In re Application of the County Treasurer & ex officio County Collector
2011 IL App (1st) 101966
Appellate Court of Illinois, First District, Fourth Division
August 25, 2011
2011 IL App (1st) 101966
District & No.: First District, Fourth Division Docket No. 1-10-1966
Filed: August 25, 2011
Held: Petitioner‘s application and petition for a tax deed were properly denied where petitioner failed to strictly comply with the notice requirement in section 22-5 of the Property Tax Code and failed to demonstrate that it exercised due diligence in serving the notice required by section 22-10 of the Code.
(Note: This syllabus constitutes no part of the opinion of the court but has been prepared by the Reporter of Decisions for the convenience of the reader.)
Decision Under Review: Appeal from the Circuit Court of Cook County, No. 08-COTD-2527; the Hon. Edward P. O‘Brien, Judge, presiding.
Judgment: Affirmed.
Jeffrey S. Blumenthal, of Slutzky & Blumenthal, of Chicago, for appellee.
Panel: PRESIDING JUSTICE LAVIN delivered the judgment of the court, with opinion. Justices Pucinski and Salone concurred in the judgment and opinion.
OPINION
¶ 1 In a scenario that has been replayed countless times in our troubled real estate economy, Graciela Garcia failed to pay a year‘s real estate taxes ($1,383.50) on her mortgaged property, which opened an opportunity for an attempted tax deed purchase of her two-flat apartment building on Chicago‘s Southwest side. This appeal arises from the trial court‘s denial of a tax deed pursuant to the Property Tax Code (Code).
I. BACKGROUND
¶ 2 ¶ 3 The essential facts in this appeal are generally undisputed. Graciela Garcia was the record owner of a two-flat building with a basement located at 2943 West 43rd Street in Chicago. To pay for the property in June of 2005, she obtained a mortgage from a mortgage broker, executed two promissory notes in favor of MILA, Inc. (MILA), and granted two mortgages to Mortgage Electronic Registration Systems, Inc. (MERS), which has at all times remained the mortgagee of record. The first mortgage document identified MILA as the lender and stated that MERS was acting “solely as nominee for Lender and Lender‘s successors and assigns.” The second mortgage document contained nearly identical language. Both mortgage documents provided the address and phone number for MERS, as well as an 18-digit “MIN,” an acronym for “mortgage identification number.” On August 1, 2005, MILA assigned both promissory notes to IndyMac Bank, F.S.B. (Indy). Indy subsequently assigned the two notes to Deutsche Bank National Trust Company (Deutsche), the current noteholder, on October 21, 2005. Indy remained the servicer of the loans.
¶ 4 On June 21, 2006, Ridge TP, LLC (Ridge), purchased Garcia‘s property at a public auction due to unpaid 2004 taxes, and a certificate of purchase was issued to Ridge on August 15, 2006. The parties agree that the original statutory period in which the property could be redeemed by Garcia or other interested parties was two years and six months from
¶ 5 On October 5, 2006, Ridge extended the redemption period to February 9, 2009. Five days later, Ridge submitted an official notice to be sent to Garcia at the subject property pursuant to section 22-5 of the Code.
¶ 6 Ridge assigned the certificate of purchase to petitioner on June 28, 2007. On July 11, 2008, Indy was placed in receivership by the Federal Deposit Insurance Corporation and became IndyMac Federal Bank, F.S.B. (Indy Federal). In September 2008, Richard Glickman, petitioner‘s attorney, and Ronald Ohr took certain measures to ascertain the persons and entities to which petitioner needed to send the notice set forth in section 22-10 of the Code and the addresses to which said notice would be sent. See
¶ 7 On September 24, 2008, petitioner extended the redemption period so that it would expire on March 23, 2009, and filed a petition for a tax deed. Petitioner subsequently made attempts to serve Garcia, MERS and MILA with the notice set forth in section 22-10. On March 20, 2009, OneWest Bank (OneWest) acquired Indy Federal and became the successor servicer to the two notes. Three days later, the redemption period expired without redemption occurring.
