In rе APPLICATION OF THE COUNTY TREASURER AND ex officio COUNTY COLLECTOR OF COOK COUNTY, ILLINOIS, for Order of Judgment and Sale of Lands and Lots Upon Which All or a Part of the General Taxes for Three or More Years Are Delinquent (DJJ Investments, LLC, Petitioner-Appellant, v. Neldava, LLC, Respondent-Appellee).
No. 1-22-0070
Appellate Court of Illinois, First District, Sixth Division
June 30, 2023
2023 IL App (1st) 220070
JUSTICE C.A. WALKER delivered the judgment of the court, with opinion. Presiding Justice Mikva and Justice Oden Johnson concurred in the judgment
Appeal from the Circuit Court of Cook County, Illinois. No. 2015 COTD 003154. The Honorable Maureen O. Hannon, Judge, Presiding.
JUSTICE C.A. WALKER delivered the judgment of the court, with opinion.
Presiding Justice Mikva and Justice Oden Johnson concurred in the judgment and opinion.
OPINION
¶ 1 On January 9, 2014, Millennium Land Development Corporation (Millennium) purchased the 2007 to 2011 delinquent property taxes on a property located at 116 N. Pulaski Road, Chicago, Illinois (Guyon Hotel), and the county clerk of Cook County issued a certificate of purchase to Millennium. In October 2015, Millennium assigned the certificate of purchase to Illinois Land Trust No. 8002359629 (Land Trust). In May 2017, the Land Trust assigned the certificate to appеllee Neldava, LLC (Neldava). The circuit court substituted Neldava as the tax deed petitioner and entered an order directing the county clerk to issue a tax deed on May 26, 2017. About two months later, appellant DJJ Investments, LLC (DJJ), filed a petition to void tax deed or vacate the order issuing the tax deed as well as subsequent amendments. In the third amended petition, count I alleged the tax
¶ 2 I. BACKGROUND
¶ 3 On January 9, 2014, Millennium purchased the 2007 to 2011 delinquent property taxes on a property located at 116 N. Pulaski Road, Chicago, Illinois. The subject property is commonly known as the Guyon Hotel. The county clerk of Cook County issued a certificate of purchase on the Guyon Hotel to Millennium on March 19, 2014. On September 29, 2014, DJJ acquired a judicial deed to the Guyon Hotel through a foreclosure of a receiver‘s lien.
¶ 4 On October 1, 2015, Millennium, through its attorney, Kenneth Pilota, assigned the certificate of purchase to the Land Trust. The Land Trust beneficiary was a trust titled O.M.A.M.E.G.A.N. trust. Hildegard Szkirpan was the trustee and primary beneficiary of the O.M.A.M.E.G.A.N trust and had power of direction of the O.M.A.M.E.G.A.N. trust. Hildegard is also the mother of Daniel Szkirpan, the president of Millennium. The O.M.A.M.E.G.A.N trust owns Millennium‘s corporate shares. On October 28, 2015, Pilota, on behalf of the Land Trust, filed a petition for tax deed. The petition states the period of redemption for the sale expired on March 17, 2016. The court granted a motion to extend the redemption expiration date to June 10, 2016. The Guyon Hotel was not redeemed by June 10, 2016.
¶ 5 Between February 2016 and May 2017, Noah Weininger and his law firm, Johnson, Blumberg & Associates, LLC (Johnson, Blumberg & Associates),1 acted on behalf of DJJ concerning the Guyon Hotel. On February 2, 2016, Johnson, Blumberg & Associates ordered an estimate of redemption regarding the Guyon Hotel from the Cook County Clerk‘s Office. The estimate of redemption invоice references the subject tax sale and certificate of purchase number. After being informed that someone was attempting to sell the Guyon Hotel, Weininger sent a letter to Brian Ploszay of Altura Realty on November 3, 2016, stating “DJJ is the
¶ 6 On May 23, 2017, Daniel assigned the certificate of purchase to Neldava as attorney in fact for the Land Trust. On May 26, the court granted a motion to substitute Neldava as the tax deed petitioner. The same day, after finding Neldava had “fully complied with all the statutes and the Constitution of the State of Illinois relating to sales of real estate for taxes and the issuance of Tax Deeds,” the court entered an order directing the county clerk to issue a tax deed to Neldava. Neldava recorded the tax deed on June 6, 2017.
