In re Application of the County Collector
2017 IL App (2d) 160483
| Ill. App. Ct. | 2017Background
- Two consolidated appeals from De Kalb County circuit court decisions about refunds after tax sales were declared "sales in error" (petitioners: Joseph Bittorf and Janson Investment Co.; respondent: De Kalb County Collector; intervenor: Town of Cortland).
- The petitioners paid large sums for delinquent-tax certificates; courts later declared the sales erroneous and petitioners were entitled to refunds under 35 ILCS 200/21-310.
- Cortland had established Special Service Areas (SSAs) to fund a water treatment (Schaeffer) system; SSA tax receipts were deposited in a Bond Fund and some SSA funds were exhausted or the SSAs expired.
- The Collector moved for guidance under section 21-310(d) on how refunds should be paid and from which accounts; Cortland intervened asserting it (or its SSAs) would be adversely affected.
- Trial court held: Cortland could intervene; Collector need not pay refunds up front but could wait to deduct from "appropriate taxing bodies" when funds were available; court treated SSAs as the taxing bodies and ordered refunds to be paid from SSA receipts.
- Appellate court affirmed intervention and timing rulings, reversed the SSA-as-taxing-body ruling: held Cortland (the municipality) is the taxing body under section 21-310(d) and refunds should be chargeable to Cortland's general tax revenue (collector may still wait until collections are available).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness / right to intervene by Cortland | Cortland’s interests would be affected only after sale-in-error was granted; intervention was timely and necessary. | Bittorf: intervention untimely; Collector already represented Cortland’s interests. | Cortland’s intervention was proper and timely; trial court did not abuse discretion. |
| Must Collector pay refunds immediately (advance payment)? | Petitioners: statute requires refund “on demand” — Collector must pay up front then seek reimbursement; otherwise purchasers may never recover. | Collector/Cortland: statute contemplates deducting from taxing bodies; Collector lacks funds to advance refunds; purchasers can sue owner under §21-340 if Collector cannot pay. | Collector is not required to advance refunds; may wait and deduct from appropriate taxing‑body receipts when available. |
| What counts as the “appropriate taxing body” under §21-310(d)? | Petitioners: "taxing body" = taxing district with power to levy taxes (the municipality, Cortland), not the SSA; refunds should be charged to Cortland’s general tax revenue (or all SSA revenues). | Cortland: SSAs are effectively taxing bodies for their receipts; refunds should be charged only to the SSAs that benefited (Schaeffer SSAs). | SSAs are not separate taxing bodies (they cannot levy taxes); Cortland (the municipality that levied the SSA taxes) is the taxing body under §21-310(d). Refunds may be charged to Cortland’s general tax revenue. |
| Remedy if taxing-body receipts are insufficient | Petitioners: waiting could make refunds impossible (SSAs expired); statute should protect purchasers. | Cortland/Collector: purchasers have alternative remedy under §21-340 to sue property owner for recovery. | §21-340 remains available as an additional remedy, but it does not relieve the Collector’s obligation under §21-310(d); the Collector may still seek reimbursement from the taxing body after making refunds when funds are available. |
Key Cases Cited
- La Salle Nat’l Bank v. Hoffman, 1 Ill. App. 3d 470 (Ill. App. 1971) (purpose of refund provisions is to afford relief to taxbuyers injured by void tax sales).
- Joliet Stove Works v. Kiep, 230 Ill. 550 (Ill. 1907) (distinguishes recovery from collector versus recovery from owner; different remedies can coexist).
- Thornton Ltd. v. Rosewell, 72 Ill. 2d 399 (Ill. 1978) (public policy encourages bidders to participate in tax sales; protections for purchasers support the tax-sale system).
- Madison Two Associates v. Pappas, 227 Ill. 2d 474 (Ill. 2008) (uses "taxing body"/"taxing district" language interchangeably; discusses taxing districts' roles in tax-distribution disputes).