In re County Collector

• Decision Date: 29 December 2009
• Docket Number: No. 1-08-1737.,1-08-1737.
• Parties: In re Application of the COUNTY COLLECTOR for Judgment and Sale Against Lands and Lots Upon Which All or A Part of General Taxes for Two or More Years Are Delinquent Pursuant to Section 21-145 of the Property Tax Code, (Devon Bank, as Trustee u/t/a/ No. 4678, Petitioner-Appellant, v. Bruce Miller, Respondent-Appellee, and Checkmate Acquisitions, Inc., Michael R. Anchetta, and Renee Mendoza, Respondents).
• Court: United States Appellate Court of Illinois

921 N.E.2d 462

In re Application of the COUNTY COLLECTOR for Judgment and Sale Against Lands and Lots Upon Which All or A Part of General Taxes for Two or More Years Are Delinquent Pursuant to Section 21-145 of the Property Tax Code,

(Devon Bank, as Trustee u/t/a/ No. 4678, Petitioner-Appellant, v. Bruce Miller, Respondent-Appellee, and Checkmate Acquisitions, Inc., Michael R. Anchetta, and Renee Mendoza, Respondents).

No. 1-08-1737.

Appellate Court of Illinois, First District, Second Division.

December 29, 2009.

Rehearing Denied January 27, 2010.

Mark R. Davis, Patricia Quinn Ford, O'Keefe, Lyons, & Hynes, LLC, Chicago, IL, for Petitioner-Appellant.

Ronald A. Damashek, Melissa L. Lettiere, Stahl Cowen Crowley Addis LLC, Chicago, IL, for Respondent-Appellee Bruce Miller.

Justice THEIS delivered the opinion of the court:

Petitioner, Devon Bank, appeals from the order of the circuit court of Cook County denying its motion for summary judgment and granting the cross-motion for summary judgment filed by respondent, Bruce Miller. Devon had filed a petition pursuant to section 2-1401 of the Code of Civil Procedure (735 ILCS 5/2-1401 (West 2006)) seeking to set aside a tax deed issued to respondent Checkmate Acquisitions, Inc., regarding certain property to which Devon held legal title, contending that it had never received any notice of the sale, as required by the Property Tax Code (35 ILCS 200/1-1 et seq. (West 2006)). Miller had responded that he was a bona fide subsequent purchaser of the property for value and that because a lack of jurisdiction did not affirmatively appear on the face of the tax deed proceeding record, under section 2-1401(e) of the Code of Civil Procedure (735 ILCS 5/2-1401(e) (West 2006)), he had a superior right to the property. The circuit court agreed with Miller.

Devon now contends that the tax deed was void because Checkmate failed to conduct a diligent inquiry to determine who owned the property and failed to serve any notice whatsoever of the sale on Devon, the owner of record. Devon maintains that this violation of its constitutional due process rights, in turn, precluded the circuit court from acquiring jurisdiction to order the issuance of the tax deed and rendered the issuance of the deed void. Devon further contends that this void judgment can now be set aside, notwithstanding the fact that Miller may have been a bona fide purchaser, under section 2-1401(f) of the Code of Civil Procedure (735 ILCS 5/2-1401(f) (West 2006)). Devon alternatively contends that under section 2-1401(e) of the Code of Civil Procedure (735 ILCS 5/2-1401(e) (West 2006)), Miller cannot be a considered a bona fide purchaser because the circuit court's lack of jurisdiction to enter the tax deed was apparent from the face of the tax deed proceeding record. For the following reasons, we reverse and remand the cause to the circuit court to set aside the tax deed.

The record discloses the following facts and procedural history relevant to this appeal. The property in question is a vacant lot located at the intersection of Deer Road and North Street in Palatine, Illinois. Devon Bank has held the legal title to the property since 1982, and Dan Daley was the beneficial owner of the property under a land trust. Daley acquired his beneficial interest in the property for no value from its prior beneficial owner, Sam Prus.

Checkmate Acquisitions, Inc., was the successful bidder for the property at the Cook County Collector's 2001 tax scavenger sale. The circuit court of Cook County subsequently issued a tax deed to Checkmate on March 4, 2003. Checkmate then conveyed the property to Michael R. Anchetta and Rene Mendoza via warranty deed for only nominal consideration on October 10, 2004. However, Anchetta and Mendoza did not record their deed until December 16, 2004. By that time, Anchetta and Mendoza had already conveyed the property to Bruce Miller via warranty deed on November 2, 2004. Miller also recorded his deed, sequentially, on December 16, 2004. Miller paid $90,000 for the property.