¶ 7 On August 4, 2017, DJJ filed a petition to void the tax deed or vacate the order issuing the tax deed. The petition was subsequently amended three times, and DJJ filed the final third amended petition to void the tax deed or vacate the order issuing the tax deed on May 28, 2021. DJJ raised three counts in the third amended petition. Under count I, DJJ alleged the motion to issue tax deed was void under
¶ 8 Neldava filed an answer to the third amended petition. In the answer, Neldava raised the affirmative defense of ratification as to the allegations that the certificate assignments were fraudulent and void. Neldava attached an executed ratification to the answer. The ratification stated (1) the beneficiary of the Land Trust is O.M.A.M.E.G.A.N. trust; (2) Hildegard was the trustee of O.M.A.M.E.G.A.N. trust and held power of direction with respect to the Land Trust; (3) Hildegard granted Daniel power of attorney to execute certain duties associated with the Land Trust on her behalf; (4) the Land Trust was “unaware” that Millennium assigned the certificate of purchase to it; (5) Pilota filed a petition for tax deed on behalf of the Land Trust; and (6) Daniel, as attorney in fact for the Land Trust, assigned the certificate of purchase to Neldava. Furthermore,
¶ 9 The case proceeded to trial from July 22 to 26, 2021. At the trial, the parties called eight witnesses and admitted 62 exhibits into evidence. Pertinent to this appeal, Daniel testified that the certificate of purchase was issued to his company, Millennium, in 2014. Daniel hired Pilota to perform duties pertaining to the certificate. In particular, Daniel directed Pilota to assign the certificate to the Land Trust and to file a petition for tax deed on behalf of the Land Trust. Daniel subsequently assigned the certificate as attorney in fact for the Land Trust to Neldava. Daniel believed he had authority to assign the certificate to Neldava as power of attorney for Hildegard, who was the trustee and had power of direction of the O.M.A.M.E.G.A.N. trust, the beneficiary of the Land Trust, and as one of the successor beneficiaries of the O.M.A.M.E.G.A.N. trust. When asked who sold the certificate to Neldava, Daniel responded, “I don‘t know if you want to say I did personally, but myself and/or Millennium and/or the Land Trust.” Daniel acknowledged that the contract concerning the sale of the certificate to Neldava stated that the transfer of the property was Millennium and Skirp Construction, Inc. Daniel explained Hildegard was the president of Skirp Construction prior to her death and Daniel was an officer of Skirp Construction. When asked why the contract does not state that the Land Trust is selling the certificate, Daniel explained, “both Millennium Land Development Corporation and Skirp Construction, Inc., the shares of those companies are owned by the same entity, namely the O.M.A.M.E.G.A.N. Trust, which is the beneficiary of the Chicago Title Land Trust.”
¶ 10 Pilota testified that he was an attorney and practiced in tax deed and tax indemnity proceedings. Pilota stated Daniel originally retained Pilota to represent “Millennium at that time.” Daniel also retained Pilota as an agent for the Land Trust. Pilota assigned the certificate of purchase to the Land Trust on behalf of Millennium on October 1, 2015. Pilota also prepared the petition for tax deed on behalf of the Land Trust.
¶ 11 Patrick O‘Flaherty testified that Neldava was his business. O‘Flaherty stated he had “been driving by [the Guyon Hotel] for years” and “[n]obody called me back on the for sale sign that was on the property.” In 2013, O‘Flaherty contacted Daniel “to see if the taxes were paid and if it could be obtained that way.” Daniel had previously performed property tax reduction work for O‘Flaherty. After conducting research, Daniel informed O‘Flaherty that the property taxes had not been paid and that the property was up for auction. Both Daniel and O‘Flaherty agreed to participate in the tax sale with the understanding that Daniel would pay for the certificate of purchase for O‘Flaherty. O‘Flaherty еxplained, “It was my understanding that Dan was going to procure the amount that was owed to the county, whatever fines and fees had to go along with it, do the paperwork, and I would pay the county their taxes, and the deed would be issued to me.”
