Demos v. Pappas
956 N.E.2d 533
Ill. App. Ct.2011Background
- Petitioners sought indemnity fund relief for losses from a tax sale of their property after nonpayment of 1999 taxes; a tax deed issued in 2004 following redemption period; petition alleged lack of notice and error by tax sale proceeding; indemnity fund created under 35 ILCS 200/21-295 funded by fees from tax purchasers; judgment entered September 19, 2009 against Treasurer as Trustee of the Indemnity Fund in the amount $497,500; Treasurer paid $501,425.48 including $3,925.48 interest at 6% from Sept 16 to Nov 4, 2009; a citation to discover assets sought additional interest from Bank of America; issue at trial was whether 6% or 9% postjudgment interest applied; court held 6% applies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What postjudgment interest rate applies to indemnity fund judgments? | Demos argued 9%; indemnity fund not a governmental entity. | Pappas argued 6%; indemnity fund is governmental. | 6% applies; indemnity fund judgments are governed by governmental entity rate. |
| Is the indemnity fund a governmental entity for purposes of the Interest Act? | Fund not public, thus 9% should apply. | Fund/Public duties; Treasurer as trustee serves public. | Yes, the Treasurer, as trustee of the indemnity fund, is a governmental entity. |
| Does the Treasurer acting as trustee perform a governmental function? | Treasurer’s role is private; fund is private. | Treasure’s duties are mandated by law and public in nature. | Treasurer’s role constitutes public functions for public benefit. |
| Do provisions on indemnity fund and Counties Code affect the rate? | Indemnity fund mechanics imply private fund. | Counties Code and indemnity fund mandate public stewardship. | Public stewardship confirms 6% rate. |
| Are prior pension fund cases controlling for this indemnity fund? | Barry and related cases limit applicability. | Distinguishable because indemnity fund serves public revenue purposes. | Distinguished; indemnity fund is public money. |
Key Cases Cited
- Barry v. Retirement Board of the Fireman's Annuity & Benefit Fund, 357 Ill.App.3d 749 (2005) (fund not a governmental entity; 9% not required in that context)
- Morton Grove Park District v. American National Bank & Trust Co., 78 Ill.2d 353 (1980) (took interest as private property; distinctions with indemnity fund)
- Carswell v. Rosewell, 150 Ill.App.3d 168 (1986) (indemnity fund judgments fall under Interest Act; 6% vs 9% context)
- Phoenix Bond & Indemnity Co. v. Pappas, 194 Ill.2d 99 (2000) (statutory interpretation guidance in tax-related contexts)
- Wade v. City of North Chicago Police Pension Board, 226 Ill.2d 485 (2007) (interpretation of governmental entity purpose under Interest Act)