United States District Court, S.D. Illinois
MEMORANDUM AND ORDER
M. YANDLE UNITED STATES DISTRICT JUDGE.
Kevin Dvorak and Kathleen Dvorak are proceeding on an eight
Count Complaint asserting an alleged conspiracy to fix St.
Clair County, Illinois real estate tax sales so that property
owners were required to pay artificially high interest
penalties to redeem their properties. The defendants include
St. Clair County, St. Clair County Treasurer Charles Suarez,
and a number of individual and associated business purchasers
who are alleged to have participated in the conspiracy
(collectively, “Purchaser Defendants”).
the Court are Defendants' Motions for Summary Judgment
(Docs. 265, 266, 267, 268, 269, 270 and 272). Plaintiffs have
filed responses to most, though not all, of these motions
(Docs. 278, 279, 280, 281, 282, 283). For the following reasons,
Defendants' motions (Docs. 265, 266, 267, 268, 269, 270
and 272) are GRANTED.
case arises from certain St. Clair County real estate tax
sales of properties for which the prior year's property
taxes are delinquent. The general structure and requirements
for the tax sales are set forth in Article 21 of the Illinois
Property Tax Code (35 ILCS 200/21 et seq.). Under
the statute, the County Collector (an ex officio
role of the County Treasurer) conducts the sales. Purchasers
do not receive clear title to the property at issue, but
rather a Certificate of Purchase and the right to collect the
amount of unpaid taxes from the owner plus a
“penalty” ranging from 0 to 18% interest. The
winning bidder for a given property is the one who is willing
to accept the lowest penalty rate if the owner exercises
their right of redemption. Each successful bidder pays the
County the amount of the delinquency. The maximum penalty
percentage that may be bid is 18%. If no bids are received on
a given property, it reverts to the County at the maximum
example, a property with a $2000 overall delinquency is
offered at the tax sale. One bidder offers 18% - meaning that
he will pay $2000 to the County and charge the property owner
an additional 18%, if they want to redeem the property.
Another bidder offers 13%. If this is the winning bid, the
property owner would pay less to redeem the property. If no
lower bids are received, the second bidder receives the
Certificate of Purchase.
property owner fails to redeem a property within the
statutory redemption period, the successful bidder may file a
petition for a tax deed. Once a tax deed is issued, it
conveys merchantable title, free and clear from most previous
interests in the property.
property is redeemed, the purchaser of the tax lien receives
the certificate amount (what it paid to the County) plus the
penalty percentage. The penalty rate increases every six
months by the amount of the penalty rate that was originally
bid. Using the above example, the property owner would owe
the winning bidder $2, 260 if redeemed within six months, $2,
520 if redeemed between six months and a year, $2, 780 if
redeemed between a year and 18 months, etc. The holder of a
tax lien may also pay subsequent unpaid real estate taxes on
a property and claim an automatic 12% penalty on the
subsequent taxes. An owner or other eligible party wishing to
redeem the property pays the total amount owed to the County,
which in turn sends that amount to the tax purchaser.
the cost of redemption is usually significantly less than the
market value of the property, there is a strong incentive for
anyone holding a sizeable ownership or security interest in
the property to redeem it following a tax sale. For that
reason, if a property owner is unable to pay the cost of
redemption, it is common for a mortgage holder or other
lienholder to redeem on behalf of the property owner in order
to preserve their interest. The amount paid on the
owner's behalf is then added to the owner's
claim that the St. Clair County tax sale process was tainted
in 2007 and 2008. Specifically, they allege that Defendant
Suarez, in exchange for political contributions for himself
and the St. Clair County Democrat Party, arranged for the
auctioneer to recognize the Purchaser Defendants as winning
bidders (presumably in cases of identical bids) and to
distribute the winning bids between the Purchaser Defendants.
(Doc. 2 at ¶¶74, 79). They also allege that Suarez
arranged for representatives tied to Purchaser Defendants to
have advantageous seating positions and caused the auctioneer
to ignore subsequent (or “trailing”) lower bids,
thereby artificially inflating the penalty rates. Finally,
Plaintiff's allege that the Purchaser Defendants agreed
amongst themselves to keep their bids at or near the 18%
statutory maximum penalty rate. (Id. at ¶74).
owned two properties that were sold at the 2007 St. Clair
County real estate tax sale conducted in November 2008.
(Id. at ¶¶6-11). The first property is
located at 518 E. Washington St., O'Fallon, Illinois
(“Washington Property”); the second property is
located at 619 W. Schuetz St., Lebanon, Illinois
(“Schuetz Property”). Both properties were
purchased by Defendant White Oak Securities at 18% penalty
rates and were subsequently redeemed on November 8, 2011 by
mortgage holder First Federal Savings Bank (Docs. 268-4 and
268-5). Because the redemption took place nearly three years
after the sale, $1, 725.03 in penalty interest was assessed
on a $1, 597.25 tax bill for the Washington Property. (Doc.
268-4). Redemption of the Schuetz Property cost $2, 018.22 in
penalty interest on a $1, 868.72 2007 tax bill. (Doc. 268-5).