¶ 12 Donald Jones testified he was the manager of DJJ. Jones currently owned his primary residence and paid taxes on the property. Jones also owned “[m]ore
¶ 13 Weininger testified he represented DJJ concerning the Guyon Hotel. At the time, Weininger was employed with Johnson, Blumberg & Associates. He primarily handled “mortgage foreclosure but other liens as well, receiver lien foreclosure, judgment liens,” and “it wasn‘t uncommon for me to come across some tax sale issue.” Regarding his November 2016 letter, Weininger explained, “I wrote this letter to tell the real estate agent to terminate the listing because DJJ was the owner.” When asked if he remembered reading a letter from Samuel Macaluso in 2016, Weininger responded, “Yes. I remember it but I don‘t remember like any of the other context.” Weininger could not specifically remember taking any action pertaining to the property taxes after receiving Macaluso‘s letter. Weininger also could not specifically remember ordering an estimate of redemption in November 2016. Regarding the May 2017 letter, Weininger stated, “I remember again there was some indication someone had listed the property, and we just notified them that DJJ was the owner, and that they should remove the listing.” Weininger never received a formal notice that a tax sale and redemption date was pending on the Guyon Hotel.
¶ 14 Following the trial, the parties submitted briefs to the court. DJJ also filed a renewed
¶ 15 As to count II, the court held DJJ failed to exercise due diligence. Specifically, the court found that, throughout the tax sale proceedings, (1) DJJ‘s attorney ordered an estimate of redemption for the tax sale on February 2, 2016, and November 8, 2016; (2) Weininger sent letters on behalf of DJJ demanding the Guyon Hotel not be listed for sale; and (3) Weininger received a letter from Macaluso stating Weininger‘s client failed to redeem the property by the redemption expiration date and advising Weininger to contact the county to confirm the information. Based on this evidence, the court determined “the knowledge of the pеnding tax sale proceeding must be imputed to DJJ at the very least by November of 2016, and at the earliest by February 2016, because the law firm was necessarily aware of the tax sale proceeding.” The court also found “the claim that DJJ and the relevant players were unaware of the tax deed delinquency when they had been involved in the mortgage foreclosure litigation seems incredible.” The court further held DJJ failed to state a meritorious claim because “[t]here was no evidence of fraud presented to the [c]ourt regarding purchase or assignments of the certificate between Neldava, Chicago Title Land Trust, or Millennium.” This appeal follows.
¶ 16 II. JURISDICTION
¶ 17 DJJ filed a third amended petition on May 28, 2021. The circuit court denied the petition in an amended order on December 17, 2021. On January 13, 2022, DJJ filed a notice of appeal. We have jurisdiction over this appeal pursuant to
¶ 18 III. ANALYSIS
¶ 19 On appeal, DJJ argues the circuit court erred in denying (1) the
¶ 20 A. Motion to Dismiss
¶ 21 DJJ argues the circuit court erred in denying the
¶ 22 A motion to dismiss brought under
the defense will prevail. Id. A reviewing court should disregard any conclusions of fact or law not supported by allegations of specific fact. Reverse Mortgage Funding, LLC v. Catchins, 2023 IL App (1st) 221197, ¶ 23. When a defense is founded upon a written instrument, that instrument must be attached to the pleading as an exhibit, and that exhibit constitutes a part of the pleading for purposes of a motion to dismiss. F.H. Prince & Co. v. Towers Financial Corp., 275 Ill. App. 3d 792, 797 (1995). A trial court‘s ruling on a
¶ 23 We first address Neldava‘s argument that DJJ waived its right to renew its
¶ 24 There is an exception to the doctrine of waiver and aider by verdict that allows a party to raise at any time a claim that the pleading fails to state a cause of action. Id. at 61. “[T]his exception applies only when a complaint fails to state a recognized cause of action. The exception does not apply where the complaint states a recognized cause of action, but contains an incomplete or otherwise insufficient
¶ 25 DJJ argues that a land trust can only hold title to real property and that Illinois case law has classified a certificate of purchase as personal property. DJJ asserts that, therefore, a land trust cannot hold a certificate of purchase and ratification of the unauthorized assignment from Millennium to the Land Trust is impоssible. Neldava claims a land trust may hold a certificate of purchase because the certificate is a charge on real property. A finding that a land trust cannot hold a certificate of purchase would defeat Neldava‘s ratification defense. Hence, we first address, as an issue of first impression, whether a land trust can hold a certificate of purchase issued in a tax sale proceeding. This argument presents a question of law, which we review de novo. People ex rel. T-Mobile USA, Inc. v. Village of Hawthorn Woods, 2012 IL App (2d) 110192, ¶ 39.