¶ 8 On April 16, 2009, Glickman filed on petitioner‘s behalf an application for a tax deed, alleging in pertinent part, that on October 10, 2006, the notice required by section 22-5 of the Code had been delivered to the county clerk to mail to Garcia. The application also alleged that Garcia, MERS and MILA were owners, occupants and parties interested in the subject property. Regarding the section 22-10 notice, the application represented that the sheriff‘s return of service showed that the manner of service for Garcia was certified mail sent on October 28, 2008, the manner of service for MERS was “Corporate” on October 9, 2008, and the manner of service for MILA was certified mail sent October 1, 2008.
¶ 9 On May 4, 2009, OneWest‘s attorney, Jeffrey Blumenthal of Slutzky and Blumenthal, filed a response to petitioner‘s application which essentially denied that petitioner complied with section 22-5, admitted that Garcia and MERS were owners, occupants or parties interested in the party and further alleged that the petitioner‘s list of interested parties entitled
¶ 10 On May 18, 2010, petitioner and respondents tendered their “Joint Trial Materials,” which included their stipulations, certain exhibits and the majority of the aforementioned facts and documents. We recite only that testimony which is relevant to the issues raised on appeal. Ohr, a member of petitioner, testified that he inspected the subject property three times in September 2008 and brought his inspection report to Glickman. The report essentially pertained to any indicia, or lack thereof, of who occupied the subject property and described the property‘s condition.
¶ 11 Glickman, who had practiced in the tax deed area for almost 50 years, testified that Ohr‘s office had prepared the first notice extending the redemption period. Glickman testified that section 22-5 set forth notice to be submitted to the county clerk within 4 months and 15 days of the tax sale to be directed to the last tax assessee of record, in this case Garcia, and that the redemption date was required to be included in the notice. He acknowledged that when the section 22-5 notice was tendered to the county clerk on October 10, 2006, it listed the redemption date of December 21, 2008, even though the redemption expiration date had already been extended once to February 9, 2009.
¶ 12 Glickman testified that prior to the expiration of the extended period of redemption on March 23, 2009, there was an additional notice-serving period, during which a diligent inquiry and effort had to be made to serve all owners, occupants and interested parties. Petitioner retained Glickman for this purpose. Pursuant to his investigation, he had Ohr inspect the property and prepare a report and apparently at some point, located Garcia‘s warranty deed from a tract book search. Glickman also identified his search results from the Chicago Abstract, Inc., regarding the subject property on September 11, 2008. The results indicated that on June 28, 2005, the subject property was deeded to Garcia and she granted two mortgages on the property to MILA. The three documents were recorded on August 10, 2005. Glickman also testified that he always searched the Cook County recorder‘s records both before and after obtaining the Chicago Abstract document but could not specifically recall doing so in this case. Glickman apparently determined from the Chicago Abstract, Inc., results and the mortgage documents that Garcia, MILA and MERS had sufficient interests in the property to warrant directing notice toward them. On September 22, 2008, Glickman took certain additional steps, including performing an Accurint search, to attempt to identify occupants of the property and locate Garcia. His attempt to telephone Garcia was unsuccessful. Our record also indicates that in October 2008, petitioner unsuccessfully attempted to mail notice to Garcia but whether these particular attempts were sufficient is not at issue on appeal.
¶ 13 Glickman reviewed the mortgage documents to determine where to serve the remaining entities and observed that the documents referred to both MERS, the mortgagee as nominee for the lender, and MILA, the lender. As to MERS, the parties stipulated that during the
¶ 14 Glickman further testified that he was familiar with MERS mortgages, although there were different types. He had also occasionally examined chapters 10 and 11 of a publication by the Illinois Institute for Continuing Legal Education (IICLE) titled “Real Estate Taxation,” which was authored by Douglas Karlen and Rodney Slutzky but essentially disagreed with its representation that MERS should be contacted to obtain the name of the current noteholder and that both the current noteholder and MERS should be served with notice. He believed there was no reason to call MERS in this instance because it was served with notice and was the only entity, as mortgagee, nominee and trustee for the lender, which was entitled to notice. When he read a provision of the IICLE indicating that MERS was akin to a land trust, Glickman testified that a beneficiary of a land trust is served with notice when the beneficiary is disclosed of record. In addition, he testified that due to noteholders not receiving notice regarding unrecorded documents in the 1990s and early 2000s, MERS‘s purpose was to permit the free assignment of mortgage notes without having to record assignments and to act as a clearing house. He further testified that MERS was formed to “cover the gap” and accept service. He did not previously know that “MIN” stood for “mortgage identification number” or that a MIN number appeared on the top of a MERS mortgage.
