 4 months and 15 days after the sale so that an official take notice could be sent by the clerk to the assessee of record. Nomanbhoy failed to deliver a section 22-5 take notice to the clerk and instead, allegedly, erroneously mailed the notice by regular mail to Salta at various addresses. It appears from the record that three different section 22-5 notices were allegedly sent by Nomanbhoy to Salta on various dates. The first two notices, entitled, "TAKE NOTICE, " incorrectly listed November 4, 2010, as the date for the expiration of the redemption period (redemption date). The third notice, entitled, "LEGAL NOTICE, " incorrectly listed the redemption date as May 7, 2010. Because the subject property was improved with a single-family home, the actual redemption date was May 6, 2011 (two years and six months from the date of sale). See 35 ILCS 200/21-350(b) (West 2010).

¶4 On November 19, 2010, Nomanbhoy filed a verified petition for tax deed to the subject property. The petition stated, among other things, that Nomanbhoy had fully complied with all of the provisions of the statutes and Illinois constitution relating to tax sales and would be entitled to a tax deed if the subject property was not redeemed. Later that same month, Nomanbhoy filed a motion asking the trial court to direct the county clerk to post Nomanbhoy's costs to the redemption records. The clerk's office, aware that Nomanbhoy had failed to deliver a section 22-5 take notice to it and believing, therefore, that Nomanbhoy would not be able to obtain a tax deed to the subject property, refused to post the costs unless it was ordered to do so by the court. A hearing was held on the motion on December 16, 2010, at which Nomanbhoy's attorney at the time, attorney James, appeared on behalf of Nomanbhoy and attorney Mock appeared on behalf on the county clerk. James acknowledged that a section 22-5 take notice had not been provided to the clerk and that his client had erroneously sent the notice by mail. James told the trial court that although he believed that only substantial compliance with section 22-5 was required, the issue regarding the notice was not yet ripe for the court to determine and that it would be litigated if the case proceeded to a tax deed or possibly not at all, if the taxes were redeemed. The trial court found that the issue regarding the take notice was not before it at that time and directed the clerk to post the costs to the redemption record.

¶5 In February 2011, Nomanbhoy filed a motion to extend the redemption date from May 6, 2011, to October 21, 2011, and to amend the petition for tax deed accordingly. On March 10, 2011, the trial court granted Nomanbhoy's motion, ordered the clerk to extend the expiration of the redemption date to October 21, 2011, and set the case for hearing on the amended verified petition for tax deed for October 28, 2011. The amended verified petition for tax deed was filed that same day, March 10, 2011. It contained the same representation as the original petition–that Nomanbhoy had fully complied with all of the statutes and Illinois Constitution relating to tax sales and would be entitled to a tax deed if the subject property was not redeemed. Within the time provided for by statute, Nomanbhoy had a section 22-10 (35 ILCS 200/22-10 (West 2010)) take notice served on the clerk and on an agent or officer of Salta. Upon receiving the section 22-10 take notice, the clerk sent out its own official notice, which appears in the court file. The sheriff attempted to serve notice at the subject property as required by section 22-15 (35 ILCS 200/22-15 (West 2010)), but that attempt was unsuccessful and it was indicated on the return of service that the subject property was vacant and for sale. Notice was also made by publication as provided for in section 22-20 (35 ILCS 200/22-20 (West 2010)) and a certificate of publication was filed with the court.

ΒΆ6 A hearing on the petition for tax deed took place as scheduled on October 28, 2011, before the same judge that had heard the motion to direct the clerk to post the costs in December 2010. No one appeared at the hearing other that Nomanbhoy's attorney, attorney James. James did not inform or remind the trial court of the fact that the section 22-5 take notice had not been provided to the clerk as required and that an official version of that notice had not been sent out. Nomanbhoy filed an application in support of its request for an order directing the issuance of a tax deed and stated in that application, among other things, that the applicable notices were given to the occupants of the property, the recorded parties in interest, and the county clerk as required by law and cited sections 22-5 through 22-30 of the Property Tax Code (35 ILCS 200/22-5 through 22-30 (West 2010)). Nomanbhoy also stated in the application that it had complied with all of the statutes relating to the issuance of tax deeds and that it was entitled to a tax deed to the subject property. Attached to the application as supporting documents were, among other things, copies of the three section 22-5 take notices that were allegedly mailed out by Nomanbhoy. After reviewing the supporting documents, the trial court entered an order directing the ...


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