¶ 26 We begin by analyzing the applicable land trust law. The Illinois land trust is a unique creation of the Illinois bar with its origins rooted in case law rather than statute. People v. Chicago Title & Trust Co., 75 Ill. 2d 479, 487 (1979). “The land trust has, over the years, served as a useful vehicle in real estate transactions for maintaining secrecy of ownership and allowing ease of transfer.” Id. While a common law trust creates a split between the legal title in the trustee and the equitable title in the beneficiary, an Illinois land trust places both the legal and equitable title in the trustee. FirstMerit Bank, N.A. v. Soltys, 2015 IL App (1st) 140100, ¶ 22. “An Illinois land trust is an arrangement under which legal and equitable title to real property is held by a trustee and the interest of the beneficiary is personal property.” Id. ¶ 19 (quoting Patrick v. Village Management, 129 Ill. App. 3d 936, 939 (1984)). “A land trust is created by the execution and recording of a deed in trust transferring all legal and equitable title to real property to a trustee.” Id. ¶ 21 (quoting Redfield v. Continental Casualty Corp., 818 F.2d 596, 607 (7th Cir. 1987)). “A second document, the trust agreement, is contemporaneously executed and outlines the right of the beneficiary to retain absolute control over the management, use, and disposition of the property and to receive all proceeds from the property.” Id. (quoting Redfield, 818 F.2d at 607).
¶ 27 Several Illinois statutes regulate specific functions of a land trust. See generally
“[A]ny express agreement or arrangement whereof a use, confidence or trust is declarеd of any land, or of any charge upon land, for the use or benefit of any beneficiary, under which the title to real property, both legal and equitable, is held by a trustee, subject only to the execution of the trust, which may be enforced by the beneficiaries who have the exclusive right to manage and control the real estate, to have the possession thereof, to receive the net proceeds from the rental, sale, hypothecation or other disposition thereof, and under which the interest of the beneficiary is personal property only.”
765 ILCS 405/1 (West 2022) .
See also
¶ 28 Notably, the statutory definition of land trust includes “any charge upon land.” This court has found that a certificate of purchase constitutes a charge on the land. See City of Chicago v. City Realty Exchange, Inc., 127 Ill. App. 2d 185 (1970). Specifically, this court stated,
“One of the interests a tax purchaser acquires through his certificate of purchase is the right to be paid the price of the sale, interest, costs and any other taxes paid, if there is redemption. This right is a charge on the real estate for payment of debt represented by the taxes.” Id. at 190.
¶ 29 We also find guidance in the Modern Land Trust Practice manual from the Illinois Institute for Continuing Legal Education authored by David Lanciotti. Lanciotti explained, “Although a title interest created by a conventional deed in trust is by far the most common arrangement established with a trustee, the land trust can hold non-title interests in real estate ***.” David J. Lanciotti, Holding Non-Title Interests, in Modern Land Trust Practice § 3.12 (Ill. Inst. for Cont. Legal Educ. 2020). For instance, “it is not unusual to see a land trust holding a bidder‘s interest in *** a real estate tax sale ***. If the bid ripens into the right to receive title, the trust becomes permanently established. If redemption is made, the trust is closed.” David J. Lanciotti, Contract Lessee‘s, Purchaser‘s, and Bidder‘s Interest, in Modern Land Trust Practice § 3.14 (Ill. Inst. for Cont. Legal Educ. 2020).
¶ 30 Indeed, a holder of a certificate of purchase has a lien that can ripen into title upon compliance with statutоry requisites of the Property Tax Code. If a court finds compliance with the Property Tax Code, it enters an order directing the county clerk to issue a tax deed to the purchaser of the certificate of purchase or his or her assignee—in this case a land trust. See
¶ 31 In light of our holding, we next determine whether Neldava presented a legally recognized affirmative defense of ratification of the unauthorized assignments of the certificate of purchase. When an act is performed for the benefit of another by a person without authority, or by an authorized agent in excess of his authority, the person for whose benefit the
¶ 32 An assignment operates to transfer some identifiable property right, interest, or claim from the assignor to assignee. Department of Transportation v. Heritage-Pullman Bank & Trust Co., 254 Ill. App. 3d 823, 826 (1993). “Generally, no particular form of assignment is required; any document which sufficiently evidences the intent of the assignor to vest ownership of the subject matter of the assignment in the assignee is sufficient to effect an assignment.” (Internal quotation marks omitted.) Cincinnati Insurance Co. v. American Hardware Manufacturers Ass‘n, 387 Ill. App. 3d 85, 100 (2008). “A valid assignment needs only to assign or transfer the whole or a part of some particular thing, debt, or chose in action and it must describe the subject matter of the assignment with sufficient particularity to render it capable of identification.” (Internal quotation marks omitted.) Id. “Whether an assignment has occurred is dependent upon proof of intent to make an assignment and that intent must be manifested.” (Internal quotation marks omitted.) Id. Furthermore, “an assignment shall not be effective towards the obligor or a third party unless accepted by the obligor or notified to him.” (Internal quotation marks omitted.) Overseas Development Disc Corp. v. Sangamo Construction Co., 686 F.2d 498, 504 (7th Cir. 1982). Assignments are “subject to the same requisites for validity as are other contracts, such as intent, mutuality of assent, capacity to contract, legal subject matter, and consideration.” (Internal quotation marks omitted.) American Hardware Manufacturers Ass‘n, 387 Ill. App. 3d at 100.
