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In re Application of County Treasurer and ex Officio County Collector of Jersey County

Court of Appeals of Illinois, Fourth District

June 13, 2017

In re APPLICATION OF THE COUNTY TREASURER AND ex officio COUNTY COLLECTOR OF JERSEY COUNTY (Dealers Service, Inc., Petitioner-Appellant,
v.
Kari L. Ray; Hunter, LLC; Hunter Contracting and Development, Inc.; David J. Ray; and Maag Law Firm, LLC, Respondents-Appellees).

         Appeal from Circuit Court of Jersey County No. 16TX1 Honorable Eric S. Pistorius, Judge Presiding.

          JUSTICE HARRIS delivered the judgment of the court, with opinion. Justices Steigmann and Knecht concurred in the judgment and opinion.

          OPINION

          HARRIS JUSTICE

         ¶ 1 Petitioner, Dealers Service, Inc., appeals the trial court's dismissal of its petition for the issuance of a tax deed. It argues the court erred in finding it was ineligible to obtain a tax deed due to interests it held in the property. We affirm.

         ¶ 2 I. BACKGROUND

         ¶ 3 In January 2016, Dealers Service filed a petition for tax deed with respect to three parcels of real estate in Jersey County. It alleged that, in November 2013, an entity named Sabre Investments (Sabre) purchased the 2012 delinquent real estate taxes for the property at an annual tax sale and was issued two certificates of purchase. In April 2015, Sabre assigned its interest in the certificates of purchase to Dealers Service "for the consideration of $10 each." Dealers Service further alleged it had sent notice to the occupants, owners, and interested parties, but the property at issue had not yet been redeemed. The redemption period was set to expire on May 4, 2016. Dealers Service asked the trial court to find that it fully complied with the procedures necessary for the issuance of a tax deed and that, in the event redemption did not occur, the court enter an order finding it was entitled to receive title to the property in fee simple.

         ¶ 4 Thereafter, two motions to dismiss Dealers Service's petition were filed by parties with interests in the property (collectively referred to as respondents). In April 2016, Kari L. Ray filed a combined motion to dismiss the petition for tax deed pursuant to section 2-619.1 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2014)). She claimed a marital interest in the property at issue "by virtue of a divorce she filed, " which was consolidated with a foreclosure action (case No. 15-CH-29) involving the property "and a lis pendens filed against the property." Relevant to this appeal, Kari argued that equity prohibited Dealers Service, as a lienholder on the property at issue, from obtaining a tax deed to the property. To support her argument, she cited In re Application of Boone County Collector, 131 Ill.App.3d 939, 943, 476 N.E.2d 800, 803 (1985) (hereinafter Candlewick), wherein the Second District held "a lienor may not obtain a tax deed and thereby cut off the interest of other lienors or mortgagees." Kari asserted Dealers Service was a lienholder and mortgagee of the property and alleged it had "filed a [c]omplaint for [f]oreclosure against the same property" in the Jersey County circuit court (case No. 15-CH-29).

         ¶ 5 In May 2016, the second motion to dismiss Dealers Service's petition was filed by Hunter, LLC; Hunter Contracting and Development, Inc.; David J. Ray; and the Maag Law Firm. They asserted dismissal was appropriate pursuant to section 2-619 of the Code (735 ILCS 5/2- 619 (West 2014)) on the same basis alleged by Kari.

         ¶ 6 In response to the motions to dismiss, Dealers Service acknowledged that it had a mortgage against the property dated March 4, 2013, and recorded on April 2, 2013; a lien against the property by virtue of an assignment of judgment lien dated May 18, 2015, and recorded on May 21, 2015; and "a lien against the property by virtue of purchasing the interest of Citizens Community Bank against the property under a [m]ortgage dated [and recorded on] April 23, 2009." (Neither party alleged, nor does the record reflect, the date on which Dealers Service obtained Citizens Community Bank's interest in the property). However, it argued Candlewick was inapplicable to the underlying proceedings because it was brought under a statute that was no longer in effect. Specifically, it noted the Revenue Act of 1939 (Revenue Act) (Ill. Rev. Stat. 1983, ch. 120, ¶ 482 et seq.) in effect at the time Candlewick was decided, was repealed and re-codified as the Property Tax Code (Tax Code) (35 ILCS 200/1-1 et seq. (West 1994)) (Tax Code). Pub. Act 88-455 (eff. Jan. 1, 1994). Dealers Service maintained that current provisions of the Tax Code-addressing annual tax sale procedures (35 ILCS 200/21-190 to 21-255 (West 2014))-were silent as to "an interested party's ineligibility to bid on delinquent taxes."

         ¶ 7 Dealers Service also maintained that because it held no interest in the property on January 1, 2012, the first year the taxes on the property at issue were delinquent, it was "not restricted from buying [the delinquent] taxes on the *** property or [p]etitioning [the circuit court] for a [t]ax [d]eed." It argued that "whether one is an interested party is measured by whether their interest attached on January 1 of the first year for which the delinquent taxes were sold." To support its argument, Dealers Service cited In re Application for Tax Deed, 269 Ill.App.3d 477, 481, 646 N.E.2d 621, 623 (1995) (hereinafter Bailey), for the proposition that "the party who owned the property as of January 1 of any given year is the owner for purposes of taxation."

         ¶ 8 In September 2016, the trial court entered a written order granting the motions to dismiss Dealers Service's petition for a tax deed. The court relied on Candlewick, noting "Illinois continued to rely upon" the proposition set forth in that case after 1994, when the Revenue Act was repealed and recodified under the Tax Code. See Goldberg v. Michael, 328 Ill.App.3d 593, 600, 766 N.E.2d 246, 252 (2002) (citing Candlewick for the proposition that "it is against public policy for [a lienholder] to purchase a tax certificate, as it cuts off claims of other lienholders").

         ¶ 9 This appeal followed.

         ¶ 10 II. ANALYSIS

         ¶ 11 On appeal, Dealers Service argues the trial court erred in granting respondents' motions to dismiss its petition for a tax deed. It agrees it had interests in the property as a mortgagee and lienholder. However, like it did before the trial court, Dealers Service maintains that because its interests in the property did not exist until after January 1, 2012, "the year for which the delinquent taxes were ...


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