Chicago Title Insurance Company v. The Teachers' Retirement System of the State of Illinois
7 N.E.3d 19
Ill. App. Ct.2014Background
- TRS (Teachers’ Retirement System), a State of Illinois agency, sold a Mount Prospect parcel to Lechner in 2002 under a written contract that included a detailed "PRORATIONS" tax clause and expressly allowed TRS to retain any tax refunds it later received.
- TRS had applied for a tax exemption years earlier; the Illinois Department of Revenue (DOR) ALJ recommended exemption for tax year 1993, and later Cook County issued certificates of error and refunded three years of taxes to TRS (totaling $138,353.24).
- In 2012 Lechner received a county "Take Notice" showing the property sold for delinquent taxes for years (1992, 1995, 1996) while TRS owned the parcel; Lechner’s title insurer paid a tax buyer $70,000 to avoid loss at the tax sale.
- Lechner, its title insurer, and its mortgagee sued TRS seeking (1) injunctive relief against the tax-sale process and (2) recovery of the money paid to avert the sale and future costs; amended complaint alleged unjust enrichment and requested declaratory relief assigning future costs to TRS.
- TRS moved to dismiss under section 2-619, submitting governmental records (certificates of error and refund checks); the trial court dismissed with prejudice, finding TRS paid the taxes and properly kept the refunds.
- On appeal the court affirmed, concluding dismissal was proper because the written contract governed and precluded unjust enrichment and declaratory relief as pleaded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TRS was unjustly enriched by retaining tax refunds while Lechner paid to prevent tax-sale transfer | Lechner: TRS was responsible for the taxes it incurred while owner and was unjustly enriched when Lechner paid to protect the property | TRS: Contract allocated tax risk and expressly allowed TRS to retain refunds; county records show TRS paid and received refunds | Held: Dismissed — unjust enrichment unavailable because a written contract governs and TRS paid the taxes and kept refunds per contract |
| Whether declaratory relief can require TRS to reimburse future title-clearing costs | Lechner: Seeks declaration that TRS must pay future expenses to clear title | TRS: Contract absolves TRS of responsibility; no wrongful conduct warranting relief | Held: Dismissed — contract language bars declaratory relief as pleaded |
| Appropriateness of deciding via a 735 ILCS 5/2-619 dismissal using governmental records | Lechner: Facts about delinquency create contested factual issues; county warrant books suggest taxes remained delinquent | TRS: Government records (certificates of error, refund checks) establish affirmative matter barring claim | Held: Court may consider official records; dismissal appropriate because contract and refunds negate the claims |
| Whether alternative remedies (breach of warranty, tax-sale challenges) affect unjust enrichment claim | Lechner: Sought unjust enrichment instead of pursuing other remedies | TRS: Those remedies existed and contract controlled; unjust enrichment is not available where express contract applies | Held: Court noted other remedies existed and unjust enrichment is not a substitute for contractual rights |
Key Cases Cited
- HPI Health Care Servs., Inc. v. Mt. Vernon Hosp., Inc., 131 Ill.2d 145 (1989) (defines unjust enrichment elements)
- DeLuna v. Burciaga, 223 Ill.2d 49 (1996) (standards for de novo review of dismissal motions)
- Rodriguez v. Sheriff's Merit Comm'n, 218 Ill.2d 342 (2006) (appellate court may affirm on any correct ground regardless of trial court reasoning)
- Provenzale v. Forister, 318 Ill. App.3d 869 (2000) (limits on using section 2-619 evidentiary submissions to contradict well-pled complaint allegations)
- Martis v. Grinnell Mut. Reinsurance Co., 388 Ill. App.3d 1017 (2009) (unjust enrichment is not an independent cause of action)
- Alliance Acceptance Co. v. Yale Ins. Agency, Inc., 271 Ill. App.3d 483 (1995) (unjust enrichment tied to unlawful or improper conduct defined by law)
- Perez v. Citicorp Mortgage, Inc., 301 Ill. App.3d 413 (1998) (unjust enrichment inapplicable where express contract governs)