¶ 33 In its affirmative defense of ratification, Neldava alleged that following the tax sale for the Guyon Hotel, a certificate of purchase was issued to Millennium. In October 2015, Millennium, through its attorney Pilota, assigned the certificate to the Land Trust. In May 2017, Daniel, as attorney in fact for the Land Trust, assigned the certificate to Neldava. Neldava noted DJJ‘s challenges to the assignments are that (1) Pilota had no authority to assign the certificate to the Land Trust, (2) the Land Trust was not aware and did not accept the assignment, (3) Daniel did not have authority to assign the certificate to Neldava, and (4) the Land Trust was not aware of the assignment to Neldava. Neldava alleged, to the extent DJJ‘s allegations were true, “the Land Trust‘s express ratification, acknowledgment, and acceptance of those specific acts approves
¶ 34 To support its argument that Neldava cannot plead a ratification defense, DJJ asserts that Neldava misconstrues the holding in Prodromos, 202 Ill. App. 3d 1024. In Prodromos, Jerry Poulos agreed to sell parcels of real estate to John Prodromos. Id. at 1027. First National Bank of Skokie held legal title to the real estate as trustee of trust No. 50102, and Poulos was the sole beneficiary of the trust. Id. at 1026. Poulos signed the real estate sales contract as the agent of First National Bank of Skokie. Id. at 1027. Subsequently, Prodromos sued First National Bank of Skokie and Poulos for specific performance of the sales contract. Id. at 1026. The defendants filed a motion to dismiss the action alleging, inter alia, Poulos did not have written authority to act as an agent on behalf of the trust in executing the contract and the trustee never ratified the contract. Id. The circuit court granted the motion. Id. On appeal, this court considered whether the trustee ratified Poulos‘s act and found no evidence of ratification. Id. at 1029-30. DJJ asserts, while the Prodromos court applied principles of ratification in a case involving a land trust, there was no issue as to whether the land trust could hold the property at issue. DJJ claims, here, the Land Trust trustee could not ratify Daniel‘s assignment of the certificate of purchase because a land trust can hold only title to real property. However, as we previously held, a land trust may hold a certificate of purchase. Furthermore, DJJ cites In re Estate of Crooks, 266 Ill. App. 3d 715 (1994), Feinberg v. Great Atlantic & Pacific Tea Co., 131 Ill. App. 2d 1087 (1970), and Alward v. Jacob Holding of Ontario LLC, 2019 IL App (5th) 180332, ¶ 17, for the proposition that a beneficiary of a land trust may not step into the position of a trustee and convey title to property. However, none of these cases address ratification. Here, we find that the circuit court properly found that Neldava pled and proved the affirmative defense of ratification.
¶ 35 B. Count I of the Third Amended Petition
¶ 36 DJJ argues the circuit court erred in denying count I of the third amended petition as it alleges that the tax deed is void under
“Failure to timely take out and record deed; deed is void. Unless the holder of the certificate purchased at any tax sale under this Code takes out the deed in the time provided by law, and records the same within one year from and after the time for redemption expires, the certificate or deed, and the sale on which it is based, shall, after the expiration of the one year period, be absolutely void with no right to reimbursement.”