¶ 16 Charles Boyle, the assistant vice president of the default risk management litigation department of OneWest, testified that he was previously employed with OneWest‘s predecessors, Indy and Indy Federal. OneWest currently serviced the loans in question on behalf of Deutsche and its responsibilities included maintaining a valid interest in the mortgages and the subject property, and ensuring that taxes were paid. Boyle testified that pursuant to the pooling and servicing agreement between Indy and Deutsche, Indy had authority to act regarding the loan without first consulting with the lender. Boyle also testified that a limited power of attorney executed by Deutsche in favor of OneWest similarly gave OneWest the power to act as if it were the lender and take all actions regarding the loan without first conferring with Deutsche. In addition, he testified that a corporate resolution between MERS and OneWest, dated March 19, 2009, permitted employees and officers of OneWest to sign documents on behalf of MERS without conferring first with MERS and that Indy and Indy Federal had previously had the same authority. Boyle further testified that MERS permitted lenders and servicers to register a mortgage and easily assign interests between different servicing entities. He testified that loans were commonly transferred and MERS generally would forward notice of a tax sale to the servicer. When counsel informed Boyle that MERS forwarded the section 22-10 notice it received to Indy Federal, Boyle testified he did not know why his company did not pay the taxes. Following Boyle‘s testimony, the court entered a continuance and ordered the parties to submit briefs.
¶ 17 At a hearing on June 10, 2010, the trial court denied the application and petition for a tax deed following the parties’ arguments. Regarding the notice required by section 22-10, the court found, in pertinent part, that service of notice to MILA, which had assigned its interest in the note, was a moot point. The court also found that petitioner made a diligent inquiry to serve Garcia with notice. As to MERS, the court found it was properly served with notice through its Illinois agent. The court found that as to any unrecorded interests, including an unrecorded assignment, the best way to receive notice is to record one‘s interest. As a result, the court found there was no obligation for a petitioner to search for potential assignees who had not recorded their interest and that petitioner had made a diligent inquiry and effort to serve the section 22-10 notice.
II. SECTION 22-5 NOTICE
¶ 19 ¶ 20 Petitioner first asserts that the section 22-5 notice in this case was sufficient. Petitioner contends it is unclear what standard of compliance applies to section 22-5, but urges us to find that substantial compliance is sufficient. In contrast, respondents contend that strict compliance is required. This issue of first impression presents a question of statutory construction, which we review de novo. In re Application of the County Collector, 356 Ill. App. 3d 668, 670 (2005).
¶ 21 Our primary objective in interpreting a statute is to determine and give effect to the legislature‘s intent. Barragan v. Casco Design Corp., 216 Ill. 2d 435, 441 (2005). All other rules of statutory construction are subordinate to this rule. Barragan, 216 Ill. 2d at 441. The most reliable indicator of the legislature‘s intent is the statute‘s language, which must be given its plain and ordinary meaning. Solon v. Midwest Medical Records Ass‘n, 236 Ill. 2d 433, 440 (2010). In determining the statute‘s plain meaning, we consider the statute in its entirety, the subject being addressed and the apparent purpose of the legislature in enacting the statute. Solon, 236 Ill. 2d at 440. If possible, a statute should be construed so that no language is rendered meaningless or superfluous. In re Application of the County Collector, 356 Ill. App. 3d at 670. In addition, the statutory construction principle that the expression of one thing in a statute excludes any other thing may be used to ascertain the legislature‘s intent where it is unclear. Bridgestone/Firestone, Inc. v. Aldridge, 179 Ill. 2d 141, 153 (1997). This maxim is applied only where it appears to reflect, and not defeat, the legislature‘s intent. Bridgestone/Firestone, Inc., 179 Ill. 2d at 153-54; see also People v. Roberts, 214 Ill. 2d 106, 117 (2005) (the maxim expressio unius est exclusio alterius is subordinate to the primary principle that the legislature‘s intent controls the construction of a statute).
