2023 IL 128252
Ill.2023Background:
- In 2005 the City of Joliet filed a condemnation complaint to take Evergreen Terrace, a low‑income apartment complex owned/managed by MB Financial Bank (as trustee), New West/New Bluff, and Burnham Management.
- The matter was removed to federal court because HUD had an interest; the owners continued operating the property and paid property taxes without protest while litigation continued.
- The City acquired fee title in August 2017 after nearly 12 years of litigation; in August 2018 the former owners sued the Will County treasurer seeking a refund of taxes paid between the 2005 filing and the 2017 acquisition (over $6 million), relying on the contention that condemnation title “relates back” to the filing date.
- The trial court dismissed the complaint under section 2‑619, concluding the owners lacked a proper claim (voluntary payment doctrine; taxation/exemption issues belonged to the condemning authority) and that counts for declaratory and mandamus relief failed to plead taxes were "unauthorized by law."
- The appellate court reversed as to the refund count, holding McCausland’s relation‑back rule made the City the owner from the filing date and the owners thus had overpaid under section 20‑175(a); it affirmed dismissal of the declaratory/mandamus counts.
- The Illinois Supreme Court granted review, overruled McCausland, held the owners were not entitled to a refund, and affirmed dismissal of all counts.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs are entitled to a tax refund for taxes paid after condemnation complaint was filed because condemnor’s title "relates back" to filing date | MB Financial: McCausland’s relation‑back rule makes the condemnor owner as of filing, so owners overpaid and are entitled to refund under 35 ILCS 200/20‑175(a) | Treas. Brophy & intervenors: after First National Bank, a taking occurs only when compensation is deposited and title transferred; owners remained owners and liable until 2017 | Court rejected McCausland, held taking occurs when compensation is deposited (per First National Bank/Kirby), so no relation back for refund; dismissal affirmed |
| Whether McCausland remains controlling law on relation‑back and valuation dates | Plaintiffs: McCausland still good law; First National Bank language acknowledged reimbursement to filing date | Defendants: First National Bank (following Kirby) changed the law — taking occurs on deposit/payment and valuation is at payment; McCausland’s premises erased | Court overruled McCausland as incompatible with later Supreme Court precedent (First National Bank/Kirby) |
| Whether plaintiffs needed to pay taxes under protest or otherwise show taxes were "unauthorized by law" to obtain refund/mandamus/declaratory relief | Plaintiffs: section 20‑175(a) allows refund for overpayment without protest; seeking refund, declaratory and mandamus relief | Defendants: plaintiffs didn’t pay under protest; counts II/III fail because taxes were not alleged to be "unauthorized by law" | Court held refund theory fails on relation‑back grounds; counts II/III properly dismissed for failure to allege taxes were unlawful or unauthorized |
Key Cases Cited
- City of Chicago v. McCausland, 379 Ill. 602 (1942) (old relation‑back rule treating condemnor’s title as dated to filing)
- Forest Preserve District of Du Page County v. First Nat’l Bank of Franklin Park, 2011 IL 110759 (2011) (holding taking occurs when government deposits compensation; applies Kirby valuation rule)
- Kirby Forest Indus. v. United States, 467 U.S. 1 (1984) (Fifth Amendment requires valuation at date of payment/tender to avoid undercompensation)
- Mills v. Forest Preserve Dist. of Cook County, 345 Ill. 503 (1931) (filing a petition gives condemnor rights superior to subsequent claims; limits on transferability during pending suit)
- People v. Chicago Title & Trust Co., 75 Ill. 2d 479 (1979) (ownership defined by control and right to enjoy benefits)