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Chicago Title Insurance Co. v. Teachers' Retirement Sys.

Court of Appeals of Illinois, First District, First Division

February 18, 2014

CHICAGO TITLE INSURANCE COMPANY, Successor by Merger to Ticor Title Insurance Company, as Subrogee for Bankfinancial Corporation; LECHNER AND SONS II, LLC, Plaintiffs-Appellants,
v.
THE TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS, Defendant-Appellee

Appeal from the Circuit Court of Cook County. No. 12 CH 23170. Honorable Kathleen Pantle, Judge Presiding.

Affirmed.

SYLLABUS

Where defendant, an agency of the State of Illinois, sold a parcel of real estate to plaintiff pursuant to a contract providing that if defendant paid any real estate taxes on the property and those taxes were refunded to defendant upon the grant of defendant's application for a real estate exemption, defendant would be entitled to keep the refunded taxes, plaintiffs were not entitled to recover the expenses incurred in responding to a notice that even though defendant's exemption had been granted, the taxes were also sold as delinquent several years after the sale and plaintiffs paid to prevent the property from being sold for the delinquent taxes, since the contract absolved defendant of any responsibility for the expenses plaintiffs incurred, and defendant did not do anything wrong and was not unjustly enriched; therefore, plaintiffs' action against defendant was properly dismissed.

For Appellants: Barry C. Brotine, of counsel, Fidelity National Group, Chicago, IL.

For Appellee: Jonathan E. Strouse, James T. Mueller, Michael A. Grill, of counsel, Hollan & Knight, LLP, Chicago, IL.

JUSTICE DELORT delivered the judgment of the court, with opinion. Justices Hoffman and Cunningham concurred in the judgment and opinion.

OPINION

DELORT, JUSTICE

Page 20

[¶1] Real estate taxes in Illinois are paid annually--not for the current year, but for

Page 21

the preceding year. See generally Jeffrey S. Blumenthal & David R. Gray, Jr., Tax Bills and Payments, in Real Estate Taxation, § 10.3 (Ill. Inst. for Cont. Legal Educ. 2012). Unpaid real estate taxes remain a lien on the property until paid. 35 ILCS 200/21-75 (West 2010). Properties with delinquent taxes are subject to possible sale at auction. Id. Accordingly, careful buyers of real estate will verify that the taxes are paid up, and contractual provisions will address how taxes for the immediately preceding and current years will be estimated and split between the parties at closing. In the ideal world, buyers and sellers walk away from closings never having to deal with each other again regarding the taxes. This case presents a textbook example of how Murphy's Law came into play after what seemed to be a routine real estate closing. The court below rejected the buyer's attempts to recover money it paid to rescue the property from loss at a tax sale. We affirm.

[¶2] BACKGROUND

[¶3] The facts are generally undisputed. The defendant, Teachers' Retirement System of the State of Illinois (TRS), an agency of the State of Illinois,[1] bought the subject property, located in Mount Prospect, in 1991. In 2002, it sold the property to the plaintiff, Lechner and Sons II, LLC (Lechner). The sale to Lechner was governed by a 16-page contract containing a single-spaced provision regarding real estate taxes entitled " PRORATIONS" that covered most of a page. The provision stated that " real estate taxes for 2000 (to the extent unpaid) and 2001 ***, if any, shall be prorated as of the Closing Date." In the contract, Lechner acknowledged that TRS was applying to certain governmental authorities for an exemption which " may eliminate or reduce the amount of Taxes assessed against" the property. Finally, as is particularly relevant to the ...


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