2023 IL App (1st) 220070
Ill. App. Ct.2023Background
- Millennium purchased delinquent 2007–2011 taxes for the Guyon Hotel (116 N. Pulaski) and received a certificate of purchase; Millennium later assigned the certificate to a Chicago Title land trust whose beneficiary was an O.M.A.M.E.G.A.N. trust.
- Millennium’s attorney, Pilota, filed a petition for a tax deed on behalf of the land trust; Daniel (Millennium officer) later, as attorney-in-fact for the land trust, assigned the certificate to Neldava, which obtained a tax deed recorded June 2017.
- DJJ held a judicial sale deed to the property (acquired 2014–2015) and, after Neldava’s tax deed issued, filed a petition to void the tax deed or vacate the order issuing it, alleging invalid/ fraudulent certificate assignments and lack of notice/due diligence.
- Neldava pleaded an affirmative defense of ratification and produced a trustee ratification stating the trust would have accepted and authorized the prior assignments.
- After a bench trial with documentary and witness evidence, the circuit court found the land trust could hold the certificate, the trustee ratified the assignments, DJJ failed to show fraud, and DJJ failed to exercise due diligence; judgment for Neldava was entered and DJJ appealed.
Issues
| Issue | Plaintiff's Argument (DJJ) | Defendant's Argument (Neldava) | Held |
|---|---|---|---|
| Whether the trial court should have dismissed Neldava’s affirmative defense of ratification | Ratification plea was legally insufficient because (a) a land trust cannot hold a certificate of purchase, (b) unauthorized assignments cannot be ratified, and (c) trustee ratification is ineffective | A land trust may hold a certificate (it is a charge on land); the trustee’s ratification cures any prior lack of authority | Denied — court (and appellate court) held a land trust can hold a certificate and Neldava adequately pled/proved ratification |
| Whether the tax deed is void under §22‑85 for failure to take out/record deed within one year after redemption | Millennium remained the true certificate holder (assignments invalid), so it failed to take out and record the deed within the statutory year, rendering the certificate/deed void | Assignments were valid (and/or ratified); and even statutory noncompliance does not necessarily render the court’s tax‑sale order void | Rejected — tax deed not void; order was not subject to collateral attack on that basis |
| Whether DJJ established fraud or due diligence under §22‑45(3) and §2‑1401 to vacate the order and obtain reimbursement under §22‑80 | Neldava (and associated parties) procured the tax deed by fraud (concealing true ownership of the certificate); DJJ timely sought relief and exercised due diligence | No fraud proved; DJJ’s counsel had notice of the tax‑sale proceedings (estimates of redemption, cease‑and‑desist letters, correspondence) and failed to act with due diligence | Rejected — court found no clear‑and‑convincing proof of fraud and found DJJ failed to show due diligence; denial of §2‑1401 relief affirmed |
Key Cases Cited
- People v. Chicago Title & Trust Co., 75 Ill. 2d 479 (1979) (historical description and uses of the Illinois land trust)
- City of Chicago v. City Realty Exchange, Inc., 127 Ill. App. 2d 185 (1970) (certificate of purchase constitutes a charge on the land)
- Prodromos v. Poulos, 202 Ill. App. 3d 1024 (1990) (principles governing ratification by a trust/trustee)
- Kulchawik v. Durabla Mfg. Co., 371 Ill. App. 3d 964 (2007) (ratification doctrine and requirements)
- Adcock v. Brakegate, Ltd., 164 Ill. 2d 54 (1994) (waiver and aider‑by‑verdict principles)
- Vulcan Materials Co. v. Bee Construction, 96 Ill. 2d 159 (1983) (tax‑sale proceeding is in rem; court acquires jurisdiction over the land)
- In re Marriage of Mitchell, 181 Ill. 2d 169 (1998) (distinction between void and voidable judgments; jurisdictional limits)