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Baker v. Forest Pres. Dist. of Cook County

Court of Appeals of Illinois, First District, First Division

May 18, 2015

TODD BAKER, RICHARD KIRK CANNON, MERYL SQUIRES CANNON, and WANDA DZIOPEK, Plaintiffs-Appellants,
v.
THE FOREST PRESERVE DISTRICT OF COOK COUNTY, and BMO HARRIS BANK, N.A., Defendants-Appellees

Page 746

Appeal from the Circuit Court of Cook County. 13 CH 20057 . Honorable Thomas R. Allen, Judge Presiding.

For PLAINTIFFS-APPELLANTS: Matthew L. McBride III, MCBRIDE LAW OFFICES, P.C., Arlington Heights, Illinois.

For DEFENDANTS-APPELLEES: Christopher W. Carmichael, Maureen Browne Schoaf, HOLLAND & KNIGHT, LLP, Chicago, Illinois; David T.B. Audley, Mark Silverman, CHAPMAN AND CUTLER, LLP, Chicago, Illinois.

JUSTICE CONNORS delivered the judgment of the court, with opinion. Presiding Justice Delort and Justice Cunningham concurred in the judgment and opinion.

OPINION

CONNORS, Judge

Page 747

[¶1] This appeal, filed by taxpayers of Cook County, concerns the statutory authority of the Forest Preserve District of Cook County (FPD) to acquire property in foreclosure by purchasing the mortgage note and subsequently bidding on the property at the foreclosure sale.

[¶2] I. BACKGROUND

[¶3] A. Foreclosure Action: BMO Harris Bank et al. v. Royalty Properties, LLC

[¶4] In December 2006, Cannon Squires Properties, LLC, and Royalty Properties, LLC, received a loan from Amcore Bank (Amcore) to purchase Horizon Farms (the property or Horizon Farms), and the two companies mortgaged the property in return for the loan. Richard Kirk Cannon and Meryl Squires Cannon, members of the companies, guaranteed the loan. When the loan matured in May 2009, the entire principal and interest became due and there were also unpaid taxes on the property. Amcore began foreclosure proceedings. When Amcore failed the following year, BMO Harris (BMO) assumed the deposits and purchased all of the assets of Amcore, including the Horizon Farms mortgage and note.

[¶5] On March 19, 2013, the Forest Preserve District Board (Board) approved FPD's purchase of the Horizon Farm's note from BMO. BMO and FPD executed an assignment and assumption agreement. On June 27, 2013, FPD paid BMO $14 million for the note and to become the assignee of the Horizon Farms mortgage.

[¶6] Shortly thereafter, defendants filed a motion to substitute plaintiff, FPD for BMO, in the foreclosure proceedings pursuant to section 2-1008 of the Code of Civil Procedure (735 ILCS 5/2-1008(a) (West 2012)) as FPD was the present holder and owner of the assignment and assumption agreement relating to Horizon Farms. The court granted the motion to substitute plaintiff.

[¶7] On August 30, 2013, a judgment of foreclosure was entered in favor of FPD.

[¶8] In October 2013, the Board authorized FPD's participation in the foreclosure sale of Horizon Farms. On October 18,

Page 748

2013, FPD participated in the foreclosure sale and credit bid for the property. FPD was the highest bidder and received the certificate of sale for the property. The sale was confirmed on May 5, 2014, and FPD acquired title to the property on May 16, 2014, upon receipt of the sheriff's deed.

[¶9] B. Instant Taxpayer Suit

[¶10] Plaintiffs, Richard Kirk Cannon, Meryl Squires Cannon, and Todd Baker,[1] filed their complaint in this action (taxpayer suit) against FPD, the Board,[2] and BMO. This taxpayer suit was filed on August 30, 2013, which was the same day the foreclosure judgment was entered in favor of FPD in the foreclosure action. All plaintiffs allege that they are Cook County taxpayers.

[¶11] The crux of plaintiffs' complaint is that FPD's purchase of the mortgage note from BMO and then its participation in the foreclosure sale was contrary to the Cook County Forest Preserve District Act (District Act) (70 ILCS 810/1 et seq. (West 2012)) which grants forest preserve districts the power to acquire land in " fee simple" (70 ILCS 810/7, 8 (West 2012)). Plaintiffs contend that because public funds were expended in purchasing the note and before FPD received title to the property, FPD did not acquire Horizon Farms in fee simple.

[¶12] Plaintiffs' complaint contains three counts--one for declaratory relief and two for injunctive relief. Count I of the complaint, focusing on FPD's statutory authority, requests that the court declare that: (1) FPD's actions in entering into the loan agreements are ultra vires and void; (2) FPD's actions in expending public funds for the acquisition of loan documents and for litigation in the foreclosure action are ultra vires and void; (3) the purchase of Horizon Farms is void and BMO must return the funds to FPD; (4) FPD does not have the authority to expend public funds in foreclosure litigation, to " purchase commercial paper or liens in private litigation, or act as a private litigant" ; (5) FPD's purchase of a promissory note is not equivalent to acquiring land in fee simple; and (6) FPD does not have the statutory authority to expend public funds in private foreclosure litigation, purchase commercial paper, or to act as a speculative investor.

[¶13] Count II of the complaint requests: (1) a preliminary and permanent injunction barring further expenditure of public funds (including attorney fees or litigation costs) in the foreclosure action; (2) a mandatory injunction to recover all litigation expenses and attorney fees incurred in the foreclosure action; (3) a preliminary and permanent injunction barring further transfers of title to third parties, modifications, or improvements to the property acquired in the foreclosure action until final judgment in the current case; (4) a mandatory injunction requiring the rescission of the loan documents; and (5) that the court declare the purchase of the land void and order return of public funds.

[¶14] Count III of the complaint seeks injunctive relief: (1) enjoining FPD from expending further public funds in the foreclosure action, or in the purchase of commercial paper or liens in private litigation; (2) enjoining and preventing the expenditure of any public funds except when the purchase concurrently bestows FPD with acquisition of land in fee simple; (3) enjoining FPD from using public funds to act as a speculative investor; (4) enjoining FPD from acquiring loan documentation secured ...


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