35 ILCS 200/22-85 (West 2016) .
¶ 37 Specifically, DJJ claimed Millennium cannot legally convey a certificate of purchase into a land trust, and therefore, Millennium‘s assignment to the Land Trust was invalid and the Land Trust did not have authority to assign the certificate to Neldava. Consequently, Millennium remained
¶ 38 We first address DJJ‘s voidness argument. Whether a judgment is void or voidable presents a question of jurisdiction. LVNV Funding, LLC v. Trice, 2015 IL 116129, ¶ 27. Where jurisdiction is lacking, any resulting judgment rendered is void and may be attacked either directly or indirectly at any time. People v. Castleberry, 2015 IL 116916, ¶ 11. “Judgments entered in a civil proceeding may be collaterally attacked as void only where there is a total want of jurisdiction in the court which entered the judgment, either as to the subject matter or as to the parties.” (Internal quotation marks omitted.) In re Marriage of Mitchell, 181 Ill. 2d 169, 174 (1998). A voidable judgment, in contrast, “is one entered erroneously by a court having jurisdiction and is not subject to collateral attack.” (Internal quotation marks omitted.) Castleberry, 2015 IL 116916, ¶ 11. When a court has acquired jurisdiction, an order will not be rendered void merely because of an error or impropriety in the issuing court‘s determination of the law. Mitchell, 181 Ill. 2d at 174. A voidable judgment
“is correctable on review [only] if a timely appeal is taken.” People v. Speed, 318 Ill. App. 3d 910, 914 (2001).
¶ 39 In this case, “[a] tax-sale proceeding is in rem and the court acquires jurisdiction over the land when the county collector makes his application for judgment and order for sale.” In re Application for a Tax Deed, 2020 IL App (5th) 190168, ¶ 27 (quoting Vulcan Materials Co. v. Bee Construction, 96 Ill. 2d 159, 165 (1983)). “Once the court acquires jurisdiction, it retains jurisdiction ‘to make all necessary findings and enter all necessary orders supplemental to the original tax sale.‘” Id. (quoting Vulcan Materials Co., 96 Ill. 2d at 165). “Thus, while
¶ 40 C. Count II of the Third Amended Petition
¶ 41 DJJ argues the circuit court erred in denying count II of the third amended petition alleging the court should vacate the order issuing the tax deed under
“Tax deeds issued under Section 22-40 are incontestable except by appeal from the order of the court directing the county clerk to issue the tax deed. However, relief from such order may be had under Sections 2-1203 or 2-1401 of the Code of Civil Procedure in the same manner and to the same extent as may be had under those Sections with respect to final orders and judgments in other proceedings. The grounds for relief under Section 2-1401 shall be limited to:
(1) proof that the taxes were paid prior to sale;
(2) proof that the property was exempt from taxation;
(3) proof by clear and convincing evidence that the tax deed had been procured by fraud or deception by the tax purchaser or his or her assignee; or
(4) proof by a person or party holding a recorded ownership or other recorded interest in the property that he or she was not named as a party in the publication notice as set forth in Section 22-20, and that the tax purchaser or his or her assignee did not make a diligent inquiry and effort to serve that person or party with the notices required by Sections 22-10 through 22-30.”
35 ILCS 200/22-45 (West 2016) .
¶ 42 Specifically, DJJ claims it set forth a meritorious claim that the tax deed was procured by fraud and exercised its due diligence in presenting its claim and filing the
¶ 43 First, we address the discrepancy between the parties’ standards of review. Citing People v. Vincent, 226 Ill. 2d 1, 14 (2007), DJJ claims the circuit court‘s judgment is the functional equivalent of a dismissal for failure to state a cause of action, and therefore, we must review this issue de novo. Neldava argues that the standard of review is an abuse of discretion.
¶ 44 Clarifying Vincent‘s application of de novo review, our supreme court held ”Vincent must be viewed in its narrow context of a
¶ 45 In this case, DJJ claims Neldava procured the tax deed by fraud because Neldava, Millennium, and Skirp Construction concealed that Millennium, and not the Land Trust, was the true holder of the certificate. DJJ‘s claim requires us to consider the particular facts of the case, and thus, raises a fact-dependent challenge. Therefore, we review this issue for an abuse of discretion. An abusе of discretion occurs only when the trial court‘s ruling is arbitrary, fanciful, or unreasonable or where no reasonable person would take the view adopted by the trial court. Seymour v. Collins, 2015 IL 118432, ¶ 41.