¶ 22 Where a statute‘s language is clear and unambiguous, the court must apply it as written without resorting to extrinsic aids of statutory interpretation. Solon, 236 Ill. 2d at 440. Nonetheless, if a statute could be understood by reasonably well-informed persons in multiple ways, the statute will be considered ambiguous. MD Electrical Contractors, Inc. v. Abrams, 228 Ill. 2d 281, 288 (2008). Where a statute‘s meaning is ambiguous, courts may look beyond the statutory language and consider the law‘s purpose, the evil that it was intended to remedy and the statute‘s legislative history. Cinkus v. Village of Stickney Municipal Officers Electoral Board, 228 Ill. 2d 200, 217 (2008). Furthermore, we may consider the resulting consequences from construing the statute in either manner and
¶ 23 Section 22-5, titled “Notice of sale and redemption rights,” states in pertinent part that “[i]n order to be entitled to a tax deed, within 4 months and 15 days after any sale held under this Code, the purchaser or his or her assignee shall deliver to the county clerk a notice to be given to the party in whose name the taxes are last assessed as shown by the most recent tax collector‘s warrant books, in at least 10 point type in the following form completely filled in.” (Emphases added.)
¶ 24 Respondents essentially contend that the statute clearly states that in order to be entitled to a tax deed, a purchaser or his assignee must completely fill in the take notice form, which is ultimately given to the last tax assessee, and that implicit in this requirement is that the form must be filled in with correct information. Thus, to allow an assignee to be entitled to a tax deed despite having filled in the form with erroneous information would contravene the clear intent of the statute and be absurd. Respondents contend it follows that strict compliance is required to fulfill the legislature‘s intent. We find it notable that the statute does not merely state that the purchaser or assignee “shall” take certain actions, but that it strongly indicates the consequence of failing to take those actions, i.e., that the purchaser will not be entitled to a tax deed.
¶ 25 Contrarily, petitioner contends that we must read the post-sale notice provided in section 22-5 with other provisions of the Code. Section 22-10, titled “Notice of expiration of period of redemption,” provides for notice which is generally subsequent to that set forth in section 22-5 and states, in pertinent part, that “[a] purchaser or assignee shall not be entitled to a tax deed to the property sold unless, not less than 3 months nor more than 6 months prior to the expiration of the period of redemption, he or she gives notice of the sale and the date of expiration of the period of redemption to the owners, occupants, and parties interested in the property, including any mortgagee of record, as provided below.” (Emphasis added).
“If the redemption period expires and the property has not been redeemed and all taxes and special assessments which became due and payable subsequent to the sale have been paid and all forfeitures and sales which occur subsequent to the sale have been redeemed and the notices required by law have been given and *** the petitioner has complied with all the provisions of law entitling him or her to a deed, the court shall so find and shall enter an order directing the county clerk on the production of the certificate of purchase and a certified copy of the order, to issue to the purchaser or his or her assignee a tax deed. The court shall insist on strict
compliance with Section 22-10 through 22-25.” (Emphasis added). 35 ILCS 200/22-40(a) (West 2008).
¶ 26 Appellant contends that because section 22-40 specifies that “strict compliance” is required for that section‘s notice provisions, by implication, strict compliance with the other notice in section 22-5 is not required and substantial compliance will suffice. It surely merits mention that because the prefatory language found in section 22-5 is substantially the same as the prefatory language found in section 22-10, it could easily be argued that reading such language in 22-5 to require strict compliance would also require the same to be said of the language in section 22-10. Compare
¶ 27 Accordingly, if we follow the plain meaning of section 22-5 by finding strict compliance is required, the “strict compliance” language of section 22-40 may be rendered superfluous. On the other hand, if we give meaning to the language in section 22-40 by finding strict compliance with section 22-5 is not required, we contravene the intent indicated by the prefatory language of section 22-5 and risk rendering such language meaningless. We find these provisions of the Code when read together expose an ambiguity, if not a contradiction, regarding whether strict or substantial compliance with section 22-5 is required to obtain a tax deed. Fortunately, a thorough review of the legislative history of these provisions sheds sufficient light to resolve this ambiguity.