Both properties were sold at tax sales several years before
and several years after the 2007 tax year sales at lower
penalty rates. (Docs. 278-2 and 278-3).
assert eight causes of actions, including claims against all
defendants for Civil Conspiracy (Count I), violations of the
Sherman Anti-Trust Act, 15 U.S.C. §§ 1 and 2
(Counts III and IV) and violations of the Illinois Antitrust
Act, 740 ILCS 10/1, et seq. (Counts V-VII). They
also assert claims for money had and received against all
defendants except Suarez (Count II) and breach of fiduciary
duty against Suarez alone (Count VIII). In each Count,
Plaintiffs allege damages “based on the difference
[between] the amount redeemed and the amount that would have
been needed to redeem the property at a reasonable and
appropriate penalty rate[, ]” plus attorneys' fees,
expenses and trebling of damages where allowed by statute.
judgment is appropriate only if the moving party can
demonstrate “that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Fed.R.Civ.P. 56(a); Celotex Corp.
v. Catrett, 477 U.S. 317, 322(1986); see also
Ruffin-Thompkins v. Experian Information Solutions,
Inc., 422 F.3d 603, 607 (7th Cir. 2005). The moving
party bears the initial burden of demonstrating the lack of
any genuine issue of material fact. Celotex, 477
U.S. at 323. Once a properly supported motion for summary
judgment is made, the adverse party “must set forth
specific facts showing there is a genuine issue for
trial.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 250 (1986).
genuine issue of material fact exists when “the
evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Estate of Simpson
v. Gorbett, 863 F.3d 740, 745 (7th Cir. 2017) (quoting
Anderson, 477 U.S. at 248). When deciding a summary
judgment motion, the Court views the facts in the light most
favorable to, and draws all reasonable inferences in favor
of, the nonmoving party. Apex Digital, Inc. v. Sears,
Roebuck & Co., 735 F.3d 962, 965 (7th Cir. 2013)
initial matter, Defendant Kenneth Rochman filed for summary
judgment of the claim asserted against him individually.
(Doc. 267). He maintains that he is entitled to judgment as a
matter of law because there are no allegations or evidence
connecting him to the alleged scheme.
did not respond to Rochman's motion. Under this
Court's local rules, “[f]ailure to timely file a
response to a motion may, in the Court's discretion, be
considered an admission of the merits of the motion.”
SDIL-LR 7.1(c). The Court finds it appropriate to invoke Rule
7.1(c) in this situation. Accordingly, Defendant Kenneth
Rochman's Motion for Summary Judgment is granted.
argue that the applicable statutes of limitations bar
Plaintiffs' claims. (Doc. 271 at 12-16). The statutes of
limitations for claims grounded in state law are governed by
the law of that state. Indep. Tr. Corp. v. Stewart Info.
Servs. Corp., 665 F.3d 930, 935 (7th Cir. 2012). Like
the statute of limitations itself, state rules that are an
“integral part of the statute of limitations”
such as tolling and equitable estoppel, are also applied by
federal courts to state law claims. Hollander v.
Brown, 457 F.3d 688, 694 (7th Cir. 2006) (citing
Walker v. Armco Steel Corp., 446 U.S. 740, 751-53
conspiracy (Count I) is not a separate and distinct tort in
Illinois. See Weber v. Cueto, 624 N.E.2d 442, 449
(1993). Rather, “[a] cause of action for civil
conspiracy exists only if one of the parties to the agreement
commits some act in furtherance of the agreement, which is
itself a tort.” Adcock v. Brakegate, Ltd., 645
N.E.2d 888, 894 (1994). See also Borsellino v. Goldman
Sachs Grp., Inc., 477 F.3d 502, 509 (7th Cir. 2007) (a
claim for civil conspiracy requires “at least one
tortious act by one of the co-conspirators in furtherance of
the agreement.”). As a result, a civil conspiracy claim
is subject to the same statute of limitations as the
underlying tort on which the claim is based.
Mauvais-Jarvis v. Wong, 987 N.E.2d 864, 894 (2013).
for money had and received (Count II) and breach of fiduciary
duty (Count VIII) must be commenced within 5 years after the
cause of action accrued. 735 ILCS 5/13-205.
year statute of limitations applies to violations of the
Sherman Act (as enforced by private parties under the Clayton
Act) (Counts III and IV). 15 U.S.C. § 15b. Relatedly, a
federal antitrust cause of action “accrues and the
statute begins to run when a defendant commits an act that
injures a plaintiff's business.” In re Copper
Antitrust Litig., 436 F.3d 782, 789 (7th Cir. 2006)
(quoting Zenith Radio Corp. v. Hazeltine Research,
Inc., 401 U.S. 321, 338 (1971) (Zenith II).
private action for violation of the Illinois Antitrust Act
(Counts V-VII) must be commenced within 4 years after the
cause of action accrued. 740 ILCS 10/7(2). In the context of
an antitrust conspiracy, accrual is generally triggered by
the last overt act in furtherance of the alleged conspiracy.
People ex rel. Hartigan v. Moore, 493 N.E.2d 85, 86
the tax sale in question took place on November 10, 2008.
(Doc. 230-4 at 78). Plaintiffs have not alleged any overt
acts in furtherance of the alleged conspiracy after the sale.
Nor do Plaintiffs claim that their injury arose from any act
committed after November 10, 2008. Plaintiffs filed this
lawsuit on October 17, 2014 - five years and eleven months
later. (Doc. 2). Facially, Plaintiffs' claims in Counts I
and III-VIII appear to have been filed out of time. The only