¶ 46 Having determined the appropriate standard of review, we now consider whether the trial court abused its discretion when it denied count II of the third amended petition pursuant to
“Tax deeds issued under Section 22-40 are incontestable except by appeal from the order of the court directing the county clerk to issue the tax deed. However, relief from such order may be had under Sections 2-1203 or 2-1401 of the Code of Civil Procedure in the same manner and to the same extent as may be had under those Sections with respect to final orders and judgments in other proceedings. The grounds for relief under Section 2-1401 shall be limited to:
***
(3) proof by clear and convincing evidence that the tax deed had been procured by fraud or deception by the tax purchаser or his or her assignee[.]”
35 ILCS 200/22-45 (West 2016) .
¶ 47
“[T]o be entitled to relief from a final judgment or order under section 2-1401, the petition must set forth specific factual allegations supporting each of the following elements: (1) the existence of a meritorious defense; (2) due diligence in presenting this defense or claim to the circuit court in the original action; and (3) due diligence in filing the section 2-1401 petition for relief.” Walters, 2015 IL 117783, ¶ 37.
¶ 48 To prove the existence of a meritorious defense or claim, a petitioner must allege facts that would have prevented entry of the judgment if they had been known by the circuit court. Physicians Insurance Exchange v. Jennings, 316 Ill. App. 3d 443, 457 (2000). Due diligence requires the
¶ 49 Here, the circuit court held DJJ failed to state a meritorious claim because “[t]here was no evidence of fraud presented to the Court regarding purchase or assignments of the certificate between Neldava, Chicago Title Land Trust, or Millennium.” The court also held DJJ failed to exercise due diligence. The court found that, throughout the tax sale proceedings, (1) DJJ‘s аttorney ordered an estimate of redemption for the tax sale on February 2, 2016, and November 8, 2016, (2) Weininger sent letters on behalf of DJJ demanding the Guyon Hotel not be listed for sale, and (3) Weininger received a letter from Macaluso stating Weininger‘s client failed to redeem the property by the redemption expiration date and advising Weininger to contact the county to confirm the information. Based on this evidence, the trial court determined “the knowledge of the pending tax sale proceeding must be imputed to DJJ at the very least by November of 2016, and at the earliest by February 2016, because the law firm was necessarily aware of the tax sale proceeding.” The court also found “the claim that DJJ and the relevant players were unaware of the tax deed delinquency when they had been involved in the mortgage foreclosure litigation seems incredible.”
¶ 50 We agree with the trial court that DJJ failed to allege any facts showing Neldava procured the tax deed by fraud pursuant to
¶ 51 The certificate of purchase sale contract between Neldava, Millennium, and Skirp Construction wherein Millennium and Skirp Construction are listed as the sellers of the certificate of purchase аt issue may suggest how Millennium viewed its ownership of the certificate. However, any inference that this evidence shows Millennium intentionally concealed itself as true holder of the certificate from the circuit court is contradicted by the evidence that the certificate was assigned to the Land Trust. At trial, Daniel testified he directed Pilota to assign the certificate of purchase to the Land Trust and to file a petition for tax deed on behalf of the Land Trust. Pilota testified he assigned the certificate of purchase to the Land Trust on behalf of Millennium on October 1, 2015. The document evincing the assignment
¶ 52 Furthermore, we acknowledge DJJ filed the original complaint raising a
¶ 53 Hence, DJJ, through its attorney, was aware of the tax sale proceedings since February 2016 but provides no reasonable excuse for failing to act in presenting its fraud claim to the circuit court. Therefore, we find DJJ failed to establish due diligence under
¶ 54 IV. CONCLUSION
¶ 55 We find the circuit court did not err in denying the motion to dismiss the affirmative defense of ratification. We further find the circuit court did not err in finding in favor of Neldava on count I of the third amended petition because the tax deed is not void. We also find DJJ failed to satisfy the requisite еlements to obtain relief under
¶ 56 Affirmed.
Decision Under Review: Appeal from the Circuit Court of Cook County, No. 2015-COTD-003154; the Hon. Maureen O. Hannon, Judge, presiding.
Attorneys for Appellant: Mindy S. Salyer and Amanda L. Moressi, of Salyer Law Offices, LLC, and Ashley W. Brandt and Emily Knight, of Tucker Ellis LLP, both of Chicago, for appellant.
Attorneys for Appellee: Terry J. Carter and Jamie L. Schmidtke, of Carter Legal Group, P.C., of Chicago, for appellee.