¶ 28 Over the last century, the Code, formerly known as the Revenue Act, has been repeatedly amended and recodified. For clarification, we refer to the provision currently found in section 22-5 as the post-sale notice provision, the provision currently found in section 22-10 as the pre-expiration notice provision, and the provision currently found in section 22-40 as the tax deed provision. We further note that the latter provisions were enacted long before the post-sale notice provision.
¶ 29 The tax deed provision has not always expressly required “strict compliance” with the pre-expiration notice provision. Hurd‘s Rev. Stat. 1909, ch. 120, ¶¶ 216, 219; Hurd‘s Rev. Stat. 1905, ch. 120, ¶¶ 216, 219; Hurd‘s Rev. Stat. 1881-82, ch. 120, ¶¶ 216, 219. Notwithstanding the absence of such language, our supreme court held that strict compliance with this notice requirement was required. Clark v. Zaleski, 253 Ill. 63, 74 (1911); Bailey v. Smith, 178 Ill. 72, 74 (1899). Our supreme court also recognized that the statute was enacted to carry out the mandate of the Illinois Constitution. Gaither v. Lager, 2 Ill. 2d 293, 299 (1954). Section 5 of article IX of the Constitution of 1870 stated as follows:
“The right of redemption from all sales of real estate for the non-payment of taxes or special assessments of any character whatever, shall exist in favor of owners and persons interested in such real estate, for a period of not less than two years from such sales thereof. And the general assembly shall provide by law for reasonable
notice to be given to the owners or parties interested, by publication or otherwise, of the fact of the sale of the property for such taxes or assessments, and when the time of redemption shall expire: Provided, that occupants shall in all cases be served with personal notice before the time of redemption expires.” Ill. Const. 1870, art. IX, § 5. See also Ill. Const. 1970, art. IX, § 8(e) (“Owners, occupants and parties interested shall be given reasonable notice of the sale and the date of expiration of the period of redemption as the General Assembly provides by law.”).
¶ 30 In July 1967, the General Assembly amended the tax deed provision by adding that “the court shall insist on strict proof of notice.” (Internal quotation marks omitted.) In re Application of County Collector, 66 Ill. App. 3d 437, 445 (1978); 1967 Ill. Laws 2134. Regrettably, transcripts of the legislative history from this time period are unavailable. Hoffman Estates Professional Firefighters Ass‘n v. Village of Hoffman Estates, 305 Ill. App. 3d 242, 251 (1999) (transcripts of legislative debates first became available in 1971). It appears however, that this amendment did not change the law regarding the standard of compliance required for the pre-expiration notice but, rather, memorialized what was already understood. In 1970, the tax deed provision was amended to specify that “[t]he court shall insist on strict compliance with the provisions of Section 263 of this Act,” section 263 being the pre-expiration notice provision. Pub. Act 76-2329 (eff. July 1, 1970) (amending Ill. Rev. Stat. 1967, ch. 120, ¶ 747); Ill. Rev. Stat. 1969, ch. 120, ¶¶ 744, 747; Ill. Rev. Stat. 1971, ch. 120, ¶¶ 744, 747.
¶ 31 Several years later, the post-sale notice provision was enacted. Pub. Act 79-1455 (eff. Sept. 30, 1976) (adding Ill. Rev. Stat. 1977, ch. 120, ¶ 722a). In contrast to the pre-expiration notice provision, this new provision stated that a purchaser or his assignee shall not be entitled to a tax deed unless he delivered the notice provided for therein within six months after a sale. Pub. Act 79-1455 (eff. Sept. 30, 1976) (adding Ill. Rev. Stat. 1977, ch. 120, ¶ 722a). Thus, this new notice was to be given prior to the pre-expiration notice and was also to be delivered to the county clerk to be given to the party in whose name the taxes were last assessed. Pub. Act 79-1455 (eff. Sept. 30, 1976) (adding Ill. Rev. Stat. 1977, ch. 120, ¶ 722a). Representative Samuel Maragos stated that the purpose of the tax deed procedures was to ensure that “any home owner whose property is being taken away by the foreclosure procedures of a tax deed that he be given additional time and notice.” 79th Ill. Gen. Assem., House Proceedings, June 7, 1976, at 33 (statement of Representative Maragos). In addition to adding the post-sale notice provision, this public act increased the redemption period under certain circumstances and made certain changes to the manner of notice provided for in the pre-expiration notice provision. Notably, the tax deed provision was not amended by this public act.
