2015 IL App (1st) 133693
Ill. App. Ct.2015Background
- Jose and Minerva Negron owned and lived in a Chicago home that had unpaid 2007 general taxes; Elm Limited purchased the certificate, which was assigned to FNA Cardinal 09, LLC, and later to Community Partners, LLC.
- FNA initiated a tax-deed proceeding, and during the statutorily required notice period it attempted service by database search, certified mail to two addresses (returned unclaimed), multiple sheriff personal-service attempts (affidavits showing “no contact” or “vacant”), and published notice.
- The sheriff served TCF National Bank (mortgagee) at a Chicago branch by serving an authorized employee; mortgage documents listed a Lombard address.
- The circuit court held an ex parte prove-up, found notice efforts complied with the Property Tax Code, entered a tax deed to Community Partners, and the Negrons were evicted.
- TCF and Minerva (later Jose joined) filed a section 2-1401 petition alleging the tax deed was procured by fraud (misstatements at the prove-up and false returns showing vacancy), violated due process for lack of actual notice, and eviction violated forcible-entry-and-detainer law; the trial court dismissed the petition with prejudice.
- The appellate court affirmed, holding no fraud (trial judge knew attempts had been made and did not rely on any misrepresentation of actual service) and that the notice was constitutionally adequate under Jones and Illinois precedent (Lowe).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether tax deed was procured by fraud under 35 ILCS 200/22-45(3) | Myers’ statement that “all interested parties were served” and service returns indicating “vacant” were false or omitted facts that would have altered the court’s decision | Trial judge knew the filings showed attempted service (certified mail, sheriff attempts, unclaimed returns) and did not rely on an assertion of actual service; no intent to deceive | No fraud—dismissal affirmed; judge found he was aware notices were attempted and would not have been misled |
| Whether appellants were denied due process for lack of actual notice of tax sale/ deed | Owner-occupants must receive actual notice when ascertainable; Negrons never actually received notices | Due process requires notice reasonably calculated to apprise interested parties; FNA undertook multiple, Jones/Lowe–consistent efforts (database search, certified mail, sheriff attempts, publication) | Due process satisfied; notice was reasonably calculated under the circumstances; dismissal affirmed |
| Whether service on TCF at a Chicago branch (not Lombard address on mortgage) was improper | Service at branch contradicted mortgage’s designated address and therefore defective | Service on an authorized agent/officer found in the State is valid under Section 2-204; mortgage address is not exclusive method of corporate service | Service on bank’s authorized agent was valid; had no effect on outcome |
| Whether section 2-1401 petition was legally sufficient / whether dismissal under section 2-619 was proper | Petition alleged facts establishing fraud and constitutional deprivation meriting vacation of deed | Petition failed to state a meritorious defense because facts alleged were known to the trial court and did not demonstrate fraud or due process violation | Dismissal under 2-619 proper; petition failed as a matter of law |
Key Cases Cited
- In re Application of the County Treasurer, 92 Ill. 2d 400 (Ill. 1982) (defines fraud in tax-deed context as wrongful intent but recognized broader considerations)
- HomeSide Lending, Inc. v. Midwest Real Estate Inv. Co., 347 Ill. App. 3d 769 (Ill. App. Ct. 2004) (failure to disclose facts that might change the court’s ruling can constitute fraud in tax-deed proceedings)
- In re Application of the County Collector, 225 Ill. 2d 208 (Ill. 2007) (Lowe) (post-Jones analysis of adequate notice in tax-deed proceedings; purchaser’s extensive efforts can satisfy due process)
- Jones v. Flowers, 547 U.S. 220 (U.S. 2006) (due process requires notice reasonably calculated under the circumstances; when certified mail is returned unclaimed, additional reasonable steps are required)
- Dahlke v. Hawthorne, Lane & Co., 36 Ill. 2d 241 (Ill. 1967) (fraud involves an act calculated to deceive)
- Exline v. Weldon, 57 Ill. 2d 105 (Ill. 1974) (burden on party attacking a tax deed to prove invalidity)