Devon commenced the present action on March 4, 2005, by filing a petition pursuant to section 2-1401 of the Code of Civil Procedure (735 ILCS 5/2-1401 (West 2006)). In its amended petition, Devon alleged that although it was the record owner of the property, it received no notice, by publication or otherwise, prior to the issuance of the tax deed. Indeed, Checkmate's application for the tax deed, a copy of which Devon attached to its petition, indicated that the notices required to be given to the record owner of the property pursuant to sections 22-10 through 22-25 of the Property Tax Code had been given to "Marquette Expl" and "PMG Enterprises of Chicago, Inc." An affidavit of Checkmate's attorney, Judd M. Harris, submitted in support of the tax deed stated that "Judd M. Harris or his agent caused a tract index search to be prepared from public tract and computerized records of Cook County, Illinois, said tract index search having been reduced to a printout, a copy of which is attached hereto and made a part hereof as Exhibit A-1." However, that attached printout was a printout of a search performed from the Chicago Title Insurance Company's computerized tract index. The search indicated that "PMG Enterprise Inc." was the owner of the property.

A disclaimer at the bottom of the printout stated that the document was "not a title insurance policy and should not be relied upon as such." The "Terms and Conditions" of the search stated that it had been prepared from the Chicago Title Insurance Company's proprietary computerized tract indices, rather than the Cook County Recorder of Deeds's grantor-grantee index, and that it would not disclose any recorded instruments not containing the legal description to the property, including deeds or mortgages. The "Terms and Conditions" of the search further stated that "No third party (other than a party making a loan on the land described herein) shall have any right to rely on said search for any purpose whatsoever * * * or under any theory of law whatsoever."

Moreover, the legal description of the property used in the search included several lots, rather than only the property in question. Specifically, the legal description used in the search described the property as "Lot 6 in Block 6 in Percy Wilson's Forest View Highlands." However, the property in question was actually only the north 30 feet of the south 60 feet of Lot 6 in Block 6 in Percy Wilson's Forest View Highlands.

This legal description was apparently taken from another tax deed that had been issued for the parcel of property located immediately to the south of the property in question. Devon attached a copy of that tax deed to its petition. That tax deed, issued April 24, 1989, was for "Lot 6 in Block 6 in Percy Wilson's Forest View Highlands." However, the deed also indicated that the property was identified with Parcel Identification Number ("PIN") 02-09-115-002-0000 and the deed further described the property as the second lot on the east side of Deer Street in Palatine, Illinois. The parcel of property owned by Devon was identified by PIN 02-09-115-001-000 and was the first lot on the east side of Deer Street.

Devon thus sought to declare the tax deed void under section 22-45(4) of the Property Tax Code (35 ILCS 200/22-45(4) (West 2006)) and under the constitutional requirements of due process as articulated in Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314-15, 70 S.Ct. 652, 657-58, 94 L.Ed. 865, 873-74 (1950), and its progeny. Devon alleged that the errors in the tax deed proceeding showed a complete lack of diligence on the part of Checkmate in ascertaining its identity as the owner of the property and in failing to give Devon any notice of the tax deed proceedings. Further, Checkmate should have known of Devon's duly recorded interest in the property, which was readily ascertainable from examination of the official public records. Devon asserted that therefore, because Checkmate gave no notice and failed to comply with the constitutional notice requirements of due process and the statutory notice requirements of the Property Tax Code, the circuit court lacked jurisdiction to enter the tax deed. Devon further asserted that this lack of jurisdiction was apparent from the face of the record of the tax deed proceedings.

Devon also asserted that Miller could not be a bona fide purchaser within the meaning of section 2-1401(e) because he was also charged with knowledge of the contents of the public records. He also should have known that Checkmate failed to conduct a diligent inquiry and failed to give proper notice as required by the Property Tax Code prior to its application for the tax deed. Therefore, Miller should not have relied on the validity of the tax deed.

Checkmate responded with a motion to dismiss Devon's amended 2-1401 petition. Miller joined that motion. The court ultimately denied the motion to dismiss. Checkmate and Miller then filed answers. Miller also filed a counterclaim against Anchetta and Mendoza for breach of warranty deed. Anchetta and Mendoza also appeared, responded, and filed a counterclaim against Checkmate for breach of warranty deed.

Devon subsequently filed a motion for summary judgment raising substantially the same allegations that it had raised in its amended 2-1401 petition. In support of its motion for summary judgment, Devon attached the same materials that had been attached to its 2-1401 petition. It also attached, inter alia, a copy of the warranty deed conveying the property from Checkmate to Anchetta and Mendoza, a copy of the warranty deed conveying the property from Anchetta and Mendoza to Miller, a copy of a title insurance policy procured by Miller, and the discovery depositions of Miller and Joseph Dennis Rotunno. The title insurance policy procured by Miller indicated that Checkmate was the owner of the property, not Anchetta and Mendoza....