¶ 32 Shortly thereafter, the post-sale notice provision was amended to provide the current redemption amount to the tax assessee. Pub. Act 80-1006 (eff. Oct. 1, 1977) (amending Ill. Rev. Stat. 1977, ch. 120, ¶ 722a). The provision also required the notice to inform the assessee that the redemption amount “is subject to increase at six month intervals from the date of sale” and that the assessee was to contact the county clerk regarding the precise amount owed prior to redeeming. Pub. Act 80-1006 (eff. Oct. 1, 1977) (amending Ill. Rev. Stat.
¶ 33 Finally, the Revenue Act of 1939 was repealed and its provisions were recodified under the Code. Pub. Act 88-455 (eff. Jan. 1, 1994) (repealing 35 ILCS 205/241a, 263, 266 (West 1992), enacting
¶ 34 We find that our review of the aforementioned legislative history supports respondents’ position that strict compliance, rather than substantial compliance, was intended by the legislature. The General Assembly transcripts confirm that the purpose of the section 22-5 post-sale notice provision was to provide a tax assessee, who is usually the property owner, with additional notice which conveys all necessary information. To achieve this goal, the legislature has indicated that a tax purchaser will not be entitled to a tax deed unless he gives the notice required. Permitting a tax purchaser to be entitled to a deed despite not fully complying with section 22-5 would defeat the legislature‘s intent. Section 22-5 “lend[s] credence to the idea that tax purchasers should not be allowed to disclose only that information they deem relevant.” In re Application of the County Collector, 295 Ill. App. 3d 703, 709 (1998) (“[a]dditional support for our position may be found in the very fact that the General Assembly actually prescribed the precise form and manner in which notice must be given”).
¶ 35 In contrast, not only did the addition of the “strict compliance” language to the tax deed provision memorialize what was already the law, but more importantly, it came before the enactment of the post-sale notice provision of section 22-5. Jahn v. Troy Fire Protection District, 163 Ill. 2d 275, 282 (1994) (when choosing between two directly conflicting statutes, the more recent enactment will generally prevail as the later expression of the legislature‘s intent). In addition, it appears that following the enactment of the post-sale
¶ 36 Petitioner contends for the first time in its reply brief that requiring strict compliance in this instance will require strict compliance with other provisions of the Code providing that an individual “shall” give notice. See
¶ 37 We also reject petitioner‘s assertion that the notice provision of section 22-10 requires a higher standard of compliance than that of section 22-5 because at the time the 22-10 notice is served, the threat of property loss is imminent. We find that not only is section 22-5 intended to assist property owners in redeeming their property before interest accumulates, but that implicit in the enactment of the post-sale notice provision is the recognition that a tax assessee should be given earlier notice and thus, additional time to make arrangements to preserve property rights. This court has recognized that persons of limited education or knowledge may overlook tax payments or, in good faith, be unable to make the necessary payments. See In re Application of the County Collector, 295 Ill. App. 3d at 708. Although section 22-10 provides interested parties notice between three and six months before the redemption period expires, the frequently much earlier notice of section 22-5 protects impoverished and unsophisticated parties who need additional time to acquire the necessary funds for redemption. Accordingly, the difference between the purposes of these notice
¶ 38 Here, petitioner failed to strictly comply with section 22-5. The notice form set forth in this section requires the date on which the redemption period will expire to be included in three different places. Petitioner listed December 21, 2008, as the redemption expiration date in all three places. At the time this notice was submitted to the clerk‘s office, the redemption period had already been extended to February 9, 2009. Accordingly, the date included in the form was incorrect. We note that the trial court indicated a petitioner has no obligation to notify a tax assessee that the redemption period has been extended. See Jeffrey S. Blumenthal & David R. Gray, Jr., Extension of the Redemption Period, Real Estate Taxation § 11.4 (Ill. Inst. for Cont. Legal Educ. 2008) (an extension of the redemption period may be obtained by filing written notice with the county clerk but it is unnecessary to give other parties notice of the extension). To be clear, we are not holding that section 21-385 (
