2022 IL App (2d) 210689
Ill. App. Ct.2022Background:
- FINA IP, LLC acquired a tax-sale certificate for Eaton’s Lake Villa single-family property (taxes for 2014) and extended the statutory redemption period to June 29, 2018.
- Eaton filed Chapter 13 bankruptcy on May 31, 2018, which triggered the automatic stay and prevented FINA from completing the tax-deed process while the stay remained in effect.
- The bankruptcy court later granted FINA relief from the stay (June 25, 2021) to permit FINA to proceed in state court on its tax-deed petition.
- On August 16, 2021 (after the stay was lifted), Eaton tendered to the county clerk $14,634.11 (the prepetition redemption amount); the clerk accepted and issued a receipt backdated to June 29, 2018.
- On August 20, 2021 the circuit court held a prove-up and granted FINA’s petition directing issuance of a tax deed; the clerk issued the deed on August 30, 2021 and returned Eaton’s funds.
- Eaton moved to reconsider, arguing his bankruptcy/plan tolled the redemption deadline and the backdated receipt established timely redemption; the circuit court denied relief. Eaton appealed and the appellate court affirmed.
Issues:
| Issue | Plaintiff's Argument (FINA) | Defendant's Argument (Eaton) | Held |
|---|---|---|---|
| Whether Eaton’s Aug. 16, 2021 tender (with backdated receipt) constituted a timely redemption under the Property Tax Code | The tender was untimely (more than three years after the extended deadline); clerk’s acceptance/backdating cannot validate a late redemption | The clerk accepted payment and backdated receipt to June 29, 2018, so Eaton effectively redeemed by the deadline | Held: Payment was untimely; late redemption is a nullity; backdated receipt did not create a valid redemption |
| Whether Eaton’s Chapter 13 filing or confirmed plan tolled the statutory redemption period | Bankruptcy stay only stayed proceedings; neither the stay nor plan confirmation tolls the statutory redemption deadline | Chapter 13 treatment of FINA’s claim as a secured claim and the plan’s 60-month payment term tolled redemption | Held: Bankruptcy plan treatment does not toll the redemption period; it only tolls the purchaser’s time to obtain a deed while the stay prevents action |
| Whether the state court should have used equitable powers to allow a late redemption | FINA maintained statutory deadline controls; equitable relief was not requested below | Eaton claimed courts liberalize redemption rights and should equitably extend the deadline | Held: Eaton forfeited the equitable argument by not raising it below; even on the merits, facts differ from cases allowing limited equitable relief |
| Whether FINA is precluded by res judicata/collateral estoppel/waiver from opposing Eaton’s arguments about the plan or redemption | FINA argued it could seek relief from the stay and was not precluded; its post-confirmation lifting-of-stay motion was proper | Eaton contended FINA’s failure to object to or appeal plan confirmation waived/estopped FINA from contesting the 60-month treatment | Held: Eaton forfeited these arguments by failing to raise them below; FINA was not precluded from later seeking relief from the stay or contesting tolling of redemption |
Key Cases Cited
- In re LaMont, 740 F.3d 397 (7th Cir. 2014) (Chapter 13 may treat a tax purchaser as a secured claimant but such treatment does not toll the statutory redemption period)
- In re Robinson, 577 B.R. 294 (Bankr. N.D. Ill. 2017) (tax purchaser can be treated as secured claim post-deadline where deed not recorded)
- In re Application of the County Collector, 265 Ill. App. 3d 485 (Ill. App. 1994) (a redemption received after the statutory deadline is a nullity; clerk acceptance cannot cure tardy tender)
- In re Application of the County Treasurer & ex officio County Collector of Cook County (Cambridge Investment Group), 308 Ill. App. 3d 33 (Ill. App. 1999) (bankruptcy court controls scope/effect of automatic stay; state court cannot relitigate stay’s scope)
- In re Application of the County Treasurer & ex officio County Collector, 378 Ill. App. 3d 842 (Ill. App. 2007) (equitable relief to permit late redemption is available in limited circumstances involving injustice or reliance)
- Schultz v. Illinois Farmers Insurance Co., 237 Ill. 2d 391 (Ill. 2010) (statutory construction: courts must apply statutes as written and may not read into them exceptions the legislature did not include)