¶ 39 Even assuming the original redemption date was sufficient to satisfy section 22-5, the date provided by petitioner was nonetheless incorrect. It is undisputed that Garcia as tax assessee had two years and six months in which to redeem the property and that the final day would ordinarily have fallen on Sunday, December 21, 2008. When the final day is a Sunday, however, it is excluded from calculating the time period in which the property may be redeemed. See
¶ 40 Petitioner contends it would be nonsensical and place additional burdens on the tax purchaser to be required to ascertain weekend and holiday dates 2½ years in the future. As stated, we find this is precisely what the legislature intended. We are confident that the minuscule burden of requiring a tax purchaser to consult a calendar will not deter individuals from becoming tax purchasers. See also In re Application of the County Collector, 295 Ill. App. 3d at 709 (“[w]e see no discernible inconvenience to tax purchasers in requiring them to fully disclose any certificate number prefix”); Gage v. Davis, 129 Ill. 236, 240 (1889) (“[t]he provision of the statute requiring the purchaser at the tax sale, or his assignee, to notify the person in possession of the lands when the time of redemption will expire, is imperative, and a notice which specifies a wrong date cannot be regarded as any notice whatever, within the meaning of the statute”). Finally, having determined that strict compliance is required, we need not consider petitioner‘s argument that Garcia failed to
III. SECTION 22-10 NOTICE
¶ 41 ¶ 42 Respondents assert that even if the section 22-5 notice was proper, petitioner was still not entitled to a tax deed because it failed to make a diligent inquiry and effort to identify and serve Deutsche and Indy Federal with section 22-10 notice. Diligence is a factual question and we will not reverse the trial court‘s determination unless it is against the manifest weight of the evidence. Gacki v. La Salle National Bank, 282 Ill. App. 3d 961, 964 (1996).
¶ 43 As stated, section 22-40 of the Code provides that “[i]f the redemption period expires and the property has not been redeemed and *** the notices required by law have been given *** and the petitioner has complied with all the provisions of law entitling him or her to a deed, the court shall so find and shall enter an order directing the county clerk on the production of the certificate of purchase and a certified copy of the order, to issue to the purchaser or his or her assignee a tax deed. The court shall insist on strict compliance with Section 22-10 through 22-25.” (Emphasis added.)
“The purchaser or his or her assignee shall give the notice required by Section 22-10 by causing it to be published in a newspaper as set forth in Section 22-20. In addition, the notice shall be served by a sheriff *** upon owners who reside on any part of the property sold by leaving a copy of the notice with those owners personally. ***
The same form of notice shall also be served, in the manner set forth under Sections 2-203, 2-204, 2-205, 2-205.1, and 2-211 of the Code of Civil Procedure, upon all other owners and parties interested in the property, if upon diligent inquiry they can be found in the county, and upon the occupants of the property. ***
When a party interested in the property is a trustee, notice served upon the trustee shall be deemed to have been served upon any beneficiary or note holder thereunder unless the holder of the note is disclosed of record. ***
If any owner or party interested, upon diligent inquiry and effort cannot be found or served with notice in the county, then the person making the service shall cause a copy of the notice to be sent by registered or certified mail, return receipt requested, to that party at his or her residence, if ascertainable.” (Emphasis added.)
35 ILCS 200/22-15 (West 2008).
¶ 45 We begin by considering what information Glickman knew from looking at the recorded mortgage documents. Both mortgage documents identified MILA as the lender and stated that MERS, the mortgagee, was acting solely as nominee for not only the lender, but also for the lender‘s successors and assigns. Thus, these documents clearly identify interests disclosed of record in MERS, MILA, MILA‘s successors and MILA‘s assigns. At a minimum, interests held by MILA‘s successors and assigns can be inferred from the record. That no successor or assign existed when the documents were drafted and thus, none were identified by name does not change the result. See In re Application of Ward, 311 Ill. App. 3d at 316-17, 319-20 (where a recorded plat of a subdivision showed the property was held for the benefit of unnamed nearby homeowners, such homeowners had an interest in the property and the tax petitioner failed to make a diligent inquiry to ascertain their identities and serve them with notice). In addition, Glickman himself acknowledged at trial that MILA may have had a successor lender.
¶ 46 Glickman, an attorney and well-seasoned veteran of these somewhat obscure tax deed proceedings, testified that the purpose of MERS was to allow for the free assignment of mortgage notes without having to record assignments. He acknowledged that MERS was formed to cover the notice gap for documents that were not being recorded. Contrary to
¶ 47 We also note that testimony was presented regarding certain chapters of the “Real Estate Taxation” IICLE authored by Karlen and Slutzky. We find that the following provision of the most recent edition constitutes sound advice:
“Noteholders should be traced in the following situations.
*** [W]hen the record interest under a mortgage is held by Mortgage Electronic Registration Systems, Inc. (MERS), the current noteholder may be ascertained. The original lender will register its note with MERS and assign its mortgage interest to MERS, who will act as a trustee for the registered noteholder. If the lender subsequently assigns its note, it will register the assignment with MERS, who will continue to act as trustee-now for the newly registered assignee. A tax deed petitioner may obtain the name of the current servicing agent by contacting MERS at 800/646-6377 or www.mers-servicerid.org. The requester must furnish an 18-digit mortgage identification number (MIN) property address, or borrower details in order to obtain this information. The MIN should appear on the recorded mortgage or on the recorded assignment to MERS. The servicing agent may provide the identity of the noteholder, but it also may not. In addition to serving notice on the noteholder if its identity is discovered, the tax deed petitioner should also serve the required notices on MERS. The tax deed petitioner should contact MERS for information on how to serve notice on MERS. For more information on MERS, visit the Web site at www.mersinc.org.” Blumenthal, supra § 11.6(l), at 1113-14.
¶ 48 The record further rebuts petitioner‘s assertion that by using a MERS mortgage parties agree not to make their interest in the property known. Not only did the mortgage documents identify MILA by name, but they identified an interest to be held by MILA‘s successors and assigns. As stated, petitioner did not contact MERS in this instance and as a result, we cannot say with absolute certainty what information petitioner would have learned had it done so. Nonetheless, it appears that a reasonable probability exists that MERS would have revealed the name of the current servicer and/or noteholder. The burden of proving compliance with
¶ 49 We reject petitioner‘s argument that Indy Federal, OneWest‘s predecessor, would not be entitled to notice because it was the servicer. The Code requires only that a party have an “interest” in the subject property to be entitled to notice.
¶ 50 Relying on section 22-15, petitioner further contends that serving notice to MERS, which is akin to a trustee, constitutes service on the noteholder, i.e., the beneficiary. See
¶ 51 We agree with the trial court‘s finding that the best way to receive notice is to record the document from which one‘s interest was obtained. As stated, however, a petitioner must make a diligent inquiry and effort to notify parties whose interest may reasonably be inferred from the public record. See In re Application of the County Treasurer, 347 Ill. App. 3d at
¶ 52 Finally, although neither Indy Federal, OneWest nor Deutsche is an entity related to MILA and it was revealed after the notice-serving period that MILA had no interest in the subject property, we question whether a petitioner intent on serving notice to MILA, which petitioner initially believed was an interested party, would accept defeat following the nominal steps taken here. Glickman concluded that once MILA withdrew its foreign registration in Illinois, petitioner no longer had an obligation to serve MILA with notice, a conclusion for which neither Glickman nor petitioner has provided legal authority. We note, however, that section 22-15 of the Code States that if a “party interested, upon diligent inquiry and effort cannot be found or served with notice in the county, then the person making the service shall cause a copy of the notice to be sent by registered or certified mail, return receipt requested, to that party at his or her residence, if ascertainable.” (Emphasis added.)
¶ 53 Having determined that petitioner failed to comply with section 22-5 and failed to demonstrate that it had exercised due diligence in serving the notice set forth in section 22-10, we find the trial court properly denied petitioner‘s application and petition for a tax deed.
¶ 54 For the foregoing reasons, we affirm the judgment.
¶ 55 Affirmed.